Stewart Hendry recently took over as the CEO of Saudi Shipping & Maritime Services (Tranship) in July and has full responsibility for all shipping, oil & gas operations and projects undertaken Kingdomwide. He spoke at length to Saudi Gazette about the prospects of the company and how it hopes to align the company's mission with Saudi Vision 2030. Here are the excerpts SG: Taking over the CEO position at Tranship, a well-established business in the Saudi Arabian bunker fuel market, must be a big challenge for you? What did you change and improve first when you took over? A: It was immediately clear that Tranship has a solid reputation in the local and international markets as a quality provider of bunker fuels in Jeddah. That reputation, supported with an excellent relationship stretching almost 40 years with Saudi Aramco offered a solid foundation for immediate growth and business diversification into other industry sectors. Tranship purchased bunker barge ‘Marwah 9' July 2018, followed by the upgrade of bunker barge ‘Marwah 8' in commitment to future outlook and overall growth of company. It sold bunker barge ‘Marwah 6' to make way for new tonnage to complement industry demand Jeddah/Red Sea. I oversaw the implementation of new IT reporting systems to align commercial, operational and financial activities within the organization, followed by addition of several carefully selected new key staff to strengthen existing business as well as plan for future — QHSSE manager, marine superintendent, commercial manager etc. We also saw the award of a new contract seeing Tranship confirmed as agents in the Kingdom of Saudi Arabia for an international ISO tank owner. Introduced a new company vision to enforce "Saudization" in all aspects of our business and which will afford Saudi nationals (male and female) opportunity to join our expanding organization throughout the Kingdom and we are fully aligned in achieving the aims of Vision 2030. SG: We cannot avoid the subject of 2020, of course. What impact, in your opinion, will it have on traders and suppliers in the region? A: The impact of new regulations set by the International Maritime Organization (IMO) will naturally vary across the MENA region. GCC countries are well prepared to deal with the consequences of the regulations, which come into effect in 2020. The new regulations require ship-owners to switch away from High Sulfur Fuel Oil (HSFO), and as they do so, demand for diesel will increase. This will enable countries like Saudi Arabia and the UAE, who added 1.2mb/d of refining capacity over the past five years, to benefit from higher exports of diesel. Reduced usage in shipping will inevitably drive down the price of HFSO, meaning that domestically, Saudi Arabia and Kuwait will also be able to benefit from lower cost HSFO for use in power generation. SG: Here in Saudi Arabia, we should be somewhat shielded from any direct impact coming from the introduction of the IMO regulations. With the complex refining capacity that has come online since 2014, further additions due over the medium term, as well as its domestic consumption patterns — it means that Saudi Arabia will be able to adjust to the needs of the global market. A: In the event that scrubbing technology proves to be a popular move for owners, then the impact will be quite negligible, with the Kingdom operating business as usual; whereas if compliance takes the form of fuel switching that results in higher demand for LSFO and marine diesel, then Saudi Arabia should theoretically benefit in two ways; firstly — in the export of diesel, of which the Kingdom is a net exporter. Secondly — from the import of cheaper HSFO to replace crude burn in the power sector. SG: How prepared are the companies, and Tranship in particular, for the global sulfur cap? A: With Saudi Aramco being the sole provider of fuel products in Saudi Arabia, we must continue to provide bunkers as per their specification and certified quality. Whilst these products are supplied as per its specification, Saudi Aramco governs the supply price and provides a weekly PPPMT (posted price per metric ton) which we adhere to. This is reviewed and circulated each Thursday, and is valid for seven days. SG: Do commercial and operational practices in the Middle East differ from those used globally, and how competitive are they when it comes to offering high quality grades of fuel and lubricants? A: From a commercial perspective — a published PPPMT rightly stops inflated bunkering prices in the Kingdom and we are pleased that this shows complete transparency in our business. Operationally, we are very much at peace of mind when loading and supplying cargoes in Saudi Arabia whilst we know the high quality of products which we are supplied with from Saudi Aramco. SG: Do sanctions against Iran affect your company's business in the region? A: Generally speaking, no. The Kingdom banned domestic entities from entering into transactions with Iranian-flagged vessels, and banned Iranian-registered/-flagged vessels from all ports. The Saudi Port Authority also extended the prohibitions to the entry of any ship carrying cargo of Iranian origin, including for transhipment purposes, into any Saudi Arabian port. Such has been in place for a considerable time and so no affect is felt in this regard. As a company, we have a stringent sanctions policy in place and which further supports the Kingdom in this regard. Tranship remains committed to complying with relevant economic and trade sanctions laws in all jurisdictions in which it operates through identifying, mitigating and managing the risk not simply because it is required to, but it is the correct way to do business. SG: What are the immediate and long term plans for Tranship? A: Looking to the future always excites me. We are in the advanced stages of increasing our presence in Saudi Arabia, with new office facilities opening in Dammam and Jubail — Eastern Province; early Q1 2019. In support of such diversification, we look set to welcome the addition of several new key and experienced staff members — essentially doubling headcount by Q1 2019. A strong focus will then continue on developing our teams and maintaining a solid corporate culture as we head towards the celebration of 40 years of business in 2019 and continue supporting our esteemed customers. Exciting times are ahead! — SG
