TANKEROperator JANUARY/FEBRUARY 2015
Features:
Refinery growth Flag states on regs STS issues debated NORDEN’s new MRs Rudder protection Enclosed space dangers
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Contents 04
Markets Trade routes changing What next?
Operations 17 Commerical C/Ps need to reflect ECAs STS issues aired STS - a risky business
24 Anti-Piracy A passive solution
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News Focus Dealing with complexity
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Middle East Report Refinery ramp up Tankers at ASRY
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Ship Registries Keeping a grip on regs IRI’s success revealed
25 Technology 25 Ship Description
NORDEN’s MRs LNG Ethylene Carriers 29 Ship Efficiency Emissions Control 30 External Coatings Protecting Rudders Carbon Credits’ Success Ice Coatings 33 Tank Services Enclosed space entry drills 29 Conference Report Motivation need highlighted
Front cover - As the competition hots up in the Middle East to win tanker repair contracts, Bahrain-based ASRY retrofitted several tankers with Mewis Ducts last year during routine drydockings. The large shiprepairer and engineering concern now claims to have stolen a march on the opposition having gained expertise in fitting the ducts, which have proved popular since they were introduced a few years ago. With tanker rates hitting levels not seen for years, the region’s repairers should see business picking up, as owners and managers have more cash to play with.
January/February 2015
TANKEROperator
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COMMENT
Are we over administered? The IMO is to be applauded for publishing the findings and conclusions of its first ever public consultation on the perceived burdens of administration. The over-burdening of shipping folk was thought caused by the slew of mandatory IMO instruments, ie, conventions, codes and other instruments that have appeared and keep appearing on a regular basis. In order to encourage the widest possible participation by everyone with an interest in, or relevant knowledge of, or work experience with IMO regulations, the consultation was launched under the banner ‘Have your say!’ on a dedicated web page. The web page was active between May and October 2013 and responses could be given either on behalf of an organisation (shipping company, etc) or in a personal capacity. All responses were processed and analysed by a steering group supported by the IMO secretariat. This steering group was established by IMO’s Council and its tasks were to review responses from the consultation and to develop recommendations. The IMO’s main objective was to identify those administrative requirements in mandatory instruments perceived as ‘unnecessary, disproportionate, or obsolete’ which may hinder effective regulatory compliance, making it more complex and difficult, with implications for daily shipping operations efficiency. In its review, the IMO said that it was very encouraging that many seafarers took part in the consultation as some 60% of the responses came from Masters, senior officers and other seafarers. The analysis of their feedback, together with that of other respondents, was conducted to establish whether administrative requirements
were thought problematic, or not, by an individual respondent (eg, a senior ship’s officer), by a particular group (ships’ crews), or by a variety of groups (ships’ crews and shipping companies). A perhaps surprising major finding was that the majority of administrative requirements addressed in the consultation process, 351 out of the total of 563, or some 66%, were not thought to be individually burdensome by any of the respondents, the IMO said. One respondent said the voluminous paper work came from charterers, shipmanagement companies, P&I Clubs and port agencies, stating that administrative burdens emanating from IMO instruments were “the very minimum” by comparison. However, even when individual administrative requirements were justified, their combined volume caused ships’ crews to spend considerable time on bureaucratic tasks, rather than actually operate the ship, which might compromise safety. Controlling control Similarly, to a large extent, inspectors focused on verifying conformity with the correct procedures and establishing that the necessary check lists, reports and other paperwork, have been produced to prove that the procedures were followed correctly. An inspection thereby becomes ‘control of control’, with a tendency to evaluate the quality of the oversight system rather than the quality of the ship and the crew. The IMO came to the conclusion that the nature of the listed requirements and the stakeholder types involved provided a rather diverse picture that cautioned against drawing firm conclusions. Calls were made for urgent change, for instance, by working with ‘intelligent’ databases on websites with secure access in
order to rationalise paperwork. This was indicative of a new, IT-savvy generation seriously questioning the necessity of keeping multiple records covering the same event, or subject matter and asking why inspectors seemingly spend more time pouring over a ship’s certificates than physically looking over the ship. It was instead recommended that certificates could be posted on a website with access provided to accredited authorities, or, according to one stakeholder, “a Facebook for ships”, with all certificates available for observation. As another respondent put it, the tendency to “smother everything we do with paper” is also a result of a blame orientated and litigious culture, encouraging everybody to increase the paperwork as a means to demonstrate that everything has been done to prevent mistakes or mishaps and thus to avoid legal liability – by pointing the blame elsewhere. Significantly, it was noted that while the majority of the 182 administrative requirements thought burdensome were still necessary, proportionate and relevant, it was often the accumulation of requirements that represented a burden and this was an important issue IMO needed to address. After hours of debate, the steering group was able to adopt recommendations to the Council by consensus, which addressed a wide variety of matters. For instance, it was concluded that the procedures perceived as burdensome – some 24% – could be reduced by using some form of electronic reporting, or notification. Keen to be seen as keeping up with the ever changing world we live in, the IMO has produced an infographic listing the full recommendations made following this revolutionary questionnaire, which can be found on its website. TO
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INDUSTRY - MARKETS
Traditional crude trade routes changing Long-established crude oil trade routes are being shaken up on the back of changes in geographic supply and demand, primarily the US. any types of crude oil are produced around the world. Depending on the requirements of a particular refinery, a blend of heavy and light crudes is processed to manufacture a variety of petroleum products, McQuilling Services said in a report. After peaking at 9.6 mill barrels per day (b/d) in 1970, US crude oil production steadily declined until it reached a low of 4.94 mill b/d in 2008. During the same period, US crude oil imports increased sharply to bridge the gap of decreasing domestic supply and increasing demand. In response to declining North American production and anticipation of rising heavy grade imports from the Caribbean, Latin America and Saudi Arabia, many US refineries were reconfigured to process heavy crude in the 1990’s. At the turn of the 21st century, rising global fuel costs led to advancements in crude oil extraction technologies, setting the stage for the development of the North American unconventional crude oil industry. Since 2008, supply from Canadian oil sands and US shale reserves have grown by 80%. The most significant aspect of the North American unconventional crude oil renaissance is the variety of crudes produced. For example, the Canadian oil sands supply heavy crudes and US shale reserves supply
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light crudes. Because of the assortment of crudes available from unconventional areas, increased North American production has displaced a wide range of foreign crudes, which has led to the restructuring of longestablished trade routes. Canadian exports to the US have had a considerable impact on the global supply chain and McQuilling forecast that this phenomenon will escalate through 2019. Canada is a net exporter of crude oil and as productivity from its oil sands increases, Canadian exports to the US will also expand. Due to intermodal transportation constraints, Canadian crudes have not reached coastal ports to load tankers for more distant export markets in any significant volumes. The US remains the main beneficiary of Canada’s growing export trade, absorbing around 97% of its international crude sales. Since nearly all US shale production is light, heavy Canadian crudes are in high demand from US refiners. Gulf Coast refineries use a blend of light and heavy crudes to optimise the crude types and increase operating efficiency. Widespread effect Considering the wide range of crude grades available from unconventional North American producers, commercialising the oil sands and shale industries has had widespread effects on global trade flows. Since 2005,
Figure 1: US Crude Oil Production and mports
exports of heavy Canadian crudes to the US increased by 1.5 mill b/d, while the US simultaneously increased light crude production by 4 mill b/d. The effect of rising North American heavy and light crude oil production on other trades is highlighted in Figure 1. By 2014, US imports from Iraq, Mexico, Nigeria, Saudi Arabia and Venezuela declined by 2.7 mill b/d from 2005 levels. Collectively, about 1.5 mill b/d of heavy grade exports from Mexico, Saudi Arabia and Venezuela to the US were displaced by heavy grade Canadian crudes, while the light grade Nigerian trade to the US was almost completely decimated by US tight oil production. As North American imports declined, the tonnage was absorbed into alternative markets. Figure 2 illustrates the trade flow shift that has taken place over the past decade, the consultancy explained. In response to falling US imports, Nigerian exports have primarily been diverted to the Indian sub-continent and Europe. India’s economy is expected to grow by about 6.5% year-over-year through 2019. By 2019, India’s crude demand is forecast to grow by 40% over 2010 levels. However, Indian crude production is only foreseen to increase by 12% during the same period, suggesting a supply deficit that will drive greater crude imports. Saudi Arabian exports to the US have declined by roughly 20% since 2005. The first
Figure 2: Nigerian Trade Flow Adjustments
Source: McQuilling Services.
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TANKEROperator January/February 2015
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INDUSTRY - MARKETS Figure 3: Saudi Arabian Trade Flow Adjustments
Source: McQuilling Services.
significant decline in Saudi Arabian exports to the US, besides the 2008/2009 recession linked drop, took place in 2013, as a result of Canadian oil sands production growth. By 2014, Saudi Arabian exports to the US had
decreased by 20% over 2005 levels. Figure 3 displays the trade flow shift caused by decreased Saudi Arabian exports to the US. Growing demand from India and China has soaked up the lion’s share of displaced Saudi cargoes. As Canadian oil sands production expands in coming years, Saudi Arabian heavy grade crudes will continue to exit the North American markets and into alternative growing markets, such as China and India. By 2019, we expect that an additional 500,000 b/d of Saudi Arabian
exports to the US will be displaced by Canadian oil sands production, McQuilling said. “It is our view that economic growth in China and India will generate enough demand to take in the displaced Saudi production, leading to increasing tanker demand on the AG/East trades,” the consultancy said. Trade flow rebalancing will be a central theme in tanker markets for the next five years. To better understand the changes in global trade flows and the impact on tankers, McQuilling Services has created a proprietary vessel deployment model. This model may help shipowners optimise fleet deployments by providing the most profitable triangulated trade routes across eight vessel classes. This will be launched in the upcoming ‘2015-2019 Tanker Market Outlook’, which is due to be released this TO month.
Markets - into the unknown? Leading London broking house, Gibson, has taken a look into its crystal ball to look at some events, which could shape 2015. t is far too early to see any impact for owners/charterers in terms of operational problems with the the new ECA maximum sulphur limits introduced on 1st January. However, the decline in bunker prices has at least softened the blow in the short term. We also expect to see the Ballast Water Management (BWM) Convention ratified (and implemented 12 months later) at some stage during the year. This convention requires just one moderately sized flag state to sign off the code, which will compel owners to invest in expensive treatment systems. Several flag states are known to be keen to sign up to the convention, but are reluctant to be the one to tip the balance. This year should also see the final few single-hull tankers taken out of service. While very few are still trading in the conventional sense, mostly in the MR sector and below, this could have an influence on scrapping levels,
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Gibson said. Overall, crude tanker supply growth slowed considerably during 2014 on the back of low ordering between 2011 and the first half of 2013 with the exception of Suezmax tonnage. As a consequence, the crude tanker delivery profile for this year is just 50 units of 10.6 mill dwt. Conversely, orders placed for product tankers over the same period will impact rapidly into the clean market during 2015 with almost 200 vessels of 12 mill dwt scheduled for delivery. Ordering slump Similar to that seen in 2013, last year many sectors of the tanker market finished with a flourish. The difference between this year and last is that thus far, we haven’t seen a proliferation of ordering buoyed by the improvement in the freight market. For the time being, investments in new tonnage has appeared to have largely dried up which for
most, must be viewed as good news, Gibson said. OPEC’s decision not to cut production may have had some influence in this area and speculation about how this decision will play out ahead of the next scheduled meeting in June remains rife. Double-edged sword The low oil price can be viewed as a doubleedged sword, stimulating oil demand but creating downwards pressure in terms of oil production. The oil contango widened significantly during the second week of January and many protagonists assessed their position ready to take advantage of the situation. In addition, any changes to US/Canadian policy on crude exports will also stimulate the market and recent changes in condensate exports legislation may be the first step to achieving this, Gibson said.
TO
TANKEROperator January/February 2015
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INDUSTRY - NEWS FOCUS
How to reduce complexity in a complex industry The tanker industry is complex. Few would argue with that point and it would take a separate article to tell the story of how that developed and how it works.* n the short term that’s unlikely to change so this paper will concentrate on what the tanker operator can do to reduce the impact on his business. The question I want to answer is:- Does a complex industry inevitably lead to a complex company and complex shipboard operation? The figure attached shows the key external influences and internal choices that shape the tanker operation. The external influences provide boundaries within which the organisation works. These boundaries can be ‘hard’ boundaries, such as are covered by the law or they may be ‘softer’ ones, which the operator chooses to adopt such as ’best practice’. Let’s look at the choices the operator can make within those boundaries and consider
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optimistic, assumption, that in the long run more complex markets should command a premium, which provides the resources to manage complexity effectively. Ownership by a corporation, especially an energy company, or conglomerate, can introduce complexity. For example, incidents in other divisions of the corporation can create generalised, non marine, requirements for the tanker division. While some of these requirements can bring fresh ideas, these need to be challenged to ensure the requirements fit the marine operating environment. The company’s motivation, why it does things, is every bit as critical as strategy. Values and culture provide a ‘sub plot’ for people to follow when making decisions and need to be clear and unambiguous. For
how that affects the complexity of the operation as distinct from the industry. The organisation’s strategy sets direction (ie what the organisation aims to do) within the boundaries and indeed may create further voluntary technical, operational and moral boundaries. Within the strategy, a number of choices can be made that affect complexity. For example, the scale of the organisation and the markets it operates in will influence the structure of the organisation, including such things as the need for regional representation and complexity of process. Strategic decisions are not, however, generally made to make business simple. So some compromise will be required between desired strategy and a simpler organisation. There is a reasonable, though currently Flag State Legislation/ Compliance
e, l tat ona S gi rt Po l/Re tion ca ula Lo reg
???
What? Direction/Strategy Core Activity Scale and Marke r ts Goals/Goal Conflicts
Why? Values Culture Motivation
How? Performance Structure Systems Tech Te h no l og y
Customers
Corporate/ Commercial
Media
‘B Best Pra actice’
Safe, Sustainable Efficient and Reliable Opera ation
Key external influences and internal choices that shape the tanker industry.
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Litig gation
Source: MOAMS.
TANKEROperator January/February 2015
INDUSTRY - NEWS FOCUS example a stated value such as openness is subverted when people are punished for things they have reported. A lack of openness means that problems with complexity in systems and process stay hidden. Perceptions of the outside world are shaped by the company’s values. For example, a company that promotes and rewards, a learning culture may generate more change than the organisation can cope with. This shows in an excessive willingness to introduce changes from litigation, media and best practice. The perception is that the organisation should react to all stimuli. Even if all the ‘what’ and ‘why’ choices are made correctly, ‘how’ you deliver them can create complexity. Performance management An example is performance management. Performance indicators are of great value and there are some long established ones covering, for example, daily running costs, downtime, incident rates. Too many KPIs have derivative goals and abstract measurements which, especially when tied to inappropriate
January/February 2015
bonus, can generate ‘cottage industries’. An assumption that performance is linear can mean that enduring KPIs eventually suffer from the laws of diminishing returns. Knowing when to stop using a KPI is as important as starting it in performance terms! There are very few genuinely enduring KPIs. Another example is organisation structure. Specialisation and layers of management are required in all but the smallest companies. As an organisation gets bigger, more layers intrude and more specialisation is required. Politics and personality can also become a multiplier of complexity. In the discussion thus far, one critical dimension has not been mentioned - people and their competence and training. In a complex system the unexpected happens. The nature of the system is that things happen at the sharp end and the front line staff are the ones who need to deal with the consequences. To do that they need to have good technical and non technical (human element) skills. They also need to understand the organisation they work for and what is expected of them. They need to know they are supported and
TANKEROperator
trusted to do the right thing when procedures and manuals run out of options. They should be treated as the star goalkeeper not the redcarded miscreant sent off for bad behaviour!! To summarise:The tanker operator faces many requirements that set his boundaries. Some are mandated and some are not. The operator’s perceptions are important in understanding and applying the non mandated ones. In addition to externally driven requirements there are many ‘what’, ’why’ and ‘how’ internal choices the operator can make that define the complexity of the operation. When the unexpected happens you need good people to make good decisions in good faith and feel supported If you take these points into account then it is not inevitable that the complexity of the industry will drive a complex organisation and complex shipboard operations. TO *This article was written by Martin Shaw, managing director, Marine Operations and Assurance Management Solutions (MOAMS).
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INDUSTRY - MIDDLE EAST REPORT
Refinery capacity build up continues During the past few years, there has been a huge revamp of refinery capacity involving most of the countries that make up the Middle East. hile much of this capacity will be used for domestic energy and utility purposes, several Arabian Gulf countries are looking to export refined products to add to their crude oil interests. In addition, Iraq and Iran are seeking to beef up their crude oil production from both new inland and offshore fields. Much of this oil will be transited via pipelines to loading terminals in the Eastern Mediterranean and the Arabian Gulf for export worldwide, especially to China and India. With both China and India also ramping up their refinery capacities, tanker demographics could fundamentally change in the coming years. The unknowns thus far, which could affect expansion plans in the longer term are the falling oil price and any change by the US Government over its stance on crude exports. According to various reports emanating from the region, the Middle East oil states are in the middle of a surge in refinery construction, which could increase regional capacity by a third in five years, a recent Bloomberg report said. The International Energy Agency (IEA) said last year that the oil producing countries would have processed 8.8 mill barrels per day of crude in 2014, almost 10% of global consumption, the highest since the IEA started estimates in 2006. The Middle East saw its first wave of refinery construction in the 1980s, but growth in regional demand has absorbed much of that capacity. The new refinery projects could bring as much as 3 mill barrels per day of new refined export capacity, reinforcing the worldwide trend towards long-distance products supply, resulting in longer tonne/miles, Bloomberg said. However, growth in exports may be reined back, due to the countries energy consumption rising twice as fast as the global average, meaning greater domestic demand, according to the US Energy Department. Taking Saudi Arabia as an example, the country’s refining production could overtake
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its crude output, Reuters said in a report published towards the end of last year. The Kingdom, a key member of OPEC, also recently committed to keep the crude oil pumping at the same rate, despite the fall in oil prices and the glut of crude oil worldwide. As an example of its expansion, two new refineries will give Saudi Arabia around 800,000 barrels per day extra capacity this year, while its total capacity could rise to 8 mill barrels per day in 10 years time. Product exports While much of this will likely be consumed domestically after 15-20 years to feed the Kingdom’s growing economy, for now Riyadh is set to become a major exporter of refined oil products, such as gasoline, diesel and jet fuel, the report said. State-owned Saudi Aramco and its subsidiaries own, or have equity interest in, domestic and international refineries with a total worldwide refining capacity of 4.9 mill barrels per day, of which its equity share is 2.6 mill barrels per day, making it the world's sixth-largest refiner. In the kingdom, a 400,000 barrels per day refinery- SATORP- located in Jubail, reached full capacity during the middle of last year and another similar capacity plant, Yanbu’s Yasref refinery, started trial runs in September, 2014 with the first gasoil export cargo seen in December. Saudi Aramco's CEO Khaled al-Falih said last May, that the company's downstream investments would exceed $100 bill over the next decade as high growth markets of the Far East and the Middle East "will make us one of the largest downstream players on the planet by volume." To market its refined products, the company has set up offices in Europe and Singapore. It has been exporting hundreds of thousands of tonnes of product monthly to Europe and Asia and negotiated spot deals through its trading arm- Aramco Trading- to supply jet fuel to the UAE and gasoline to Kuwait and Bahrain last year, local sources told Reuters.
Aramco Trading was set up in 2012 to trade and sell products directly to refiners. Other national oil companies, including China's Sinopec and CNPC, have also significantly increased their trading arms. "By 2018-19 Saudi Arabia will be producing two thirds product and one third crude. That will have great implication for OPEC," Fereidun Fesharaki, chairman of energy consultant FGE, said on the sidelines of last year’s Oil and Money conference in London, reported Reuters. Seven refineries According to Iran’s Mehr News Agency - the National Iranian Oil Refining and Distribution Co (NIORDC) has built, or is planning to build, seven refineries across the country. These are Khuzestan refinery, The Persian Gulf Star refinery, Shahriar refinery, Anahita refinery, Hormuz refinery, Caspian refinery and Pars refinery. When all of these refineries come on stream, Iran’s refining capacity of crude oil and gas condensates will be raised by 1,560,000 barrels per day, while 110 mill litres will be added to its gasoline production, the news agency reported. While most of these refineries will be used for domestic consumption, some, notably Khuzestan, near Abadan and Hormuz at Bandar Abbas, are, or will export refined products. However, according to a recent report from Bloomberg, Iran’s oil exports have dropped 60% to 1 mill barrels a day, the Tehran-based Shargh newspaper reported, citing comments by Oil Minister Bijan Namdar Zanganeh without detailing the time scale involved. US and European sanctions on Iran over its nuclear programme have curbed foreign investment and hindered development of the MEG state’s oil and natural gas reserves. Predicting oil prices is impossible because “political motives and interventions are behind” the recent market collapse, Zanganeh said, without explanation, according to Shargh. He previously described the drop in
TANKEROperator January/February 2015
INDUSTRY - MIDDLE EAST REPORT crude prices as “a political plot” and said Iran would “under no conditions let go of its share of the oil market,” the ministry’s news website Shana reported on 17th December. The drop in crude prices compounds the pressure Iran faces from economic sanctions. Efforts to reach a deal with the US and other world powers over its nuclear work have gained Iran some relief from the restrictions, though diplomatic negotiations have been extended until July amid differences, Bloomberg said. Iranian exports rise Another report compiled by Platts said that Iran had exported 2.94 mill barrels per day of oil in December, 2014, some 430,000 barrels per day higher than the month before. The hike in exports was down to a recent deal hammered out with the Kurdish authorities, Platts said. The exports include 2.76 mill barrels per day from southern Arabian Gulf terminals, along with 180,000 barrels per day shipped from the Turkish port of Ceyhan, Iraqi oil sources confirmed to Platts on 5th January. Based on these figures, Iraq's production during December was estimated at 3.4 mill barrels per day, including 150,000 barrels per day of Kurdish crude. If confirmed, this would be the country's highest production rate since 1979, Platts said. November production was 2.89 mill barrels per day, while exports were 2.51 mill barrels per, according to the official figures. Oil previously exported through an independent pipeline system operated by the semi-autonomous Kurdistan Regional Government (KRG) was transferred to storage tanks controlled by Iran’s State Oil Marketing Organisation (Somo) to be exported from Ceyhan.
This followed the 13th November, 2014 agreement between Erbil and Baghdad under which the KRG agreed to supply at least 150,000 barrels per day of oil to Somo. The northern export rate is expected to increase to 550,000 barrels per day through 2015, with 150,000 barrels per day supplied by the KRG and 300,000 barrels per day supplied by Iraq's North Oil Co. These volumes will all be transported by the Political map of the Middle East and its surrounds. new KRG export However, southern exports rose on average pipeline, according a subsequent agreement 328,000 barrels per day to 2.5 mill barrels per reached on 2nd December. day, compared with 2.13 mill in 2013. The The record export rate indicates an average increase could have been larger if the pumping rate of around 115,000 barrels per necessary pumping and storage infrastructure hour to the Gulf terminals. If sustained were in place, Platts said. throughout this year, it will go a long way to As much as 3.1 mill barrels per day of vindicating the assumption made in Iraq's draft southern crude was available for export at the 2015 budget under discussion in parliament at end of last year, in addition to 7 mill barrels the time of writing, which forecasts 2.75 mill stored in tanks, which could have added barrels per day of exports from the south, around 200,000 barrels per day to the export Platts said. rate, Platts concluded. Northern Iranian exports - excluding the Other Middle East countries known to be KRG's own exports by pipeline and trucks involved in refinery upgrades, or the averaged 62,000 barrels per day in 2014, introduction of new plants, include Egypt, compared with 263,000 barrels per day in Iraq, Jordan, Kuwait, Oman, Qatar, Syria, 2013. UAE and Yemen. This sharp drop was as a result of the The key of course, is whether the falling oil closure of the Iraq/Turkey pipeline due to price is sustained through this year and sabotage in March and the subsequent whether the Chinese economy continues to takeover of the pipeline area by Islamic State cool. militants since mid-June. TO
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INDUSTRY - MIDDLE EAST REPORT
Tanker success at leading Gulf repairer Bahrain-based shiprepairer ASRY repaired 32 tankers in the first half of 2014, the same number as in the first half of 2013. he figures for the full year were not available at the time of writing. The majority of tanker work last year was routine drydockings. However, several dockings included the installation of Becker Marine Mewis Ducts. Due to the number of Mewis Duct installations that ASRY has undertaken, the repairer has managed to bring the turnaround time down to be much less than most of its competitors, the company claimed. For example, the shipyard completed a full drydocking, including the Mewis duct installation, on an a Greek-owned VLCC in 10 days. Down the years, ASRY has built long-term relationships with many leading tanker owners and managers, including Bahri, KOTC, Odfjell, Springfield, BW Fleet Management, UACC, AMPTC, Redsea Marine, Solvang, Transpetrol, Sun Enterprises, Chandris Hellas, and more. Recently, Maran Tankers joined the list, thus boosting the Greek presence. A company spokesman said that there were positives and negatives for the shipyard going forward in the tanker market. The positives include the political changes in the region, such as Iran’s sanctions loosening and Iraq’s recent crude export highs. In addition, this year should see the first dockings of over 600 tankers for their statutory five-year surveys since they entered service in 2010; the implementation of regulations, such as the Ballast Water Management Convention and emissions restrictions, will also result in tanker owners/managers looking to upgrade their vessels; while a relatively low level of tanker fleet growth will mean current fleet optimisation will be increased. Negatives include the overcapacity in the tanker market keeping spot prices low directly impacting the owners OPEX budget; uncertain docking schedules from the majority of tankers being in the spot market; and the increased repair capacity in the Gulf Cooperation Council (GCC) region. Based on the above, looking forward, ASRY forecasts that tanker rates will continue to be
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under pressure in 2015, due to an overall limited demand and abundance in available supply. For crude carriers, the shipyard predicted stability to still be quite far off, whereas there is more positive outlook for product carriers. (The reverse in currently truebut for how long? As well as undergoing normal drydocking, Maran Tankers' VLCC - Ed) Elizabeth I A was retrofitted with a Mewis Duct. Although the industry to Bahrain,” said Nils Kristian Berge, value per project will remain on the low side, ASRY CEO, “and we will undoubtedly benefit more dockings can be expected involving from having authorised experts on hand to product carriers over crude carriers. provide quick services and repairs to the many “Overall, we look forward to the possibility customers which choose MAN’s products. of global GDP rising, meaning oil demand Combined with other recent additions to the picking up and tanker fleet utilisation yard under ‘Project Jupiter’, such as Seven increasing, resulting in better freight rates for Seas, ABB, Solas, and more, ASRY is securing owners and bigger projects for shipyards,” the its position as a regional hub for authorised spokesman said. “Realistically, this optimistic marine expertise.” situation is still uncertain with the political Olaf Gunia, general manager of MDT tensions in the region looming large.” Meanwhile, ASRY has continued its strategy Middle East, commented, “Being able to widen our authorised support network to of teaming up with leading OEMs and service include ASRY and the Kingdom of Bahrain is providers. an excellent boost to MAN’s presence in the The latest tie-up came last November and region. ASRY’s addition ensures that involved MAN Diesel & Turbo, who now has a permanent presence in the shipyard. The new customers who choose our products can be confident that our experts are present at the MDT workshop area allows its service majority of the world’s major shipyards.” engineers to provide authorised support to the ASRY already accommodates 33 specialist company’s products installed on vessels contractors at the yard, including Gates, Alfa calling at ASRY and the Kingdom of Bahrain. Laval, Blohm+Voss, Harris PYE, Goltens, and This agreement is the latest development in more. As ‘Project Jupiter’ continues, 2015 will ‘Project Jupiter’, an initiative to give ASRY see several more leading service companies the leading portfolio of on-site specialist and OEMs take up permanent residence in the contractors in the Middle East. yard, the company said. “ASRY is proud to have attracted one of the TO most recognised names in the global marine
TANKEROperator January/February 2015
INDUSTRY - SHIP REGISTRIES
Issues abound this year for flag states There are several regulatory initiatives in the pipeline this year that ship registries (flag states) need to keep a grip on going forward. t seems that the world is becoming more litigious with national and international edicts coming thick and fast. Many of these have come from the IMO through its membership- the flag states themselves, but others have been thrust upon them, mainly for environmental reasons. This has put an extra burden on ship registries coming in the form of administration, vessel inspections and trying to double guess Port State Control (PSC) officers to remain of the various PSC administrations ‘White Lists’ and thus avoid PSC inspections altogether. Down the years, most flag states have come up to speed with safety legislation resulting in the old ITF mantra ‘flag of convenience’ almost becoming a thing of the past. Indeed, the largest flag states by tonnage of Panama, Liberia and the Marshall Islands are now considered to be ‘blue chip’, a situation that would have been unheard of some 15-20 years ago. Tanker Operator sought the views of two of the leading flag states/registries on a range of issues, which could affect vessel operations in the future. Perhaps the most pressing issue is the Ballast Water Management Convention, which should be ratified this year, meaning it will enter into force in 2016. For example, David Pascoe, head of maritime operations & standards, Liberian International Ship & Corporate Registry (LISCR), the US-based manager of the Liberian Registry said that Liberia has concerns about the PSC inspection of BWM systems, because some of the systems have operating limitations that are still unknown. “Liberia has strongly supported the revision of the G8 type-approval guidelines to make the process for approving ballast water treatment equipment more robust. Liberia again expressed its support for a revision of the G8 guidelines at MEPC 67 and was pleased when the committee agreed to begin a comprehensive review. Liberia is participating in the review,” he said. He explained that Liberia was participating
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January/February 2015
in the work involved. “As a party to the BWM convention, Liberia is conducting additional assessment of currently type-approved BWM systems intended for installation on Liberianflagged ships. If potential limitations are noted, they are included in an appendix to the type approval certificate issued by Liberia. We believe this additional information will help shipowners in their decisions regarding BWM systems.” Liberia has also supported Resolution MEPC.253(67), which was agreed at MEPC 67 and recognises that shipowners who have installed type-approved BWM systems, prior to application of the revised guidelines (G8), should not be penalised and that PSC should refrain from applying criminal sanctions, or detaining a ship, based on sampling during the trial period of two-to-three years following entry into force of the Convention. Goal Based Standards Also coming to a head is Goal Based Standards in vessels construction following the acceptance of the Harmonised Common Structural Rules. Pascoe said Liberia was pleased to learn at MSC 94 that IACS had completed the submission to the IMO of its member class societies’ documentation that is needed to start the Goal Based Standards verification audits. “However, we have certain concerns that some difficulties were identified that will make the work of IMO’s five audit teams more complex and difficult. It is hoped these will be sorted by mid-2015,” he said. At the end of last year, LISCR said that it had expanded its Middle East presence not least with the appointment of Fay Catsiba to the position of business development manager, based in Dubai. Pascoe explained, “The Middle East and Indian subcontinent is an area of strategic importance to the Liberian Registry. The Liberian Registry is committed to providing its clients in the region with the highest possible level of service and immediate access to the quality of expert advice they demand.”
TANKEROperator
LISCR’s David Pascoe.
Sunil Jaitly, the founder of Dubai-based marine consultancy and engineering services specialist Cleghorn Wilton and Associates (CWA), is a regional director of LISCR. In addition to managing CWA, he represents LISCR at all maritime events, both government and private, in the Middle East and in the Indian subcontinent. “This has helped increase the visibility and presence of the Liberian flag in the region and enabled local and international shipowners alike to receive firstclass, prompt flag administrative and engineering services, Pascoe said. CWA is LISCR’s authorised agent, providing a wide range of registration, flagging and certification services to shipowners and managers from the west coast of Africa across to the Far East. Greeks dominant Liberia has also become the flag of choice for Greek shipowners and operators, securing the leading position for the first time in more than 40 years, since the early 1970s. Recent figures produced by the Greek publication ‘Shipping & Finance’, which based its findings on data from the Marine Information Services database for Greek and 13
INDUSTRY - SHIP REGISTRIES Cypriot shipping companies, confirmed that the Greek merchant fleet now includes 800 Liberian-flag ships, 10 more than registered under the Greek flag and 300 more than are registered under the flag of Panama, LISCR claimed. Scott Bergeron, LISCR CEO, said at the time of the report,“This news is testament to the strong links which have existed between Greek shipping and the Liberian flag, dating back to the day in 1949 when the Stavros Niarchos-owned oil tanker World Peace became the first ship to be registered under the Liberian flag. “From that time until the present day, the Greek shipping community has supported the Liberian Registry, and vice-versa, through good times and bad. “Liberia’s dominant presence in the Greek shipping sector owes much most recently to the efforts of Michalis Pantazopoulos, senior vice president of LISCR (Hellas) in Piraeus, and to the continuing support of Capt Nick Soutos, president of the Soutos Group of companies and Consul General of Liberia in Greece since 1971.
“The shipping ties between Greece and Liberia have become even stronger during the extremely difficult economic climate of the past six years and it is gratifying to see that the Liberian flag is now the number one choice of Greek owners and operators. “Greece remains the undisputed number one shipping nation in the world and it is appreciable that it has demonstrated its continuing faith in the world’s leading open ship registry in such a transparent way,” he concluded. Turning to the problem of a dwindling world vessel orderbook, Pascoe said that ship registration, like all other sectors of the shipping industry, is highly competitive and will remain so throughout the continuing ups and downs in the market. To fail to compete is to compete to fail. Competitiveness among ship registers, again like that in other maritime sectors, is based on service and price and, perhaps more than any other part of the shipping industry, the results are transparent through PSC findings and other independent arbiters of safety and quality. Ship registries, which are able to show a
healthy and consistent growth in ships and tonnage on the strength of first-class service provided at a competitive price, while still appearing on all PSC white lists, should be the registries with which quality owners look to flag their ships. “The safety of ships and personnel must always be the number one priority for ship registries. Progressive registries must be proactive in the interests of their customers in today’s industry, anticipating problems where possible and providing solutions which keep ships moving safely and profitably,” he stressed. As for servicing the tanker sector in particular, he said that many of LISCR’s managers in its US head office and in its regional offices around the world have operational experience on tankers and/or have work experience as classification society surveyors, naval architects and marine engineers. As a result, tanker owners and operators are always provided with rapid access to specific expertise and experience, wherever and TO whenever they need it.
IRI expands on all fronts “We have had an exceptional year,” claimed International Registries (IRI) Chief Operating Officer, John Ramage. RI provides administrative and technical support to the Republic of the Marshall Islands (RMI) flag. In 2014, the tonnage of vessels flying the RMI flag increased by 17% reaching 114.5 mill gt by year end. The two largest vessel types under the RMI flag are bulk carriers and tankers each representing 36% of the fleet in terms of gross tonnage. Gas carriers, another growing sector, now stand at 9% of the tonnage of vessels registered. Ramage also indicated that the RMI Registry still has several more tanker newbuildings to come, despite a general downturn in ordering. A certain amount of consolidation occurred in tanker fleets last year and many of these new additions to fleets, by way of mergers and acquisitions, entered the RMI registry. This increase in tonnage has led to a beefing
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up of key personnel worldwide to service the vessels and their owners. Ramage said that recruiting the right people is essential and IRI is in the fortunate position of having 26 offices located worldwide thereby giving a wide geographical spread for potential recruits. The offices cover the key time zones, enabling IRI to offer 24/7 service, which is aided by a number of departmental specific email addresses whereby an owner, or his, or her representative, is able to contact the relevant department of the registry at any time and those personnel located in the relevant time zone can deal with the enquiry. In addition to the departmental contacts the RMI also has a duty officer system, which is available to respond to emergencies 24/7. Each of the worldwide offices has at least a Master Mariner, a technical expert and a class
IRI’s COO John Ramage.
TANKEROperator January/February 2015
INDUSTRY - SHIP REGISTRIES
The 2013-built Marshall Islands flag MR Front Avon seen outward bound in the River Elbe.
expert on hand, or a combination of all three, to field any query that an owner has. It is this focus on providing first class service that has made the RMI the flag of choice for many owners and operators, Ramage claimed. Local knowledge Local knowledge is also deemed to be an important element of the service, as the registry quickly realised that it was impossible to look after shipowners’ interests from one location. Owners need to be able to discuss issues with the registry in their own time zone; it is not practical to expect them to wait 12 hours until the office opens. “You are only as good as your
people,” Ramage stressed, and IRI is fortunate to have a conscientious and committed team of people. This year will see the ramp up of a training initiative, spurred on by the hiring of new people, from general office staff to those with technical expertise and for senior management. For example, several high level people have been recruited from class societies who have a very good technical and regulatory background but training is required to explain how a flag state administration operates. Training will be a combination of in-house and external training including CBT packages. A number of staff have completed a diploma in
Mill gt
Vessels
Fleet growth
As at 31st December, 2014
January/February 2015
TANKEROperator
Source: IRI
shipmanagement to gain a better understanding of the industry. Regular quarterly management meetings are held at which in-house procedures are reviewed, modernised and streamlined to eliminate any outdated methodology within the company. These initiatives are now necessary as the role of the flag state has changed considerably over the years. A responsible flag state is one which has a close relationship with the owner and class and has the expertise to achieve a balance between enforcing the various international conventions and providing guidance and assistance to the owner. Ramage stressed that IRI looks for owners who have a long term view of shipping and are committed to operating their vessels in a safe and secure manner. Any new potential companies wishing to use the RMI flag for their vessels will undergo a thorough vetting process together with the management company, if applicable. The management will also be visited by registry representatives if that company has not used the flag administration before. Like most flag states, IRI uses the class societies as recognised organisations (ROs) to conduct surveys and undertake other statutory work on behalf of the RMI Registry. The IMO subcommittee on Flag State Implementation (FSI) has developed a new Code for ROs, addressing its purpose, framework and structure, based on all existing requirements and recommendations of IMO instruments regarding ROs. RO guidelines Some important resolutions relating to ROs include guidelines for the authorisation of organisations acting on behalf of 15
INDUSTRY - SHIP REGISTRIES administrations and guidelines on specifications on the RO’s survey and certification functions acting on behalf of an administration. According to the IMO, this Code provides a consolidated instrument containing criteria against which ROs are assessed and authorised/ recognised and gives guidance for subsequent monitoring of ROs by flag state administrations. It was adopted last year at MEPC 65 and MSC 92. The two committees also adopted amendments to mandatory instruments, which were expected to enter into force on 1st January, 2015 to make parts 1 and 2 of the Code mandatory under MARPOL annexes I and II, SOLAS and the 1988 Load Line Protocol, the IMO said. “We need class in order to fulfil our function as a flag state administration and in this regard it is essential to have people with expertise of both technical and regulatory matters. We have a person dedicated as our class liaison who is in daily contact with the various ROs,” Ramage explained. As for the Ballast Water Management (BWM) Convention, the RMI Registry is generally happy with the port state control
(PSC) guidelines, which encourage a stepped approach to inspection and without a need to sample, unless there is evidence of clear grounds to do so. The RMI considers this to be a reasonable approach, especially when considered in conjunction with other agreements made by the MEPC sub-committee, Ramage said. Immediately as the BWM Convention enters into force, there will be a three year experience building trial period, including a moratorium on sampling related detentions and criminal sanctions. In relation to the three year trial period, MEPC noted that sampling and analysis protocols need further testing before these should be considered reliable grounds for detaining a vessel. MEPC also addressed another particular concern to ship operators, the subject of ballast water sampling during tank stripping operations, and here the committee agreed it was inappropriate to take a sample during the stripping process, when eductors are in operation. Regarding the International Association of Classification Societies’ (IACS) Harmonised Common Structural Rules (CSR) for tankers
and bulk carriers, which enter into force in July, Ramage explained that the IMO assessment teams are now making comments to be addressed by the individual societies. However, there is still a considerable amount of work to be done by IMO in consolidating the comments from all five teams before a final report on the new rules’ compliance with IMO's Goal Based Standards is submitted to the TO Maritime Safety Committee in June, 2016.
IRI Registry vessel types* Vessel
Number
Fleet %
Gross tonnes (mill)
Fleet % gt
Bulk carrier
950
28
41.1
36
Container
304
9
10.6
9
Gas carrier
131
4
10.1
9
General cargo
117
3
3.3
3
Miscellaneous
40
1
0.6
0.5
MODU
159
5
4.0
3
MOU
50
1
2.6
2
OSV
169
5
0.4
0.3
Passenger
10
0.3
0.3
0.3
Tanker
899
27
41.6
36
Yacht
514
15
0.1
0.1
*As at 31st December, 2014.
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Source: IRI.
TANKEROperator January/February 2015
INDUSTRY - COMMERCIAL OPERATIONS - ECAS
Charterparty clauses need to reflect ECAs Insurance and P&I service provider Skuld has published an advisory notice outlining how charterparties and their clauses should reflect the 1st January mandation of low sulphur fuels in ECAs. he new ultra low sulphur fuel (ULSF) regulations in ECAs under MARPOL Annex VI now requires more than on board ship preparations, they also require existing and future charterparties to be reviewed and their clauses to properly reflect the changes to reduce the risk of disputes between owners and charterers from a number of angles. There are several issues that could give rise to disputes between owners and charterers due to the new MARPOL regulations, which mandate the use of bunker fuel not exceeding 0.1% sulphur content by mass in designated ECAs in North America and Northern Europe from the beginning of this year. These include: Trading warranties. Readiness of the vessel to enter an ECA. Fuel specifications. Delays and fines if a violation is alleged. Deviations to avoid ECAs, or limit the time therein. Owners and operators would be well advised to consider these issues closely before concluding new fixtures and also for any existing charters, Skuld warned. The insurance concern outlined a brief overview of the types of issues that may arise.
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Trading warranties Charters will typically specify the geographical range in which a vessel can trade and indeed usually provide a list of expressly excluded ports, countries and areas. This is very important, or the owner may find that the charterer is at liberty to trade without limit (Temple Steamship vs Sovfracht (1944) 77 LL Law Reports 257). If a charter excludes North America and Northern Europe, then the impact of the new MARPOL Annex VI regulations should not be an issue unless it is decided between the parties to alter the trading range to include ECA areas. Should such a decision be made, then in particular the shipowner will have to January/February 2015
carefully review the position to ensure the vessel can physically fulfil any contractual promise to lawfully trade to such areas. If a vessel is chartered out on the basis that ECAs are within the agreed trading range then an owner will have to comply with charterers' lawful orders to go there, even if that is not the trading pattern where the vessel was previously employed (absent special factors or contractual variations). English and US legal positions will be similar on this, Skuld explained. Vessel readiness The shipowner typically undertakes, to a certain degree, that the vessel is physically and otherwise ready to perform the lawful orders of the charterers, trade within agreed ranges and carry agreed cargoes. The nature and extent of this obligation, including whether, or not, it is in the nature of a continuing warranty, will very much depend on individual charterparty terms, but it is typically taken to be an obligation that goes beyond just seaworthiness (The Derby [1985] 2 Lloyd's Report 325). For the US position, see Harloff vs Barber & Co, 150 F 185, 192 (DNY 1907). (The duty is upon the owner of a ship to render her fit in design, structure, condition and equipment to encounter the ordinary perils of the voyage, to follow and perform contractual lawful orders and to be fit for the receipt and carriage of cargo). One question, however, which has come up repeatedly in the run up to 1st January 2015, is how extensive the obligation may be on a shipowner to take steps to modify a vessel to make her ready for trading in the ECAs, while using ULSF. Given that the ULSF will in all likelihood have to be kept carefully segregated from any residual high sulphur fuels, or risk cross contamination and possible MARPOL violation, vessels will have to check whether tank and line arrangements, as well as
TANKEROperator
capacity, will allow this to be undertaken safely. Modern ships may have numerous fuel tanks with separate lines, but older vessels may have less capacity that can be dedicated to the use of ULSF and tanks that previously carried residual fuels are likely to require extensive cleaning prior to switching to ULSF. Modifications and cleaning are likely to result in cost and time and it is not a straightforward question, as to who would be responsible, Skuld said. While these issues may yet be tested in arbitration, or litigation, it is likely that both under English and US law, a vessel will be contractually compliant if she can as a matter of fact safely carry the ULSF separate from the residual fuel even though she may have limited tank capacity and may need to bunker repeatedly while in an ECA. It would, however, fall to the shipowner to ensure that some tank capacity is available and ready to be used. Fuel specifications Bunker clauses have always been an important part of charterparties, given that MARPOL compliance is just one issue of many that concern bunker fuel. Despite the very significant price falls last autumn for bunkers (following the drop in the price of crude oil), fuel is still a very large factor in a vessel's daily running costs and ULSF costs can be double that of residual fuels. Bunker clauses need therefore to be carefully drafted and inter alia address the following: The ISO specification and other specific features/properties that the fuel should possess. Price setting formulas for delivery and redelivery bunkers. Bunker consumption criteria (typically found in vessel performance clauses). Bunkering/fuel supply arrangement clauses. Bunker sampling and testing provisions. 17
INDUSTRY - COMMERCIAL OPERATIONS - ECAS Specific MARPOL compliant fuel provisions (often cited in a separate specific MARPOL clause). While it may be an implied legal term, at least under English law, that fuel supplied must in any event be fit and safe for the specific vessel's engine (assuming engine description criteria form part of the charterparty), it may be prudent to have such warranty expressly included as part of a comprehensive bunker fuel clause. See also Wilford on timecharters' discussion of the unreported case of Nippon Yusen Kaisha vs Alltrans (20th February 1984). It is expected that US law may take a similar approach to this. Breaches delays/fines If a vessel is inspected by Port State Control (PSC), or other authorised government agency (such as the US Environmental Protection Agency (EPA)) and fuel on board is found to violate the MARPOL standards, then it is likely that a dispute may arise between the shipowner and the charterers as to whether or not contractual/compliant fuel was supplied and what may have caused the fuel to be off specification. The issues that could be involved are numerous and include: Possible supply problems. Contamination on board (tanks, lines, mixing other fuel, etc). Sampling procedures. Testing procedures. In any event, it is likely that a very technical and scientific investigation would have to follow in order to determine what the root cause may be. Given the very low margin for error in ensuring fuel is at no more than 0.1% and the relative ease with which the ULSF could be contaminated at some stage, this is an
area of concern going forward, Skuld said. Vessel focus Shipowners should expect that the policing government agency will focus first and foremost on the vessel for enforcement action and penalties even if the ultimate issue is the fuel as supplied given that contractual disputes between an owner and a charterer will unlikely be a way of raising a defence in such a situation. It may be, however, that if the issue is indeed due to the charterers' supplied bunkers then at least the vessel will not be offhire (Nourse vs Elder Dempster (1922) LLoyd’s List Law Reports. 197). For the US position, see The MV Kartini, SMA 1958 (Arb NY 23rd April, 1984) ("the charterer is not permitted to place the vessel offhire where the event causing the loss of time is due to charterer's breach of the charter party"); The MS Olympic Melody, SMA 2474 (Arb NY 26th April, 1988) (the SMA panel ruled that hire during the period of deviation was payable to the owners of the vessel by the charterer since "no fault [was] attributed to the ship. . . ."). Deviations No doubt charterers on a cargo voyage, or owners on a positioning voyage, will seek to reduce costs by reducing the need to burn the more expensive ULSF and this may be possible through careful voyage planning. However, Skuld warned that practical and commercial views should not race ahead of the legal position under either the charterparty contract, or the contract of carriage -in case of a laden voyage. Whether the deviation is taken to minimise time in an ECA, or avoid it altogether, a vessel needs to have the proper liberties in the charterparty, as well as the bills of lading,
before she can take anything other than the most direct route using utmost despatch to get there (The Pearl C [2012] 2 Lloyd's Report 533 and The Hill Harmony [2001] Lloyd's Report 147 (HL)). For the US position, reference may be made to General Electric Co International Sales Div vs SS Nancy Lykes, 706 F2d 80, 84 (2d Cir 1983) ("a deviation results when a vessel 'wander[s] or stray[s] . . . from the customary course of the voyage'")(quoting Spartus Corp vs SS Yafo, 590 F2d 1310, 1313 (5th Cir 1979)). In the absence of an appropriate liberty clause, the deviation may in breach of contract and further it may also impact on insurance coverage. A careful review of existing arrangements would be needed before changing course and for future contracts, it will be prudent to include appropriate liberties, Skuld advised. Careful contracting is very important to loss prevention, as an unsuitable contract, or an overlooked clause, could have an unexpected and very undesired effect that will hit the bottom line as much as a mechanical breakdown could. Review arrangements Taking the time to review existing arrangements in the light of the upcoming regulations and ensuring new contracts are drafted appropriately will limit the scope and risks for disputes in the future. The time and effort spent on this will yield dividends, even if it is not possible to ‘measure’ the value of the dispute avoided, Skuld said. Skuld acknowledged US law firm Chalos & Co for its input on the US legal angles when compiling this advice.
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TANKEROperator January/February 2015
INDUSTRY - COMMERCIAL OPERATIONS - STS
STS forum outlines issues to be considered Interest in ship-to-ship (STS) cargo transfer operations continues to grow worldwide, as more than 12,000 operations were completed in 2013. here are around 62 STS service providers and the number is increasing. However, not all have a high level of safety and proper procedures in place, a recent seminar revealed. This and several other issues have emerged since MARPOL, Annex 1 Chapter 8, came into implementation in April, 2012, which regulates STS cargo transfers, on a statutory basis. At the seminar held last November, organised by Clyde & Co in association with INTERTANKO, panellists addressed various questions, such as; Should STS service providers confirm the examination of vessel STS plan prior each STS operation? Should the Master rely on the advice of the ‘Person in Overall Advisory Control’ (POAC)? Should tanker owners sign the LOI presented by the service provider, etc? On what grounds could a tanker be rejected for participation at an STS operation? Should two POACs attend an STS operation instead of one? Should charterers request for clearance of service providers in the same way they request clearance for participating vessels? Are the rest hours of POAC taken into account during the planning phase of an STS operation? Under the chairmanship of Clyde & Co’s Martyn Haynes, the panellists included Ajay Gour– INTERTANKO, Dr Alexander Glykas– OnlineSTS.net DYNAMARINe, Capt Bob Gilchrist – SafeSTS, Eamon Moloney– North P&I Club, Ed Mills-Webb – Clyde & Co and Capt Keith Loffstadt – Fendercare. INTERTANKO’s Ajay Gour described an STS operation as a “controlled collision” and said it was an unnatural operation. The panellists agreed that West African operations had improved considerably during the past three to five years, however, from a P&I perspective, this area is still a problem. They said that some ‘rust buckets’ still exist and that
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January/February 2015
it was time to put pressure on charterers. The answers provided by the panellists commented on best practices, liabilities, incurred logistics and statutory facts. The overall outcome was that STS operations, as regulated by MARPOL, have an increased burden on tanker owners’ liability, who should exercise their due diligence in order to protect their reputation and actions. Basically, third party service providers provide an essential service to cargo owners in order to undertake an STS cargo transfer. The experience and level of advisory control of the POAC is a factor that contributes to the safety of the operation to the same extent of the competency, training and preparedness of crew. It was stressed that the Master should respect and take into account the POAC’s experience and advice, however he should not completely rely on the POAC. At the seminar, North’s Eamon Moloney claimed that the POAC tended to be a “shadowy figure” and advised that Masters should ascertain who they are talking with and above all confirm his qualifications prior to the commencement of the STS. He said that a little bit more transparency was needed on who they were and how to get in touch with them after the event. Gour said that there was a certain reticence to criticise an operation after the event. Clyde & Co’s Ed-Mills Webb urged Masters not to handover the reins during an operation before real caution is exercised. He warned of accidents “in far flung places, where justified, due diligence is lacking.” DYNAMARINe’s Alexandros Glykas also warned that a Master who relied on a POAC could become complacent. He also asked; “how do you define the experience of a POAC?” SafeSTS’s Bob Gilchrist said that a Master should be gaining confidence in a pilot/POAC during the approach to an STS operation. “A Master should familiarise him/herself with a POAC” and should approach an operation with confidence.
TANKEROperator
The integrity and effectiveness of bridge team management is an essential part of STS operations, which builds the anticipated trust between senior officers and the POAC. The presentation of LOI’s from the service providers to the Master is an “annoying” procedure, which does not contribute in an effective relationship between bridge team. Tanker owners do not have a contractual relationship with the service provider, thus such LOI’s do not have substance, the panellists said. A POAC’s review of the STS plan should be part of the joint plan preparation and tanker owners should ascertain that such information is made available to the provider, well before the commencement of the operation. A small ‘bump’ during operations could be a financial disaster for an owner, resulting in $3 mill plus claims and possible offhire lasting between 40- 60 days if a drydocking is necessary. Complexities DYNAMARINe – onlineSTS.net has provided an insight of the complexities of STS operations that could jeopardise the reputation of tanker owners. The procedures of onlineSTS.net’s screening service set the principles of a methodology of standardised, but adaptable, actions towards ensuring safety and vessel suitability, the company claimed. The key element in all cargo transfer operations is the post assessment of STS records and to what extent those are incorporated in the clearance and planning phase. Athens-based DYNAMARINe addressed such questions as - do STS cargo transfers take place according to OCIMF guidelines? As mentioned above, STS transfer operations are governed by the MARPOL chapter 8 of ANNEX I, latest OCIMF guidelines and IMO manual on oil pollution, section I, prevention chapter 6. These are the references that prescribe the 19
INDUSTRY - COMMERCIAL OPERATIONS - STS requirements for procedures towards ensuring safety in all aspects, from the vessel nomination and clearance until the completion of the operation. Implementation of the regulations and guidelines take place through the tanker operators ISM, TMSA procedures, as prescribed in their safety management system (SMS). ISM procedures and TMSA assessment actions contain the necessary tools for implementing the regulations for the “proper and detailed planning”1, as well as the post evaluation. Risk assessment procedures should include apart from operational hazards, other risks, associated with the involvement of third parties, such as the service provider who provides the POAC and STS equipment. STS records should be retained for three years, as a statutory requirement. Hence, the assessment of such records provides an extra level of valuable information for STS operations. POAC2 screening is included as a procedure within the IMO manual on oil pollution and the STS equipment supplied should be according to ISO 17357:2002. Furthermore, the number and type of fenders as well as rigging pattern, should take place according to OCIMF guidelines, the company said. Third party quality assurance is of paramount importance. For this reason OCIMF guidelines provide the ability to the “users” (ie, the Master and the vessel operator) to exercise their due diligence with respect to the quality of the services give by the service provider. The Master should not proceed with an STS operation, unless he/she is confident that the operation has been properly planned and that the service provider has presented a
comprehensive joint STS plan, which has received the Master’s consent. Master’s role For all STS transfer operations, each Master is responsible at all times for the safety on his/her own ship, including the crew, cargo and equipment. The Masters must not allow the safety on their vessels to be compromised through the actions of others, such as by the service provider and the POAC. Both Masters must ensure that the procedures recommended by latest OCIMF guidelines are followed as a contractual commitment3 and assurance towards safety. STS operations require proper planning, which starts from the nomination of the participating vessel and progresses through the technical advice to the Master, from his principals. DYNAMARINe stressed that the following procedures should be followed: During vessel nomination, the vessel operator should consider the clearance with respect to vessel suitability, STS location and past STS company records, etc. The tanker operator should act with due care at this stage and justify his clearance on the basis of established policies. Prior to the commencement of each STS operation, the vessel operator should confirm that the nominated POAC is qualified according to IMO regulations and that he/she has sufficient experience in the same size and type of vessels. The tanker operator should request the fenders and hoses certificates to ensure that they are manufactured and maintained according to ISO 17357:2002.
STS operations FAQs Last November, Clyde & Co in co-operation with DYNAMARINe released a draft of a 15-page guide, which contains 34 frequently asked questions (FAQs), plus answers, regarding STS transfer operations. Since the ratification of MARPOL Annex 1 Chapter 8, some five years ago, greater requirements have been imposed, which have helped to make STS operations more complicated for tanker owners/operators. For example, the need for an STS plan was an additional requirement to the rules as laid down by OCIMF. IMO’s rules decree that the STS plan be integrated with the shipowners’ safety management system 20
(SMS), resulting in the plan being open for scrutiny in the event of an incident and any subsequent litigation. Owners and operators STS responsibility is not only defined by the existence of the plan, they have to take a justified approach that takes into account both commercial and safety considerations, the authors said. They explained that the guide was produced to provide answers to questions associated with the required knowledge of tanker owners/operators and their Masters and officers for STS operations. This is a draft edition and the authors said that they will soon publish the final edition, based on questions raised by the tanker industry during STS operations.
The service provider should present to the Master a joint plan for the operation. This plan should include the nominated size and type of fenders, suggested mooring plan, etc. The Master should confirm that the fenders comply with OCIMF fender selection guidelines. Should they be different, this should be discussed and further clarified with the provider. The STS operation should be completed according to the approved STS plan. After completion, records should be returned to the vessel operator to be assessed for future reference for the TO clearance phase and proper planning. Footnotes [1] Bristol Crown Court. Mr Justice Eder Judgment, Falkonera vs Arcadia, Case No 2011FOLIO624. [2] Mooring Master. [3] Charter party requirement.
DYNAMARINe audits Top Fenders In December 2014, DYNAMARINe undertook an audit on Top Fenders on behalf of its onlineSTS.net members. This is the first time that 27 tanker operators, with a fleet over 500 vessels, performed a synchronised documentary audit on a service provider, the company claimed. The audit did not require an on site visit but utilised data provided by a third party, as well as data available at DYNAMARINe’ database- OSIS. In addition, publicly available data was also used, provided it was derived from credible sources. This audit report can be included in the audit of the tanker operators at the following TMSA elements - element 1 (Stage 3), elements 1 (Stage 4), 12A (all stages) - as aiding the monitoring and improving the services provided in STS operations. Top Fenders has experience in the West African region. The company has also recently opened up operations in different locations in the Mediterranean. In addition, an updated STS service provider list is now available at the onlineSTS.net website.
TANKEROperator January/February 2015
INDUSTRY - COMMERCIAL OPERATIONS - STS
STS transfers- a risky business The number of STS transfers has increased dramatically over the last decade, particularly in UK waters where there has been a boom in operations taking place off Southwold, Suffolk.* TS transfers are, however, more risky than port-based operations. The need to co-ordinate two moving vessels requires specialist assistance and, because such transfers usually take place at sea, they can be more susceptible to difficulties and delay. Despite the increased frequency, the law in this area remains relatively undeveloped. Although standard clauses do exist, the few reported decisions on STS transfers make it clear that a tanker operator needs to give careful thought to the specific operations envisaged under a charterparty when negotiating such clauses. Charterparties often require the owners to approve the second vessel in advance of an STS operation. The wording of such provisions varies, but a clause of this type was considered by the Court of Appeal in The Falkonera last year, in relation to a VLCC. The charterers had the option of transferring cargo to “any other vessel including, but not limited to, an ocean-going vessel” and wanted to conduct an operation with another VLCC. The charterparty also provided that: “(i) if charterers require a ship-to-ship transfer operation or lightening… then all tankers and/or lightering barges to be used in the transhipment/lightening shall be subject to prior approval of owners, which not to be unreasonably withheld…. (ii) all ship-to-ship transfer operations shall be conducted in accordance with the recommendations set out in the latest edition of the ICS/OCIMF ship-to-ship transfer guide (petroleum)." The charterers asked the owners to approve the transfer to another VLCC. The owners refused to permit the transfer, citing safety concerns because the vessels were the same size and, also, because such a transfer was not envisaged by the version of the ICS/OCIMF Guide current at that time. The Court of Appeal decided that the owners had been unreasonable in refusing the
S
January/February 2015
charterers' request and found that, because the charterparty provided a clear right to transfer to another ocean-going vessel, to refuse a request reasonably there would need to have been "some characteristic of the [second] vessel which would mean that the proposed operation could not be carried out safely.” Even though a VLCC-to-VLCC transfer required more planning than a normal STS transfer, in this instance there had been time for such planning and there was nothing inherently unsafe in a VLCC-to-VLCC transfer, if such planning had been undertaken. The Falkonera judgment makes it clear that, if an owner wants an unfettered right to vet transferring or receiving vessels, then robust wording will be needed. Such wording would need to give the owner the right to refuse the other vessel based on its own discretion. Charterers should be wary of such amendments, however, because a broadly drafted right to refuse an STS transfer (or to delay while deciding whether to refuse) could cause a charterer to incur substantial costs, especially where there are two vessels involved and often an ancillary web of sales contracts. Double banking Many timecharters contain a ‘double banking’ clause, which seeks to place the risks associated with STS transfers onto the charterer and, frequently, also provide an indemnity from the charterers for any damage that might result. The wording of such clauses varies, with some applying only to cargo operations (such as the current BIMCO "Ship to Ship Transfer Clause") while others extend to off-shore bunkering operations as well. An earlier BIMCO clause was considered in London Arbitration 2/99 in relation to lightering a bulk carrier. The Arbitration concerned damage by stevedores at three locations in the Pipavav Roads, India. The lightering operations took place shortly before the monsoon, amidst "a prevailing swell and
TANKEROperator
tidal streams" with "numerous interruptions to loading due to bad weather." There was also some confusion about the correct location for loading, and it was found that the Master had moored in the first location against the charterers' advice and without the benefit of local charts (referred to in the voyage instructions). The second and third locations were specified by charterers, however, and the vessel's hull sustained damage in all three locations. The double banking clause provided that the charterers would "indemnify the owners for any costs, damage and liabilities resulting from such operations". The charterers were also required to re-deliver the vessel in "like good order and condition as on her delivery, but with ordinary wear and tear excepted." The owners claimed for the cost of repairing the damage to the vessel’s hull, which they said had been caused by the charterers ordering the vessel to go to a place which was "adverse, hazardous and unsafe for loading heavy cargoes using grabs and barges with inadequate fendering". The charterers claimed that the damage had been caused by the owners’ own actions and argued that the Master had not tried to suspend the operation, which he could "if in his reasonable opinion it [was] not safe." The Tribunal decided that, because the owners had specifically agreed to load at a named anchorage in the weeks before the onset of the monsoon, they were deemed to have reasonably anticipated the conditions. Also, because the vessel had only been fixed the day before the operation there was not time to purchase local charts and "the Master was entitled to anchor where he did, and had acted reasonably in anchoring the vessel in those places." Nevertheless, the exception for "ordinary wear and tear" had "to be considered in the light of the trade for which both parties had contracted". On this basis, the owners were entitled to an indemnity for the damage 21
INDUSTRY - COMMERCIAL OPERATIONS - STS
When negotiating a charterparty in which STS transfer is envisaged, it is important that careful thought is given as to how liability for such an operation is apportioned.
suffered in the second and third locations (to which the vessel had been specifically directed by the charterers) but not for the damage suffered in the first. This could have been avoided if the Master had followed the charterers' advice and such damage was also "to be expected when loading off-shore on the West Coast of India from shore lighters." London Arbitration 2/99 makes it clear that an owner cannot guarantee being able to rely
on a double banking clause indemnity for all consequences of an STS operation. The "ordinary wear and tear" that might arise from an STS in heavy weather in an unsheltered location could be substantial. In addition, the fact that damage arising from owners' own actions might not be covered, even where those actions were apparently reasonable and not negligent, could have a significant impact on the extent of the indemnity. This is
particularly important where, during an STS operation, decisions might have to be made quickly and without time to liaise with the charterers. A prudent owner will want to obtain an indemnity from a charterer that extends to all loss and damage incurred in an STS operation, whether "ordinary wear and tear" or not. In addition an owner will want to ensure that all actions that a Master might take are covered
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) &( . (". +(!% - +0-) -&*" +) 222 +(!% - +0-) -&*" +) "(
TANKEROperator January/February 2015
INDUSTRY - COMMERCIAL OPERATIONS - STS by the indemnity. A charterer should, however, be very careful about the extent of any amendments here because some P&I Clubs are known not to cover losses arising from indemnities that cover Master's negligence during STS operations. When a vessel arrives to perform a loading or discharging operation it tenders a notice of readiness (NOR), which in turn starts time running under the relevant voyage charter (and sale contract). To tender a valid NOR, the vessel needs to be legally (and physically) ready to undertake the operation in question. Approval issues Issues have arisen regarding the need for MCA approval before undertaking an STS operation off Southwold. Although local STS operators are known to obtain such approval as a matter of course, the Merchant Shipping (Ship-to-Ship Transfers) Regulations 2010 only apply within "United Kingdom waters", where approval from the MCA is required before an STS operation can take place. Outside territorial waters (where many transfers take place) the requirements are different and "notification", along with a ship
transfer operations plan approved by the vessel's flag state, are required instead of a "permit". This creates uncertainty where operations often take place under way and can, sometimes, start inside territorial waters but finish outside. Disputes have arisen over whether a vessel can be legally ready to start an operation (and so capable of tendering a valid NOR) before such approval, or notification, has been arranged. Local operators may want to obtain "approval" even for operations taking place in international waters and, even where such approval is actually needed, there can be delays while it is obtained. These are issues that can be managed using an appropriate rider clause, which clarifies the situation and apportions liability for any delay while approval is obtained, or notification given. An owner will, in particular, want to ensure there are no questions over when NOR can be validly tendered to avoid disputes later over when time actually started running for the purposes of demurrage. As these three issues make clear, when negotiating a charterparty in which STS
transfer is envisaged it is important that careful thought is given to how liability for such an operation is apportioned. Although clarity is, of course, the main aim for both parties, an owner may want to vet a possible second vessel if they have any concerns (of whatever nature) and to ensure the Master can proceed without having to worry about the extent of the indemnity in the charterparty. An owner will also want clarity about when an NOR can be tendered and perhaps to try and make any delays in obtaining approval for STS transfer something for the charterer's account. These are all things which are better clarified within appropriate rider clauses, rather than being decided after the event in TO costly arbitration or litigation. *This article was written by Sean Gibbons and Joe Gosden. They are Partner and Associate, respectively, within the Marine and International Trade team at law firm Stephenson Harwood. They both regularly act for owners, charterers, oil majors and commodities trading houses in litigation, arbitration and non-contentious matters.
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January/February 2015
TANKEROperator
23
INDUSTRY - ANTI-PIRACY
A passive solution to the piracy threat With 231 worldwide piracy incidents occurring last year, and six reported pirate attacks on tankers in December alone, the threat of unwanted boarding shows no sign of disappearing. eports of razor wire being cut through and armed guards not always deterring the most foolhardy of pirates from boarding, (or armed guards not allowed in certain territorial waters) means providing a safe place for crew to muster has never been more crucial. Just recently, nine pirates in two skiffs approached a tanker underway on the Red Sea. With the alarm raised, the crew were safeguarded by proceeding to the citadel on board and no injuries or fatalities ensued. Marine Armor System manufacture, supply and install passive solutions (MAS) against maritime piracy around the world, providing ballistic protection to the crew. The installation of MAS prevents pirates from being able to take control of the bridge on board a vessel and is also suitable for the creation of anti pirate blockades, bunkers and armoured citadels. MAS is manufactured using kriptonia, a high-quality material stronger than steel. Exclusive to the company, there are no other comparable products on the market; it is the only one with ballistic classification FB6 which stops military weapons. MAS is part of the Collbaix group, which has over 40 years’ experience in the production, distribution and installation of aluminium roller shutters, automatic glass doors and high security blinds. Using this extensive experience in providing secure
R
MAS has a ballistic classification, which is claimed to stop military weapons.
access solutions to both commercial and residential properties, MAS was formed as a solution against naval piracy. Having listened extensively to industry feedback, Marine Armor System has developed a system with a manual override; providing a lighter, simpler and more cost effective solution. The system is designed specifically for windows, portholes and hatches and allows for self- installation. One unit can easily be installed by two crew members within a couple of hours. Weight is reduced by 25%, as the system has no motors, no electronic components and is manufactured in lighter materials. This results in a total cost reduction of about 50% - while providing the same level of ballistic protection against piracy, terrorism or sabotage. An A unit can be installed by two crew members in a couple automatic system can
of hours. 24
also be installed, which is essential for use on the bridge and deploys in just a few seconds – at the touch of a button. Installation can take place anywhere worldwide - onshore or offshore - as it does not interfere with the ship’s normal activity/operations. Designed to suit the ship’s interior, when in use MAS does not reduce visibility and is easy to maintain. MAS can also be fitted during the newbuilding stage. East & West Africa The system is currently being used on several ships and oil rigs operating in East and West Africa, with ongoing projects in Singapore, Malaysia, Indonesia and Middle East. Marine Amour System’s, Edurne del Río, explained “Due to demand from the industry, we have launched a manual version of our vessel protection system that will allow selfinstall. This results in no electrical work, or installation costs for our clients, halving the cost of the solution. This enables Marine Armor System to provide much more flexibility to our customers, while still offering the highest level of security - ballistic classification FB6, which stops military weapons. TO
TANKEROperator January/February 2015
TECHNOLOGY - SHIP DESCRIPTION
Four fuel-saving MRs to enter NPP’s fleet this year During the first half of this year, Copenhagen-based drybulk and tanker owner NORDEN will take delivery of four newbuilding MR Eco product tankers from STX Offshore & Shipbuilding. he vessels - Nord Superior, Nord Supreme, Nord Sustainable and Nord Swift – are to be delivered in January, April and July, 2015, respectively. As a result of several improvements to the design and equipment installed on board, the vessels are expected to be 11-12% more fuel efficient than the most operationally economic tankers in NORDEN’s fleet. Each of the four vessels will have a carrying capacity of around 50,000 tonnes. “This means that the new vessels in a fully laden state and sailing at a speed of 13 knots will consume approximately 19 tonnes of bunker oil per day – a saving of more than two tonnes. With a bunker price of approximately $450 per tonne, we will obtain significant savings with these four new vessels. “The four new vessels are also proof that it is still possible to optimise vessels’ fuel efficiency without compromising their cargo carrying capacity significantly and without it affecting the correlation between the price for the vessel and the financial benefits by having lower fuel consumption,” said head of fuel efficiency, Peter Sinding. During the construction of the MRs, in an effort to reach the lowest possible fuel consumption, the yard made use of the latest design and technology on offer. In addition, STX also to a great extent drew on the experience from the construction of the four MRs that were delivered NORDEN in 2013 and which also excelled in fuel efficiency compared to NORDEN’s tanker fleet at the time, the company claimed. The improvement of the vessels can be seen directly from the shape of the hull. NORDEN’s director newbuilding, Søren Westergaard, explained; “Some years back, when vessel fuel was a minor cost in the shipping companies’ accounts and environmental awareness was smaller than it is today, many vessels had a hull
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January/February 2015
which, roughly put, looked like a shoe box that had been shaped in the front and back. “Now, the focus is completely different – fuel consumption must be reduced and the environmental impact must be as little as possible. The yards therefore work to reduce what is called the block coefficient– ie, the goal is to make vessels less quadrangular and as streamlined as possible without affecting their cargo carrying capacity. The four new product tankers have a slimmer hull than the first four STX vessels in our fleet. But then they are also two metres longer and have 15 cm more draft,” he said. New engine design The four new vessels are fitted with a new type of main engine constructed by MAN Diesel & Turbo in Copenhagen, an 6G50ME-B9.3, which operates at a slower speed than the engines fitted on board on the first four STX vessels delivered to NORDEN. Whereas the earlier vessels were equipped with 6.2 m diameter propellers, those fitted to the new vessels are 6.8 m in diameter and they are of the WTC type, designed by STX Offshore & Shipbuilding and manufactured in South Korea. “A larger propeller rotating slower is more efficient than a smaller propeller rotating faster. The simple explanation is that a larger propeller rotating slower hits a larger volume of water. It is therefore better at thrusting the vessel forward – even at smaller fuel consumption. “In contrast, a smaller, faster rotating propeller is more expensive to operate partly due to the fuel consumption and partly because some of the
TANKEROperator
performance is lost in the wake,” said Westergaard. To further improve the propellers’ efficiency, the vessels are each fitted with a Becker Marine Mewis Duct, which improves the way the propeller hits the water. At the same time, the duct increases the water flow towards the propeller. The pistons in the new engines also have a longer stroke – ie, the pistons’ bottom and top are further apart. In addition, the engines are fitted with equipment to automatically adjust the settings enabling them to run at an optimal speed at all times and ensuring that the combustion pressure is equally distributed on all six pistons. This not only reduces fuel consumption, but also maintenance costs and the engine will also be better protected against overload, the company said. The vessels will also be more efficient at utilising the waste heat from exhaust gases, which can be used for heating the fuel for the main and auxiliary engines. Previously, only the exhaust gas waste heat from the main engine was used and while the main engine was shut down during port calls, the oil-fired boiler was operating. The exhaust heat recovery unit was manufactured by Kangrim Korea.
The MRs have a sleek hull design. 25
TECHNOLOGY - SHIP DESCRIPTION However, this will not be as necessary on board the new vessels, as the exhaust gas waste heat from the auxiliary engines, can be used, which are operating during port calls. ”This initiative also contributes to total fuel efficiency. And everything counts,” said Westergaard. “It is common practice in NORDEN that we continuously optimise newbuildings, just like we constantly consider whether a profit can be made from retrofitting existing vessels with the purpose of reducing their fuel consumption. “We have always kept a young and modern fleet. We will continue to do so and this is possible without jeopardising any commercial aspects,” he said. Westergaard has been responsible for about 100 newbuildings for NORDEN, thus far. During the construction of the latest four product tankers at STX, NORDEN’s newbuilding department at the Hellerup head
Principal particulars - Nord Superior Length, oa........................................ Breadth, extreme............................. Depth, moulded............................... Draft, summer.................................. Deadweight...................................... Main Engine..................................... Output, SMCR................................. Class................................................ Flag.................................................. office made use of feedback from the crew members on board the earlier product tankers delivered in 2013 to a great extent. In total, around 60 suggestions from the crew members were used when constructing the new vessels. ”With regard to all the great ideas from the crew members, it naturally applies that both practical, as well as financial implications must all be in order before the ideas are realised. But if this the case, we are happy to do so,” said
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183 m 32.23 m 19.10 m 13.30 m 49,572 tonnes MAN B&W 6G50ME-B9.3 7,570 kW at 91 rev/min DNV GL Danish (DIS) Westergaard. As the first of the four new product tankers Nord Superior - has already undergone trials, this proved that the vessel more than meets the 2015 and 2020 requirements from the IMO with regard to CO2 emissions. The trials showed that the vessel’s CO2 emission was reduced by 30% and thus, the vessel even meets the 2025 requirement- the first in the company to do so. NORDEN’s goal is for all newbuildings to meet the 2020 requirement, which is a prerequisite for the company to categorise the newbuilding as an Eco vessel. The new product tankers will be incorporated into tanker pool Norient Product Pool (NPP), which both commercially and operationally manages NORDEN’s and the Cypriot shipping company Interorient Navigtion’s fleet of owned and chartered product tankers, as well as other product tankers under management. Currently, the NPP fleet includes 85 vessels, which is a new high. NPP celebrated its 10th anniversary on 1st January 2015. Today, the 85 vessels are made up of 43 MRs and 42 Handysize vessels. In addition, another five will enter the pool this year. ”In order to have critical mass, the pool must have a lot of vessels trading all over the world. But whether there are 80, 85 or 90 vessels in the pool is not that important from a commercial point of view. On the contrary, it provides us with a number of commercial advantages that we have achieved a better balance between MR vessels with a cargo carrying capacity of 45,000-50,000 tonnes and Handysize vessels with their cargo carrying capacity of 37,000-40,000 tonnes. “Previously, we had a large overweight of Handysize vessels, which are important to our business. But MR vessels are more flexible: While Handysize vessels primarily sail in Northern Europe and the Mediterranean, MR vessels are used all over the world,” explained NPP CEO Søren Huscher. TO Footnote: This article was taken from NORDEN News with added input from the company.
TANKEROperator January/February 2015
TECHNOLOGY - SHIP DESCRIPTION
LNG powered ethylene carriers make their debut Last November, two new dual-fuel powered hybrid gas carriers were named Coral Star and Coral Sticho, respectively, in a joint ceremony on Teesside, UK. perated and managed by Anthony Veder, the vessels are chartered to Saudi Basic Industries Corp (SABIC) to lift liquefied ethylene gas (LEG) from the company’s Wilton facility on Teesside to manufacturing plants in Northwest Europe and Scandinavia. The chemicals will be used to make a range of items, such as food packaging, PVC, detergents and adhesives. By using LNG as a fuel, both vessels, each with a cargo capacity of 4,768 cu m, will reduce NOx emissions by over 85%, with SOx and soot particles reduced by nearly 100% and CO2 by 20%, Anthony Veder claimed. The additional cost of the vessels LNG equipment fitted on board was partly funded under the European Union's TEN-T programme. The sisters were products of China’s Avic Dingheng Shipbuilding, are classed by Bureau Veritas and fly the Dutch flag. Both vessels are fitted with two cargo tanks each of 2,384 cu m capacity, which are served by two deepwell pumps of 300 cu m per hour capacity each, giving a maximum load/discharge rate of 600 cu m per hour per vessel. They are each powered by a Wartsila 6L34DF medium speed dual-fuel engine producing 2,700 kW at 750 rev/min. Two Wartsila 6L20DF dual fuel engines, developing 1,056 kW each, make up the auxiliaries fitted on board both vessels. This
O
Principal Particulars - Coral Star, Coral Sticho Length overall .............................................................................. 99,95 m Length, bp ................................................................................... 93,60 m Deadweight (ethylene draft)............................................................ 3087 t Deadweight (summer draft)............................................................. 3604 t Machinery Main engine.....................................................................Wartsila 6L34DF Power........................................................................2,700 kW at 750 rpm Auxiliary engines........................................................2 x Wartsila 6L20DF Power..........................................................................................1,056 kW Average speed...................................................................................14 kn Range..........................................................................................6,500 nm Bow thruster...................................................................................450 kW Cargo Installation Tank pressure (IMO) max.............................................................. 6,0 bar Loading/discharging rate.......................................................... 600 m3/hr Min tank pressure......................................................................... -0,3 bar Min tank temperature.................................................................... -104 °C Deepwell pumps................................................................. 2 x 300 m3/hr Booster pumps.................................................................... 1 x 300 m3/hr Cooling ethylene, from -98°C up to -102°C................................ 35 hours
gives the vessels a service speed of 13.5 knots. A 450 kW bow thruster has also been fitted on board each of the gas carriers for ease of manoeuvrability. For the LNG, two fuel tanks of 100 cu m capacity each have been fitted on deck per vessel.
As well as ethylene, the vessels will also be able to carry ammonia, butane, butadiene and propane. “As a responsible global company, SABIC is committed to providing high-quality products to its customers while doing all it reasonably can in order to reduce the
Cargo Tanks Filled 98%:
Ammonia
Butane
Butadiene
Ethylene
Propane
Sp grav [t/m3]
0,681
0,600
0,653
0,569
0,582
At temperature [°C]
-33,4
-0,5
-4,5
-104
-42,8
Total capacity [t]
3,182
2,803
3,051
January/February 2015
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2,658
2,719
Volume 98%
4.672 m3 27
TECHNOLOGY - SHIP DESCRIPTION
Source:www.shipspotting.com
environmental impact of its operations,” said SABIC’s European supply chain director of chemicals, Wouter Vermijs, at the naming ceremony. “We are proud to be the first chemical company in the world to be transporting our products on carriers running
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on LNG and to have an innovative partner in Anthony Veder.” “We are delighted that SABIC has chosen Anthony Veder as its partner in the development of a new greener way to transport materials around the globe. By demonstrating
their commitment to using LNG powered vessels, SABIC and Anthony Veder are leading and embracing this cutting-edge technology. They could be at the forefront of opening up a whole new sector of seagoing transport,” said Anthony Veder CEO, Jan Valkier. TO
TANKEROperator January/February 2015
TECHNOLOGY - SHIP EFFICIENCY
Emissions control system fitted on board tanker Bremen-based SAACKE’s new se@vis emission control system has been installed on Carl Buettner’s chemical tanker Levana. he 2009-built 15,202 dwt chemical/products tanker had earlier been fitted with SAACKE’s exhaust gas cleaning (EGC)
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system. se@vis makes emissions data from the hybrid multi-stream EGC system available to the operator both on board the ship and on land using data transmission. Live surveillance and optimisation using data cloud storage is also possible from ashore, the company said. All relevant measured data can be analysed live and stored for up to 1.5 vessel operating years. By monitoring the EGC components, all emission sources can be analysed, resulting in a savings potential for all ship operations. “On one hand, our system creates benefits for energy efficient and economical operations for the ship’s crew and, on the other hand, it opens up new possibilities for direct influence and evaluation, especially for shipowners and ship operators, in a way that no other EGC systems can,” claimed Nils Homburg, manager at SAACKE’s EGC department. The se@vis system forms part of the SAACKE EGC plant. The emissions cleaning system is comprised of a sulphur washer and an upstream soot separator. By filtering out the soot first in the dry process, the sludge in the exhaust gas boilers and in the wash water is reduced. This also has added benefit of fulfilling the requirements for reducing emissions’ sulphur content, the company said. The emissions control system’s automation is integrated into the ship’s system. A userfriendly human interface touch screen installed in the control cabinet, displays all the relevant operational data – for instance, operating condition, temperature, or damper settings. A remote screen is positioned in the engine control room, enabling operations to be conducted at this location. By controlling up to 64 process and 64 status data units – including variables relating to January/February 2015
specific guidelines such as the SO2/CO2 ratio, pH value, or opacity difference for inflow and outflow of the wash water – ship´s crew and operators are able to monitor the system. All the operating data can be seen using the emission data monitor, which is installed on a shipboard computer and networked to the control cabinet. Bridge alarm Should the system exceed the limits for emissions in the water or air, it will automatically sound an alarm on the bridge, to ensure a quick reaction, thus avoiding expensive fines. According to the IMO regulations, the live data is saved every 4.5 mins. For a more precise analysis, shorter back-up intervals are possible. With a few clicks, the program creates the emission report, which not only shows emissions data, but also compiles it with geodata and periods of time that can be configured individually. The ship´s crew can transfer the emission report to the local authorities for inspection. It presents data clearly and is easily understood, which accelerates the inspection process. Crew members do not have to be specifically assigned to
TANKEROperator
accomplish this task. “Moreover, analysing this data can provide crucial indications about the entire ship´s systems, such as if the boiler is working intermittently and thus wastefully, or if the burner control needs to be optimised,”said Homburg, highlighting some advantages of the monitoring system. In addition to storing data on the ship, the data can be stored with a mobile data connection (cellular, or satellite), making it available to the shipowner at any time. A special protocol transfers the data in a compressed, tamper-proof method, resulting in minimal costs for data traffic. The data is then saved on servers requiring authentication. In the first months following installation, SAACKE will provide service support for daily operations and, based on the monitoring, an analysis of the optimisation potential for the entire emissions control system. Experienced SAACKE engineers are able to analyse the data and make recommendations, the company said. TO
A schematic of Saacke's sea@vis system.
29
TECHNOLOGY - EXTERNAL COATINGS
Protecting rudders from cavitation damage During the past few months, the rudders of several types of vessels were coated with Subsea Industries’ Ecoshield at yards in China, Singapore and Poland. These included a number of Pleiadesmanaged tankers, for example, the sister Panamaxes Voidomatis (applied at Yalova, Turkey) and Nedas (applied at Tuas, Singapore). In addition, the company has also coated the rudders of several other tankers for the same owner - the Panamaxes Aliakmon, Evrotas, Pamisos and Xanthos. In most of the cases, the propeller nozzles were also coated. Several other tankers are scheduled to be coated this year. According to the Hydrex Group owned company, Pleiades has had first hand experience of the devastating effect of rudder cavitation when treated with a traditional coating system. For this reason the Greek tanker company decided to use Ecoshield to ensure lasting protection against corrosion and erosion damage for the rudders of their vessels for the remainder of their service life. Before Ecoshield was launched, the problem of cavitation damage to rudders remained
unsolved. Cavitation causes erosion, pitting and sometimes complete failure, necessitating very expensive repairs, or replacements. The need for rudder repairs, involving welding and resurfacing in drydock, has been almost universal. The cost of rudder maintenance and the safety hazards connected with worn and failing rudders are out of proportion to the relatively small surface area involved. Efforts to solve this problem have taken the form of redesigning the rudder, changing its position relative to the propeller, trying various materials, including stainless steel, metal facing the surface, cathodic protection and a variety of coatings. But the problem has persisted. Ecoshield is a specially reinforced version of the Ecospeed non-toxic underwater ship hull coating, which has been formulated for the entire underwater hull of any vessel. Small but significant variations of the Ecospeed formula have been tested on rudders since 2002 with extraordinary results, Subsea Industries said. Ships that were experiencing heavy cavitation damage to their rudders have seen
no further cavitation damage erosion once the glassflake coating was applied. Some of them have been sailing for as long as 10 years after application with no sign that the coating will need replacement during the life of the ship. Newbuildings Protection of the running gear of a vessel is best begun at the newbuilding stage. When a vessel comes into drydock, maintenance of its stern area, especially cavitation damage repair, can take a long time. There are strict procedures concerning blasting, painting, welding and propeller and stern tube seal work. Painting is then assigned to the end of the schedule. As a consequence, it may be rushed, or not done at all, or else prolong the vessel’s stay in drydock. With an Ecoshield application these problems can be avoided from the start, as the underwater gear will not need to be repainted during future drydockings. The coating will remain intact for the lifetime of the vessel and it is guaranteed for 10 years. At the most, quick and easy touch-ups amounting to less than 1% of the surface area will be required. Planning the maintenance of
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TANKEROperator January/February 2015
TECHNOLOGY - EXTERNAL COATINGS the vessel’s stern area therefore becomes much easier, the company claimed. Apart from at the newbuilding stage, the coating can also be used to protect vessels that have been in service for some time and are already facing cavitation and corrosion damage, similar to the rudders coated over the last months. Ecoshield’s flexibility makes it easy to adapt the application schedule to the rest of the activities scheduled at the shipyard, or drydock, by not interfering with them. Overcoating time can be as short as three hours, which means that for smaller surfaces, such as rudders, or bow thrusters, the two coats required can normally be applied in a single day. The smoothness attained by the coating also provides optimum hydrodynamic conditions. This allows rudders to operate at maximum efficiency. The ship's performance therefore remains stable, which brings savings to the owner, the company said. Besides offering rudder protection, Ecoshield is also suitable for thrusters, azimuth thrusters, azipods, thruster nozzles, kort nozzles, thruster tunnels and other underwater ships gear, which need special protection from corrosion. If an owner/manager takes into account the
January/February 2015
Ecoshield is guaranteed for 10 years and will last for a vessel's lifetime.
costs of temporary underwater repairs and the regular inspections required by a condition of class until the next drydocking, the investment in a coating system that offers extra protection from day one has an attractive return on investment.
TANKEROperator
A ‘White Paper’ with full details about protecting rudders and running gear from cavitation damage is available in the publications/papers section of www.shiphullperformance.org for free download.
TO
31
TECHNOLOGY - EXTERNAL COATINGS
Carbon credits success claimed This year, two shipowners are due to be awarded a combined total of almost $500,000 when the first claims resulting from a new carbon credits methodology developed by AkzoNobel and The Gold Standard Foundation are finalised. The scheme allows ships to generate income in the form of carbon credits, which are earned by reducing CO2 emissions. A total of 17 vessels feature in the first two claims, while 50 further vessels were expected to join the scheme by the end of 2014. Launched in April last year, this methodology is based on shipowners converting existing vessels from a biocidal antifouling system to a biocide-free hull coating, such as Intersleek, part of AkzoNobel’s International marine coatings product line. “With shipowners and operators under increasing pressure to drive efficiencies and improve sustainability, the ability of carbon credits to turn energy efficiency into bottom line benefits is a timely and significant step forward,” said Trevor Solomon, Intersleek
business manager at AkzoNobel’s Marine Coatings business, last year. “Almost 90% of the shipping industry considers it important to measure emissions using a standard methodology, which makes carbon credits particularly advantageous for senior management teams who require evidence of a tangible return before investing in a clean technology, such as advanced hull coatings,” Solomon explained. “This is possible through our partnership with The Gold Standard Foundation, which validates carbon credits based on vessel data that is collected, analysed and for Intersleek, administered by AkzoNobel. As an additional step to ensure rigor and transparency, the fuel savings that are generated are also verified by independent UN accredited auditors.” Based on the 100 eligible ships already converted from a biocidal antifouling to Intersleek technology, there is an estimated $2.8 mill worth of carbon credits potentially available to shipowners and operators. As well as being able to sell the carbon credits, the scheme also offers shipowners the option of passing them on to other stakeholders, such as cargo owners, to offset
AkzoNobel’s Trevor Solomon.
their emissions. They can alternatively be used to voluntarily offset other sources of CO2 emissions. AkzoNobel spent more than two years developing the carbon credits methodology as part of its research into making eco-efficiency technologies more accessible for the wider shipping industry. The company worked with The Gold Standard Foundation as it was found to be the highest quality and most trusted carbon certification standard with rigorous sustainability benchmarks. TO
THE FOUNDATION FOR SAFETY OF NAVIGATION AND ENVIRONMENT PROTECTION
Making Money in a Tough Market
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TANKEROperator January/February 2015
TECHNOLOGY - EXTERNAL COATINGS
Specialist coating for ice conditions With the interest in ice class vessels growing, PPG Protective and Marine Coatings’ SIGMASHIELD 1200 has seen increasing interest from owners specifying ice-capable coatings for newbuildings and existing tonnage. This is mainly as a result of the potential of Arctic transits and the growth in Arctic offshore activity. Developed from research conducted in PPG’s own facilities, the coating is claimed to deliver exceptional abrasion and impact resistance in ice, combined with very low friction properties. It was developed for very high abrasion and impact applications on decks and hulls and combines phenolic epoxy with selected pigments to provide exceptional performance in icy waters, the company claimed. SIGMASHIELD 1200 has already seen more than a decade of service on ships operating in areas of heavy ice formation, including the Baltic Sea and St Lawrence Seaway/Great Lakes system.
PPG product manager, Christophe Cheikh, said:“The combination of a top quality epoxy matrix and extremely hard pigment is unique in this type of application and provides superior protection. “We have designed this product to be easy to use by single feed airless spray whether for drydocking or newbuilding projects. Its quickcuring hardener means SIGMASHIELD 1200 can be applied at low temperatures without compromising performance and allowing for a fast return to service,” he said. The size of the ice class fleet is increasing, as is the size of the ships. Currently, around 10% of the ice class order book is above 60,000 dwt, with the majority of the investments made by owners in Germany, China, South Korea and Norway. German owners have the second largest share of the order book and the largest proportion of the ice fleet, while China has the second largest ice-capable fleet on order. Cheikh claimed that the coating has been particularly successful in newbuilding projects where owners require a higher grade product than the standard anti-corrosive coatings.
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Its excellent low friction coefficient in ice has been confirmed by Aker Arctic Technology, a major testing institution based in Helsinki, which specialises in lowtemperature testing at the limits of ice-going conditions. Vessels serving new energy projects in the Russian Arctic will also feature SIGMASHIELD coatings. SIGMASHIELD 1200 benefits claimed include: Outstanding impact and abrasion resistance in ice conditions. Excellent cathodic protection and creep resistance. Standard and low-temperature versions for enhanced curing and application in winter conditions. Single-coat application using standard equipment, with easy maintenance and repair. Recognised by Lloyd’s Register as an abrasion-resistant ice coating. Recognised by Aker as a low-friction TO surface coating.
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TANKEROperator
33
TECHNOLOGY - TANK SERVICES
Mandatory drills for enclosed spaces entry now in force From the beginning of this year, IMO SOLAS Regulation III/19 requires mandatory enclosed space entry drills, as well as rescue drills, to be conducted every two months. ome of the problems occurring on tankers, include fatalities in double bottom spaces, ballast and cargo tanks, as well as the various lockers to be found on board. Leading insurance and P&I service provider Skuld said in a note to members that given the continued occurrence of tragic accidents to personnel going into enclosed spaces, owners and operators should exercise extreme caution. Over the years, Skuld has had to deal with a number of accidents resulting in fatalities, which followed the entry in to an enclosed space starved of oxygen, or containing harmful gasses. These incidents occurred typically due to a failure to follow safety procedures and this has affected both crew, as well as people coming on board, such as stevedores and surveyors, repairers, etc. In the case of tankers, accidents have happened while tanks were being inspected, or maintenance carried out. Tragically, these accidents have at times been compounded, because once it had become clear that a person was in trouble, someone else rushed to help them - but without themselves first taking proper precautions and using appropriate safety equipment, sometimes resulting in a fatality. At sea-level, humans require air that contains at least 19.5% oxygen. Below that, an environment will be unsafe for human life, basis oxygen percentage alone. It must be stressed, however, that even at 19.5% oxygen the air may be unsafe, given that the basic oxygen level of air is 20.9% at sea level, Skuld warned. Where, for instance, the 1.4% difference is taken up by a gas, such as carbon monoxide then a person may fall unconscious within a few breaths and death may follow within three minutes. Following the rise in accidents down the years, the IMO developed Regulation III/19 of
S
34
SOLAS to address this trend. As of 1st January, 2015 mandatory entry and rescue drills are required every two months. All seafarers who have responsibilities for entry into enclosed spaces, or the rescue, will have to participate in these drills. Drills shall include the following: 1) Checks and use of personal protective equipment (PPE) 2) Checks and use of communications equipment and procedures. 3) Checks and use of atmosphere measuring devices. 4) Checks and use of rescue equipment. 5) Instruction on first aid and resuscitation. Skuld stressed that all drills should be properly planned and carried out with a ‘safety first’ approach. As such, no entry in to an enclosed space should be made, other than may be strictly necessary and while all due safety precautions are fully observed, ie, such space should not be opened purely for the drill itself. The intention of the new regulation is to ensure that all relevant personnel have the necessary awareness of the risks and are properly trained to follow all the procedures to ensure that any actual enclosed space entry will be undertaken in as safe a manner as possible. Loss prevention Given that the risk of an accident is very high, as well as the risk of such accident leading to a fatality, it cannot be stressed enough how serious this issue needs to be taken, the association said. Every seafarer should be aware of the risk that an oxygen starved environment presents and only those crew who have received the necessary training should conduct any entry into an enclosed space, or perform any rescue operation. Vessels need clear policies that govern the entry into enclosed spaces and all seafarers
should be advised of the same. This advice should be repeated at periodic safety briefings on board. As for either a drill, or an actual entry, this needs to cover the following: 1) Be properly planned, in particular for a time and place where safety can be prioritised. 2) A safety assessment should be carried out. 3) Specific vessel SMS and ISM procedures need to be followed. 4) All crew concerned should, with the appropriate officer, conduct a safety briefing before proceeding. 5) All crew concerned with possible rescue and first aid should be given advance notice and given time to ready themselves for possible action. 6) Throughout the entry and until its completion, careful monitoring should be undertaken of the crew involved until all are safe and accounted for outside of the enclosed space. 7) Proper logs and records should be kept of every drill and every actual entry. Skuld acknowledged the help of Dr John Allum of Hannaford Forensic Services (Asia) for contributing to this advice. The company has also prepared a note on oxygen level issues. Enclosed space audits To help seafarers and companies to manage entry into enclosed spaces, Videotel, in conjunction with Mines Rescue Marine, has launched Enclosed Space Management (ESM) system software. This software was designed to help effectively assess, audit and manage the safety of enclosed spaces on board ship as well as combating the number of accidents and fatalities that often occur when problem areas are overlooked. Beneficial to crew; contractors; surveyors;
TANKEROperator January/February 2015
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TECHNOLOGY - TANK SERVICES
Enclosed space entry audits are now mandatory to try to cut down on the number of incidents.
port state inspectors and office staff; this is currently the only computer-based system available that enables vessels and installations to comply with the IMO’ adopted resolution. A.1050(27) “Revised Recommendations for Entering Enclosed Spaces Aboard Ships”, Section 3 – Safety Management for Entry into Enclosed Spaces, as well as the latest SOLAS recommendations for enclosed spaces, Videotel claimed. It provides an auditing process to follow, allowing safety risks to be identified and solutions to be put in place. All seafarers can contribute to this ‘living’ system by adding their own comments, photographs and experiential data to each space record, ensuring that knowledge is retained and the risk of safety being affected by crew changes is lowered. The software also provides ready access to all essential information needed to enter and work within an enclosed space as safely as possible. In addition, the gathered information can be viewed onshore, as on board and a PDF report can be sent directly to any third party
by email, as required, as the data is cloudbased. All data entered is stored and hosted and the system itself is updated at regular intervals to reflect changes in laws and regulations. The ESM system’s auditing process allows for the assessment of internal spaces, entry points and rescue requirements, eg the size of manholes; difficulty of entry; ability to rig a man riding winch for rescue purposes; availability and effectiveness of communications; dimensions of the space; internal design features; and the ability to operate while wearing breathing apparatus. It also prompts the user to record the manpower and equipment requirements for both entry into and potentially rescue from, a space. On completion of the audit, a simple traffic light warning system is provided, based on the degree of difficulty to get into, operate inside and rescue from each space. Nigel Cleave, Videotel CEO, said at the software’s launch: “We are very proud of the Enclosed Space Management System which, we believe, will make a meaningful
contribution to industry efforts in the prevention of needless loss of life. As a further extension of its all-encompassing programs on enclosed spaces, Videotel is pleased to be able to take this unique step in helping the maritime industry take a proactive approach towards a significant reduction in issues involving enclosed spaces.” Raal Harris, director of e-Learning & digital media at Videotel, explained: “We have spent two years working with Mines Rescue Marine researching and developing the Enclosed Space Management System. The Mines Rescue Service has a vast amount of experience and knowledge, as well as specialist skills in the field of rescuing mineworkers from underground. This, combined with Videotel’s expertise in training and e-Learning, has resulted in a practical, easy-to-use system designed to become an essential part of everyday life in the shipping industry,” he said. Adam Allan, Mines Rescue Marine’s managing director, said: “This is the culmination of a two-year project initiated by our realisation that one of the major problems on ships and offshore installations was the lack of detailed audited information on enclosed spaces, and a specifically designed depository for it. “We felt that if we could provide a facility which shares information with not only crew members, but others working on board, such as surveyors and contractors, it would considerably increase the safety of people entering and working in these spaces. “Together with our partner Videotel, we developed the Enclosed Space Management System, the only such system in the world. We believe it will change the way in which enclosed spaces are dealt with forever,”he concluded. TO
Pneumatic level measurement system PSM has introduced the new BMS4 multipoint pneumatic level transmitter system. Joining PSM’s TankWatch range of level and pressure transmitters, switches and systems, the BMS4 is suitable for fuel, water, bilge, ballast and draught measurements on all types of vessels, the company said. The new system is supplied as a complete package that is engineered and configured for each specific application. It comprises an air
36
handling unit, multi-channel transmitter module and HMI display for accurate and reliable measurement and monitoring. Pneumatic level measurement, the ‘bubbler’ principle, is a well-established and proven technology that can be used for many marine tank gauging applications. The addition of the BMS4 to its product range allows PSM to enhance the systems it offers to customers as part of its consultative project solutions, the company said.
“Thanks to the BMS4 we now have even more products at our fingertips, allowing us to provide the best possible technical solution to our growing global customer base,” said Mark Jones, PSM sales director. “With over 30 years’ experience in tank gauging instruments, our engineering sales team are dedicated to understanding the application need and delivering the right system – reducing costs, minimising lead times and optimising system performance in the process.”
TANKEROperator January/February 2015
TECHNOLOGY - TANK SERVICES
Highlighting the need for motivation At Tanker Operator’s Hamburg and Singapore conferences last year in the current series ‘Making Money in a Tough Market’, the question of crew, shoreside personnel and company culture was covered by several speakers, among other topics. or example, in Hamburg, Norman Schmiedl, HR manager seagoing personnel at Columbia Shipmanagement (CSM) explained CSM’s policy, which was to employ no more than four different nationalities on a vessel at any one time. He addressed motivation by emphasising that a dedicated/motivated crew will follow rules and regulations, as well as procedures. As a result, vetting inspections will be passed and favourable terminal feedback will be received. Costs can be controlled by saving on bunkers whenever possible and port stays can be reduced by good planning. When on passage, a vessel’s trim will be optimised, the crew will ensure that efficient tank cleaning is undertaken, the cargo is properly cared for and that the cargo intake is maximised. Motivated seafarers will also participate in management reviews to improve the existing systems. “We have 13,500 seafarers, so we need a system to allow them to speak,” he explained. Turning to the shoreside management, Schmiedl said that the managers should communicate the company’s mission, vision, policy and values in a clear and simple way, set clear targets and give directions, empower the seafarers to think like owners, pay attention to details and stay approachable, invest in
F
Minimum requirements Matrix
efficient IT systems reducing double/tripple workloads, In addition, the shoreside management team should ensure that shipboard and office personnel act as a team and treat each other with respect, share incidents, circulate lessons learned and encourage a open reporting culture and explain the background of the decisions made. The crewing department should plan crew rotations in accordance with the contract durations of crew on board and availability dates of the crew ashore, arrange for a rotation on a group of vessels and not necessarily plan for the crew to always return to the same vessels and consider matrix requirements while planning (see below). Also in Hamburg, Independent consultant, former P&I club man and seafarer, Mark Bull, addressed ‘synthesis’, that is where closer cooperation and information sharing may help to reduce costs. In the same way as the industry needs to come together to improve its image and profitability, it should share and deliver information much better than occurs today, he said Citing an example of his own professional training – the radar observer’s course – classic examples of collisions were used as part of the course material. Are these used in training on
Master & Chief Officer
Columbia Shipmanagement's Norman Schmiedl.
board? Have the current officers and crew heard about them? He asked. Does a company’s safety management systems (SMS) cover these types of incidents? Ignore them at your peril!! He said that at the P&I club where he was employed, the vast majority of ships did not have a copy of the club’s safety bulletin on board. He thought that some companies required a minimum number of incidents and near misses to be reported each month, which is as bad as not reporting them at all – but it
Chief Engineer & 2nd Engineer
Junior Officers
Time with company (years) - Total
2*
2*
1.5*
Time in rank (years) - Sea service only
3*
3*
1*
Time on tankers (years) - Sea service only
6
6
1**
* If time in rank is below two years the minimum requirements for the time with the company shall be minimum two years. If the time with the company is below two years the time in rank shall be minimum two years. ** If there is only one junior officer on board the figures will be half. If the junior officer years in rank figure does not comply and there is more than one junior officer on board , the years of the previous rank on watch will be considered to check the compliance. In such cases, the years of the previous rank figure is provided in parenthesis. Source: CSM.
38
TANKEROperator January/February 2015
CONFERENCE REPORT satisfies the tick box! Incidents recorded However, he warned that today, the modern seafarer is more clever and when he/she sees something dangerous, it will be recorded and posted on YouTube. “Does you corporate policy allow the use of YouTube in the office? Is it time to have a collective re-think about safety management and how we get the message across?” he asked. As for regulations, maritime law forms a huge part of statute law. The combination of the many laws in place go towards providing a safe environmentally responsible industry. The shipping industry has been faced with an onslaught of regulations in recent years. The problem is that the legislators are not shredding old and outdated legislation to ease matters. Another issue is that some legislation was ill considered while other legislation was badly written. Taking the example of ColRegs (International Regulations for the Prevention of Collision at Sea), the last major change was in 1976, but it remains fit for purpose and is well written, Bull said. As for the ISM Code, which was introduced in 1979, this is no longer fit for purpose and is badly written. “Those charged with drafting such legislation must be aware that it will have to be translated into other languages to enable it to be used on a global basis. Therefore, the content must be unequivocal and the highest standard of grammar should be employed. But the ISM Code throughout employs the word ‘should’ – which, in English, expresses no obligation whatsoever. It is used 75 times whereas ‘shall’ is used in the ColRegs and ISPS Code. “Second, the ISM Code makes no reference to the key activities and skills performed and used on board ship- navigation, seamanship (example of how to fix a computer), marine engineering, cargo handling and care. What proportion of time does your ship spend at sea, and what is the main activity being undertaken? Navigation. “Instead these functions are supposedly wrapped up in the term ‘shipboard operations’ like some kind of dirty word. The users or practitioners will thus feel no sense of pride, or ownership of a Code which does not recognise their profession. There is little wonder then that today incidents falling under these headings continue to form the largest proportion of safety failures and claims,” Bull said Maximising potential At our Singapore conference, Arvind Sharma,
Bernard Schulte Shipmanagement’s (BSM) group director, HR Marine, told delegates that there were now limitations in squeezing costs still further, especially with technical and maintenance costs and the trick was to reduce operating costs in every area without compromising on quality and standards. Owners and operators are continuously seeking reductions in crew costs, as this is a major expense, sometimes by sacrificing training, others by reducing numbers and increasing risk. This is not the answer, Sharma stressed. What is required is a change of focus from minimising the cost of the talent available to maximising its potential. He defined motivation as internal and external factors that stimulate desire and energy in people to be continually interested and committed to a job/role, or to make an effort to attain a goal. The delivery of services of high quality using minimum money, resources and time is aligned to efficiency. “There is a tight relationship between motivation and efficiency!” Sharma said. An organisation’s culture, which needs to be driven by its top management, determines staff retention, motivation, ownership and the desire for continuous improvement. Taking organisational culture, a positive no blame regime results in transparency, dedication and ownership. This results in - long term crew retention, high staff satisfaction rates, improved job performance and improved safety and loss prevention. Once created, a positive culture will not stay forever, but needs to be maintained with continuous monitoring and intervention. However, to make the task manageable, we need high retention and an increasing number of staff rising up through the ranks. We also need continuous education, of ship and shore staff, not only in technical subjects, but more so in soft skills and finally, we need to give recognition and positive feedback of jobs well done. Sharma explained that BSM had introduced a large number of cadets during the past six years with a target to eventually have 80% of the company’s senior officers coming from the cadet intake. The company has a policy of an extremely stringent cadet selection process taken only from a limited number of audited and approved schools. BSM conducts continuous and close monitoring of cadet training while they are in schools and when on board using dedicated training officers. As for BSM’s current officers, their competence management and career
BSM’s Arvind Sharma.
development are managed via the company’s in-house CMS system. All officers are required to attend BSM’s soft skills training courses, as well as taking the company’s shiphandling simulator course every five years. This is in addition to STCW requirements, Sharma explained. Turning to shore staff, Sharma said that all the training and positiveness will come to naught if the shore staff behaviour is autocratic, or blame focused, thus mandatory soft skill training has been introduced for those in the offices worldwide. Risk taxonomy Capt KK Mukherjee, director (operations), NYK Bulkship (Asia) advocated a ‘plan- docheck- act’ philosophy by undergoing a risk classification, or taxonomy, on all of a company’s business processes. Once created, a risk assessment of each process should be completed. Connect the business metrics of each process to mitigation activities and connect the mitigation activities to each of the key risks identified for these processes. Following these steps, the process risks should be connected to performance management strategic objectives, he explained. He described NYK’s business ethics as being focused towards corporate social responsibility. This philosophy is based on three ‘Is’ and three ‘Ms’. Innovation -Continually think of new ideas for improvement, even when conditions appear satisfactory. Integrity - Be respectful and considerate to your customers and colleagues. Intensity -:Carry through with and accomplish your tasks. Never give up. Ongoing operations always give rise to the three Ms, he said. Muda -Non-value-adding activities. Mura- Unevenness in production, or work activities. Muri: Excessive burdens. Overcome the challenges and remain motivated, but overall keep things simple, he advised. TO
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TANKEROperator January/February 2015
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