Valero faces two lawsuits over contaminated bunkers

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It looks like that cases of bad bunker fuels still remain on the news, at a time where a lot of people believe that IMO 2020 regulations will make quality issues even worse. Last week, two companies filed lawsuits at Texas courts against Valero Energy, alleging that they faced damages due to contaminated bunkers which were delivered by Valero during 2018.

In one of these cases, Bhari, the National Shipping Company of Saudi Arabia has initiated a lawsuit claiming a total amount of approximately $1.1 million for damages arising from a bunkering of about 750 tons fuel oil on its 26,000 dwt M/V Bahri Yanbu.

According to Bhari, the said bunkering took place on the 30th March 2018 at Houston. The vessel switched to the new bunkers about 1 month later, on the 27th April 2018, and within 1 day she experienced serious engine malfunctions which resulted into a main engine failure. After the vessel drifted for about 2 days, the crew finally restarted the main engine and the vessel deviated to Alexandria of Egypt for further investigation. Due to found damages on major engine machinery (injection pumps, pistons, valves etc) the vessel experienced a further delay between the 5th May and the 11th May 2018 for repair-works which were carried out at its main engine.

As the company mentions in its court filings, the consumption of the contaminated bunkers were discontinued, replacement bunkers were taken at Jeddah, while the bad bunkers were finally debunkered at Fujairah. In its $1.1 million claim, NSCSA includes the cost of repair-works, the loss of income due to the reported delays, the replacement cost of bunkers and the cost of debunkering.

In a second similar case against Valero, Indelpro SA, a Mexican petrochemical company, filed a claim for damages in excess of $75,000 arising from bad bunkers which were supplied on its chartered vessel MV Zoe Schulte and which, according to the company, they resulted into Zoe Schulte’s engine damage in May 2018. According to Indelpro, the vessel’s engine had to be repaired and its fuel tank and pipelines cleaned.

Both companies in their court documents mention that Valero had provided them with certificates showing that the bunker fuels were actually on spec. However, Indelpro, in a very serious statement, mentions that Valero was aware that the bunker fuels were contaminated and unsuitable for use. For this reason, the company continues, Valero did not use these bunker fuels for the vessels chartered by subsidiaries of the Valero Group.

Whether these allegations will be validated by the courts, it remains to be seen, however taking into consideration that Valero is the second largest fuel refiner in the United States, it becomes clear that the credibility of a bunker supplier does not guarantee, by its own, the high quality of bunker fuels. The industry needs to encourage a more modern approach for due diligence, in an effort to eliminate such concerns, especially as we are moving towards a multi-fuel era.

Link to Valero Energy’s profile page on BunkerTrust here.

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