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Modern marine diesels use heated bunker fuel(fuel oil used for steam turbines)) but he Graf Spee had a oil conversion plant using steam. How did it work, was it some sort of steam distillation?

There was a boiler, used among other things to warm the diesel oil. I think this was done to give it the proper viscosity.

Graf Spee had a oil conversion plant using steam

No. GS used diesel fuel from her bunkers, not heavy oil. The steam powered system of which you speak was the filtration systems for the diesel and lubricating oils. Fuel was pumped from the bunkers to settling tanks, and thence through mesh filters to remove larger solid particulates and bio contaminants. The partially filter fuel then went to the steam activated banks of centrifugal separators, that in essence polished the fuel, to use a modern term, by removing smaller particulates and water droplets. The cleaned fuel was then deposited in the day use tanks for the engines.

As an aside, the boiler in question also powered lube oil filtration for the diesels, provided steam heat for crew spaces, steam for fire suppression, and i think steam for cooking in the galley.

Just in case anyone is interested in German wartime diesel fuel production:

http://www.fischer-tropsch.org/primary_ ... 187_45.htm

doublen wrote:Modern marine diesels use heated bunker fuel(fuel oil used for steam turbines))

You mean pre-heated bunker fuel?

The bunker oil used in steam ships during the first half of the 20th century was known as HFO or Bunker C oil, and had too high a viscosity to be used in diesels of the time period, even when heated. It was roughly equivalent to Fuel Oil #6. Fuel oil #5 could be used in diesels if properly cut with #1, 2, or 3 fuel oils to allow it to be pumped without heating and to properly atomize in the injectors.