BK International denies contaminating GPL $40M fuel

Jan 25, 2009 News

Yesterday, in response to an article that appeared in that day’s issue of Kaieteur News, BK International Inc. released a press statement to the media contending that it is too early to lay the blame on anyone for the delivery of some $40M worth of contaminated fuel to Essequibo Coast.

According to the company, it has been agreed that a series of tests would be conducted on the fuel to ascertain the facts, and as a result, BK International and Guyana Power and Light have sent samples of the fuel to Trinidad and Tobago for comprehensive testing.

“It is therefore premature to speculate on these matters in the absence of results. Suffice it to say that the precise amount of fuel uplifted from GPL was delivered, and at all times, GPL security was aboard the vessel securing the product….It is also clear that any possible contamination could have been in the fuel at the time it was uplifted, because no tests were done at the time the product was uplifted,” according to BK International.

The company added that the fuel supplies were also handled by a third party in Essequibo, who uplifted the fuel from the vessel for onward delivery to the plant at Anna Regina. Samples from GPL tank and our vessel were sent to Macorp for testing, and both samples were confirmed to be from the same stock.

“We are further sending samples to the UG laboratory for further testing, to confirm the percentage of the water in the fuel whilst we are awaiting the results from the samples sent to Trinidad and Tobago.”

As it relates to claims that BK’s vessel, the MT New Horizons, had been deemed unfit by the Trinidad authorities and was not certified to operate in those waters, the company said that the vessel is fully certified by the Guyana Maritime Bureau Inc., Surveyor of Ships, appointed by the Government of Guyana for carriage of fuel, and has been so doing to many countries in the Caribbean, South America and Trinidad for many years, and was never rejected by Trinidad.

The company insists that it is convinced that, based upon the pre-loading exercises conducted by BK and GPL and the security precautions involved, in no way can it be held responsible for the so-called contamination, particularly in the absence of definitive tests and a completed investigation into all the circumstances surrounding the issues.

This newspaper had reported that GPL sustained some $40M in losses over the past two weeks when it tried to ship fuel to the Anna Regina power station.

The first shipment of fuel, some 75,000 gallons of heavy fuel oil, was shipped to the Essequibo Coast via a vessel operated by BK International.

However, it turned out that the fuel was contaminated but the operators were not aware until they tried to use it in the turbines.

Nearly three dozen injectors and pump elements were damaged, plunging the Coast into periods of prolonged blackouts. By the time the problem was discovered, the damage had been done, according to a GPL official on the Essequibo Coast.

The repairs were costly and took more than a week. One engineer said that each pump element cost some US$1,000. The injectors also cost a tidy sum. By the time the turbine became operational, GPL was forced to spend some $8 million.

A source said that the remainder of the fuel had to be returned to the city and disposed of. The cost of that shipment of fuel was some $20 million.

The power company undertook to ship a replacement of 75,000 gallons of heavy fuel oil to the Essequibo Coast; but when the vessel landed, it was found that that shipment was also contaminated. Inspection revealed that it had some six per cent of sea water. The loss was a further $20 million.

The vessel was once more returned to the city with the contaminated fuel; and up to this week, it was moored at a city wharf with the fuel inside. The power company was reportedly hard pressed to find a suitable place to dispose of the fuel.

The original contract to transport the fuel was entered into with one Winston Rambarran, but BK International secured the contract after a tender process for the shipment of the fuel.

GPL offered no reason for seeking to terminate the arrangement it had with Rambarran.