Valero may have supplied more than 100 ships with defective fuel early last year — but the Texas refiner is blaming Swiss oil trader Trafigura for the mistake.
According to papers from two federal lawsuits in the southern district of Texas, Valero admitted to providing two ships with off-spec fuel in 2018. It then argued the fuel was already contaminated when Trafigura delivered it.
"The source of all damages ... is Trafigura's provision of unsuitable, substandard, defective, contaminated, unfit, non-conforming and/or off-specification product," Valero said in two third-party complaints, one filed in March and the other in April.
Two separate deliveries
The lawsuits stem from two separate fuel deliveries. One was to the Bahri-owned, 26,000-dwt Bahri Yanbu (built 2014) and the other to the Bernhard Schulte-controlled, 15,136-dwt LPG carrier Zoe Schulte (built 2015), which was being chartered by Mexican firm Indelpro. Both received the fuel in March last year.
In the $1.13m Bahri lawsuit, the Bahri Yanbu was allegedly left drifting at sea for two-and-a-half days after the contaminated fuel forced it to shut off its engines.
In the Zoe Schulte case, Indelpro argued it was one of 150 ships that Valero or intermediaries supplied with the defective fuel.
"The effects of the contaminated marine fuel ... have been well-documented and include vessel breakdowns, engine and machinery malfunctions, and damage and economic loss suffered in the form of vessel delays, loss opportunities and discharge of the contaminated product," the complaint read.
Serious operational issues
When the Zoe Schulte switched over to the fuel in May last year, it began experiencing "serious operational issues" and suffered damage to its engines and fuel tanks.
The lawsuit did not specify the value of the damage.
Valero blamed Trafigura. It said it received the off-spec fuel in five separate deliveries in February 2018.
Trafigura, which declined to comment, denied the fuel was defective from the beginning, and accused Valero of "bootstrapping" it into the lawsuit and argued the court lacked subject matter jurisdiction.
Valero did not immediately return requests for comment.