Chinese Ports In Shandong Intensify Scrutiny Of Aging Tankers

Ports in China’s Shandong province have now been demanding more detailed information about oil tankers, which are over 15 years old, that reportedly calls at their terminals, sources who have knowledge of the issue said, potentially postponing the unloading of crude shipments at the biggest oil importer of the world.

Last week, the maritime safety administrations of Rizhao and Qingdao, which covers the oil terminals at the port of Lanshan, informed shipping agencies to submit details on their ships’ age, where a vessel is flagged, insurance coverage, and instances where the ship altered its name and ownership in the past 36 months as well as past inspection records, mentioned a shipping agent and two traders who handle oil imports from China.

The sources refused to be named owing to the sensitivity of the whole matter.

The shipping agent mentioned that the details are new requirements that the safety administrations did not seek earlier. The sources said the new documentation must be submitted five days before a vessel arrives.

Qingdao and Lanshan are two of China’s top five biggest oil-importing ports, per Kpler’s data. Delays at the terminals can lead to disruptions in Chinese refineries, which are expected to increase the fuel output as the nation recovers from the COVID-19 restrictions of 2022.

Shandong is home to several independent refineries referred to as teapots and those that account for almost one-fifth of the processing capacity of China.

The Shandong Maritime Safety Administration informed Reuters that it hadn’t set special inspection needs for tankers beyond the current regulations and international conventions.

The ports of Rizhao and Qingdao did not respond to requests for comments sent out on Friday.

Port authorities could detain vessels for up to days to rectify issues, prompting the shippers to divert cargoes to other ports in China, the sources mentioned.

Authorities are well wary of possible incidents like the oil spill from a vessel collision close to Qingdao in 2021, one of the sources mentioned.

The latest requirements follow Qingdao’s maritime safety administration’s examination in April of the supertanker dubbed the Titan that discovered over a dozen deficiencies onboard, per data from the port state control agency dubbed Tokyo MoU and a public shipping database named Equasis.

The 20-year-old Titan is a Cameroon-flagged large crude carrier capable of being loaded with up to two million barrels of oil managed by Seychelles-based firm Seapalm Shipping Ltd, per data received from Refinitiv Eikon. Seapalm couldn’t be reached for comment.

Almost all tankers hauling crude to Qingdao for independent refiners are over ten years old, mentioned Emma Li, a Vortexa analyst.

After recent incidents, the Chinese port authorities realized that old tankers contain multiple deficiencies and aren’t adequately covered by insurance, which is potentially problematic for the environment and port operations, she mentioned.

The average waiting time for a tanker at Qingdao went up to over two days on Sunday, up from less than one day a week ago, data on Refinitiv Eikon reflected.

Tankers unable to furnish the necessary documents can divert to ports in nearby provinces like Hebei, Jiangsu, and Liaoning, the shipping agent mentioned, as the documentation needs are limited to only Shandong.

In April 2023, tankers calling at Shandong ports encountered delays after relevant customs authorities strengthened stringent checks, particularly on diluted bitumen cargoes.

References: XM, Reuters