takeroperator · 2013-04-12 · singapore report apm- huge interest shown shiprepair hub...

MARCH 2010 www.tankeroperator.com

Incorporating:

The TA�KEROperatorAnnual Shipping

Review

TA�KEROperator

Features:� US tanker consolidation� Singapore – a major hub� Szymanski speaks out� BWT decision day looms� New cargo tank coating� STS rules soon

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March 2010 � TANKEROperator 01

ContentsMarketsRenewed energy demand forecast

ProfileProvision management saves costs

US Report� Jones Act conundrum

� Crowley expands tanker fleet

Singapore Report� APM- Huge interest shown

� Shiprepair hub

Shipmanagement� New secretary general takes office

� Software suite case study

Technology25 Ballast Water Treatment� Convention comes closer

� Various approvals in the offing

34 Tank Servicing� New cargo tank coating unveiled

� Huge tank cleaning project

38 Ship-to-Ship� Mandatory STS rules come closer

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I 2010 – What are we in for?IV Oil spills at their lowestVI TA�KEROperator’s top 30XV Risks attached to new fuel limits

ANNUAL REVIEW

15

Front cover photo We will witness many scenes like this during 2010. Some say too many. If most of the scheduled deliveries occur, we could see a changein the tanker fleets’ composition, especially in theMR sector. Photo Credit—AET.

20

25

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As the first two of this year’s major events arealmost upon us, it will be a chance to take stockand to see whether the shipping industry is reallyweathering the recession.

Strangely, the two events – CMA and Asia Pacific Maritime (APM) -

are only a couple of days apart. However, that’s where the similarity

ends as they will take place thousands of miles apart. The first is being

held in the US and the second in the vibrant island Republic of

Singapore.

The two events should be the barometer of the industry to gauge

whether there are signs of a recovery on the horizon. Industry observers

will be gauging the mood of the speeches and no doubt counting the

number of visitors going through the doors.

There appears to be no problem in selling booths, but will the

executives manning the stands get the right type of punter? Both CMA

and APM should be okay as they tend to go for a different sector of

the industry.

The Connecticut Maritime Association (CMA) has built up its

membership and reputation as a leading catalyst for US service

providers, such as brokers, lawyers, financiers and consultants. There

maybe the odd owner to be seen as the annually elected Commodore

always seems to come from the shipowning ranks, not only in the US,

but also worldwide, John Fredriksen being a prime example.

APM is more of a showcase for Asian shipbuilders, repairers and

equipment manufacturers who come to market their wares to the many

shipmanagement and owner/manager representative offices that adorn

the island.

Down the years both owners and managers have set up shop to be

near where their vessels are trading, which includes Singapore. Broking

houses have followed, as have lawyers, bankers and others. Also

surrounding Singapore are the oil and gas powerhouses of Indonesia

and Malaysia.

In the US, several companies are quoted on NASDAQ and the New

York Stock Exchange. However, with the troubled financial markets,

we have not seen many companies trying to raise cash with the

exception of Herbjorn Hansson’s Nordic American Tanker Shipping,

who uses the money raised by issuing shares to purchase ships in cash,

thus has no finance amortised into his vessels’ daily operating costs.

In Singapore, a few companies are listed on the Singapore Exchange

Securities Trading exchange, including leading independent bunker

supplier Chemoil. Bunker supply is still one of the mainstays of

Singapore’s service offerings.

In the Annual Review, leading accountant and consultancy Moore

Stephens said that several companies were cash rich and were looking

for either other companies, or distressed newbuilding tonnage to gobble

up, thus taking advantage of the situation in order to renew their fleets

for a reasonable return.

One recent example was Odfjell purchasing an MR from SLS

Shipbuilding of South Korea. The agreed price was about $33.5 mill

and the vessel was due for delivery in April 2010. Due to its prompt

delivery, the vessel was believed to be the resale of a tanker originally

ordered by Eletson.

This purchase was announced as Odfjell continued to phase out older

tonnage. Recently, the company sold three 1980s built parcel tankers

for recycling.

Brokers and consultants believe that there will be several more

vessels sold by cash strapped owners, or shipbuilders, this year at knock

down prices in all sectors.

Tough yearMoore Stephens agreed that this year would be tough for both owners

and builders alike. Interestingly, more service providers, such as banks

and cargo owners, will be looking at a vessel’s ‘Green’ components

before deciding whether to finance, or charter the vessel, which is a

completely new way of thinking for most.

Those owners and operators without access to credit will find that the

coming year or so will be a difficult period to survive, especially if the

freight rates stay low, either equal to, or just below daily operating costs.

Also those companies, which have re-financed their tonnage,

effectively taking out a second mortgage to raise cash, will have

difficulty in keeping up the higher repayments as was seen in the 1970s

and 1980s.

Elsewhere, in the pages of this month’s TA�KEROperator, we have

commemorated the passing of the Knock �evis (see page 37) – the last

of the 1970s built giants. If one remembers just how many ULCCs were

constructed in the heady days of the 1970s, before the crash, this vessel

was probably the last example.

Some only lasted a matter of 10 years- Shell’s ‘B’ class ULCCs built

at St Nazaire spring to mind. However, this old lady spent much of her

30 years in shipyards and acting as a storage vessel before arriving at

Alang for breaking in January of this year.

This leaves the Euronav/OSG’s 440,000 dwt trio originally built for

Hellespont just under 10 years ago as the sole ULCC survivors. We will

ever see their like again? We doubt it.

COMMENT

Forthcoming expos will gauge the shipping industry’s mood

TO

TANKEROperator � March 201002

TANKEROperatorVol 9 No 4Tanker Operator MagazineLtd213 Marsh WallLondon E14 9FJ, UKwww.tankeroperator.com

PUBLISHER/EVENTS/SUBSCRIPTIONSKarl JefferyTel: +44 (0)20 7510 [email protected]

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Crowley is one of the few tug companies to earn full Safety, Quality & Environmental (SQE) certificationfrom the American Bureau of Shipping (ABS).

Being E-certified means we have a recognized and approved program in place for minimizing our environmental

impact with our tug operations. To ensure the highest standards are being met, Crowley tugs undergo regular envi-

ronmental, safety and quality audits.

Additionally, Crowley uses ultra low sulfur diesel fuel in all West Coast harbor tugs, and has installed, or is in the process

of installing, shore side power at all West Coast Crowley facilities so idle tugboats don’t have to run their engines at the dock. To further

reduce fuel consumption and emissions, Crowley worked with the Port of Los Angeles to establish various intermediary lay-berths in

and around the port, which significantly reduces the need to run back to the ‘home dock’ between ship assist jobs.

Crowley’s latest initiative is the design of a tugboat that is so environmentally friendly it wouldn’t even require a

smokestack. It’s just another way Crowley is committed to preserving the environment for future generations.

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Tacoma, Seattle, North Puget Sound and Prince William Sound/Valdez, Alaska, call Crowley at 800-248-8632. Or visit www.crowley.com.

Our tugboats are red and white, but our environmentalstewardship is as green as it gets.

Liner Shipping • Worldwide Logistics • Petroleum & Chemical Transportation • Alaska Fuel Sales & Distribution • Energy Support •Project Management • Ship Assist & Escort • Ship Management • Ocean Towing & Transportation • Salvage & Emergency Response

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p2-24:p2-7.qxd 26/02/2010 10:04 Page 3

This reflected a renewed demand

for energy amidst improving

economic conditions, said

McQuilling Services who analysed

the report.

After posting declines for the last two years,

the EIA’s latest outlook now calls for a 1.2

mill barrel per day growth in consumption

during 2010, and a further 1.6 mill barrels per

day in 2011.

World liquid fuels consumption is set to end

the first quarter of this year at 85.2 mill

barrels per day after averaging 85.1 mill

barrels per day in 4Q09 (see Figure 1).

While a jump in tanker freight rates earlier

this quarter may be a reflection of this uptick

in demand, the forecast for 2Q10 will likely

see rates fall with seasonality effects lowering

consumption to 84.8 mill barrels per day.

However, even at this predicted 2010-low,

consumption in the second quarter would still

be healthier than the 2009 average of 84.1

mill barrels per day.

By 4Q10, the EIA expects world fuel

consumption to average 86 mill barrels per

day, rising to 86.9 mill barrels per day in

2011, reflecting a 3.3% increase from 2009.

Non-OECD countries will see a 5.6%

growth in consumption during this period,

with Chinese demand increasing by over 11%.

China’s consumption in December 2009

already revealed a 12% increase from the

previous year, indicating that the economic

stimulus packages put in place have helped to

boost demand. Similar growth is expected to

continue.

US liquid fuel consumption fell by 4.2% to

18.7 mill barrels per day in 2009. However,

gasoline use actually posted a small gain,

although demand for distillates and jet fuel

fell by about 8.5% each.

The world’s largest consumer of liquid fuels

is expected to increase consumption by

180,000 barrels per day in 2010, and a further

210,000 barrels per day in 2011 with motor

gasoline and distillates comprising the bulk of

this growth.

OPEC growthWorld liquid fuel supplies from non-OPEC

nations are believed to have already passed

their peak in 4Q09 at 21.18 mill barrels per

day, and are forecast to decline nearly 5% by

2011. OPEC supplies are predicted to grow

steadily through 2011 until achieving a 41.6%

share of total world supply, up from a 40.3%

share in 2009.

McQuilling pointed out that net tanker

tonnage supply will grow modestly in 2010

owing to IMO-mandated phase-outs, but more

rapidly in 2011 as deliveries overtake

demolitions (see Annual Review, page ii).

While the consultancy maintained that

fleet growth will be difficult for demand to

absorb, it also acknowledged that several

recent adjustments called for increasingly

greater growth to global liquid fuel

consumption.

The extent to which increased consumption

will translate to tanker tonne/mile demand is

yet to be seen, but at least some of the

newbuilds will find fresh employment.

INDUSTRY - MARKETS


A renewed demandfor energy?

In a February report by

the US EIA, the forecast

for global liquid fuels

consumption was

revised upwards.

81

82

83

84

85

86

87

Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 2011

Million bbl/d

81

82

83

84

85

86

87

Q1-09 Q3-09 Q1-10 Q3-10 2011

Million bbl/d

39%

40%

41%

42%

OPEC Share

Total World Supply

OPEC Share (Rt Axis)

Source: US Energy Information Administration

Figure 1: World liquid fuels comsumption 2009 - 2011 Figure 2 : World liquid fuels supply 2009 - 2011

TO

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However, in today’s healthy eating

environment, the food served up

in ships’ galleys has taken on far

more significance, especially

with seafarer recruitment and retention

probably the most important issues facing

the industry.

There are now specialist suppliers who have

contracts with leading ship operators, thereby

taking over the role of consumables

management for a vessel and/or fleet. One

such company with several of the leading

tanker owners and operators signed up is

Garrets International.

Business development manager Andrew

Brown explained that an agreement with a

shipowner or operator is usually put in place

to manage vessels’ provisioning. This usually,

but not always takes the form of a fixed

person per day feeding rate.

Each vessel will send an order to Garrets

who will then source the products with the

relevant suppliers. This service operates

worldwide and the purchasing decisions are

made according to the vessels’ trading

patterns.

Garrets has a standard list of items, to

which, shipowners/operators can add their

own requirements. In this way, the company

will know that the basics are covered while

still allowing the seafarer to order whatever he

or she wants, Brown explained.

Although flexible, Garrets prefers to

operate by undertaking a major storing

every two months with a top up of fresh

provisions every 10-14 days. However, in

some cases the number of storings depends

upon the size of the vessel and its current

trading pattern.

The company uses a network of ship

suppliers and is not contracted to a particular

outlet. However, Brown said that Garrets had

worked with some suppliers for over 20 years.

By being independent, this allows the

INDUSTRY- PROFILE GARRETS


company to select any supplier in any port

that best suits the customer.

Quality agreementEach supplier used is asked to sign a

service/quality agreement to ensure that the

provisions and service reach the standards

required. The major suppliers are also audited.

Brown said that the company believed in

using local suppliers, rather than trucking

goods long distances… ”

which seems to be ‘de

rigueur’ these days,”

he said.

To expedite the

orders, Garrets has

its own Excel-based

system covering orders,

stock inventories and

reporting to the

customers. “Excel

does what we need,

everyone knows how

to use it, plus the ships

and land-based offices

already have the

software, thus there

are no IT conflicts.

The vessels therefore

can easily contact us

directly via this

system,” Brown

explained.

Today, vessels need

good quality, simple

products, which allow

the cooks to produce

healthy food to suit the

tastes of those on board.

For example, Garrets

recently announced free

range egg policy is part

of this need. With the

numbers of different

nationalities on board increasing, Brown said

that the company was seeing a demand for

more specialised national products on the

vessels supplied.

All seafarers have to work hard today and

the cook is no exception. “Three good meals a

day are one of the few things that seafarers

have to look forward to, so a good cook can

boost morale as easily as a bad cook can

lower it,” Brown said.

Proper managementof provisions can save

considerable costsThe supply of consumables, including fresh food has never been high on the agenda. People

still tend to think back to �elson’s day of salt beef, ships’ biscuits, scurvy and weevils.

p2-24:p2-7.qxd 26/02/2010 10:04 Page 5


INDUSTRY- PROFILE GARRETS

“I was recently on board a vessel with an

excellent cook. His speciality was baking and

every day he made a batch of fresh doughnuts.

As you can imagine, this made him very

popular and it certainly made for a happier

ship,” Brown commented.

Expiry datesThe chief cook must ensure that the stock is

properly rotated and all the items are within

their expiry dates. In certain ports, owners and

operators can receive large fines for having

expired stock on board. “We are seeing more

galley inspections and expiry dates are an

‘easy find’ for any official,” Brown said.

Hygiene is always very important, but with

the ILO MLC 2006 convention approaching,

it will be more closely inspected, so cleaning

routines must be in place and more

importantly – followed, Brown thought.

Garrets also supplies consumables, such as

cabin/galley stores, including cleaning

materials.

Brown explained that the company acts

more as a catering consultant by providing

support for customers, both shipboard and

land-based, on subjects such as menu

planning, stock control, purchasing plans and

hygiene.

Vessel inspections are carried out and

training given as necessary. For newbuildings,

Garrets offers assistance with galley design

and initial storing services.

Gaining access to vessels, especially

tankers, has become more challenging, mainly

due to the introduction of the ISPS Code.

“This is one of the reasons we favour local

suppliers,” Brown said. “They know the port

agents, how the local ‘system’ works and any

possible issues with a particular berth.”

“With virtually all deliveries for tankers

being done by barge, we insist that our order

must go out on the same vessel that owners

have arranged for their own orders. This saves

time and money as owners only have to pay

for one barge and the crew only has to deal

with one delivery,” Brown explained. “Local

expertise and flexibility is vital for this.”

Garrets policy is one of steady and

sustainable growth and having systems and

people in place ready for fleet growth. The

company is currently managing 672 vessels

and, according to Brown, is looking to expand

further. The Far East is a growing market, but

the company has customers worldwide.

Brown then gave an example of a major

tanker company that switched its supply

source. He claimed that this particular

company was not happy with the level of

service previously experienced. Garrets agreed

a schedule for the takeover, which enabled the

supplier to settle in one group before the next

one arrived. The masters were used to

working with catering concerns, so were used

to the culture.

The primary change was how the communi-

cations were handled with both the shore-

based operations and the shipboard

management. By working with both, Garrets

managed to quickly introduce its system,

understand the needs of each individual

vessel, which in turn allowed the feeding rate

to be brought under control with minimal

disruption on board.

By linking up the deliveries, the customer

estimated that Garrets had saved the company

between $8,000-$12,000 per vessel per year,

compared with the previous provider. For a

fleet of more than 20 vessels, this added up to

a reasonable amount of money, Brown

reasoned. TO

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Essentially, the company has set

itself up as a commercial

shipmanager looking after small

chemical and products tanker. It was

formed by Donso-based Furetank and Alvstank,

following the cessation of their chartering

agreements with Broström Tankers, once it was

sold to the AP Moller-Maersk group.

Last November, Holbaek-based Milestone

Marine announced that it had won contracts to

commercially manage eight 17,000 dwt to

22,000 dwt oil/chemical tankers on behalf of

Bremen-based Rigel Schiffahrts. Six of the

vessels are operating in CPP trades, while the

other two are involved in the DPP cargo sector.

In January of this year, Furetank took over

the technical management of the IMO II type

14,000 dwt �orthern Ocean, handing over the

commercial management of the vessel to

Milestone Marine. The vessel’s owner is

Donso Bunker.

Similar to three other vessels in the fleet, the

�orthern Ocean flies the Faroese flag, which is

administered by the Danish Maritime Authority,

having switched from NIS. The other three

Furetank vessels fly the Swedish flag.

As well as commercial management, the

company now offers competitive brokerage,

vetting and operational consultancy to the oil

and chemical industry.

Milestone’s vetting department offers full

support on operational matters, such as TMSA,

KPIs and incident investigation. Close contact is

kept with the oil companies’ vetting departments,

national authorities and international

organisations to enable the team to keep the

customers up to speed with new rules, national

and international requirements and standards,

plus any edicts from the oil companies.

The company team ranges from master

mariners to naval architects and most have

long experience in the tanker industry under

managing director Soren Weinreich.

Weinreich told TA�KEROperator; “ For the

future, we hope that we will be able to attract

more tonnage, similar to the tonnage we

already have now.”

He also said that he had not ruled out the

possibility of developing some kind of pool

arrangement that could involve both present

and new clients.

Milestone mainly trades on the spot and

COA markets today, but in addition, has

concluded longterm timecharters.

“We are always open for new ventures

suitable for our exclusive tonnage”, Weinreich

said. “We are 'in the market' for additional

staff and hope to take on a couple of more

people in our chartering and operation

department during spring 2010.”

He agreed that the oil and chemical market

have been very poor for quite some time now

and therefore it was very difficult to predict

how many players will remain solid in the

years to come.

Weinreich concluded that he had a firm

belief that as long as his clients maintained the

high quality of their tonnage, there will be a

home for Milestone Marine in this sector.


INDUSTRY PROFILE – MILESTONE MARINE

�ew commercialmanagement concern

Danish newcomer Milestone Maritime has been gradually adding to

its vessel portfolio since opening its doors for business on 1st June 2009.

‘Tanker Vetting’ by Tim Knowles*In this long needed small book**,Tim Knowles with his manyyears of experience of tankervetting for an oil major, providesa concise understanding of theissues involved.

In doing so, he dispels a number of myths,

long harboured by many shipowners,

operators, their staffs and many of those on

the commercial side of the business.

The author explains that vetting is a risk

assessment process with the objective to

evaluate the exposure of the charterer to the

risk of an incident or poor performance when

using a third party tanker.

This book provides, to what after all is a

very dry subject, an interesting, concise and

easily digestible clarification of the vetting

process. It is livened-up by insertion

throughout the text of ‘notes from the author’

providing personal observations based upon

Tim Knowles’s long and valuable experience.

He clearly demonstrates that the freight

rate/price is not the sole arbitrator when

chartering a tanker, that vettings are generally

performed by charterers for each and every

service a vessel will perform (some carry out

90,000 or more per year!), that vetting is not

the result of a third party inspection of the

vessel and to receive a written statement that

the vessel is approved is rare these days.

Knowles clearly defines the reasons that

tankers are vetted, the components of

vetting, details of the processes generally

adopted and the impact of vetting on the

chartering business.

He mentions that vetting is now being

practiced in other sectors of the maritime

business, primarily drybulk, but also container.

He also looked to the future, speculating that

with use of computers and common data

feeds, vetting will remain but become less

complicated with less ship inspections as the

focus moves to the operator’s management

system and results from TMSA.

He pointed out the importance and

prominence that TMSA results are now

being given by many charterers within their

vetting process and the need for operators to

ensure that any changes in their TMSA

profile are communicated to customers and

recorded in the OCIMF database.

In all, a very helpful reference book for all

those involved in the business of owning,

operating or commercially involved with

tankers, or any other type of vessel.

Perhaps a few minutes spent browsing

through these details provided by Tim

Knowles will not only avoid a lengthy and

acrimonious communication with the

charterer’s vetting department but expedite

the fixture of the vessel. �*Reviewed by Captain Chris Allport, F�I,Gout-Rossignol, 31st January 2010. **Published by Witherby SeamanshipInternational, January 2010, ISB�: 978 1905331 93 2, price £25.

BOOK REVIEW - A Critique

TO

p2-24:p2-7.qxd 26/02/2010 10:04 Page 8

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This is well illustrated by the

situation with the ongoing saga of

Aker Philadelphia Shipyard

(AKPS) and its 12 Jones Act

product tanker series for American Shipping

Co (AMSC) and Overseas Shipholding Group

(OSG). In addition, Crowley bailed out

bankrupt US Shipping Partners series of

product tankers building at NASSCO (see

page 12).

On 11th December, AKPS delivered the

eighth in the series of 12 product tankers to

AMSC and OSG and entered into convoluted

agreements with OSG, AMSC, Aker ASA and

various other related parties.

As part of the agreement, AMSC sold its

rights to buy two tankers in the 12-vessel

newbuilding programme to OSG in order to

resolve AMSC’s ability to finance these

vessels. AKPS further resolved to pay

liquidated damages in the event of late

delivery of these vessels under the terms and

conditions agreed under the new agreement.

Also, the exclusivity originally agreed

between AKPS and OSG and between

AKPS and AMSC for the tanker

construction programme was eliminated,

allowing Aker to pursue other opportunities

for the vessels.

AKPS and AMSC also agreed to cancel

the options beyond Hull No 20. The latter

still maintained the four options for Hulls

Nos 17-20.

Fixed costsAs part of the settlement agreement, fixed

costs were negotiated on the remaining tankers

and AMSC agreed to pay about $2.6 mill in

credit enhancements to the construction

financing – ultimately to Caterpillar Financial

Services Corp and to Aker ASA and assigned

its rights of about $3 mill in deposits for long

lead equipment to AKPS.

Due to the revised pricing structure, total

revenues on the existing shipbuilding

contracts with AMSC were reduced by

$9.7 mill.

Aker said that in accordance with EU IFRS

standards, the shipyard is now recognising

that the last nine tankers of the 12 tanker order

as one single project, thus revenue and

expense are taken on a single project basis. As

of 31st December last year, Aker said that the

project was around 74% complete.

This negatively affected Aker’s 2009 results

and at the end of the year, the shipbuilder had

four tankers still under construction. This year,

Aker forecast that revenues would be

generated from additional work completed on

the remaining four tankers being built for


INDUSTRY - US REPORT

This year’s CMA event is taking place at a time when US tanker companies, especially

those involved in the Jones Act operations, were suffering perhaps a bit more than most.

Jones Act tankerscause massive

headaches

p2-24:p2-7.qxd 26/02/2010 10:05 Page 10



AMSC and OSG. The company said that if

full capacity is maintained, targeted an

EBITDA margin of 6% or better, over the

project, which is scheduled to be completed in

the first quarter of next year.

The company said that this year’s key

focus was to secure new orders to increase its

work backlog. The start of production for the

first unsecured tanker (Hull No 17) is

scheduled for the Spring of this year.

However, this depended on securing a firm

order and/or the financing.

Despite no firm orders in place, AKPS had

already made prior purchase agreements for

equipment for Hull Nos 17-20. Aker said

that if Hull No 17 was not built, the

company would incur expenses in excess of

$15 mill. It admitted that if there was a long

delay in starting to build another series

following the delivery of the 12 product

tankers, the company would be hard pressed

to continue operating.

In addition, as multiple vessels were in

production at any one time, lack of continued

firm backlog would cause operational

inefficiencies for completion of the

remaining vessels in the current 12-tanker

series, Aker said. The company said it would

continue to pursue orders in the Jones Act

containership, product and shuttle tanker

markets. Offshore wind turbine support was

another area being evaluated.

No change to Jones ActAker also said that market experts believed

that significant changes to the Jones Act were

unlikely. The company said that in evaluating

future risks on its ability to construct the

vessels, it was found that its ability to meet

anticipated learning curves and throughput,

as well as the availability of skilled workers

and the ability of maintaining stable suppliers

network and sub-contractors, was a cause

for concern.

For its part, AMSC explained that under the

agreement, it will assign the two shuttle tanker

shipbuilding contracts to OSG. The first of

these was delivered in December last year,

while the second was scheduled to be

delivered in the fourth quarter of 2010.

Therefore, AMSC’s fleet will consist of 10

product tankers all of which will be under

long term bareboat charter to OSG. Under the

agreement, these charters will be extended to

December 2019, upon satisfying certain

conditions, including the timely delivery of

the remaining vessels and the satisfactory

refinancing, or extension of AMSC’s vessel

debt and bond obligations.

At the end of 2009, AMSC’s seven vessels

operated by OSG were chartered to Shell, BP

and Tesoro. The remaining three vessels were

expected to be delivered in the second and

third quarters of 2010 and the first quarter

of 2011.

As a result of the settlement agreement, the

company said that it had improved its liquidity

and was now in a better position to service its

debt obligations of its senior lenders. In

addition, AMSC said that it had stable long

term bareboat charters, that pending the

satisfaction of certain conditions, would all

become 10 year charters.

Any profit sharing would be in addition to

the bareboat rate paid and would depend on

charter rates negotiated by OSG and the

company’s ability to operate the vessels’

cost-effectively.

AMSC said the short term did not bode well

for any profit sharing, but the longer term was

more positive. TO

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p2-24:p2-7.qxd 26/02/2010 10:05 Page 11

This agreement allowed investment

concern - Blackstone Group - to

severe its links with troubled US

Shipping Partners and to form a

new company – American Petroleum Tankers

(APT).

In effect, the new company became

responsible for five MR tankers, three of

which are in operation and the other two due

to be delivered from shipbuilder NASSCO in

San Diego this year. Originally, they were to

be owned by a joint venture controlled

primarily by affiliates of The Blackstone

Group and US Shipping Partners. The latter

had filed for bankruptcy protection under

Chapter 11 earlier last year.

Subsequently on 17th July 7, 2009, the

Bankruptcy Court approved a Settlement

Agreement under which US Shipping Partners

agreed to release its ownership interest and

management role within the company. As a

result, Blackstone continued the operation

under name of American Petroleum Tankers.

Crowley Maritime Corporation was then

appointed as the construction manager for the

three tankers being built at the time and the

technical manager for all five vessels. In

addition, DVB Bank SE’s Product Tanker

Group arranged debt financing to the tune of

$250 mill.

APT’s current fleet includes the GoldenState, which was delivered in January 2009

and is on long-term charter to BP, the PelicanState, which was delivered in June and is on

long-term charter to Marathon, plus the

recently delivered Sunshine State, chartered to

Chevron USA.

Still to come are the Empire State, and the

Evergreen State, which upon delivery, are due

to be chartered to the US Military Sealift

Command.

The Sunshine State was the first vessel

Crowley took delivery of since the company

was contracted by APT to handle the shipyard

construction management and the overall

vessel management, crewing and operations of

the company's growing fleet.

In addition to the five 49,000 dwt MRs,

Crowley has two 1981-built 42,300 dwt US

flag product tankers – Blue Ridge and CoastalRidge – on its books.

All the vessels operate within the Jones Act

in US coastal waters. The fleet also includes a

series of articulated tug/barges (ATBs), plus

another three newbuildings, which when

delivered in 2012-2013, will be the world’s

largest ATBs.



The Sunshine

State was thethird MR out offive delivered byNASSCO andtaken over byCrowley. She waschartered toChevron USA.

Crowley extendstanker portfolio

Last July, a settlement agreement approved by the US Bankruptcy Court Judge

in �ew York paved the way for Crowley Maritime Corporation to pick up

the management of five US flag newbuilding product tankers.

p2-24:p2-7.qxd 26/02/2010 10:05 Page 12



Crowley’s tanker fleet comes under the

banner of subsidiary Crowley Petroleum

Transport and is managed by Intrepid Ship

Management, based at Jacksonville (Fla).

Escort dutiesThe Crowley group is also famous for the

supply of tugs and barges, many of which are

used for escort duties on the US west coast,

including Alaska. For example, in Valdez,

Crowley has a contract with Alyeska Pipeline

Service company's ship escort/response vessel

system (SERVS). SERVS is claimed to be the

largest oil spill prevention and response

organisation in the world.

Through this commercial partnership,

Crowley provides tug escorts for tankers

traveling through the Prince William Sound

to and from the Valdez Marine Terminal,

sometimes under the most extreme weather

conditions. Secure docking and undocking

operations are also provided at the oil

loading terminals.

The main tugs located in Alaska are the

Alert class and Prince William Sound class

tugs. These vessels, which Crowley claimed

feature the best available technology, were

specifically designed for tanker escorts and

assist work in the region and have

firefighting, emergency and, oil spill

response capabilities.

The three Alert class tugs have Azimuthing

drive propulsion units developing 10,192 hp,

while the other two large tugs are fitted with

Voith Schneider propulsion units developing

the same horsepower. In addition, there are a

series of twin screw tugs available of up

to 7,200 hp.

As well as operations in Alaska, Crowley’s

escort and harbour tugs cover the Cook Inlet,

the Puget Sound ports of Seattle and Tacoma

plus others, San Francisco Bay, Los

Angeles/Long Beach and San Diego.

Last month, Crowley signed a contract with

Bollinger Shipyards to build two newly

The 1981-built product tanker Blue Ridge seen in San Francisco Bay.

p2-24:p2-7.qxd 26/02/2010 10:05 Page 13



designed ocean going tugs, with options for

additional vessels.

These 10,880-hp tugs mark the beginning of

Crowley’s newbuild programme to further

enhance its ocean towing, salvage and

offshore support capabilities.

Crowley said that the new tugs will be

ideally suited to work with the company’s new

455 series heavy lift deck barges.

Additionally, the tugs will be outfitted for, and

capable of, rig moves, platform and FPSO unit

tows, emergency response and firefighting.

Crowley subsidiary, Jensen Maritime

Consultants played a key role assisting

Crowley veteran Ed Schlueter and a cross

functional team in the design of this new class

of vessel. The new tugs will be designated the

Ocean class, with the first two named OceanWave and Ocean Wind. They will be

constructed at Bollinger Marine Fabricators in

Amelia, Louisiana, with deliveries scheduled

for the third quarter of 2011 and the first

quarter of 2012 respectively.

They are designed to have a minimum

bollard pull of 150 tonnes, and their range will

be about 12,600 miles at 15 knots free running

speed. The tugs' features are designed with

personnel safety as a priority. The waterfall

style winch, shark jaws and retractable pins

can all be controlled from the wheelhouse,

keeping the deck clear of personnel and

creating a safer working environment.

Tom Crowley Jr, Crowley chairman,

president and CEO said. "Crowley has always

been an industry leader in tug design,

technology and performance, and these new

vessels are a reflection of our continued

commitment to that. Moreover, they will

provide our crews with ergonomic

accommodations and comforts needed to

minimise fatigue and injuries."

These next generation towing vessels are

to be fitted with twin-screw, controllable-

pitch propellers in nozzles and high lift

rudders for a combination of performance

and fuel economy. The Caterpillar supplied

main engines and generators are all EPA

Tier II compliant, with the ability to be

upgraded for future environmental standards,

for cleaner emissions and a lower

environmental impact.

During construction the vessel will be

documented and receive a Green Passport

Certification. Further environmental

protection is provided by the tugs' double-

hulls, which are designed to prevent any

overboard discharges of fuel or fluids. All

tanks containing liquids are inboard of the

side shell.

The tugs will meet all SOLAS and ABS

criteria, and including ABS Fi-Fi 1

firefighting standards. Additionally, the

Ocean class vessels will have the capability to

support salvage and rescue towing

opportunities, as well as the US Navy's

SUPSALV contract.

Bollinger Shipyards owns and operates 12

shipyards located between New Orleans and

Houston with direct access to the Gulf of

Mexico, Mississippi River and Intracoastal

Waterway. The company also claims to be the

largest vessel repair/conversion company in

the Gulf of Mexico region with a total of

32 drydocks in Louisiana and Texas.

Titan acquiredAnother one of Crowley’s strings to its bow

concerns salvage and oil spill response. This

side of the business came into being in 2005

when Crowley acquired salvage concern Titan

Maritime, which today operates worldwide as

Titan Salvage.

Since then the company has joined the

Marine Alliance Response (MRA), set up to

offer owners and operators emergency oil

spill response around the US coasts under

OPA 90 compliant new US Coast Guard

regulations 24/7.

MRA is a consortium of emergency towing,

lightering, salvage and marine firefighting

companies. The limited liability company is

comprised of Crowley, Marine Pollution

Control, Titan Salvage and Marine Hazard

Response - a joint venture of Wild Well Control

and Williams Fire and Hazard Control.

Changes in the response to federal

regulations and similar developments in the

States have prompted MRA to expand and

strengthen its capabilities. Today for a small

fee, MRA customers have access to high

horsepower tugs, lightering barges, portable

pumping equipment, marine fenders, salvage

gear and expertise, firefighting equipment and

trained firefighters to meet federal and state

requirements, the company said.

Singapore salvage baseLast year, Titan Salvage opened a new

salvage response facility in western

Singapore. It is a 45,000 sq ft, self-contained

facility, which now serves as Titan's

corporate office in the region.

The complex features a fully equipped

workshop to service and repair Titan's

extensive inventory of salvage equipment,

a dedicated diving equipment workshop

and specialised storage and equipment

handling space.

It was set up to expedite emergency

response in the region in support of Titan's

continued international operations and to

consolidate the salvage company’s operations

in the Southeast Asia.

As a result, Titan increased its personnel

significantly through the redeployment of

existing workers and the employment of

Singapore nationals.

Another boost to the salvage arm occurred

last year when Titan’s Todd Busch was elected

International Salvage Union (ISU) president.

Busch is also senior vice president and general

manager of parent Crowley.

Crowley’s new Ocean class tugs are under construction at Bollinger.

TO

p2-24:p2-7.qxd 26/02/2010 10:05 Page 14

INDUSTRY - SINGAPORE REPORT


From humble beginnings, the bi-

ennial show has grown from 241

exhibiting companies in 2004 to

841 in 2008, the last time this event

was held. The number of visitors also grew

from 3,505 in 2004 to 7,058 registered two

years ago with 8,000 plus expected this year,

according to the organisers.

The expo should defy the general downturn

as more than 900 companies from 52

countries have confirmed their participation in

the exhibition. Also this year there will be at

least 12 national pavilions, including those

from China, France, Germany, Japan, the

Netherlands, Norway, Romania, Singapore,

South Korea and the UK, backed by their

respective national organisations.

A total of 10 conferences and seminars

covering ship financing (including Islamic

financing), maritime law, marine propulsion &

auxiliary machinery, marine electronics &

communications, tanker shipping & trade, green

shipping and the business outlook in the

respective Asian markets, will be featured. These

have been designed around the theme ‘Shipping

in Asia Today, Preparing for the Future’.

The bi-ennial international maritime

exhibition and conference is being supported

by some 27 industry organisations from 12

countries, including six from Singapore.

Kicking off the conferences on 24th March

will be a keynote session featuring main speaker

Hennie van Schoor, Maersk Line's director of

business performance for Asia Pacific. Joining

van Schoor is a panel of high-level shipping

executives, which include Dr Volkmar

Wasmansdorff, executive vice president of

Germanischer Lloyd (GL), Bill Smart, managing

director of Bengal Tiger Line and Divay Goel,

director and head of Asia operations, Drewry

Maritime Services (Asia). The session will be

moderated by David Hughes, a specialist marine

writer based in the UK.

Green shipAPM, in partnership with the Danish Marine

Group, will also be presenting the ‘Green Ship

of the Future’ seminar (see TA�KEROperator,

January/February, page 17), to share the vision

for green shipping going forward, including

discussions on business and technological

issues and case studies.

Kurt Feldtfos, senior sector manager of the

Danish Marine Group, which is presenting the

seminar, said: “The Danish maritime industry has

always been proactive in its role in ecological

responsibility and it is with this direction and

mission in mind that we come together to put

forward the need for the global maritime players

to embrace the Green Ship programme.

“We are confident that this approach will

eventually be the key solution for companies

to tap on new business projects that involve

green shipping and the sustainable sector is

just making its mark in Asia. For the first time

we are presenting at Asia Pacific Maritime

and this is exactly the right platform we need

to educate the industry professionals of the

impending trends to come,” he concluded.

Said Thomas Yong, customer relations

manager - SE Asia & Taiwan, Aalborg

Industries: "As market leading manufacturer of

highly efficient and environmentally friendly

equipment for the maritime market, the Aalborg

Industries Group develops new green solutions

to support our customers in building and

operating their commercial fleet to the highest

standard for low environmental impact."

The conferences and seminars include: -

� Ship Financing conference: Navigating

uncertainties”, 24th-25th March.

� Asian Maritime Law conference – recent

developments in Asian maritime law and

issues in international disputes, 26th March.

� Spotlight on Asia Series- on the current

shipbuilding trends and capabilities in

China, Japan and India, 24th, 25th and 26th

March respectively.

� Green Ship of the Future seminar on 25th

March.

The Spotlight on Asia series will be rolling

out distinguished speakers from the three

featured countries - China, India and Japan.

From India will be five speakers including

Lakshmi Venkatachalam, director general, DG

Shipping, who will cover ‘Shipping -

Challenges in Painting Global Economic

Landscape’, and Karan Madhok, CEO, The

Institute Of Marine Engineers (India), who

will talk about the ‘Indian Shipbuilding

Industry- Perspective in the Global Market’.

China dayOther key highlights at APM 2010 include

’China Day’ – a special feature on China’s

maritime industry. Besides featuring a China

Pavilion that comprises key equipment

manufacturers, shipyard and technology

providers, a visiting delegation headed by the

government and commercial organisations, is

planned. Visitors can look forward to an array of

free seminars, networking cocktails and

exchange sessions with the Chinese delegation.

*The latest issue of TA�KEROperatorMagazine will be available at the show.

Asia/Pacific showcasesits expertise

The forthcoming 11th Asia Pacific Maritime (APM), organised by Reed Exhibitions,

will be held between 24th and 26th March at the Singapore Expo centre.

The organisers of APM hope for a good turnout.

TO

p2-24:p2-7.qxd 26/02/2010 10:05 Page 15

Lying strategically between the

MEG/Suez and the Far East,

deviation time is little, or none at

all. The vast anchorages and a

leading international airport lend themselves

to all manner of ship supplies, crew changes,

bunker supplies and afloat repairs, plus other

services.

In addition, companies such as Sembcorp

and Keppel have built up considerable

expertise in repair and conversions, as well as

offshore construction.

For example, in February Sembcorp

Marine’s subsidiary Sembawang Shipyard

secured major longevity, upgrading and

damage repair contracts worth Sing$130 mill,

reinforcing its reputation as a world-leading

shiprepair yard, the company said.

These include the following contracts:

The first was a longevity project awarded

by North West Shelf LNG Venture, one of the

shipyard’s Favoured Customer Contract (FCC)

clients, for the life extension of its LNGC,

�orthwest Snipe. The six partners in the North West Shelf

Venture gas interests are BHP Billiton

Petroleum (North West Shelf), BP

Developments Australia, Chevron Australia,

Japan Australia LNG (MM), Shell

Development (Australia) and Woodside Energy.

�orthwest Snipe is scheduled to arrive in the

shipyard in September 2010 to undergo

sophisticated life extension work, which includes

ballast tanks blasting and coating work, hull

structural enhancement, integrated automation

system renewal, HVAC and refrigeration system

renewal, cargo and ballast valve actuator system

replacement and boiler system renewal.

This will be Sembawang Shipyard’s second

longevity contract undertaken for the North

West Shelf LNG Project following the

successful completion of the life extension

work on �orthwest Sanderling in August 2009.

Sembawang Shipyard’s has been

particularly successful is winning specialised

LNGC life extension work.

The second contract was awarded by

Sembawang Shipyard’s regular customer from

Taiwan. This was for the repair of major fire

damage to a 2005-built product tanker.

With a contract value estimated in the region

of Sing$35 mill, the scope of work includes

major steelwork renewal, complete renewal of

the entire accommodation block, major

electrical and instrumentation work in the

engine room, mechanical work and pipework.

Work on this product tanker recently started.

Besides the above, other major contracts

secured recently by Sembawang Shipyard

included the refit and upgrade of two drillships.

Long term businessSembawang also announced the renewal of its

long-term contract with the Eitzen Group.

Signed on 28th January 2010 in Singapore,

this long-term contract was the reaffirmation

of the close relationship enjoyed between the

two companies, Sembawang said

The Eitzen Group controls some 100 ships

trading worldwide and under this contract, the

company will continue to send some six to

eight ships to the yard annually for scheduled

and upgrading repairs.

However, the shipyard said that the above

contracts were not expected to have any

material impact on the consolidated net

tangible assets per share and earnings per

share of Sembcorp Marine for the year ending

31st December, 2010.

Sembawang Shipyard is a wholly-owned

subsidiary of Sembcorp Marine and has one of

the largest integrated shiprepair facilities in

Southeast Asia. The shipyard's reputation is

based on the company's commitment to high

HQSE standards, timely delivery, superior

customer service and innovative solutions, the

company said.

Besides its expertise in the tankers, bulk

carriers and container/cargo vessel sectors, the

shipyard is also a specialist in niche markets,

such as LNGCs, passenger ship

conversions/upgrades, FPSO conversions,

offshore conversions and newbuildings,

damage repairs, as well as chemical tanker,

LPG carriers and naval vessels.

Rival Keppel also has a number of VLCC

dimensioned drydocks and is involved in

FPSO, FSO and other conversion projects. It

has built up expertise in the area of rig

building and is constructing an FSO for

Lukoil for use in the Caspian Sea.

Drydocks WorldThere are several other repair and shipbuilding

concerns on the island republic, including

Drydocks World-Southeast Asia, part of the

huge shiprepair/shipbuilding Dubai-based

combine.

Marine activities are focused on four

shipyards in Singapore and Indonesia, namely,

Drydocks World – Graha, Nanindah, Pertama

and Singapore, which between them offer 29

building berths, eight floating docks, and a

specialised rig building yard.

Plans are also in place to expand operations

further on Batam Island with the construction

of a new yard PT Batam Maritime Centre.

Drydocks World – Southeast Asia was

established in April 2008 as a result of the

purchase of Labroy Marine and Pan United

Marine shipyards and is a member of the

Dubai World group of companies.

Furthermore, the integrated shipyards are

supported by the group’s own ship chandlery

service available 24/7.

Following the problems associated with

Dubai World, the group said that Drydocks

World and its subsidiaries were not included in

the proposed restructuring process for Dubai

World and its real estate related subsidiaries.

In a statement issued last November, the

group said that it had been in constructive

dialogue with its lenders for several months

and its financial profile did not require it to be

included in the more wide-ranging

restructuring process envisaged.

Drydocks World had reacted promptly to

the challenges of the global economic

slowdown, which have impacted the shipping

sector globally. The company has

implemented extensive operational

improvements over the past year.

The group continued to have sufficient

financial capacity to service its debt and

remained well positioned to take advantage of

the expected improvements in the shipbuilding

and offshore industries in the coming years,

the statement concluded.



Singapore – a majorshiprepair hub

For many years, Singapore

has been a major hub for

shiprepair and conversions.

TO

p2-24:p2-7.qxd 26/02/2010 10:05 Page 16

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p2-24:p2-7.qxd 26/02/2010 10:05 Page 17

Leading Canadian-basednavigation equipmentmanufacturer and supplier Ruttersaid that its interest inSingapore stems from theexcellent match that its radarproducts have with the changingneeds of tanker operators. At APM, Rutter will be showcasing its

products. The Sigma S6 small target

detection radar is excellent for anti-piracy, as

it can see, alarm on and track small fast

moving targets that conventional radars miss,

the company said.

The company is also demonstrating its new

oil spill detection radar, which Rutter

believes is very timely considering the

emphasis now being placed on environmental

protection.

Rutter’s Paul Snow explained that the

bottom line with this product, again because

of the depth in specialised radar products, is

that it can detect the oil more reliably, in all

weather and across a wider range of sea

states than other systems that we have

compared with it during trials.

“We can all appreciate that the earlier a

spill is detected the more quickly a response

can be marshalled and the lower the cleanup

costs. As US regulations are now attaching

the responsibility for the cleanup of the oil to

the owner of the oil we can expect this to be

a market driver for this product,” Snow said.

As for the attraction of Singapore, Snow

said that for Rutter, it is the fact that

Singapore is centrally located in Southeast

Asian region. So from a service and supply

perspective, it is a convenient place for

vessels to stop and either service, or install

their bridge equipment.

“This central location also makes

Singapore a logical distribution centre for the

entire region. We do business in Vietnam,

Malaysia, Indonesia and the Phillipines, so

we very much value our supply chain

partners in Singapore to help us with that

business,” Snow explained.

Rutter is also a pioneer in ice navigation

radar and with the build up of traffic forecast

in the Barents Sea, Baltic and Russian Far

East, the company is actively marketing its

products to owners/operator with ice class

vessels.

Snow said that the Arctic regions were fragile

environmentally sensitive areas and for that

reason technologies were needed that enable

icebergs to be seen and avoided, plus multi-year

ice that can be the consistency of cement.

“A bergy bit or growler can be 60 times as

difficult to see than a conventional target of

similar size. So yes we believe that an ice

navigation radar is necessary and a

responsible piece of equipment to have.

Those who use our Ice Navigation radar find

that it provides them with higher definition

images that also help them optimise routes

and reduce fuel costs when travelling in

heavy ice,” Snow said.

Rutter is also involved in the supply of

VDRs. However, the VDR retrofit business is

coming to an end in July 2010. Snow said

that the company had achieved its market

penetration goals and had an installation base

that will keep Rutter in the VDR business for

a very long time. “Our business plan sees a

demand for taking that VDR data collected

and using it to assess and optimise vessel

performance,” he said.

He also said that tanker operators would

always be a significant customer for Rutter.

“Our products are industry leading and we

see the tanker industry as early adopters of

technology. So it is an excellent fit for us,”

he concluded. �

An equipment manufacturer’s take on Singapore



Singapore’s APM has been chosenas the venue for the launch of anew company -PartfinderMarine™.PartfinderMarine™ is a new on-line trading

platform connecting buyers of marine parts,

equipment and services with relevant vendors.

The company is managed by James Phillips

who has over 20 years experience of developing

and overseeing on-line trading platforms.

Phillips said, “Over the years I have

learned which features clients really need in

an on-line trading platform and these are

built into the DNA of PartfinderMarine™ to

ensure that it becomes the marine trading

platform of the future”.

A recent survey conducted by the company

showed that users of an on-line marine trading

platform wanted:

� Quality - a quality supplier network for

Europe and beyond.

� Security – a site used exclusively by

professional buyers and sellers who have

been financially vetted and approved when

first joining.

� Confidence – sellers rated by previous

buyers in addition to reviewing feedback

on their transactions

� Easy Access - a fast-loading site for easy

access, anywhere in the world.

� Speed – a simple, clutter-free trading

interface allowing fast posting of parts and

services using text and digital images.

� Convenience - an intelligent ‘smart’ search

engine with relevance ranked results.

� Records - easy-reference transaction

history of sales and purchases.

Phillips claimed that PartfinderMarine™ is

designed to deliver these market demands and

thus will quickly become the leading player in

the maritime marketplace for on line parts and

services trading.

A full explanation will be available at the

PartfinderMarine™ breakfast launch events

each morning (24th – 26th March 2010

inclusive) at 08.30 am in the Van Kleef Suite

at the Park Hotel Clark Quay, Singapore

during APM. �

New company launch at APM

“As US regulations are now attaching the

responsibility for the cleanup of the oil to

the owner of the oil we can expect this

to be a market driver for this product,”

“

”

p2-24:p2-7.qxd 26/02/2010 10:05 Page 18

HEMPADUR 15500– Ultimate protection with widest possible resistance

“This product has more than fifteen years track record with excellent global performance and is rated the best phenolic epoxy tank coating in the market today. In Korea we have coated the tanks of more than 100 vessels with HEMPADUR 15500 without a single claim.’’

Michael Aamodt, Group Marine Product Manager

For more information please visit: www.hempel.dk

p2-24:p2-7.qxd 26/02/2010 10:05 Page 19

InterManagerwelcomes new

secretary generalThis year should be a something of a watershed for InterManager,

the international shipmanagement association.


INDUSTRY - SHIPMANAGEMENT

First - the association will welcome

a new secretary general – Captain

Kuba Szymanski - to replace the

retiring Guy Morel and, second -

several workshops are planned in relation to

its huge KPI project, which should be nearing

fruition by the end of the year, ready for

launching in 2011.

TA�KEROperator talked with Szymanski

about the task ahead and how he sees the

future in navigating the association through

various obstacles.

He explained that his main aims will be to

further unite the shipmanagement industry.

“By being united, we can achieve even more.

I plan to start by organising more regional

meetings, conferences and seminars,

particularly in the Far East.

“I also want to further improve the image of

shipmanagers in the eyes of the general public

and to make our industry more appealing to

the young generation. This work goes hand in

hand with InterManager’s efforts to promote

the positive image of shipmanagers among

shipowners and I will continue this,” he said.

He also said that he would continue the

good work Guy Morel achieved over the past

few years, particularly with the KPI project,

and will aim to build on his successes by

increasing the links InterManager has with

other organisations like BIMCO, Intercargo,

Intertanko, the ITF, OCIMF and for example,

Szymanski will also continue to represent

Intermanager at the IMO and EU.

On a domestic level, he said that he planned

to listen and respond to members’ views and

one of the first internal projects would be to

re-invigorate the InterManager members’

website.

Difficult issuesFor the longer term he said that he wanted to

tackle the difficult issues like the

criminalisation of seafarers and to start a new

project to follow on from the KPIs.

“Of course InterManager is also looking to

expand, but any such expansion will be based

on quality not merely quantity,” he stressed.

Turning to the comprehensive KPI project,

he said that this was very much on track. For

this year, several stakeholder meetings have

been planned, the first taking place this month

(March) in London. “These meetings create

golden opportunities for the industry to

familiarise itself with the project and, more

importantly, to participate in it and have their

say”, he said. “We are also responding to the

industry’s request to widen the attendance and

will be holding meetings and workshops

outside of Europe to allow greater

participation.”

Information collated from more than 1,000

vessels should be completed well before the

end of this year. Marintek is playing a very

important role, but it is the KPI committee,

led by George Hoyt, who is pioneering this

initiative, Szymanski said.

InterManager plans to work more closely

with other organisations and has already

scheduled a series of meetings with OCIMF,

ITF, Intertanko, which will immediately

follow Szymanski’s taking on the secretary

general’s role this month. “It makes great

sense to work together. Fellow associates are

already participating in the KPI stakeholders

workshops and play crucial roles in them.

However, I am confident that there is scope

for further co-operation and our ties could be

tighter. We have a lot in common – we all

serve seafarers!” he said.

This year has been declared the ‘Year of the

Seafarer’ by the IMO and Szymanski thought

that InterManager had already strongly

demonstrated its priorities, whether it is a

seafarers’ year or not. He referred to the HebeiSpirit, Full City and, recently, the Cormorantcases, which clearly demonstrate

InterManager’s ability to act quickly and

swiftly to support the seafarers.

“We are also co-operating very closely with

ITF to make sure seafarers’ rights are being

respected,” he emphasised.

Plans for this year include further co-

operation with all associations, “keeping an

eye” on the developments and raising the

profile of the shipping industry – and

therefore the seafarers world – among the

general public, he said.

As for the thorny subject of remuneration,

Szymanski said; “Members are indeed finding

it more challenging nowadays, particularly

when their principals’ revenues suffer. But

there is always a place for a good service

provider and shipmanagers are very

sophisticated providers of extremely complex

services”.

Cadets on the agendaCadet training is another area to be addressed

and Szymanski said that InterManager was

very proud of its initiative. This has led to

Captain Kuba Szymanski

p2-24:p2-7.qxd 26/02/2010 10:05 Page 20

p2-24:p2-7.qxd 26/02/2010 10:05 Page 21

every member agreeing to have a cadet on

board of every vessel and the majority were

seeking to train two cadets on their vessels.

Some members are now seriously

considering ensuring that their newbuilds are

delivered with specially dedicated cadet

spaces, and that can mean up to 10 cabins

being designed into the accommodation.

“This is very important for us and we hope

to start discussions with other associations and

societies regarding newbuildings. Nowadays,

vessels are delivered with very little space for

cadets and we believe that is an unnecessary

limitation. We need to change this,” he

stressed.

InterManager has formed active committees

to monitor problems, such as the

criminalisation of seafarers and piracy and

they are working together to find solutions.

The association is very active at the IMO.

For example at the next IMO session (22nd-

26th March), InterManager will be

represented by four members. “This level of

attendance is necessary in order for us to

participate in different meetings and give our

full attention to relevant issues being

discussed,” Szymanski explained.

“We also make sure that our members are

kept up to date and fully appraised on the new

and prospective legislation through our

membership communications and our website

where members can view relevant IMO

session reports,” he said.

Port State Control is becoming an

increasing relevance in certain areas of the

world. Szymanski said that he recognised this

and was very pleased with the co-operation

between the association and the Paris MOU.

“For example, just last month (February),

InterManager held a regional meeting for its

members and the shipping community in

Monaco where Richard Shiferli, Paris MOU

general secretary, explained the ‘new regime’.

We all welcomed the new structure and the

scoring matrix which will, in fact, benefit

good shipmanagers, ie our members.

“We hope to continue our co-operation and

will definitely organise more regional

meetings to promote awareness of this ‘new

regime’. We strongly believe in the

philosophy of ‘education – not regulation’”,

Szymanski said.

He explained that the role of secretary

general was like that of a skipper, who does

not bring his vessel to port safely without

listening to his navigator and having full back

up of other officers and crew. “I do strongly

believe in team work”, he concluded.



TO

“We strongly believe in the philosophy of

‘education – not regulation’”

Captain Kuba Szymanski, secretary general,Intermanager

“”

p2-24:p2-7.qxd 26/02/2010 10:05 Page 22



customer, we appreciate the opportunity to

receive world-class software licenses on our

newbuilds for a full year at no additional cost,

especially in these trying economic times.

“Of the five newbuildings we recently

ordered, four of them are oil/chemical tankers,

which will be classed with ABS and will

utilise all of the modules included in the

newbuild program – hull inspection,

maintenance and repair and Web-based

drawings. The fifth is a chemical tanker being

built in Japan, which is classed with ClassNK

and this vessel will also be integrated with the

NS5 software modules,” the company

explained.

Humboldt also said that it did not have any

immediate plans to integrate any other NS5

modules, but might incorporate the drydock

and structural maintenance modules in the

future. “We would also like to build an

interface between NS5 and our own shoreside

purchasing application,” Humboldt said.

ABS Nautical Systems explained that its

current fleet of software modules – NS5 – is

an off-the-shelf solution with built in

configurations and is fully integrated allowing

owners and operators the ability to share data

between individual software modules and

external accounting systems.

Separate or complete modulesEach module can be purchased separately, or

as a complete suite. NS5 interface is based

upon the Windows standard, which allows

users to move easily between modules and to

quickly access the information they need

through a centralised and integrated database.

The entire suite or specific modules can be

purchased, reflecting an owner/operator’s

specific needs. The hull inspection,

maintenance and repair modules and the Web-

based drawings management tool offered as

part of the newbuild program are also

available as part of NS5.

Humboldt has installed NS5 modules, such

as maintenance and repair, drydocking,

purchasing and inventory and replication

manager on more than half of its fleet,

including gas carriers, chemical and oil

tankers. Several other vessels were still in the

implementation stage. “We expect this

software to be the standard for maintenance

and material management in all ships under

our management,” a Humboldt spokesperson

said.

The company said that the integration of the

modules would help it track the availability

and reliability of all the vessels’ equipment

and systems, so that better resources could be

ABS �autical Systems, a

provider of integrated fleet

management software,

experienced record growth

in the second half of 2009.

During that period, which began

with the launch of the newbuild

program, ABS Nautical Systems

has expanded its business by

signing 30 new contracts in just 26 weeks and

forecasts even stronger growth in 2010.

“By integrating our ship maintenance

software with the classification and survey

requirements of ABS, we will have the ability

to streamline the owners’ inspection process

and move towards developing a more

standardised, class-approved maintenance

program,” said Karen Hughey, president and

COO of ABS Nautical Systems, speaking at

the end of January. “The tremendous success

of the newbuild program has prompted us to

double our customer support staff and develop

expanded offerings to provide greater value

for our customers.”

One of the first class-integrated, fleet

maintenance solutions, the newbuild program

offers free hull inspection, Web-based

drawings management and maintenance

management software to all ABS-classed

vessels built after 1st January, 2009.

TA�KEROperator spoke with both ABS

Nautical Systems and user Humboldt

Shipmanagement about their experiences with

this software.

”We are currently using the NS5 suite on

our chemical tankers and it has been the

backbone for the maintenance of critical

equipment on our vessels,” said Francisco

Lopez, Humbolt Shipmanagement. “As a

A software suite forall occasions

Learn more about our cargo tank level radar and recent retrofits at www.krohne-skarpenord.com

Need good cargo tank levels?We are upgrading tankers with new equipment - for better performance and easier operation

p2-24:p2-7.qxd 26/02/2010 10:05 Page 23



allocated to ensuring the fleet delivers its

cargo on time and safely. Because of NS5’s

flexibility, Humboldt said that it could

customise the modules to fit the organisation’s

needs. For example, in the maintenance and

repair module, the company has incorporated

its own requirements for cargo, valves, pumps

etc into maintenance check requirements.

Each month, a report is run on the

maintenance and repair module for a list of

items that need attention, including those that

were scheduled in the previous month and any

outstanding issues for each vessel. This report

is circulated to the superintendents and

managers, enabling them to gauge progress.

This module also enables Humboldt to analyse

fleet wide maintenance to detect systematic

problems and identify critical areas where

preventative measures may be taken to reduce

future costs.

In addition, budgeting and cost analysis

tools help the company to develop cost

projections for upcoming maintenance work

and drydocking and to evaluate past

maintenance and equipment costs to forecast

future expenses.

Furthermore, Humboldt said that the

integration of the hull inspection module on

the four newbuildings through the newbuild

program will be a huge advantage during the

vetting process when oil majors look at the

maintenance of critical equipment. “We’ll also

be able to quickly find and access structural

maintenance and management data for co-

ordinating the response to vettings,” the

company said.

ABS Nautical Systems explained that the

integration of NS5 modules could help with

facets of operational management for a vessel

– from keeping track of regulatory

requirements, to managing crew and payroll,

to organising maintenance programmes.

Through the newbuild program, the modules

integrate with classification and survey

requirements, streamlining the inspection

process and providing a more cost efficient

and effective method of monitoring long term

ship maintenance and integrity.

Humboldt installed the modules both on

board the tankers and in the onshore

management office, which manages and

oversees all maintenance work across the fleet

providing the company with synchronised

information across the databases with updated

status’ and real-time data.

Green PassportThe company also thought that the system

would help create a Green Passport in that if a

certificate needed to be updated, a very

detailed record tracking spare parts and

maintenance for each ship would have to

exist. NS5 modules allow the company to

track controlled and critical spares on board

and to keep a more accurate history and an

ongoing inventory of vessel equipment,

systems and maintenance work.

Fernando Lehrer, director, ABS Nautical

Systems’ product development explained:

“The newbuild program will be especially

helpful in tracking inventory for Green

Passport compliance. The three software

modules that are offered through the initiative

are pre-programmed with technical data

specific to the newly built vessel, including

relevant information extracted during the

construction phase. This means that each

newbuild will have a solid database on which

shipowners can start tracking hazards,

consumables and other parts to meet green

passport requirements.

“Furthermore, ABS Nautical Systems is

able to provide our clients with a variety of

modules that enables them to assess their

environmental impact and allow them to

mitigate any issues before they arise. Our

maintenance management modules record the

maintenance work related to a vessel, provides

a standardised method for onshore planning

and tracks the structural condition of a vessel

throughout its service life.

“Our HSQE (Health, Safety, Quality &

Environmental) manager module documents

the audit reports, incident reports, drills and

inspection reports and corrective action

requests. Our additional safety management

modules can dictate how and when vessel

discharges should be handled and track the

shelf life of inventory including hazardous

materials, keeping vessel owners and

operators compliant”, he said.

As for the cost, Joe Woods, vice president,

global sales & marketing said: ”With the

newbuild program, the first year of annual

fees is waived and customers receive up to

seven days of consulting services, including

expenses to cover office and vessel

implementation. After 12 months, owners who

wish to continue using the modules will be

required to pay an annual

maintenance/licensing fee for each module.”

Woods also said that more than 15 tanker

companies were using the modules, including

Chemikalien Seetransport, Phoenix Energy

Navigation, Orkim Shipmanagement, Satsuma

Shipping and American Heavy Lift.

The NS5 suite is currently available to all

vessels regardless of classification society.

Non ABS-classed vessels can also purchase

the three modules offered in the newbuild

program through the NS5 suite. However,

vessels built after 1st January, 2009 that class

with, or transfer to, ABS receive

complimentary software, data entry and

installation.

Lehrer explained: “To build a strong asset

registry and database through the newbuild

program, we have to wait until all of the parts

for the ship are recorded into the system. We

then pre-populate the software with vessel

specific data gathered during the newbuild

phase, which includes ABS class surveys and

certificates, ship models and structural

requirements.”

Finally, Woods said that ABS Nautical

Systems had not examined the retrofit market

thus far, but has already expanded the

newbuild program to include companies that

transfer their vessel classification needs

to ABS.

A screenshot of the software in action.

O

p2-24:p2-7.qxd 26/02/2010 10:05 Page 24


TECHNOLOGY – BALLAST WATER TREATMENT

The committee agreed that no

further postponement would be

granted for the fitting of

equipment - capable of treating

ballast water to the “D-2” biological standard

in the BW Management Convention - to ships

having a ballast capacity of not more than

5,000 cu m, which are to be delivered in 2010.

This decision took into account the supply

and demand side of the marine industry; that

is, the increase in the number of approved

ballast water treatment technologies to

produce enough ballast water treatment units

by 2010 and the expected downturn in new

construction that year.

At MEPC 59, the committee agreed to

instruct the secretariat to prepare a draft

resolution, requesting administrations to

encourage the installation of ballast water

management systems during new ship

construction in accordance with the

application dates contained in the BWM

Convention, to be presented to MEPC 60

(March 2010) for consideration and adoption.

The Ballast Water Convention came closer

to entering into force last December with the

signing of the protocols by Sweden, the

Marshall Islands and South Korea.

This convention requires ratification by 30

states, representing 35% of the world’s

tonnage before it can enter into force. By

December, 21 states representing 22% of

tonnage had ratified the convention.

At the IMO, there is optimism that the final

tranche of signatories needed would come this

year and if this situation occurs, the

convention will enter into force in 2011, some

12 months after the total number of states and

tonnage was reached, according to the

International Parcel Tankers Association

(IPTA) bulletin.

Once the convention enters force, the

effective dates within the convention will

immediately become valid. For example,

vessels constructed in 2010 and 2011 having a

ballast capacity of below 5,000 cu m will have

to be fitted with systems which meet the

convention’s biological efficacy treatment

standards on the day that the convention

enters into force.

Vessels built in 2009 with a ballast water

capacity of below the limit were granted

dispensation, allowing them to trade until their

second special surveys, providing that they are

not later than 31st December, 2011.

By 2012, all new vessels will have to meet

the treatment standards, while existing vessels

must comply by 2014, or 2016, depending on

their ballast capacity. From the entry into

force until the time specified for the fitting of

the treatment systems, vessel will be required

to undertake ballast water exchange.

IPTA explained that there is a rigorous

testing regime that the treatment systems must

undergo though the GESAMP scientific group

and the IMO’s MEPC, before they are granted

approval to be used on board ship.

These tests comprise the Basic Approval,

which is meant to show that the systems do

not harm the environment or seafarers. Once

gaining the Basic Approval, systems have to

undergo shipboard tests to attain the Final

Approval certificate to prove that they work at

sea. The third phase is the issuing of a Test

Certificate by the vessels’ flag states.

According to the latest IMO circular, eight

systems have gained Final Approval and a

further 16 were at the Basic Approval stage.

This was deemed to be sufficient for the

earlier implementation date criteria, according

to the MEPC.

IPTA said that it had become increasingly

clear that a number of issues still have to be

dealt with. These included the handling and

storage of possibly toxic chemicals, the

systems’ maintenance and the potential

increase in vessel fuel consumption that the

systems will cause.

There is also the need to integrate

procedures with the vessels’ on board Safety

Management System (SMS), as failure to do

so could lead to a deficiency under the ISM

Code, the association warned.

The IMO’s MEPC said last July that the number of ballast water treatment technologies

amounted to six Type Approved systems with four additional systems being granted

Final Approval and three granted Basic Approval at the 2009 session.

A wide choice ofdifferent capacities

p25-40:p39-50.qxd 26/02/2010 10:25 Page 1


In addition, there was no guarantee that

these systems would meet any future

requirements. For example, the US is

considering proposed phased legislation,

which would require treatment equipment of

an efficacy standard for some organisms of

around 1,000 times more stringent than the

present convention requirements.

Other regions may also impose stricter

standards and there have been suggestions that

the IMO Convention itself needs

strengthening.

IPTA rightly warns that as usual, the

shipowner will be left with regulations to

follow, but with no clear idea as to how to

carry out the necessary forward planning to

adhere to the new regulations.

TA�KEROperator has highlighted just some

of the equipment available below in strict

alphabetical order.

PureBallast, Alfa Laval’s chemical-free

system for ballast water treatment has been

selected for 79 vessels of varying types,

thus far.

Developed in co-operation with Wallenius

Water, Alfa Laval recently received its first

order for PureBallast 2500, the largest version

of the system.

It will be installed on board the Arctic

drillship Stena DrillMAX ICE.

Featuring a flow rate of 2,500 cu m per

hour, the PureBallast 2500 system will

provide more than double the capacity of any

previous version, the company claimed.

The order came from Samsung Heavy

Industries on behalf of Stena Drilling. The

PureBallast system will be delivered in June

2010 to the Geoje shipyard, where it will be

installed on board the specialist drillship.

Stena decided not to wait to install a

ballast water treatment system until the

regulations are in place, as this would result

in taking the drillship out of service and

placing it into drydock.

As with any retrofit, the cost would include

the equipment, which would need to be added

to the cost of downtime and the drydocking

expense.

“For Alfa Laval, the order of a PureBallast

2500 for the Stena DrillMAX ICE represents

a combination of firsts,” said Peter Carlberg,

general manager of Alfa Laval Marine &

Diesel. “As well as being the first order for

our largest PureBallast system, it represents

our first PureBallast delivery to the Stena

fleet. This makes it yet another positive step

in Alfa Laval’s long-term co-operation with

Stena.”

PureBallast received full Ballast Water Type

Approval from DNV on behalf of Norwegian

authorities on 27th June 2008. It was

originally launched in 2006.

NewcomerOne of the newer challengers in the ballast

water treatment markets is Auramarine.

Turku-based Auramarine is perhaps better

known as a leading manufacturer of heavy

fuel oil supply systems and other auxiliary

units for marine and power station engines.

However recently, the company unveiled the

Auramarine Crystal Ballast, ballast water

treatment system (BWTS).

Thanks to technological innovations

featured in this system, it is claimed to be

energy-efficient, compact and easy to install.

Additionally, Auramarine's solution does not

affect the time required for ballasting or de-

ballasting operations, or increase the duration

of port calls.

The project is currently entering an

intensive type approval testing phase. This is

progressing on schedule, and the first system

type approvals and final products are expected

to reach the market in the second half of 2010.

Up to 2019, the market potential is

estimated to be substantial, as around 50,000

ships will need to be equipped with a BWTS,

the company said.

In the Crystal Ballast project, Auramarine

said that it had four main goals as the

company was determined to provide the best

practical solution for shipowners and yards

around the world. The project also strived for

a comprehensive understanding of ballast

water conditions and flows on board ships,

and aimed at a system that could be adjusted

and fitted for various vessel types and

ballasting operations. Finally, the product had

to be competitive as regards its size, weight,

energy consumption and cost-effectiveness,

both at the time of installation and in

operation.


Drawing of Auramarine’s Crystal Ballast system.

Alfa Laval’s PureBallast installed on aWallenius car carrier.

p25-40:p39-50.qxd 26/02/2010 10:25 Page 2

Think local. Act global.

In the near future, IMO legislation will require ballast

water treatment from vessels worldwide. Alfa Laval’s

PureBallast provides a well-balanced way to meet the

regulations, giving you IMO-compliant results while

taking into account your own demands for space,

economy and ease of use on board.

By choosing Pure Ballast, you choose world-leading

technology in which no chemicals are added or

generated. Besides having full Ballast Water Type

Approval, PureBallast has been selected by more ship

owners and shipyards than any other system. And only

PureBallast has Alfa Laval’s global backing.

PureBallast gives you the best of both worlds.

www.alfalaval.com/pureballast

Hilanders EM

D00155EN

p25-40:p39-50.qxd 26/02/2010 10:25 Page 3

Auramarine's solution is based on utilising UV-C radiation as it

presents indisputable advantages. The technology is already familiar as

it is in use treating drinking water and wastewater.

Managing director Heikki Saaros told TA�KEROperator that the

system was, “not yet type approved. The type testing is going on and

should be finished at the end of this year”. Saaros also said that no

orders had been won thus far as the tests were still ongoing.

As for the system’s capacity, Saaros explained; “There are no

limitations in quantity of the systems we can deliver. The system is

feasible to install ships with ballast water pump capacity up to about

6,000 cu m per hour. Also higher capacities are possible.”

Exiting the marketOn 31st January this year, Hamann announced that it was temporarily

withdrawing its SEDNA BWTS from the market.

The system used a chemical substance – PERACLEAN Ocean –

which was developed by Evonik-Degussa. A Type Approval, which

included some specific conditions, was issued by the German

Hydrographical Institute (BSH).

“The SEDNA system itself is working beautifully. However, recent

findings showed that the degradation of PERACLEAN Ocean requires

further testing,” explained Mathias Schmidt, Hamann’s ballast water

product manager.

Recent scientific publications had also addressed this issue,

contributing to Hamann’s decision to exit the market on a temporary

basis. The existing patents on the SEDNA system will be maintained,

the company said.

On 10th March last year, Dutch ballast water treatment concern

Greenship was acquired by Hamworthy to become part of the UK

company’s water treatment division.

Greenship was set up in the spring of 2001. In June 2005,

Greenship’s ballast water management system was land based tested

and audited by Lloyds Register EMEA.

In November 2005, Greenship announced that Holwerda

Shipmanagement was the first to install Greenship’s full-scale BWMS.

Later, in July 2007 two Chemgas vessels Solano and Thresher were

delivered equipped with a Greenship sediment removal system.

Since 10th January 2006, Greenship’s BWMS has been operating on

board a feeder containership and in June 2008, the shipboard tests were

successfully concluded and certified by LR.

In July 2008, Greenship signed a contract with Schelde Naval

Shipbuilding for the delivery and supply of BWMS on board four

naval patrol vessels for the Royal Dutch Navy. In January 2009,

Greenship received a new order for two Sedinox® BWMS to be

installed on board Chemgas vessels.

Chemgas had already used the sediment reduction system

Sedimentor® for over two years. Reducing sediment in ballast tanks

decreased the vessels’ draft by almost 70 mm. This reduced their fuel

consumption by almost 3%, Chemgas said.

In late 2008, Chemgas asked Greenship to arrange for an upgrade

for these vessels to a Sedinox® BWMS. Deliveries took place during

the first half 2009.

Finally, in July 2009, during MEPC 59, the committee granted Final

Approval to Hamworthy Greenship's treatment system Termanox ®.

Hamworthy’s Sedinox BWMS consists of three major components -

SEDIMENTOR - This sediment removal system removes sediment and

biota during uptake, resulting in almost 100% removal of particles ≥20

micron, 80% removal for particles of ≥10 micron, ΔP = 3 bar approx.

TERMANOX -This electrolytic cell decimates bacteria and

organisms. Together with the Sedimentor the electrolytic cell achieves

BALLAST WATER TREATMENT


p25-40:p39-50.qxd 26/02/2010 10:25 Page 4



a killing rate of 99.99%. The "killing

efficiency" of this electrolytic process is based

on the electrolysis of NaCl present in

seawater, according to MEPC 53.

CONTROL AND POWER UNIT - The

Sedinox control and power unit is claimed to

provide easy operation of the BWMS.

Hamworthy said that by being compact,

modular and an easy-to-install system, the

BWMS saves time, space and money. It is of a

flexible construction through a modular

system for vessels with ballast flow rates from

100 cu m per hour to 1,000 cu m per hour.

It is easily integrated into existing ballast

systems, thus ideal for retrofits, while the

modules are designed and sized for easy

access into the ship’s machinery spaces,

engine and pump room.

UK based Transvac Systems Ltd has

announced that it has signed an agreement

with San Diego US-based MH Systems to

market the MHS Ballast Water Treatment

system in Europe and other selected markets.

Transvac will offer the technology through

its recently restructured marine solutions

division, Coldharbour.

Transvac director, Howard Towers said

“Ballast water treatment is an important sector

for Coldharbour. We have been working

closely with MHS for more than a year, and

we are confident that the MHS technology

represents not only the best solution for our

customers, but also fits very well with our

own developments in fluid handling solutions.

These include domestic water modules,

marine ejectors and our latest third generation

inert gas generator”.

The MHS BWTS uses the patented

application of inert gas, which is distributed

into the ballast tanks via special diffusers.

The system is currently undergoing final

testing and certification prior to full

commercial availability later this year.

Towers added, “Our customers can now

count on us for a complete solution to their

ballast water treatment needs, including initial

survey, design, installation and

commissioning.”

For newbuildings, Coldharbour can offer its

Sea Guardian range of inert gas generators,

which have been designed to work with the

BWTS. For tanker retrofit requirements,

Coldharbour said it could work with the

vessels existing IGG unit, provided that the

gas generated by the system is to the required

residual oxygen and minimal soot levels.

In many cases, installations can be

undertaken at normal drydocking periods, the

company said.

After many months of review and many years

of testing, �EI Treatment Systems’ Venturi

Oxygen StrippingTM (VOS) ballast water

treatment system was issued with a BWTS Type

Approval Certificate at the end of 2007.

The certification was issued by the Liberian

Registry, with the technical review by the

American Bureau of Shipping (ABS). Land-

based biological testing was conducted by the

Chesapeake Biological Laboratory (CBL) at

the University of Maryland Center for

Environmental Science.

Shipboard trials were conducted by a team

of scientists from CBL and the Marine

Invasions Research Laboratory of the

Smithsonian Environmental Research Center,

a US Federal Government laboratory. This

testing was funded by the US National

Oceanic and Atmospheric Administration

(NOAA) as part of the US ballast water

technology demonstration programme.

VOS is a deoxygenation technology that

NEI claimed rapidly removes 95% of

dissolved oxygen from ballast water. This is

accomplished as ballast is drawn into the

vessel by mixing very-low oxygen gas

through large-diameter venturi injectors in the

ballast piping. Aquatic organisms cannot

survive in these conditions, the company said.

NEI has since obtained Type Approval (flag

states will Type Approve each system) from

both Marshall Islands and Malta. Approval

from Panama is pending, and Bahamas is at

the review stage, the company said.

To date, NEI has won orders for large

capacity machines to be fitted on board

drybulk carriers. These include six 4,400 cu m

per hour systems for German-based shipowner

Hartmann for vessels being built at Dayang

Shipyard in China.

The company has also installed equipment

on small chemical tankers with a capacity of

around 1,000 cu m per hour each. The

smallest standard size is 300 cu m per hour.

However, NEI explained that there was no

upper capacity limit, but standard sizes are

available up to 6,000 cu m per hour and

systems can be doubled up for large vessels.

Of interest to tanker operators - the VOS

system includes a component very similar to

an inert gas generator. NEI said that it had

gained ABS approval to use this component as

a topping generator for large tankers that use

flue gas IG. The company said that it is also

able to design systems for smaller tankers

where the device provides 100% of the cargo

inert gas, as well as ballast water treatment.

Since the deoxygenation method is used,

NEI’s treatment system has been shown to

reduce ballast tank corrosion by up to 84%,

saving owners millions of dollars over the

years. The cost - to purchase, install, and

operate the VOS system - is less than the

savings in corrosion repair costs. No other

ballast water treatment system offers such a

benefit, NEI claimed.

Many other technologies use chemical

oxidisers, which degrade coatings and anodes,

thus increase corrosion.

In addition, no active substances are used

with the VOS system. NEI explained that

tanker owners were sensitive to this, as were

the oil majors. Since a VLCC discharges

100,000 tonnes of ballast at each loading even

a low concentration results in a big discharge

of chemicals into waters adjacent to their

customers' facilities, the company said.

Large vesselsIn the larger vessel sector, Norwegian

manufacturer OceanSaver appeared to be

ahead of the game.

The company said that it was the first

ballast water treatment equipment supplier to

confirm major orders for large vessels.

In January this year, OceanSaver announced

the signing of a contract with Hyundai Heavy

Industries to fit ballast water management

systems (BWMS) on board three VLCCs on

order for Oman Shipping Company.

“This is a milestone to be noticed,”

explained OceanSaver’s CEO, Stein Foss,

speaking in January. “It is a milestone for the

Convention as the industry confirms the

availability of suitable BWMS in the large

and complex ships segments and further, that

the timeline for the introduction of the new

ballast water management regime is indeed

OceanSaver’s CEO Stein Foss.

p25-40:p39-50.qxd 26/02/2010 10:25 Page 5



fixed and must be taken seriously.”

The contract is for supply of OS BWMS

6000 EX on board three 317,000 dwt tankers

currently on order at HHI for OSC. The OS

BWMS 6000 EX is claimed to be able to treat

6,000 cu m of ballast water per hour, which is

roughly the size of a large tanker’s ballast

tanks pumping rate.

According to Foss, the contract is a

significant breakthrough for OceanSaver,

marking its transition into becoming a major

supplier to the maritime industry.

“The global market for BWM systems is

new and represents a massive opportunity. It is

driven by regulations and is predictable, but

all technologies need to go through a

thorough, time-consuming and costly approval

process”, he said.

“We have crossed a crucial frontier in

terms of technological development, and are

now focusing on successful commercialisation

and production. We have established a strong

global network of highly capable agents and

secured production capacity to accommodate

significant orders this year and in years to

come,” Foss explained.

Since 2002, the company has been solely

concentrating on fit-for-purpose BWMS.

Following a successful pilot-project on the

vehicle carrier Höegh Trooper in 2005,

OceanSaver obtained Type Approval in

April 2009.

“We estimate the overall BWM market to

be about $30 bill from 2010 to 2020. We

expect to take a significant market share

particularly within the tanker, LNG and

chemical sector, but also larger tonnage in

general” said Foss.

OceanSaver’s core focus lies in the large

vessel market representing some 20% of the

total by numbers, but 40% by value at an

estimated $12 bill.

“We have clearly defined goals, which

include remaining in the lead and being

established as one of the top three suppliers

within our selected tonnage (sector). This will

secure rapid and sustainable growth over the

next years,” Foss concluded.

In December last year, the company told

TA�KEROperator that it had signed technical

agreements involving 18 crude oil tankers.

OceanSaver’s patented BWMS has been

successfully tested according to the IMO

Ballast Water Performance Standard and to the

satisfaction of independent experts and major

commercial operators, the company claimed.

It has been type-approved by DNV on

behalf of the Norwegian Flag State Authority.

The system is also approved for installations

in gas hazardous areas, a prerequisite for

tanker applications.

During the development of the technology,

comprehensive and independent corrosion and

coating impact studies were carried out, both

in laboratories and under real-life on board

conditions. These confirmed reduced

corrosion and coating weathering rates.

OceanSaver’s BWMS has also

demonstrated compliance with the intentions

of the IMO Performance Standard for

Protective Coatings (PSPC).

The single largest cause of oil spills is

structural failure, much of which is caused by

ballast tank corrosion. During the first three to

four years of operation, a ship’s ballast tank

normally corrodes at a rate of 2%, but this can

quickly rise to annual levels of 5%, or 6% by

year five. A 1% breakdown in a salt water tank

can lead to severe localised corrosion and

dangerous cracks and holes between the cargo

tanks and the double hull spaces. After 10

years of operation, a wrong choice can cost

tanker owners up to $5 - $10 mill in re-blasting

and recoating, the company explained.

OceanSaver said that a BWM system may

change the conditions for which coating

systems are designed. It can affect oxidation

processes causing weathering of coating

systems and can accelerate the rate of

corrosions caused by a coating defect.

As mentioned, the company claimed that it

is the only known BWMS verified to be

‘Compliant with the intentions of the

Performance Standard for Protective

Coatings (PSPC)’.

The PSPC requires ballast tank coatings to

achieve a 15-year target life and focuses on

epoxy coatings. Corrosion engineers and

coating system experts at DNV and Safinah, a

UK coating consultancy firm, have completed

thorough coating assessment and corrosion

tests using the OceanSaver’s BWMS.

These tests demonstrated that OceanSaver

prevents creep corrosion and has a beneficial

effect reducing sacrificial anode consumption.

By combining the IMO PSPC with

OceanSaver’s treatment system, tanker,

chemical and gas ships can expect extended

ballast tank lifespan beyond the 15-year PSPC

requirements, even for the entire life of the

vessel, the company said.

DNV completed the BWMS studies to

gauge its suitability for tankers, gas carriers,

chemical tankers and bulk carriers, in terms of

interfacing with ballast water handling,

locations, on board power, equipment sharing

and ballasting procedures.

Most BWM technologies available are

designed for medium to low-capacity systems.

Few existing technologies are suitable for

larger vessels, or complex tonnage, such as

tankers, chemical carriers or gas carriers.

Further, some BWM systems grow

exponentially in size as the ballast volume and

pump capacity increases.

OceanSaver claimed that its system is more

flexible than most of the others, as it has been

designed as far as possible around the

capabilities normally required on board a ship.

With only two components needing to be

aligned with the ballast water pipeline, the

system can be installed in whatever design

space is earmarked on board. There is no

linear growth in terms of space and cost.

The system can technically handle any

capacity from 40 to 10,000 cu m, or more of

ballast water per hour without any delay in

ballasting operations. However, it is most

suitable for medium sized tonnage and

upwards (for example, for capacities from

1,000 cu m and upwards).

OceanSavers' largest investors are - Statoil

Venture AS (Energy Capital Management),

Höegh Autoliners and Storebrand

Livsforsikring AS.

Foss explained that in general, it was much

cheaper to install at the newbuilding stage as

the only cost incurred is at the design stage,

whereas retrofits require engineering and a lot

of modification work.

OceanSaver uses a number of sub-suppliers

who deliver to the company’s hub operation at

Drammen before shipment. “We will sub-

contract assembly of the core component,

which is our own technology. This will be

done in Norway. The future will determine

whether there will be a need for additional

hub(s)/assembly stations. The engineering

and logistics are key issues for us – not

manufacturing capacity,“ Foss explained.

Service arrangements and spare parts supply

will also be offered. “A design for lifetime

The single largest cause of oil spills

is structural failure, much of which

is caused by ballast tank corrosion.

“

”

p25-40:p39-50.qxd 26/02/2010 10:25 Page 6

does not mean maintenance free. Nothing in

this world is maintenance free. Our design

facilitates easy replacement of parts. This is

applicable for serious malfunction, as well as

normal maintenance and replacement of wear

and tear parts,” he concluded.

OptiMarin received Type Approval

Certificate for the OptiMarin Ballast System

(OBS) in November last year. It was issued by

Det Norske Veritas (DNV) on behalf of the

Norwegian Maritime Administration and

confirms OptiMarin’s compliance with the

IMO convention.

The OBS was tested extensively at the

Norwegian Institute for Water Research (NIVA)

in accordance with IMO’s G8 guidelines with

excellent results, the company claimed.

Shipboard testing requirement was

completed aboard a Klaveness cement carrier

using DNV and NIVA for testing and

verification. Based on the NIVA test results,

OptiMarin has received confirmation from the

California State Land Commission that the

system meets its standard for Best Available

Technologies to be implemented this year.

OBS is a mechanical system based on

filtration and UV and does not affect the

normal operation of the ship. It is easy to

install on board existing ships, as well as on

newbuilds and uses standardised components

for all flow configurations. The system is one

of very few treatment options that do not

introduce chemicals, electro-chemical

generators or biocides in its treatment process,

the company claimed.

The key benefits of the Type Approved

OBS are that it has a simple and reliable

design with few movable parts. The system is

operated as part of the normal ballast system

with a low pressure loss.

The company delivered the worlds first

ballast treatment system to the cruise vessel

Regal Princess in 2000. In all, OptiMarin has

delivered seven systems prior to the current

regulations, including one to a product carrier.

The OBS is suited for any type or size of

vessel, the company said.

CEO Pål Sanner said; “With the certificate

in hand I must give thanks to Innovasjon

Norge, Stavanger, who has supported us

for the last three years. The pipeline of

potential order is substantial and 2010

deliveries will be numerous.”

Thus far this year, the company reported

orders for systems to be fitted on board eight

offshore support vessels for Norwegian

interests.

The IMO granted the Final Approval of

Active Substances to RWO’s ballast water

treatment system CleanBallast at MEPC 59

last year.

As a first step, RWO received the basic

approval of active substances from the IMO

in October 2006 and subsequently finalised

the land-based type approval of CleanBallast

in 2007.

Two of the three required tests were carried

out on board a containership, while the third

was due to be undertaken late last year.

With the newly granted Final Approval, the

ongoing shipboard type approval will be the

last step required for gaining the type approval

certificate. Therefore, RWO was hoping to

be issued with the full Type Approval

Certificate for its CleanBallast system by the

German administration this month (see

TA�KEROperator, October 2009, page 20).

RWO is a part of Veolia Water Solutions &

Technologies, which in turn is a subsidiary of

Veolia Water.

Data collectedThe 46,100 dwt US-controlled tanker S/RAmerican Progress, managed by SeaRiver

Maritime, was accepted into the U S Coast

Guard’s Shipboard Technology Evaluation

Programme (STEP) last August.

This was to demonstrate the use of and



OptiMarin’s OBS seen installed.

RWO’s CleanBallast system.

p25-40:p39-50.qxd 26/02/2010 10:25 Page 7

collect data on the effectiveness of the Severn

Trent De �ora (STDN) BALPURE® BWTS.

The USCG established the STEP

programme in 2004 to promote the

development of alternatives to ballast water

exchange as a means of preventing invasive

species from entering US waters through

ships’ ballast water.

STEP participation is available to all

international and US domestic vessels subject

to the USCG’s ballast water management

regulations.

BALPURE is a patented system that

generates biocides, meters and analyses the

residual level of both biocides and neutralising

agents and logs the performance of the overall

BWTS, the company explained.

Third party testing of the BALPURE

system has confirmed effluent quality that

meets the proposed IMO ballast water

standards.

The BALPURE system has achieved a

number of certification milestones, including

one in 2007 from the American Bureau of

Shipping stating that the system was explosion

(EX)-proof for use on board tankers.

In addition, Severn Trent De Nora received

a grant from the National Oceanic and

Atmospheric Administration (NOAA) in 2006

for US third party validation and recognition.

STDN is a joint venture supporting marine

and offshore industrial water disinfection

needs by bringing together the expertise of

Severn Trent Services and Gruppo De Nora,

Milan, Italy.

For BALPURE®, the completed Basic

dossier was submitted to the IMO via

BSH/Germany in August 2009 – in time for the

MEPC 60 conference (March 22–26, 2010).

It is expected to gain Basic Approval at

MEPC 60 and Final Approval by October

2010 (at MEPC 61). STDN is working with

shipowners to complete shipboard mechanical

and efficacy tests to obtain Type Approval,

which is projected to be completed early in

2011, the company said.

Wärtsilä Corporation and Trojan

Technologies have signed an exclusive

agreement to jointly develop, market, and

distribute a ballast water treatment product for

shipboard use.

The two companies will gain benefits from

the combined strength of Wärtsilä's global

reach and presence in the marine market, and

from Trojan Technologies' experience in

developing ultraviolet (UV) treatment

solutions, the companies said.

The ballast water treatment product is

presently in pre-production, with third-party

validation expected to take place in late 2010

and it is expected to enter the market at the

end of the year.

"Ballast Water Treatment is becoming an

important item on the environmental agenda for

our customers, and therefore also for us,"

explained Roger Holm, vice president, solutions

management, Wärtsilä Services. "Moving into

this field is a natural step for Wärtsilä, and one

that continues the development of our

environmental services portfolio."

Trojan Technologies has over 30 years of

experience in developing UV treatment

solutions. As a world leader in developing UV

technology for municipal wastewater, drinking

water, and industrial water treatment systems,

Trojan was a logical partner in providing

Wärtsilä with UV technology for ballast water

treatment, Wärtsilä said.

Marvin DeVries, Trojan Technologies

president said; "Trojan has a long history of

innovation and leadership in the global UV

industry, and we believe that our water

treatment expertise, combined with

Wärtsilä's strong presence in the marine

industry, will enable the two companies to

play a significant role in providing a

compact, cost-effective and high

performance system to address the emerging

ballast water treatment market."

Wilhelmsen Marine Services’ (WMS)

Unitor ballast water treatment system

combines the use of cavitation, sterilisation

and physical separation to provide a system

equally efficient in both seawater and

freshwater environments.

This combination of methods also allows it

to handle diverse conditions, such as high

turbidity, due to organic and mineral matter, or

polluted water, the company claimed.

The reactors can be mounted in a vertical

loop or horizontally (total length 3 m-3.6 m)

meaning they offer the widest range of

installation possibilities. The requirement

for electric power is about 40 kW for the

largest system with a capacity of 3,500 cu m

per hour.

It is suitable for most vessel types and is

available across the full range of sizes

required by the commercial marine market,

WMS said.

The system gained IMO Basic Approval in

2008 and has been recommended by

GESAMP to be awarded its Final Approval at

MEPC 60 in March this year.

A couple of years ago, subsidiary

Wilhelmsen Ships Equipment (WSE) fitted a

test ballast water treatment system on board

BW Gas’ LPG carrier Berge Danuta.The system used was the Unitor Ballast

Water System (UBWT) originally developed

by South African-based Resource Ballast

Technology (RBT).

Project engineering and installation

supervision were carried out by the Norwegian

company, which was specifically designed to fit

the 78,500 cu m capacity VLGC’s 800 cu m

per hour ballast pump capacity.

BW Danuta carries LPG, propane, butane

and ammonia at temperatures down to

-50 deg C.

BW Gas’ fleet manager for technical

operations, Ola Petter Dahlen said at the time:

“After considering a number of technical

solutions, we recognised that the UBWT

system’s small size, low energy requirement

and low pressure drop made it ideal for

retrofit installation.”

DNV has worked on the basic approval of

the system. Manufacturing first started in

South Africa before switching to a 10,000 sq

m warehouse in Shanghai.

UBWT is part of parent Wilhelmsen Marine

Services (WMS) ‘Act’ environmental product

family. This combines water treatment,

emission reduction and wastewater

management systems, products and services

under one banner.

WMS said that it was able to offer complete

systems through its network covering 330

offices in 72 countries. “In many cases you

will find companies focusing on a single

environmental area. We’re appealing to our

customer base by delivering a much broader

offering, one which encompasses our

commitment to improving environmental

performance,” said WMS president Dag

Schjerven.

The company spent a number of years

looking at different technologies and then

short listed these down to two options. DNV

was then commissioned to come to a

conclusion on what the class society thought

was the superior option – RBT.

It was originally installed on a test basis on

a Wilhelmsen ro-ro and was also presented to

South Korean shipbuilders Daewoo, Samsung

and STX at a meeting organised by Hyundai.

An important aspect of this particular

system is that it can be installed while a vessel

remains in operation. However, the

Wilhelmsen ro-ro was in drydock when the

system was installed, meaning that the BW

gas carrier was the first to receive a system

while in service. WSE provided the project

engineering and installation supervision for

the system.

BW explained that this vessel was chosen

for the trials as it normally trades in northern

Europe, making it easier to put personnel and

equipment on board.

TECHNOLOGY - BALLAST WATER TREATMENT

TO


p25-40:p39-50.qxd 26/02/2010 10:25 Page 8

p25-40:p39-50.qxd 26/02/2010 10:25 Page 9

Called MarineLine® X, the new

tank coating offers versatile,

effective solutions for product

and oil tanker carriers trading in

clean petroleum products (CPP), biofuels,

vegetable oils, crude oil and dirty petroleum

products (DPP), wine carriers, FPSOs,

vegetable and edible oils and all tankers

carrying IBC Chapter 18 cargoes.

APC’s MarineLine® 784 internal cargo

tank coating brand is already well-established

in the chemical tanker market, especially

when handling aggressive chemical cargoes.

MarineLine® 784, which uses a forced hot air

forced heat cure to form one of the strongest

bonds in chemistry, is currently in service on

more than 300 chemical tankers worldwide.

Based on this success, Donald Keehan,

APC chairman, explained, “Using our

extensive background in the marine tank

coatings industry, we studied the product and

oil tanker markets for several years, working

to develop the proper tank coating system for

their specific needs, which is different than

those of chemical tankers. The result is

MarineLine® X – a coating that offers much

better performance and versatility for product

and oil tanker operators than conventional

phenol epoxy or zinc silicate linings, which

have limitations.

“We formulated MarineLine® X to

outperform those coatings, first providing an

application costs savings using a non-forced

US-based tank coatings manufacturer Advanced Polymer Coatings (APC) has upgraded

its product portfolio to include larger product and oil tankers.

Cargo tank coatingunveiled for product

and oil tankers


TECHNOLOGY - TANK SERVICING

MarineLine® X has been developed for larger product tankers’ cargo tanks.

p25-40:p39-50.qxd 26/02/2010 10:25 Page 10



hot air heat cure approach, yet still

maintaining the coating’s performance

features for easy cleaning and excellent cargo

resistance. This allows us to provide

MarineLine® X at a comparable cost to

current coatings on the market, ensuring we

will change how product and oil tankers will

coat their tanks in the years ahead,” he

concluded.

AdvantagesMarineLine® X offers a number of key

benefits for the shipowner and operator, APC

claimed. In economic comparisons for the tank

coating and the application costs, MarineLine®

X only requires a two-coat system, compared

to three coatings for phenol epoxy. This

eliminates extra days for drying and extra spray

application costs, resulting in savings and

allowing the owner to maximise the return on

investment in a short period of time.

It has, like all the coatings in the

MarineLine® family, a very smooth, low

energy surface. This provides fast and easy

cleaning. Once cargoes are discharged, tanks

are cleaned and dried with minimal effort.

This is especially noteworthy when switching

from dirty to clean cargoes as the

shipowner/operator normally incurs heavy

cleaning costs. Keehan provided an example,

“Compare switching from dirty to clean

products in a 45,000 dwt product tanker, with

27,000 sq m of tank coating in 20 cargo tanks.

Cleaning a phenol epoxy coating takes eight

days, requiring a high amount of gas oil.

Cleaning MarineLine® X coating takes only

four days and requires a small amount of gas

oil. The labour and material savings can be up

to $100,000 per cleaning. Multiply this

amount every time the tanker switches these

types of cargoes during a year, and the savings

are immense. More savings results in higher

operational profit.”

Another key benefit claimed is

MarineLine® X’s inherent chemical

resistance, as the coating is formulated with

patented high performance polymers that

cross-link together to form a hard, tightly knit

structure. This durable coating ensures

consistent product purity, the company said.

APC said that MarineLine® X offers more

corrosion resistance than either phenolic

epoxy coatings, that can absorb cargoes due to

hydrolysis, or zinc silicate coatings that also

have absorption problems by retaining oil-like

cargoes and are difficult to clean.

A key concern to the tanker industry is the

acidified moisture (sulphuric acid) of wet inert

gas systems that corrodes conventional tank

coatings. However, MarineLine® X is

resistant to this acidified moisture, providing a

longer lasting solution.

Versatility is a key strength of MarineLine®

X, APC said. Due to the coating’s easy and

fast cleanability and resistance to a wide range

of cargoes, the shipowner/operator can easily

switch, enabling the tankers to carry a range

of cargoes from port to port.

MarineLine® X comes with a semi-gloss,

light blue colour. The coating is offered in five

gallon (19 litres) and 1 gallon (4 litres) kits

with catalyst.

APC has also developed a new ‘Chemical

Resistance Guide’ that presents both

MarineLine® X for the product and oil tanker

markets and MarineLine® 784 for the

chemical tanker sector, allowing operators to

see which coating system is appropriate for

handling a particular cargo.

An online version of the guide on

the company’s website is also under

development. TO

Rely on the new MarineLine® X tank

coating to handle the wide range of easy chemicals and CPPs carried by product tankers. MarineLine® X offers greater corrosion resistance than phenolic epoxies or zinc silicates, with more versatility.

for Product Tankers

Advanced Polymer Coatings

Avon, Ohio 44011 U.S.A.

THE tank coating system for carrying easy chemicals, CPPs, and edible & vegetable oils.

+01 440-937-6218 Phone +01 440-937-5046 Fax www.adv-polymer.com

APC said that MarineLine® X

offers more corrosion resistance

than either phenolic epoxy coatings

“

”

p25-40:p39-50.qxd 26/02/2010 22:41 Page 11

The vast expanse of the Knock Nevis can clearly be seen.



Dulsco’s East Coast branch recently

completed a tank cleaning project

on the ULCC/FSO Knock �evis,

the longest ship ever built, while

she was anchored off Fujairah, waiting to sail

for India for recycling.

The company cleaned the Knock �evis' 49

tanks and de-mucked 3,200 tonnes of sludge

from the tank bottom, while implementing an

environmentally-friendly process in disposing

of the sludge in accordance with UAE federal

law. Dulsco also secured zone II certification

for the equipment used in the project, such as

air compressors, generators, air fans and ex-

proof lights, ensuring compliance with strict

international safety norms.

A team of 130 specialists were deployed,

including a project superintendent,

supervisors, safety officers, foremen and

experienced tank cleaners for the two-month

project. The successful clean-up of the giant

tanker served as an important milestone for

Dulsco, giving the

company the

momentum to pursue

similar large-scale

projects in the

shipping industry, the

company claimed.

"Dulsco East Coast

has a highly skilled

workforce along with

one of the best

equipped workshops in

the industry. Extensive

expertise and top-of-

the-line technological

resources, combined

with our utmost

commitment to quality

and excellence, have allowed Dulsco to

comply with stringent quality, safety and

environmental standards and satisfy the

specific demands of the tanker owners.

“Moreover, despite the delicate nature and

the unprecedented scale of the project, Dulsco

was able to complete it in time without being

derailed by any kind of accident. This project

will certainly help thrust Fujairah into the

limelight as an attractive destination for

specialised marine, de-mucking and tank

cleaning services, while highlighting Dulsco's

world-class expertise in handling large-scale

projects," said Amjad Khan, general manager,

Dulsco East Coast.

Built in 1979, the Knock �evis was latterly

used as an FSO unit, having been recently

converted at Dubai. She was owned by

Norwegian company Fred Olsen Production.

Formerly known as the Seawise Giant, HappyGiant and Jahre Viking, the tanker, which was

built from 83,000 tonnes of steel, is the longest

ship ever built in the world with a length of 458

m and a beam of 69 m, a fully laden draught of

24.6 m with a dwt of 564,763.

Dulsco’s Fujairah base supports both

offshore and onshore tank cleaning and the

company has agreements in place with the

local ships’ agents.

Cleaning projectcompleted on world’s

largest tanker �ew benchmark claimed in cleaning 49 tanks and de-mucking 3,200 tonnes of sludge

in an environmentally friendly manner.

TO

p25-40:p39-50.qxd 26/02/2010 10:25 Page 12



In today’s economic climate, it isbecoming more and more criticalfor vessel operators to maximiseefficiency.For operators of chemical carriers, the choice of

coating on the cargo tanks can have a major

impact on the operational efficiency of the vessel

from initial coatings selection, application, cargo

carriage and performance in service to ease of

tank cleaning and vessel turnaround.

One key issue during the application of tank

coatings, which should be carefully controlled

is overspray/dry spray. This can greatly impact

the tank coating surface properties, warned

International Paint (IP).

Overspray/dry spray refers to paint particles

landing on areas not intended for coating or

rebounding from target areas that are and then

drying before being deposited in other areas of

the tank. This can be made worse when there is

an overly turbulent airflow in the application

area; incorrect spray gun set up or from paints,

which are not optimally formulated.

Overspray/dry spray causes contamination of

nearby areas, can roughen a smooth finish and

can cause the application environment to be

potentially unsafe for applicators due to

excessive coating fog in the atmosphere. As tank

coating application occurs in a confined area the

risks associated with this issue can be significant.

Minimising overspray/dry spray is also

desirable from a productivity and financial

point of view as it means completion of tank

coating application in a shorter space of time,

reducing cleaning time and a reduction in

paint wastage, all resulting in a reduction in

the final cost of coating.

IP maintained that correctly formulated coat-

ings are essential to ensure maximum efficiency

during the application process in the shipyard and

the long term chemical resistance and ease

plus speed of cleaning for ships in service.

Dong-Uk Oh, painting team section chief in

Samho Shipbuilding Co, South Korea, who

has a long track record of tank coating

applications said, “When applying

International Paint’s Interline 994, a 30%

reduction in overspray compared with

previously used epoxy phenolic coatings was

achieved. This means not only less re-work

and coating wastage for the yard but also a

smoother coating surface for the operator.”

He also said, “We hope we would work

with International Paint again for future cargo

tank projects given their reliable technical

service and product application properties.”

Minimising overspray/dry spray has a longer

term impact than just yard application; a smooth

tank surface is more easily and rapidly cleaned

allowing for faster vessel turnaround times and

increased productivity for the operator.

Evidence of this was clear during a one year

inspection of Interline 994 coated tanks on a

17,539 dwt chemical tanker. The tanks were in

excellent condition with the vessels Chief

Officer commenting that he was very

impressed with the performance of the coating

on the tanks given the aggressive sequence of

cargoes that have been carried in them.

Minimising overspray/dry spray is just one

example of how coating manufacturers,

shipyards and vessel operators can work

together to ensure maximum vessel operating

efficiency, IP said. TO

Careful control is needed of overspray and dry spray.

Overspray/dry spray should be carefully controlled

Knock Nevis –A potted historyKnock Nevis was built in 1979 atSumitomo Heavy Industries'sOppama shipyard as SeawiseGiant for a Greek owner whowas unable to take delivery ofthe vessel.

The shipyard exercised its right to sell the

vessel and a deal was brokered with Hong

Kong’s Orient Overseas Container Line

founder CY Tung to lengthen the ship by

several metres thus adding a further 87,000

tonnes of cargo capacity. Two years later she

was relaunched as Seawise Giant.She was badly damaged during the

Iran/Iraq War while transiting the Strait of

Hormuz and was declared a total loss and

laid up in Brunei. At the end of the war she

was towed to the Keppel Company shipyard

in Singapore, repaired, and relaunched in

October 1991 as the Happy Giant. Jørgen Jahre bought the tanker in 1991 for

$39 mill and renamed her Jahre Viking.From 1991 to 2004, she was owned by Loki

Stream AS and flew the Norwegian flag.

In 2004, she was bought by First Olsen

Tankers, renamed Knock �evis, and

converted into a permanently moored

storage tanker anchored in the Qatar Al

Shaheen oil field in the Persian Gulf.

In December 2009, she was sold to

Indian breakers, via an intermediary.

Renamed Mont for her final journey, she

was reflagged to Sierra Leone on the basis

of a single voyage. After clearing Indian

customs, she was beached at Alang at the

beginning of January, thus ending a varied

career.

Her longevity was put down to being well

maintained throughout her career, a

considerable rebuild following severe

damage off Hormuz and due to the fact that

she traded infrequently, being primarily used

as storage vessel.

When TA�KEROperator’s editor visited

the ship at Antifer in January 1995, the

master told him that the vessel had only

undertaken about a dozen voyages with

cargo since she was built. �

p25-40:p39-50.qxd 26/02/2010 10:25 Page 13


TECHNOLOGY - SHIP-TO-SHIP TRANSFERS

Two TORMvesselsundertaking anSTS while slowsteaming.

We have recently seen up to 50

tankers anchor off the UK’s

Suffolk coast and more in

Lyme Bay. There are

designated STS transfer sites off Denmark, at

designated sites in Europoort/Rotterdam and

elsewhere, including the MEG.

Last July, the IMO’s MEPC 59 adopted

amendments to the MARPOL Convention to

prevent pollution during STS oil transfer

operations.

The MEPC adopted amendments to

MARPOL Annex I for the prevention of

marine pollution during some STS oil transfer

operations. These amendments were expected

to enter into force on 1st January 2011.

The new chapter 8 on prevention of

pollution during transfer of oil cargo between

oil tankers at sea will apply to oil tankers of

150 gt and over and will require any oil tanker

involved in oil cargo STS operations to have,

on board, a plan prescribing how to conduct

STS operations (the STS Plan), which would

be approved by its administration.

Notification to the relevant coastal state will

be required not less than 48 hours in advance

of the scheduled STS operations although

some relaxation to this rule is allowed in

certain, very specific, cases. The regulations

will not apply to bunkering operations, many

of which are carried out by barge, or small

tanker offshore. Other types of transfers not

included are those between a tanker and an

FPSO/FSO, or rig, or to securing the safety of

a ship or its crew, or for combating specific

pollution incidents.

Any tanker involved in STS shall carry on

board a STS Operations Plan not later than the

date of the first annual, intermediate or

renewal survey of the ship to be carried out

after 1st December 2010.

The STS plan may be incorporated into the

existing SMS required under SOLAS, if that

requirement is applicable to the tanker in

question.

STS operations tohave mandatory

standardsWith the plethora of tankers of all size ranges anchored in �orth European waters and

now increasingly in Asian waters, the focus on ship-to-ship (STS) transfers has grown.

p25-40:p39-50.qxd 26/02/2010 10:25 Page 14

TECHNOLOGY - SHIP-TO-SHIP TRANSFERS


The person in overall advisory control of

STS operations shall be qualified to perform

all relevant duties, taking into account the

qualifications contained in the best practice

guidelines, the IMO said.

Consequential amendments to the

International Oil Pollution Prevention (IOPP)

Certificate, the supplement to the IOPP

Certificate and the Oil Record Book were

also adopted.

Splitting cargoesShip-to-ship (STS) transfers at sea have been

undertaken for almost 40 years. It was

originally widely used to load and offload

VLCCs/ULCCs and other large tankers, thus

splitting cargoes into smaller hulls, which

could gain entry to draught restricted ports.

However, as the numbers of vessels

involved in storage increased, we have seen

many STS transfers taking place on smaller

laden chemical and product carriers anchored

in strategic areas near main import and export

terminals.

Lightering operations are still undertaken

in considerable numbers in the US Gulf and

along the US East Coast, where draught

restrictions apply. Although there are a few

exceptions, US ports are unable to

accommodate tankers of over Aframax size

fully loaded. Hence the favourite cargo

from the Caribbean to the US Atlantic

Coast is around 80,000 tonnes loaded in an

Aframax hull.

Last year, it was estimated that more than

25% of crude oil imported into the US was

subject to lightering operations before being

delivered to the refineries. Some of the

companies involved in crude oil lightering

operations in the US Gulf include OSG, SPT

and Chevron among others.

These specialist companies employ

experienced mooring masters and have the

relevant equipment and backup, including

workboats/launches, to prevent pollution

wherever possible.

Lightering operations can be undertaken

while the vessels are anchored, or while

steaming at a very low speed. Huge rubber

fenders, such as Yokohama fenders, are placed

between the vessels, while the oil is

transferred through rubber hoses attached to

’quick release’ mechanisms.

Industry standards were first developed for

STS operations jointly by OCIMF and the

International Chamber of Shipping (ICS)

some 35 years ago and have been updated on

a regular basis.

MARPOL Annex 1’ STS Plan will cover

start-up procedures, flow rates, checklists,

communications and topping off and stripping

arrangements.

The fourth edition of the OCIMF/ICS Ship

to Ship Transfer Guide, Petroleum, which

cover transfers of crude oil and petroleum

products was published in 2005, some 30

years after the first edition.

Included in the new set of provisions are

criteria for determining the quality and

competence of lightering superintendents;

acknowledgement of a then new international

standard, ie ISO 17537, applicable to the

material, performance and dimensions of

floating pneumatic fenders; updated mooring

operations information following an industry

study on the behaviour of tankers moored

together in open and exposed waters; and

provisions governing the transfer of personnel

between vessels, according to an article

appearing in the BIMCO News, explaining

the new amendment. TO

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Stand 225

p25-40:p39-50.qxd 26/02/2010 10:25 Page 15


TECHNOLOGY - NEWS

Marine lubricants supplier SealubAlliance Americas, an affiliate ofHong Kong-based Gulf Oil Marine,has opened a fully operationalmanufacturing, supply anddistribution network in the USand select areas of Canada.Sealub is now producing all of its marine

products in four strategic blending facilities

and has established a comprehensive

distribution network to support delivery

operations in more than 80 ports in the US

and Canada.

In addition, the Americas group has

established new supply operations in Panama,

Hawaii and on the Mississippi River.

This expansion complements the existing

Sealub Alliance global coverage of more

than 700 ports in over 90 countries, the

company said.

Sealub also has plans to expand its capacity

in Canada and to establish a presence on the

Great Lakes by the end of this year.

In addition to its extensive delivery

capabilities, Sealub also offers technical

services for the US market, including ship

visits, complete used oil analysis, on board

test kits and technical seminars.

The company told TA�KEROperator that it

produces a 40 BN cylinder oil with the

majors. The same additive technology and

basestock is used. “However, one thing we

need to keep in mind is that the major doesn’t

require the use low BN cylinder oil if the

vessel is only operating for less than 24 hours

on low sulphur fuel. So, depending on how

long the vessel will be operating in restricted

waters will dictate whether or not they chose

to use the low BN product”, a company

spokesman explained.

Talking about vessels entering the busy

Californian ports, the company said that as the

OEMs had relaxed the amount of time that the

engine can run on low sulphur fuel and a

standard 70 BN CLO, most vessel operators

make the decision based on how long they

will need to run the engine and then decide

whether or not they need to switch to low BN

cylinder oil.

“The issue is that if an engine is run too

long on a standard 70 BN CLO, when

operating on low sulphur fuel, there is a risk

of creating deposits from an un-reacted BN

additive on the ring lands and behind the ring

itself. This can lead to scuffing and premature

liner wear”, the company said.

As for the busy US Gulf tanker ports, most

of the VLCCs deliver their cargoes way

offshore, making the supply of lubricants

difficult. OSV deliveries are possible but the

vessels are in high demand and the cost can be

significant. As a result, many of the VLCCs

take their lubricant deliveries via drums from

a launch. This is obviously not the most

efficient way to handle a delivery as it is

particularly difficult in high seas, the

company said.

Areas, such as LOOP and the Delaware

Anchorages, see supplies on a regular basis

through the support of delivery agents.

Sub-contractsSealub Alliance Americas primarily uses sub-

contractors for deliveries. “We do not own or

operate any delivery vessels, nor do we

facilitate our own deliveries. We have found

that contracting with sub-contractors who

specialise in marine lubricant deliveries is the

most efficient way to conduct our business.

“There are so many rules, regulations and

restrictions that are port specific and we have

found that contracting with a company that

knows all the specific requirements for a

given port allows us to better inform our

customer regarding the delivery method to be

employed and any issues that would make the

delivery more difficult or costly.

“In many cases, by working closely with

our sub-contractor delivery agents, we are

able to advise the customer of alternative

delivery options that ultimately saves the

customer money. This is all part of our

corporate directive to provide industry leading

customer service,” the company said.

Sealub manufactures in four locations in the

US - Philadelphia, Houston, Los Angeles and

Tacoma - and is in discussions for a blending

operation in Canada. Additionally the company

has warehouse locations in New York, Norfolk,

Jacksonville, New Orleans, Houston, Los

Angeles, Rainer WA and Tacoma.

As for the amount of lubes taken on board

a large vessel, such as a tanker, in many

cases, this depends on the area of the world

where the lubricants are lifted. Some areas

have higher costs and therefore a tanker will

usually only take on the minimum amount of

lubes that it needs. In other areas where the

costs are more favourable, the quantity of

lubes supplied will be greater due to the

better economics.

The company explained that for a new

lubricant company to enter the global market,

which has for decades been dominated by the

major integrated oil companies, the new

entrant has to have everything that the majors

offer as a minimum, but in addition, has to

demonstrate superior performance in order to

carve out their place in the market.

Gulf Oil Marine/Sealub Alliance is

managed by former senior managers from the

major oil companies, as well as additive

companies. Personnel have also been

recruited from the OEM side of the business.

“We are fortunate in that we can take all of

this diverse talent and mould our business in

such a way that we can capitalise on the best

practices of many different companies,” the

company concluded.

Lube oil independent attacks the US market

TANKEROperator The Latest �ews is now available on

TA�KEROperator’s website at

www.tankeroperator.com and is updated weekly.

For access to the �ews just register by entering

your e-mail address in the box provided. You

can also request to receive free e-mail copies of

TA�KEROperator by filling in the form displayed

on the website. Free trial copies of the printed

version are also available from the website.

These are limited to tanker company executives

and are distributed at the publisher’s discretion.

TO

p25-40:p39-50.qxd 26/02/2010 10:25 Page 16

The starting point was assessing the

future tanker deliveries, what had

already been delivered and the

current scheduled orderbook for

this year with the help of leading London

broker EA Gibson’s research team.

Gibson said that 443 new tankers above

25,000 dwt would be expected to enter service

this year; which on the face of it would

indicate more new deliveries than the 405

seen last year.

However, the collapse in market earnings

last year led to newbuilding contract

renegotiations, delays and cancellations. The

nature of these changes was not always

transparent and tended to be kept ‘behind the

scenes’.

Nonetheless, some handle on developments

can be determined by looking at what the

scheduled tanker orderbook was for 2009 at

the start of the year and comparing it to what

actually happened.

From this, 79 tankers out of the original 484

scheduled for 2009 were not delivered,

accounting for 16% of the original orderbook.

Looking at the breakdown by size, Suezmax

and MR deliveries were around 75% of the

original schedule; VLCC and LR1 deliveries

were higher, at 89%, but the Aframax/LR2s

were surprisingly high, with almost all

scheduled deliveries actually coming out of

the yards, Gibson said.

Given the collapse in the tanker market seen

in 2Q09, there is more leeway for delays to

the 2010 delivery schedule than the 16%

witnessed last year. Gibson made the

assumption that some 25% of 2010 scheduled

deliveries would not materialise this year and

as a result only 300 new tankers would join

the fleet (compared with last year’s 405).

Looking at each size group, there would be

around 50 VLCC deliveries, 40 Suezmaxes,

65 Aframax/LR2s, 25 LR1s and 120 MRs.

Using this and taking into account the forecast

of scrapping and conversions, the net gain in

tanker fleet above 25,000 dwt would be

around 175 vessels this year, compared with

314 last year; still an increase, but not as

much as in 2009.

However, substantial growth in oil demand

and trade will still be required even to absorb

this more modest growth in tanker supply,

Gibson concluded.

RecyclingTurning to recycling, by 5th February, some

1.2 mill dwt of tanker tonnage had been sold

for breaking thus far this year, according to a

Gibson’s weekly tanker report. The sheer

volume of tanker tonnage coming onto the

demolition market could be the only

stumbling block give that Bangladesh beaches

are a favoured destination for recycling.

Last year, 62 of the 93 tankers sold for

recycling ended up in Bangladesh, mainly due

to higher lightweight prices negotiated and the

dubious attraction of not requiring a gas-free

certificate. The dangers associated with this

kind of work were highlighted at the end of

last year when several workers were killed

and others injured while cutting up a tanker.

Incidents such as this will add to

international pressure on the traditional

shipbreaking nations to accept tighter

regulations, such as that proposed by the

IMO’s Hong Kong Convention, which was

adopted last year, but thus far has not gained a

single signatory. Last year’s Bangladesh

tanker intake was more than double that seen

in 2008. Thus any significant changes could

have implications on the price level on offer

and perhaps more significantly on capacity,

Gibson said.

In an analysis of last year’s statistics,

Gibson said that 10 VLCCs were sold for

recycling, nine of which were sold from

August onward. The largest tanker sold was

the 285,900 dwt Front Vanadis, which fetched

$325 per ldt. The highest price paid was

reported to be $378 per ldt for the 249,000

dwt VLCC V Malibu. The total deadweight of

vessels sold was 7.2 mill dwt (vessels of over

10,000 dwt).

In addition, there were four Suezmaxes, 15

Aframaxes, 12 Panamaxes and a massive 38

MRs, sold for demolition, which could have

been caused by the rock bottom market for

product and chemical tankers.

Last year, demolition prices remained

comparatively firm, but well below the levels

seen in 2008. The first VLCC sale this year

achieved $415 per ldt. The strengthening

prices were seen across all sectors with Indian

ANNUAL REVIEW - MARKETS

�ew deliveries - not asmany as you think?We have taken a look at brokers and consultants view of what 2010 holds.

Most ‘pundits’ believe it will prove to be a difficult year – one of consolidation

– with a possible pickup in fortunes during the third and fourth quarters.

March 2010 � TANKEROperator Annual Review I

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p41-56:p39-50.qxd 26/02/2010 10:46 Page 1

breakers becoming prominent. With 13% of

the fleet of single hull construction, there are

plenty of candidates for the recycling beaches

this year, Gibson said.

Floating storageAnother sector looked at by the broking

house’s research department was the floating

storage position. Both crude and clean

products were being stored in abundance since

early last year. Contango play, weakened oil

demand, record levels of land-based crude and

product stocks, changes in regional patterns of

oil consumption and very low freight rates all

combined to give market participants a range

of opportunities to play the storage game,

Gibson said.

By November last year, 149 tankers were

storing 55 mill barrels of crude and 98 mill

barrels of clean products, enough to satisfy

global demand for nearly two days. This

translated into 6-8 % of the VLCC fleet and up

to 35% of the LR2 sector being tied up at any

one time, which helped to prop up spot rates,

by taking enough vessels out of the market.

While difficult to quantify, Gibson said that

it was worth comparing the fortunes of the

VLCC against the MR last year. VLCC

earnings on the benchmark TD3 route (MEG-

East) averaged over $31,000 per day, above

fixed operating costs. By contrast, MRs, not

used for storage, averaged $7,000 per day on

the TC2 route (UK/Cont-US), which was very

close to breakeven.

This year began positively with rising spot

rates, oil prices and oil demand. VLCC spot

earnings trebled to peak at just over $101,000

per day and WTI crude rose to a 15-month

high of 82.75 barrels, partly in response to the

extreme cold weather in the Northern

Hemisphere. This resulted in the narrowing of

the oil price contango coinciding with higher

charter rates, which led to a number of storage

vessels discharging their cargoes. However,

this was partly offset by more storage tonnage

being taken in the Far East.

By the end of January this year, the number

of storage tankers had fallen to 119 from 141,

less than feared. Again, storage will be a key

factor to determining the rates for this year.

Gibson reasoned that any downward pressure

on tanker rates caused by the redelivery of

storage vessels and a return to a steeper price

contango with warmer weather/lower oil

demand could recreate the conditions that

encouraged floating storage in the first place.

With current high freight rates (end

January) and a shrunken contango, the

ingredients do not mix well, but storage

participants, having successfully played the

game, will be ready to act quickly, if and

when the right recipe redevelops, Gibson

concluded.

Asian storageGas oil stored on tankers in Asia had swolen

to unprecedented volumes of at least 14 mill

barrels by the middle of February this year

and could rise further as weak global demand

persists, prompting traders to turn to this

region for support, reported Reuters.

The volumes, which were enough to

meet 16% of global daily oil demand, come

as the current East-West arbitrage economics

was not viable, even as Western distillate

supplies are gradually drawn down during

the cold winter.

''Players are positioning their vessels mostly

in Southeast Asia, waiting for the East-West

arb (arbitrage) to open, so they can float them

over to Europe,'' said a distillates trader with a

European trading firm, talking to Reuters.

But overall global volumes remain heavy

and traders may also be hoping for demand in

India, Indonesia and Vietnam to take up the

supply, ahead of spring maintenance in Asia

and as refineries here face the occasional

outages, sources said.

Most of the 18 LR tankers storing a total of

nearly 2 mill tonnes of gas oil are anchored

off Southeast Asian, with a few located off

India and the MEG.

At least six Panamaxes, nine Aframaxes and

three Suezmaxes, were anchored off

Singapore, Malaysia, Indonesia, Fujairah and

Sikka along the Indian coast.

Charterers include European trading

houses Vitol, Sempra, Mercuria, Trafigura

and Glencore, as well as oil major Shell and

US investment bank Morgan Stanley, the

sources added.

More trading houses could join in the

contango play when the market structure widens

towards the end of winter as demand for heating

fuel thins out, analysts and traders said.

For now, the vessels will probably remain

in Asia, as it would too costly to move cargoes

to Europe, as had been done regularly since

the first quarter of last year, traders said.

McQuilling’s viewUnder the influence of massive orderbook

deliveries, and IMO-mandated exit profiles,

the tanker fleets are poised to endure some

drastic changes to net composition.

This year will see over 300 newbuilds

joining the fleet, tempered by nearly 200

single-hulls beaching for recycling. The net

result may offer some balance through 2010,

but come 2011, McQuilling Services forecast

that the tides may turn once more.

McQuilling presented the tanker fleet

supply estimations based on a reference case

scenario. In January, the consultancy found

1,055 confirmed orders for tankers of 27,500

dwt and above for delivery through 2014

(confirmed orders being those with IMO

numbers assigned).

From this figure, some 1-2% of the orders

were deducted due to possible cancellations

from contracts held by financially

questionable owners in similarly challenged

yards. In addition, IMO I and II type chemical

carriers were excluded, thus arriving at an

orderbook of 899 vessels.

Against the newbuilds, the exit profile

assumed that over half of those vessels due to


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p41-56:p39-50.qxd 26/02/2010 10:46 Page 2

March 2010 � TANKEROperator Annual Review III


leave the trading fleet in 2010 will actually

exit, with the remaining continuing to trade

having passed life extension inspections as per

IMO provisions.

Given poor returns, narrowing trade

opportunities, and a considerable cost for the

4th and 5th special surveys, it is likely that

few owners will invest in the extension of

single-hulls.

However, after careful review of flag states

that own single hull tankers, together with

their IMO-13G stances, it would appear not

all are ready to let older tonnage retire so

soon, McQuilling thought.

In order to arrive at projected tonnage

supply, the exit profile for each sector was

combined with the anticipated deliveries to

produce a net fleet growth. All tanker sectors,

except Panamax and MR1 product carriers,

show net fleet growth during this period.

The Panamax sector decreased by 11

vessels last year, and is expected to contract

further in 2010 before seeing a slight growth

in 2011. The aged MR1 fleet also decline in

number this year, before seeing a four-vessel

net increase in 2011.

In the larger sectors, the VLCC fleet

experienced a 24 vessel growth last year and

is set to see further growth in 2010 by 31

vessels. The Suezmax fleet saw a net increase

of 42 vessels last year, but expansion will

slow to 19 vessels in 2010 - largely tempered

by forecasted delays from particular yards that

hold a significant portion of troubled orders.

McQuilling’s long-held perspective is that

the majority of tanker sectors are oversupplied

with tonnage relative to demand. Net fleet

growth is expected to peak in 2011,

particularly evident in the VLCC and

Suezmax sectors.

This means that tonnage overhang is almost

certain to continue to build in the face of near-

term tepid tanker demand.

So while net fleet growth this year may be

somewhat subdued, the tides of supply in

2011 will see considerably greater numbers of

vessels entering the fleet.

Cash is kingLondon-based accountant and consultancy

Moore Stephens said that opportunities exist

for those with cash.

Despite the pressure of increased

environmental compliance, 2010 will be a

good year for anyone in the shipping industry

with cash and access to finance, the

consultancy said.

Julian Wilkinson, head of the Moore

Stephens shipping industry group, said, “For

the first time in a decade, shipping bankers

can get a decent and certain return on their

dollar. Credit is restricted, loan pricing is up

strongly and no banker now has to look for an

excuse to turn away marginal business.

Stronger clients and higher margins point

towards happier bankers, even more so where

the banks foreclose on the weakest borrowers.

“In the shipyards, the shortage of credit is

being used by shipowners to push back

delivery dates and renegotiate contracts. The

effect is less profound in China, where

Chinese banks and the government are taking

up the slack. The big European yards are

expecting big cruise orders, as the global

economy begins to look up. But in the world’s

leading shipbuilding nation, South Korea, we

may see mass lay-offs if work dries up.

“Most shipowners, meanwhile, expect tough

markets for the next year. But a growing

global economy, booming scrapping and a

fast-diminishing orderbook-overhang may

mean that the markets will be less tough than

expected. Combine that with record low

global interest rates, and things don’t look too

bad for owners who are not over-extended.

“Shipping is already the greenest of all

forms of transport. Globally, it is much

greener right now than it has ever been, as a

large proportion of the fleet is going into lay-

up, the scrapping of old tankers is reaching

record levels, and those ships still working are

doing so at slow and very economical speeds.

But this year shipping will see more green

costs forced on it. IMO will act slowly, and it

will be some time before we see a shipping

carbon tax or trading scheme. There are

already pressures from charterers, however, to

measure the green performance of ships,

because they want to be able to tell the end-

consumer how green their supply chain is. The

result will be that older and less fuel-efficient

ships will find it harder to get charters, and

will face lower rates, while forward-looking

owners will have to invest in a green agenda.

“2010 will be a tough year for shipping,

and toughest of all for the yards. But it will

be a year of opportunity for anyone with cash

and access to finance, as they pick up cheap

assets from failing projects. And it will also

be the first year in which we will see a new

kind of shipping finance, as cautious but

forward-looking bankers begin to enquire

about the environmental performance of ships

and companies they are being asked to fund.

Then we shall see a lot of people going green,

and those without access to credit looking

green with envy at those who have it,”

Wilkinson forecast.

0

100

200

300

400

500

600

700

800

900

1000

VLCC SUEZ AFRA LR2 PANA LR1 MR2 MR1

1/2010

12/2010

12/2011

Moore Stephens’ Julian Wilkinson. TO

Tonnage supply 2010 - 2011

Number of vessels

Source: McQuilling Services.

p41-56:p39-50.qxd 26/02/2010 10:46 Page 3

For the first time since the

International Tankers Oil Pollution

Federation (ITOPF) began collating

tanker spill statistics, no major oil

spills were recorded from tankers last year and

the total was the lowest in history, the

federation said.

Defined as 700 tonnes or greater (> 5,000

barrels), the number of major spills from

tankers had consistently been reducing over

recent years, such that the average number of

major spills for the decade (2000-2009) is

about three. This was less than half of the

average for the 1990s and just an eighth of the

average for the 1970s.

The same was true for medium sized spills

from tankers (from seven to 700 tonnes, or 50

– 5,000 barrels) where the average number of

spills occurring in the last decade was 14, half

of that experienced during the previous

decade. Consistent with the reduction in the

number of oil spills from tankers, the volume

of oil spilt also showed a marked reduction. In

some cases, the total quantity of oil spilt in the

last decade was less than had been spilt

previously in a single year.

Nevertheless, there was obviously

considerable annual variation in the

incidence of oil spills and the amounts of

oil lost, as a single major incident can

severely distort the statistics for a particular

year. Indeed, the recent collision between a

tanker and a tug towing barges in Texas,

meant that the record for 2009 will not be

maintained; such is the unpredictable nature

of accidents.

However, the statistics for the last decade

reflected the downturn in accidental spills

from tankers that had been evident since the

end of the 1970s. This reduction can largely

be attributed to the combined efforts of the

oil/shipping industry and governments

(through the IMO) to improve safety and

pollution prevention, ITOPF said.

Minor spill problemsAgainst a background of a declining number

of major tanker spills, smaller operational

spills and bunker spills from non-tankers

continued to occur. “In our experience, even

minor incidents can generate significant

claims for environmental damage and

economic loss, many of which can require a

substantial contribution from ITOPF staff and

ensure that we remain busy”, the organisation

explained.

TANKEROperator Annual Review � March 2010IV

�umber of oil spillscontinues to decline

Lack of recent major oil spills has significantly reduced the overall figures

on the quantity of oil spilled.

ANNUAL REVIEW - POLLUTION

0

100

200

300

400

500

600

700

1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009

000'

s to

nnes

KHARK V 80,000 tonnes

ATLANTIC EMPRESS287,000 tonnes

EXXON VALDEZ 37,000 tonnes

CASTILLO DE BELLVER252,000 tonnes

ABT SUMMER260,000 tonnes

ERIKA20,000 tonnes

PRESTIGE63,000 tonnes

HEBEI SPIRIT10,500 tonnes

SEA EMPRESS72,000 tonnes

Position Shipname Year Location Spill Size (tonnes) 1 ATLANTIC EMPRESS 1979 Off Tobago, West Indies 287,000 2 ABT SUMMER 1991 700 nautical miles off Angola 260,000 3 CASTILLO DE BELLVER 1983 Off Saldanha Bay, South Africa 252,000 4 AMOCO CADIZ 1978 Off Brittany, France 223,000 5 HAVEN 1991 Genoa, Italy 144,000 6 ODYSSEY 1988 700 nautical miles off Nova Scotia, Canada 132,000 7 TORREY CANYON 1967 Scilly Isles, UK 119,000 8 SEA STAR 1972 Gulf of Oman 115,000 9 IRENES SERENADE 1980 Navarino Bay, Greece 100,000 10 URQUIOLA 1976 La Coruna, Spain 100,000 11 HAWAIIAN PATRIOT 1977 300 nautical miles off Honolulu 95,000 12 INDEPENDENTA 1979 Bosphorus, Turkey 95,000 13 JAKOB MAERSK 1975 Oporto, Portugal 88,000 14 BRAER 1993 Shetland Islands, UK 85,000 15 KHARK 5 1989 120 nautical miles off Atlantic coast of Morocco 80,000 16 AEGEAN SEA 1992 La Coruna, Spain 74,000 17 SEA EMPRESS 1996 Milford Haven, UK 72,000 18 NOVA 1985 Off Kharg Island, Gulf of Iran 70,000 19 KATINA P. 1992 Off Maputo, Mozambique 66,700 20 PRESTIGE 2002 Off Spanish coast 63,000 35 EXXON VALDEZ 1989 Prince William Sound, Alaska, USA 37,000

Quantities of oil spilt (over 7 tonnes) from 1970 to 2009

Major oil spills since 1967

Source: ITOPF.

Source: ITOPF.

p41-56:p39-50.qxd 26/02/2010 10:46 Page 4

ANNUAL REVIEW - POLLUTION

March 2010 � TANKEROperator Annual Review V

ITOPF’s figures include spills from

tankers, combined carriers and barges and

take into account – accidental – spills and

not those caused by acts of war, such was

seen in the Middle East Gulf during the

Iran/Iraq conflict.

Information is held on almost 10,000

incidents with the majority of spills being in

the smallest category, ie plus or minus seven

tonnes. However, information on spills of

more than seven tonnes tends to be more

reliable, ITOPF said.

Of course one large spill can distort the

figures as seen in the 1979 VLCC AtlanticEmpress (280,000 tonnes), the 1983 Castillode Bellver (252,000 tonnes) and the 1991

ABT Summer (260,000 tonnes) cases. By

comparison, the Exxon Valdez grounding

only amounted to a loss of 37,000 tonnes,

putting her at No 35 on the list of the

all time highest oil spills recorded by

OCIMF.

The first major oil spill officially recorded

concerned the Torrey Canyon, which

grounded and broke into two off the Scilly

Isles in 1967, resulting in a spill of 115,000

tonnes of crude oil.

There were several incidents on board

VLCCs in the late 1960s and 1970s, however,

these occurred while the vessels were in

ballast and were put down at the time to a lack

of knowledge on gas freeing.

Causes of spillsMost incidents are the result of a combination

of actions and circumstances, all of which

contribute to a varying degree to the final

outcome. ITOPF has analysed spills taking

into account the primary event, or the

operation underway at the time of the

incident.

The Federation found that most spills

resulted from routine operations, such as

loading/discharging and bunkering, which

normally occur in ports, or at oil terminals.

The majority of the operational spills

were small with some 90% involving

quantities of less than seven tonnes, the

Federation said.

Accidental causes, such as collisions and

groundings generally give rise to much

larger spills with at least 84% of these

incidents involving quantities of more than

700 tonnes. TO

“In our experience, even minor incidents can

generate significant claims for environmental

damage and economic loss, many of which can

require a substantial contribution from ITOPF

staff and ensure that we remain busy”

“

”

ITOPF was established as a non-profit making serviceorganisation in 1968. In theearly days its principal functionwas the administration of theTOVALOP voluntary oil spillcompensation agreement. However, for the past 40 years, ITOPF has

also provided a broad range of technical

services in the field of marine pollution to

and on behalf of shipowners, their P&I

insurers and other groups, such as the

International Oil Pollution Compensation

Funds, as well as to the community at large.

The Federation’s membership currently

comprises some 5,980 shipowners and

bareboat charterers of more than 10,500

tankers with totalling over 300 mill gt.

The organisation also benefits from the

participation of some 495 mill gt of

non-tanker tonnage owned and operated by

its associates.

ITOPF's main sphere of activities is the

response to accidental marine spills and the

organisation's team of highly experienced

technical staff are at constant readiness to

travel anywhere in the world at a few hours’

notice, the organisation claimed.

Since 1978, ITOPF staff has attended

some 650 incidents on site worldwide.

ITOPF also:

� Assesses the damage caused by spills

to the environment and economic

resources;

� Provides advice on the technical

merits of claims for compensation;

� Conducts contingency planning,

advisory and training assignments;

� Produces a wide range of technical

publications;

� Maintains various databases as well as

a website at http://www.itopf.com

Broad range of services offered

Collisions29.1%

Groundings36.3%

Loading/Discharging8.1%

Hull failures12.4%

Equipment failures0.9%

Fire & Explosions7.2%

Other operations1.1%

Other/ Unknown5%

Incidence of spills >700 tonnes by cause, from 1970 to 2009Source: ITOPF.

p41-56:p39-50.qxd 26/02/2010 10:46 Page 5

Part of the company’s tonnage restructuring

plan, included the termination of timecharter

contracts on five Suezmaxes from Eiger

Shipping. Two were redelivered to their

owners in November last year, another two

last December and the final vessel was due to

be redelivered this year.

In addition, in 2009 the company and its

affiliates cancelled four Suezmax and two

VLCC newbuilding contracts.

The structure of the company has not changed.

It is still a commercial operation handling

vessels owned by its affiliates and others on

long term charters.

All of the technical operations are sub-

contracted to four third party shipmanagement

concerns. These include V Ships – Germany,

Norway and the UK; Wallem

Shipmanagement; International Tanker

Management of Dubai (now part of V Ships)

and Thome Shipmanagement.

Frontline has dealings with other companies

in which Norwegian entrepreneur John

Fredriksen has interests. These include

Independent Tankers Corp, Knightsbridge

Tankers and Ship Finance International. �

Despite a period of cancellation and tonnage restructuring,

Frontline and its affiliates’ total comes out as

much the same as last year’s listing.

The total is made up of 27 Suezmaxes,

eight OBOs and 45 VLCCs with another three

Suez-maxes to come this year plus a further

six VLCCs – two this year and four during

2011-2012.

At the beginning of this year, Frontline’s

commercially managed fleet included one

single hull Suezmax and five single hull

VLCCs.

TANKEROperator Annual Review � March 2010VI

TOP 30 TANKER COMPANIES

FRONTLINE(18.9 mill dwt, plus 2.3 mill dwt newbuildings)

TA�KEROperator’sTop 30 owners and operators

This list has been compiled taking the total deadweight tonnage of each fleet in

descending order. The list includes owned, managed and operated tonnage where known.

The total tonnage is made up of crude carriers, chemical and product tankers of over

10,000 dwt. We have not included FPSOs, or gas ships. The information has been

compiled with the help of company websites, the Equasis database

and other sources, plus the companies themselves.

1

p41-56:p39-50.qxd 26/02/2010 10:46 Page 6

This international groupwith its routes in Japan now says it

operates 181 tankers of 17.4 mill dwt, which

moves the group into second place.

A steady stream of deliveries, including

VLCCs, has taken the total number of crude

Teekay only has onechartered in VLCC on its books, hence

the total deadweight tonnage is less than

Frontline and MOL.

The group, which now consists of

separately public companies Teekay LNG

Partners, Teekay Offshore Partners and Teekay

Tankers, plus parent Teekay Corporation,

claims to ship about 10% of the world’s

seaborne oil and has dubbed itself – ‘The

Marine Midstream Company’.

At the end of last year, the company had

158 vessels shown on its fleet list. These

included chartered in and managed vessels,

plus 13 newbuildings.

Recently the fleet has diversified through a

series of mergers and acquisitions and now

consists of 45 Aframaxes; 35 shuttle tankers;

30 Suezmaxes; 10 product tankers; six FSOs,

five FPSOs and one VLCC.

Not included in the figures are a further 15

LNGCs, plus four newbuildings and two LPG

The purchase of the Navion fleet boosted Teekay’s involvement in the North Sea shuttle tanker sector.

March 2010 � TANKEROperator Annual Review VII


2

MOL GROUP(17.4 mill, plus over 1 mill dwt newbuildings)

carriers, plus another four newbuildings.

Teekay’s interests in FPSOs came about due

to the acquisition of specialist Norwegian

player Petrojarl, while the group’s shuttle

tanker business was built on the back of the

purchase of Navion, plus Anglo Nordic and

tie ups with other companies. Likewise, the

product tanker business was built up on the

back of the 50% buyout of OMI with TORM.

At the end of last year, the tanker newbuilding

programme was coming to an end. �

TEEKAY CORPORATION(16.3 mill dwt)

3

carriers to 47, product tankers to 56 and chemical

tankers to 78, according to data published in the

third quarter results as at September of last year.

In addition and not included in the overall

figures are 10 LPG carriers and interests in

72 LNGCs.

However, included in the figures are

chartered vessels and those operated in joint

ventures. MOL’s main tanker subsidiaries

include Tokyo Marine, Asahi Tanker and MS

Tanker Shipping, which account for a large

tranche of chemical tankers. �

p41-56:p39-50.qxd 26/02/2010 10:46 Page 7

TANKEROperator Annual Review � March 2010VIII

Taking NYK as a wholeentity the fleet has considerably

increased with the deliveries of a tranche of

VLCCs with still more to come.

Under operational management are 35

VLCCs, plus six other crude carriers, 33

product tankers and seven chemical carriers.

NYK claimed that the number of VLCCs

now operated put the company in third place

in the large tanker category.

In addition, NYK has interests in 10

VLGCs and one ammonia carrier, plus 39

LNGCs.

The newbuildings included another seven

VLCCs and one MR. �

Nippon Yusen Kaisha (NYK)(11.5 mill dwt, plus 2.3 mill dwt newbuildings)

4


Similar to most tanker operators

today, OSG operates a mixed fleet of

owned and chartered vessels.

The company is also involved with joint

ventures and pools. The company’s fleet

ranges from ULCCs, two of which are part

owned with Euronav, taking in every tanker

size range and sector to Jones Act product

tankers, specialised lightering tankers,

articulated tug/barge combinations (ATBs),

plus a car carrier.

OSG has recently sold off all of its single

hull units and today only operates double hull,

double bottom, or double sided tonnage.

Two of the ULCCs, co-owned with

Euronav, have been converted to FSOs at

Dubai for a contract to operate in Maersk Oil

Qatar’s Al Shaheen oil field off Qatar, but one

– FSO Africa, ex TI Africa - is now subject of

a dispute between the owners and charterer,

while the other – FSO Asia, ex TI Asia – has

been delivered and is on site.

In its foreign going fleet, OSG operates 15

VLCCs (including the ULCC TI Oceania).

These include eight owned and seven

chartered vessels. In addition, there are two

chartered in Suezmaxes, 15 Aframaxes (six

owned and nine chartered, including an LR2),

13 Panamaxes (11 owned and four chartered,

including LR1s), seven specialist lightering

Overseas Shipholding Group (OSG) (10.8 mill dwt, plus 2.1 mill dwt newbuildings)

5

NITC took the world bysurprise last year by ordering 12

VLCCs from two Chinese shipyards for

delivery 2012-13.

At the end of last year, the Iranian tanker

company added the last of a series of 13

VLCCs built in South Korean yards,

bringing the total VLCC fleet to 28.

In addition, the Iranian concern has nine

Suezmaxes and five Aframaxes trading

internationally, plus three handysize

chemical/product tankers used purely for

domestic trades.

As well as the VLCCs on order, NITC is

believed to have ordered a series of five

63,000 dwt shallow draft Panamaxes for

Caspian Sea operation from Iranian

shipyards. �

NITC(10.6 mill dwt, plus atleast 3.82 mill dwtnewbuildings)

OSG owns a diverse fleet, including Jones Act tankers.

6

vessels (two owned and five chartered) and 25

product carriers (10 owned and 15 chartered),

which includes two US flag tankers trading

internationally.

OSG’s US flag Jones Act fleet includes

11 handysize tankers (four owned and

seven chartered), seven ATBs and three

lightering vessels. Neither the ATBs, nor

four Q-Flex LNGCs were included in the

overall figures.

As for the newbuildings, at the end of

October last year, OSG had three VLCCs,

four LR1s, 15 handysize (five US flag), plus

two lightering tankers on order, or under

construction. �

p41-56:p39-50.qxd 26/02/2010 10:46 Page 8

March 2010 � TANKEROperator Annual Review IX


and two LPG carriers, plus various other types

of vessels in the fleet.

The Sovcomflot board at a regular meeting

on 18th December 2009 considered the results

of the implementation of the ‘principal

directions of Sovcomflot’s development’ for

the period of 2004-2009 and approved the

SCF group’s strategy for 2010-2015.

During the past five years, the SCF fleet has

grown by more than three times. The average

age of the tankers has been reduced from 7.5

to 6 years.

By entering such sectors as the

transportation of LNG and LPG, as well as the

development of new and unique transportation

technologies for crude oil shuttle tanker

operations in extremely harsh and heavy ice

conditions of the Arctic and the Far East, the

range of services offered has been

significantly broadened. Revenues have

increased more than three times and in 2009

amounted to $1.23 bill. The book value of net

assets has doubled to $2.81 bill and dividends

paid have increased by 14 times. �

Since the amalgamation ofSovcomflot and Novoship, the Russian

giant now claims to be the world’s largest MR

operator and the second largest Aframax

operator in terms of owned vessels.

Due to its activities in the Barents Sea region,

Sovcomflot is also the largest owner of Arctic

shuttle tankers and due to its participation in

Sakhalin 2 project, the company also claims to

be the number one in ice class LNGC operation.

Of the 118 tankers currently operating, 15

are Suezmaxes (plus one chartered), 36

Aframaxes (plus two in commercial

management), 12 smaller chemical tankers

(formerly owned by MarPetrol), four LR2s,

five ice-classed shuttles (including three

Arctic shuttle tankers), 30 MRs (plus two

chartered) and 16 are handysize tankers (plus

one in commercial management).

In addition, Sovcomflot’s newbuilding

portfolio includes five Suezmaxes, four

Aframaxes, two Panamaxes and two small

chemical tankers.

Not included in the figures are six LNGCs

Sovcomflot Group (9.63 mill dwt, plus 1.4 mill dwt newbuildings)

7

Sovcomflot’s new livery can clearly be seenon the MR East Siberian Sea.

p41-56:p39-50.qxd 26/02/2010 10:46 Page 9

TANKEROperator Annual Review � March 2010X


Maersk Tankers, part of theAP Moller-Maersk group, has also

shot up the rankings, partly due to the

amalgamation of Broström’s tonnage and

partly through the delivery of newbuildings

and more chartered in tonnage.

This gives the Danish giant control over

nine VLCCs, 33 LR2s, 33 MRs, 103

Handysizes, 66 intermediate and 16 small

product tankers. Most of the vessels operate in

various pools in which Maersk Tankers is the

commercial operator, or partner.

The total will probably increase even more

next year as the company’s newbuilding

portfolio includes another eight VLCCs, two

Aframaxes, four MRs, seven Handysize and

six small product tankers.

In addition, Maersk Tankers manages 24

LPG carriers. Elsewhere, the LNGC fleet is

managed by Maersk LNG, having come

under the banner of the Maersk Drilling

The Belgian-based tankerowner has increased its fleet since last

year’s listing.

Including long term chartered vessels and

those co-owned in joint ventures, Euronav

has interests in 24 VLCCs/ULCCs, of which

nine are chartered in either directly, or jointly

with partners.

In addition, there are another 18 Suezmaxes

either owned, or operated on Euronav’s books.

A total of 21 VLCCs and one ULCC are

operating in the Tankers International Pool of

which, Euronav is one of the major partners.

Another ULCC is currently being converted to

an FSO, while a third is under long term contract.

In addition, the company has still to take

delivery of one more VLCC and six

Suezmaxes, which are on order or under

construction. Four of the Suezmaxes will be

managed under joint venture agreements. �

In this year’s listing,we have included commercially

managed tonnage where possible, hence

Danish product tanker giant TORM has

shot up the rankings.

TORM manages three pools – MR,

LR1 and LR2 – which together with other

vessels managed, gives the company

responsibility for a grand total of 124

vessels split into 11 Handysizes, 49 MRs,

34 LR1s and 30 LR2s.

In addition, TORM has a further 13

MRs and seven LR1s building for its

own account. �

Euronav (9.6 mill dwt, plus 1.3 mill dwt newbuildings)

8

TORM(9.6 mill dwt, plus 1.3dwt newbuildings)

9

Maersk Tankers(8.4 mill dwt, plus 3.3 mill dwt newbuildings)

10 division in April 2009.

Another AP Moller-Maersk group affiliate

manages FPSOs and FSOs, which are not

included in the figures. �

Euronav has 21 VLCCs in the Tankers International Pool.The TORM Gerd operates in TORM’s MR pool.

Maersk Tankers

controls 33 LR2s.

p41-56:p39-50.qxd 26/02/2010 10:46 Page 10

AET operates 49

Aframaxes and

has another 13 to

come.

The MISC Berhad subsidiary

operates 11 VLCCs, 49 Aframaxes,

one LR2, one Panamax, three MRs and six

smaller coastal tankers.

In addition, AET has 13 Aframaxes, three

MRs and two smaller tankers on order, or

under construction, all due to be delivered this

year, or next.

For its Galveston lightering operation, AET

has two workboats on order, due for delivery


Formerly Kristen Navigationand part of the Angelicoussis Group,

Maran Tankers Management has expanded its

fleet since the last review.

Maran Tankers Management (8.4 mill dwt, plus 1.1 mill dwt newbuildings)

11

AET Tankers (6.9 mill dwt, plus 1.9 mill dwt newbuildings)

12 in mid-2010.

Parent MISC also claims to be the world’s

largest independent operator of LNGCs and

also has two FPSOs and one FSO on its

books, plus a series of chemical tankers. �

March 2010 � TANKEROperator Annual Review XI

Saudi giant Vela has sheda few single hull VLCCs and taken

delivery of its sixth newbuilding VLCC in the

period under review.

VELA International Marine (6.2 mill dwt, plus 1.3 mill dwt newbuildings)

13

Today, the shipmanagement arm has 19 VLCCs,

11 Suezmaxes and eight Aframaxes on its books.

The list of VLCCs include four vessels

longterm chartered to Chevron Shipping.

Today, the fleet consists of 20 VLCCs

(down from 24) one Aframax (LR2) and four

MRs. In addition there are another four

VLCCs to come from Daewoo this year.

In addition, there is one Aframax and another

three VLCCs to come.

Another group company - Maran Gas - looks

after the fleet of LNGCs and LPG carriers. �

Added to this, are an unknown number

of tankers regularly taken on timecharter,

or spot charter, on behalf of its parent

Saudi Aramco. �

p41-56:p39-50.qxd 26/02/2010 10:46 Page 11

TANKEROperator Annual Review � March 2010XII


NSCSA is anothercompany, which has shot up in

the rankings. This was due to taking delivery

of a series of VLCCs with possibly more

to come.

National Shipping Corporation of SaudiArabia (NSCSA) (5.8 mill dwt, plus 720,000 dwt newbuildings)

14

Dynacom has also risen in the rankings, due to

taking delivery of one VLCC, two Suezmaxes and eight Panamaxes

last year.

At the turn of the year, the company had 10 VLCCs, nine Suezmaxes, one

Aframax and 18 Panamaxes.

Some of the VLCCs are vintage so some sales are probable this year.

Early this year, Dynacom is due to take delivery of another two

Suezmaxes and has a further six VLCCs on order. �

Dynacom TankersManagement(5.7 mill dwt, plus 1.2 mill dwtnewbuildings)

15

At the time of this survey, NSCSA

controlled 17 VLCCs and 11 chemical

carriers. There are another 16 chemical

carriers under construction, which will join

their sisters in the NCC subsidiary. NCC is

80:20 owned in a joined venture with

SABIC.

The Dubai-based Saudi company also has

a 30.3% interest in Petredec, operator of a

fleet of LPG carriers. �

Singapore-based concern – BW Maritime – formerly BW Shipping

Management, manages 16 VLCCs, 12 LR1s and two smaller

chemical carriers.

The company’s newbuilding projects include two more

VLCCs.

Other affiliates look after offshore and gas shipping

interests of the BW Group, which are substantial. �

BW Maritime(5.5 mill dwt, plus 720,000 dwtnewbuildings)

16

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March 2010 � TANKEROperator Annual Review XIII

At the beginning of January,TEN operated 51 tankers covering all

size ranges from VLCCs to Handymaxes.

The split was 26 crude carriers from

VLCCs to Aframaxes and 24 products tankers

from LR2s to Handysizes. The other vessel is

an LNGC.

In addition, TEN has a further two

Aframaxes for delivery this year and two

more Suezmaxes on order for delivery 2011.

In late January, the company announced

that it had sold two Aframaxes – the 2003

built Marathon and Parthenon – for a total

of $78 mill. �

Also higher up in thepecking order, Singapore-based Ocean

Tankers has taken delivery of several vessels

with more to come.

Ocean Tankers is an affiliate of Hin Leong

and thus far manages four VLCCs, seven

Suezmaxes, 14 LR2s, seven LR1s, 21 MRs,

19 what are called general purpose tankers

and 12 bunker barges.

On the newbuilding front, the company has

seven VLCCs and three MRs on order, or

under construction. �

Tsakos Energy Navigation(TEN) (5.5 mill dwt, plus 526,000 dwt newbuildings)17

OceanTankers(5.4 mill dwt, plus 2.4mill dwt newbuildings)

18

Tanker PacificManagement(5.2 mill dwt, plus 900,000 dwt newbuildings)

Tanker Pacific is anothercompany to have sold off its single

hull tankers recently in the light of the IMO

phase-out.

This leaves the Singapore-based company

with eight VLCCs, two Suezmaxes, 18

There is no change to BP’sfleet composition this year and no

newbuildings on the horizon.

Today, the shipping arm of the oil major

manages four VLCCs, 20 Aframaxes in two

classes, 17 MRs in two classes, plus four

VLGCs, seven LNGCs in two classes, one

LNGC for the Northwest Shelf project and a

shuttle tanker. �

Although difficult to quantify as many of the vessels are

purely employed on coastwise trades, a

calculation using the Equasis database

showed that the conglomerate operated four

VLCCs, five Aframaxes, 13 Panamaxes, 34

Handysize to MRs, plus a plethora of small

product tankers.

As for the company’s newbuilding

programme, this consists of three VLCCs,

eight Panamaxes and two MRs. �

19

BP Shipping(4.3 mill dwt)

20

21

ChinaShippingDevelopment(4.3 mill dwt, plus 1.6mill dwt newbuildings)

TEN’s 40,000 dwt MR Byzantion seen anchored in Fos Bay.

One VLCC is shown for delivery this

year out of three on order. In addition,

the company has another two Aframaxes

to come. �

Aframaxes, two LR1s and 13 MRs.

Its newbuilding programme consists of four

Aframaxes and eight MRs.

In addition, affiliate Tanker Pacific Offshore

Terminals owns FPSOs and FSOs, which were

not included in the figures. �

Dalian Ocean Shipping(4 mill dwt, plus 1.1 mill dwt newbuildings))

Part of the huge COSCOgroup, Dalian Ocean Shipping

operates eight VLCCs, three Suezmaxes,

one Aframax, 13 Panamaxes and an MR.

22

Minerva Marine has risenslightly in the rankings due to new

deliveries, including a VLCC last year.

The company now manages two VLCCs,

Minerva Marine(4 mill dwt)

23 five Suezmaxes, 19 Aframaxes and 10 MRs.

In addition, Minerva recently entered the

drybulk Capesize market and now manages

three recently delivered units. �

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TANKEROperator Annual Review � March 2010XIV

This company regularly buys and sells tonnage, as well as

being active in the newbuilding

market.

At the turn of the year, Thenamaris

managed two VLCCs, seven Suezmaxes, 16

Aframaxes and five MRs.

In addition, the company also has a sizeable

drybulk carrier fleet. �

Univan manages 12 VLCCs,three MRs and eight smaller

chemical/product tankers.

Among the tankers under management are

vessels for Cido, Dannebrog Invest

Management, Shinyo, TMT and Van-Clipper.

The company is also involved with

newbuilding supervision for third-party

owners, including VLCCs. �

Chevron Shipping operateseight VLCCs, four Suezmaxes, two

Aframaxes and five MRs.

Four of the VLCCs are on longterm charter

from the Angelicoussis group.

The shipping arm of the US oil major has

several 1970s built tankers, but all are double

hulled.

Chevron also has interests in two LPG

carriers and one of the Northwest Shelf

project LNGCs. �

Shipping Corporation of India (SCI)(4 mill dwt, plus 1.2 mill dwt newbuildings)

SCI’s huge fleet is undergoing

a replacement programme as the

earlier tonnage is single hull, whose

operation is now banned along the Indian

coast.

Several vessels have been sold for recycling

and more will no doubt follow. Others are

24

Thenamaris ShipsManagement(3.7 mill dwt)

25

SK Shipping is involvedwith South Korea’s utility companies

by shipping oil and gas.

The company manages nine VLCCs, two

LR2s and three MRs, plus one Handysize

tanker. As for newbuildings, SK Shipping

has seven VLCCs on order, or under

construction.

In addition, SK Shipping has interests in six

LNGCs and a further six LPG carriers. �

One LR1 has been added tothe fleet since the last Top 30 listing,

giving KOTC a total of eight VLCCs, three

LR2s, three LR1s and three Handysize

product carriers.

AMC is the tankershipmanagement arm of the

Hong Kong Min Wah Group, itself

part of the giant China Merchants Group.

The company manages eight VLCCs, eight

Afrmaxes, one Suezmax and has a further four

VLCCs on order, of which two were due for

delivery early this year. �

Univan Ship Management (3.7 mill dwt)

26

27

ChevronShipping (3.5 mill dwt)

SK Shipping (3.2 mill dwt, plus 1.1mill dwt newbuildings)

Kuwait Oil Tanker (KOTC)(3.1 mill dwt)

AssociatedMaritime (3 mill dwt, plus 1.2 milldwt newbuildings)

28

29

30

One of Thenamaris’ 16 Aframaxes.

being used for storage and lightering duties.

Included in this review are four VLCCs, six

Suezmaxes, eight Aframaxes, seven

Panamaxes, eight MRs and six Handysize

tankers. The company also has interests in two

LPG carriers and two LNGCs.

Two MRs were delivered in January of this

Univan manages 12 VLCCs.

year and another one is to come. In addition,

there are six LR1s, two LR2s and four

Aframaxes on order or under construction.

There could be more orders in the pipeline, as

similar to other Indian owners, state-owned SCI

is looking to further build up its fleet on the

back of increased Indian refining capacity. �

KOTC also has another four VLCCs

on order, or under construction.

In addition KOTC manages four

LPG carriers and another four bunker

tankers. �

p41-56:p39-50.qxd 26/02/2010 10:46 Page 14

ANNUAL REVIEW - INSURANCE

March 2010 � TANKEROperator Annual Review XV

Risks associated withnew green fuel

legislationRegulations for the restriction of air pollution from ships will mean extra costs and

responsibilities for shipowners, BMT Marine & Offshore Surveys has warned.

Speaking at a London insurance

market seminar organised by the

marine consultancy, principal

surveyor Gerry Williams said:

“Burning ships’ fuel in an environmental

manner is a huge challenge.”

Williams said that fuel technology is a

discipline and a science, on its own. Most

shipowners currently use a fuel mix

containing on average worldwide 2.6%

sulphur, but Marpol Annex VI regulations

specify a reduction in July 2010 for ships to

1%, and in 2015 to 0.1% in ECAs.

The control areas are the English Channel,

North Sea and Baltic Sea. Ships can still burn

1.5% sulphur in the Mediterranean and

potentially 4.5% outside the European Union.

The US has similar legislation pending, which

would create control areas 200 nautical miles

off its coastlines. One of 24 miles off

California is already in force and has its own

separate controls, one of which sets all fuels

to or below 0.1% by 1st January, 2012.

“Potentially, this could result in some ships

carrying four different fuel types at any one

time. The complex changeovers will

inevitably increase the opportunity for errors

which in turn may lead to costly claims,”

explained Williams.

Record keeping vitalIn order to comply with the legislation, a

ship’s officer will have to demonstrate in his

or her record-keeping that the fuel has been

changed in sufficient time before crossing into

a control area. The changeover can be done in

about one hour, but if it is done too quickly,

“there is a danger you can gas up the engine.”

A rapid change of temperature can also cause

thermal shock, or seizure of the fuel pumps.

Commencing in 2010, a raft of legislation

limiting sulphur in marine fuels to 0.1% will

come, or have already come into force. This

includes EU Sulphur Directive (2005/33/EC)

for most ships ‘at berth’ in EU ports

(1/1/2010), CARB Regulated California

Waters regulations, mandating the use of

ISO8217: 2005 DMA or DMB grade fuels in

main and auxiliary engines and auxiliary

boilers (1/1/2012) and MARPOL Annex VI

for fuel oils to be used inside ECAs

(1/1/2015).

Currently, according to a survey, the

average sulphur content in heavy fuel oil is

2.46%, although some owners already have a

sulphur limit of 1.5% in their specification.

Yet there is little experience around of the

likely effects of using 0.1% sulphur, said

Williams, and this experience may come at a

premium as this legislation comes into force.

Turning to other fuel concerns, Williams

said that what was described as ‘bad fuel’ in

casualties was more to do with poor handling,

rather than sub-standard fuel. In one example,

a chief engineer experiencing severe

purification problems, such as heavy sludging,

forced through the out of specification fuel

rather than reporting a problem and as a

result, wrecked the engine.

Engine damagePoor management of even above average

specification fuel could cause a very costly

failure. For example, since 2001, BMT

surveyors have dealt with at least 30 instances

of engine damage caused by fuel problems

related to catalytic fines. This problem is

increasing and is likely to get worse with the

additional demands for low sulphur fuels.

Each of these casualties required a complete

renewal of pistons, liners and injectors, at a

cost of $1 mill to $3 mill each. One resulted in

a vessel failing to keep up with a convoy and

falling victim to Somali pirates.

Williams also referred to the problem of

unscrupulous suppliers adding waste to their

product, inflicting serious damage. Chemical

and other wastes had found their way into fuel

selling at $500 per tonne. On one occasion

fuel was contaminated by waste from the

cosmetics industry. “The engineer surveyor

had a difficult time explaining to his wife

when he came back from survey why he smelt

of perfume when he usually smelt of the

engine room!” said Williams.

Calling for strict controls by shipping

companies over their use of fuel, he urged that

they institute, or improve fuel management

programmes to ensure sampling before use

and regular inspection of handling. Williams

said that exemplary care was shown by

managers of the Maersk fleet. He said that the

company does not allow its ships to use any

fuel until thoroughly analysed and confirmed

BMT’s Gerry Williams.

p41-56:p39-50.qxd 26/02/2010 10:46 Page 15

ANNUAL REVIEW - INSURANCE

TANKEROperator Annual Review � March 2010XVI

by the technical management ashore that it

can be used.

He also praised the new Lab-on-a-Ship

concept developed by Danish company

NanoNord and classification society Lloyd’s

Register, which checks the fuel and lubes

before use.

Polar problemsSpeaking at the same seminar, Andrew

Kendrick, vice-president of BMT Fleet

Technology, the Canadian subsidiary of BMT

Group addressed the problems of overcoming

navigation in ice covered waters and cold

climates.

“World authorities and maritime businesses

remain desperately short of expertise in

ensuring safe shipping operations in polar

regions,” Kendrick said.

This situation prevails despite the rush to

exploit and trade minerals in these harsh

climates, and sell polar passenger cruises, he

explained. Laboratory testing cannot provide all

the answers as to what happens when a 100,000

dwt vessel crashes into a large piece of ice.

But BMT is discussing with shipping

companies how to build a new, safe

generation of Arctic tankers. What is well

known is that even light ice can exert

dangerous forces on a ship, especially those

with poor quality steel. Furthermore, the

speed of a ship is critical in an impact; while

most sail quite slowly in the Arctic, LNGCs

cannot because for reasons of efficiency, they

have to keep up with the trains (facilities)

producing the LNG, Kendrick explained.

This means there will soon be big ships in

the Arctic travelling quickly, and no

operational experience exists in this area.

BMT therefore is trying to develop a thorough

understanding of what the loads of these ships

will be, and whether LNGCs will take the

dynamics of ice-breaking loads. These ships

will, however, cost significantly more than the

standard open water ships.

Oil and gasThe biggest factor exciting people at present is

the prospect of oil and gas: the Arctic is

estimated to contain up to 25% of the world’s

undiscovered reserves and several giant fields

have been discovered. Kendrick forecast that

sea transport will play a major role in energy

exploitation, with offshore fields having

marine components for exploration, drilling

and production; heavylift by ship and barge

will compensate for lack of infrastructure

around onshore fields; and movement of LNG

cargo will be by sea.

Pipelines are difficult to build in Arctic

areas, and keeping the permafrost bed frozen

in summer is a key factor. “As the summers

get longer and the winters get warmer, that

becomes more of a challenge.” said Kendrick,

as pipelines are both a technical and an

ecological risk.

The Antarctic presents a more complex

problem when it comes to managing

emergency response, due to its remoteness

and low population density. As a result, the

IMO has been asked to turn its guidelines for

ships operating in polar waters into a

mandatory code.

Kendrick went on to warn of limited

icebreaker support and expressed concern that

it will probably be at least a decade before a

new generation of icebreakers is available

from any government source. Response times

for any emergencies are therefore going to be

slow for summer events and very slow for

winter events.

On a similar theme, Kendrick went on to

underline that there are very few ports in polar

regions and very limited refuges where a

disabled vessel could safely spend the winter.

If ice formed more rapidly than expected, it

would be impossible to find a safe haven. He

said that the Canadian Arctic, an area the size

of Western Europe, has a population of

15,000, and these people are dispersed in

small settlements.

Rescue difficultTherefore, it would take some time before any

rescue service could intervene by air, let alone

by sea. Lifesaving equipment is unsuited for

polar conditions, and pack ice would quickly

rip liferafts apart. Lifeboats had little inherent

winterisation, while non-ice strengthened

vessels would simply be crushed, he said.

The development of Arctic shipping suffers

from a severe lack of trained people,

following from the downturn in training in the

late 1980s and early 1990s. To fill the gap,

retired Russian, or Canadian icebreaker

officers, sometimes well into their 70s, are

being asked to perform the duties of an ice

navigator, advising a vessel’s master.

In addition, the absence of both adequate ice

navigation simulators and on board experience

makes a challenging situation more difficult.

This is further complicated by the fact that

standard modern radar does not pick up the

presence of ice particularly well. Charts are

poor, except for those which are the preserve of

military powers. This is made worse by the fact

that national governments are not investing

much in charts, although energy companies are

working on this necessity.

BMT Marine & Offshore Surveys recently

received the Chartered Insurance Institute

(CII) accreditation for its training events and

seminars during 2010. The company is

arranging further CII accredited seminars in

New York, Greece and Hong Kong in the

first half of this year. These will address

topics such as lay-up problems, new bunker

fuel regulations, polar ice operations as

well as the Chinese newbuilding and

components market. TO

BMT’s Andrew Kendrick.

“World authorities and maritime

businesses remain desperately short of

expertise in ensuring safe shipping operations

in polar regions”

Andrew Kendrick, vice-president BMT Fleet Technology

“

”

p41-56:p39-50.qxd 26/02/2010 10:46 Page 16

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