Fuel Tankers Supply Chain

CHINA VISIT AFTERMATH

Jan 2020

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BACKGROUND
Due to expansion projects and redevelopment of facilities and infrastructures in the Kingdom of
Bahrain, fueling facilities belonging to Governmental and private sectors was established. For
example, a number of fueling facilities was developed for Ministry of Interior and Ministry of
Defence with strategic storage capacities. New large scale Hospitals projects (i.e. King Hamad
Hospital, Awali Shiekh Moh’d Bin Khalifa Specialist Cardiac Hospital) and faculties serving the
general public also have emergency Diesel storage facilities for Generator backup power supply in
case of blackouts.

On the private sector, as a result of any forced interruption of supply of Jet A-1 through the Pipeline
to Arad Depot, Bapco is obliged to response for the implement of road bridging of Jet A-1 from
Bapco Marketing Terminal to Arad Depot, as and when required (1.8 million liter per day using 10
road tankers was used in our last bridging exercise). Moreover, the Bahrain Airport Company is
building a Diesel fuel facility to overcome any black out or power outages, their bulk diesel storage
facility is of 280,000 liters capacity.

In addition BAPCO is now engaged in Diesel Emergency Supply agreement with AMAZON DATA
center facilities (460,000 liters per day). This required tankers to be readily available for use may
the requirement emerge.

All the above requires having the capability of delivering Diesel Fuel if and when the need is
emerged. Thus, a dedicated logistics for the tanker is vital to meet the required demand volume if
and when it occurs.

It should be noted that, from surveys conducted, the only viable suitable Vehicles available on the
Island for bridging purposes are Bapco's road tankers and Caltex road tankers.

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China Visit

OBJECTIVE

IDENTIFY POTENTIAL NEW SUPPLIERS AND

READILY STREAMLINE THE SOURCE OF
TANKER SUPPLY.

To visit factories in China, & to identify a list of technically acceptable

“China tanker suppliers”
and to verify their technical capabilities and standards of fuel tankers.

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LIST OF VISITED FACILITY / FACTORY COMPARISON
Date Workmanship ADR \ SASO
Item Visited Manufacturer Name Location & Quality tankers Certification / Remarks
produced

1 25-Nov HONGTAI Cangzhou Good NO Can be produed assigning third party

2 26-Nov Chengda Auto Co. in Cangzhou Good NO Can be produed assigning third party
3 28-Nov Shengrun Auto. Co Jining-Shandong Verygood Yes Third party report provided
4 30-Nov Shandong Washida Special Auto Jining-Shandong Not good No workmanship and quality is poor
2-Dec CIMC head office
5 4-Dec CIMC Lingyu Luoyang city, Henan Verygood Yes Third party report provided
6 5-Dec Henan Jushixin Transport Equipmen Suizhou,Hubei Not good Yes N/A
7 6-Dec ChenglongWei Suizhou,Hubei Not good NO N/A
8 7-Dec Dali (carbon steel ADR) Suizhou,Hubei GOOD
9 8-Dec CLW- Chengli Suizhou,Hubei GOOD Yes Third party report provided
10 9-Dec Hubei Huilong Special Vehicle Co. ltd. Suizhou,Hubei Verygood Yes Third party report provided
11 10-Dec CIMC Ruijiang Automobile (RJST) Wuhu, Anhui Excellent Yes Third party report provided
ADR / They are producing to Saudi
12 11-Dec Yangzhou CIMC Tonghua Special Vehicles (THT) Yangzhou Excellent Yes Arabia, with an Assembly Location in BIIP
Bahrain

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LIST OF VISITED FACILITY / FACTORY COMPARISON
(BEST TO WORST ORDER)

Ranking
In Order Supplier / Manufacturer Name Factory City Name
1 Yangzhou CIMC Tonghua Special Vehicles (THT) Yangzhou Capable
2 CIMC Ruijiang Automobile (RJST) Wuhu, Anhui See
3 CIMC Lingyu Luoyang city, Henan video

4 CLW- Chengli Suizhou, Hubei

5 Capable
Hubei Huilong Special Vehicle Co. ltd. Suizhou, Hubei
6 Shengrun Auto. Co Jining-Shandong See
video
7 HONGTAI Cangzhou
8 Chengda Auto Co. in Cangzhou Capable
9 Dali (carbon steel ADR) Suizhou, Hubei See
10 Shandong Washida Special Auto Jining-Shandong video

11 Henan Jushixin Transport Equipment Suizhou, Hubei

12 ChenglongWei Suizhou, Hubei

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FACILITY / FACTORY COMPARISON
Item Supplier / Manufacturer Name Factory Location
1 Yangzhou CIMC Tonghua Special Vehicles (THT) Yangzhou
This factory has an assembly facility located in Bahrain (BIIP) Capable
the facility is primary focus is the Saudi Arabia Market. The See
Video/pic
team already visited the facility on 23/1/2020.

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FINDINGS
Item Criteria China - Standard ADR/DOT SASO From Hail
Price (BHD) Around 10,000 <35,000 <35,000 45,120
1
Less copitive price to China Less copitive price to China
Attractive & compititive price Standard but still better (30%-20%) Standard but still better (30%-20%) Known / Spare parts
compared to other options like
less than the purchasing price of less than the purchasing price of availability.
renting or purchasing.
Europian/Americal Suppliers. Europian/Americal Suppliers.
Advantages
2 fast order placement and International Standard
manufacturing. known/ Spare parts availability. Known / Spare parts availability. Equipment

International Standard Equipment Customised

to Saudi Market
Equipment

being a contengency
being a contengency equipment, being a contengency equipment, equipment, some of the
some of the parts would need to some of the parts would need to parts would need to be
spares availability in future
be replaced. Like the air suspention be replaced. Like the air suspention replaced. Like the air
Dis-Advantages

after long storage. after long storage. suspention after long

storage.
3
unknown spare sources of Price is higher than chiness Price is higher than chiness
components used. standard standard High Price

communication gap with supplier communication gap with supplier communication gap with supplier

WHAT WE NEED?
Cost Effective, (lower) specifications that meets the Bahrain Kingdom Contingency requirements
both technical “to minimize the cost” and operational “to do the job”.

HOW WE MEET THIS NEED?

T&BS to Agree with Operations on the minimum requirements in case of contingency and then
develop a specification for Budgetary and requisition.

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7
COST COMPARISON
Purchase/down
Monthly fee per Accumulative Accumulative
Tanker Source Location/Source payments per unit Total for Year(1)
Unit (BHD) Total for 2 years Total for 3 years
(BHD)

Leasing Tankers
Al-Absool Saudi Arabia 0 7,200 86,400 172,800 259,200
Delmon Local 2,812 33,750 67,500 101,250
Chevron Local 5,000 569 11,828 18,656 25,484

Purchasing Tankers

Recent Tender - Hiel International 54,810 0 54,810 54,810 54,810

China – Chinese Standard China 10,130 0 10,130 10,130 10,130

China - ADR/DOT/SASO China 38,000 0 38,000 38,000 38,000

60,000 600,000
Al-Absool - Rent
Hiel
50,000 500,000 Delmon - Rent

COST BHD
Chevron
COST BHD

40,000 ADR/DOT/SASO from China 400,000

Heil - Recent Tender
nt
30,000 k er s Re 300,000 CHINA Specs
an
vr on T
Ch e 200,000 CHINA- ADR/
20,000 DOT/SASO

China Tankers 100,000

10,000

0
0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
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ACTUAL COST
Purchase/down
Monthly fee per Total for Year(1) Total for Year(2) Total for Year(3)
Tanker Source Location/Source payments per unit
Unit (BHD) 10 units - 2019 10 units - 2020 10 units- 2021
(BHD)

Leasing Tankers
Chevron Local 5,000 569 118,280 186,560 254,840

Purchasing Tankers

Recent Tender - Hiel International 54,810 0 2.1 3.5 4.6

China – Chinese Standard China 10,130 0 11.6 18.4 25.1

China - ADR/DOT/SASO China 38,000 0 3.1 4.9 6.7

Table shows the actual incurred amount due to renting, and the
amount no. of tankers corresponding to the same rented fee

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RECOMMENDATION
BAPCO to agree internally the required Specification for these contingency tank-
trailers in order to be both, practical and cost effective, before approaching the
suppliers for final quotations.

CONCLUSION
PROPOSED APPROACH

• Make a trail purchase of a pilot unit(s).

• Tender the (agreed & needed) specifications and require number of tankers and
include the identified Manufacturer/Suppliers from CHINA.

In parallel BAPCO can:

• Negotiate With Chevron to acquire these tankers for a price less that 10,000
BHD each, once Chevron terminate their obligations for fuel supply by 2021.
These tankers are +30 years old, but were renovated by BAPCO recently to
meet Jet A1 bridging exercise, and the tanker book value to Chevron is
considered to be zero.

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CHALLENGES
China Manufacturers have the technical capability and capacity for producing almost any
requirements. The factories production capacities are about 10,000 units per year, in addition to
multiple production lines. With a production varying from 20 to 10 units per day. Thus, small order
quantities might not be attractive to the factories specially if the units are highly customized and not
standard production.

China manufacturers might not be familiar with Bahrain Kingdom – Tender Board & Bapco
requirements like TB website, financial report, performance bonds and bank grantees, this might
hinder those factories from looking at our Tendered requirements specially with the small order
quantities. After sales support remains also unknown with advantage to the factory (THT) since it
has a presence inside Bahrain.

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THANK YOU
We Work together to Add value.