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Wednesday, October 17, 2018

DISCHARGING DIFFERENT GRADES OF CARGO CONSECUTIVELY

One of the most problematic areas for tanker owners is to get paid for all the time used for pumping out the cargo. This may be for different reasons, but they are seldom due to the vessel being “sub-standard”.

One candidate for incorrect penalties is when a vessel carries more than one grade and the grades are discharged consecutively rather than concurrently. In this respect it is valuable to look at the pumping clause in ExxonMobil VOY2000, which follows its predecessors Exxonvoy 84 and 90, and includes a sensible and practical provision concerning discharge of grades consecutively. Clause 18 (f) provides:

“…Owner warrants that vessel shall discharge its entire cargo (be it one or more grades) within twenty-four (24) hours pumping time or maintain 100 psi pressure at vessel’s rail during the entire period of discharge provided shore facilities permit. All time lost as a result of vessel being unable to discharge its cargo in accordance with the pumping warranty above shall not count as laytime or, if vessel is on demurrage, as time on demurrage. If the terminal or place of discharging does not allow or permit vessel to meet the above warranty or requires discharging grades consecutively, master shall forthwith issue a letter of protest…Any pumping time lost solely due to restrictions imposed by the terminal or place of discharging shall count as laytime or, if vessel is on demurrage, as time on demurrage.” (we have added the underlining)

The important matter is that consecutive discharge is identified to fall into the same category as when shore facilities do not permit a vessel to comply with the pumping warranty. Other charterparties do not have such a provision, including modern forms such as BPVOY 4.

The following example illustrates the practical problems that may arise where a vessel is required to discharge 4 grades of cargo consecutively. We will use a vessel capable of carrying 4 grades of 25,000 mt each, i.e. 100,000 mt of cargo in 4 equal sized cargo separations (by tank, pump and line i.e. true natural segregation).

If the vessel is discharging homogeneous cargo, each of the vessel’s pumps are allowed to pump for 24 hours in order to discharge its “assigned” 25,000 mt of cargo before there is a question of reducing time payable to owners due to alleged failure to comply with the pumping warranty. The same will apply to discharging 2, 3 or 4 grades in concurrent discharge i.e. each pump can work for 24 hours together with the other pumps before the question of the vessel being penalised is raised.

If, however, the terminal requires discharge grade by grade the following will happen since the charterers are likely to insist that each 25,000 mt must be discharged inside 25% of the 24 hours allowed, i.e. 6 hours since this equals its prorated share of the cargo. This means that since the charterers require double valve segregation, only the assigned pump to each grade can be allowed to work. Consequently, charterers will no longer take 24 hours before the vessel is penalised, they will start making their deduction after 6 hours. So whilst during concurrent discharge the vessel is allowed 24 hours per grade of cargo, when discharge of grades is consecutive each pump must now work at an average speed of 100,000 mt per 24 hours in order to get 25,000 mt out in 6 hours. No doubt that this is outside the pump’s capability, but still most charterers will insist that the vessel is sub-standard and want to deduct alleged underperformance.

There is a further aspect to this; during concurrent discharge the total stripping time will also be concurrent and last say 2 hours towards the end of discharge, which is only 8.33% of the 24 hours allowed. Each grade will require roughly the same time for stripping, but with consecutive discharge, 2 hours will represent a full 33.33% of the 6 hours allowance for each grade.

Admittedly, the charterers will claim that the vessel can avoid any penalty by maintaining 100 psi, but it is really the shore configuration/restrictions which will decide the pressure which the vessel can achieve, and this will be dealt with in a future issue of our weekly news to members.

Even if a pumping warranty does not have the express provision we have highlighted in ExxonMobil VOY2000, it is still possible to maintain the above argument on the basis that it is a shore restriction that the vessel is being required to discharge its grades consecutively and so defeat charterers’ claim that the vessel is in breach of the warranty.

INTERTANKO’s charterparty question and answer service is an important aspect of the work of our Legal and Documentary Section. Members should send their questions to john.fawcett-ellis@intertanko.com