Aps Spring 2015

Spring 2015

Asia Pacific Shipping The Magazine for the ASIA PACIFIC Shipping Industry

ChallenginG

times R e g u l a t i o n i s h i g h on the agenda for this year

n FOCUS China, Singapore, Australia and India n IMO REPORT MARITIME SAFETY AND ENVIRONMENTAL ISSUES ARE BACK ON THE AGENDA n WHAT”S NEW? ALL THE LATEST NEWS, PRODUCTS AND INDUSTRY REPORTS FROM AROUND THE WORLD

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Asia Pacific Shipping

introduction Publisher W H Robinson Editor Sandra Speares Tel: +44 (0)1483 527998 E-mail: sandra.speares@mar-media.com Project Director Taj Oberai Mob: +44 (0) 7880 822869 E-mail: taj.oberai@mar-media.com DESIGNER Justin Ives E-mail: justindesign@live.co.uk

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If many shipping companies worry low freight rates are continuing, there may be light at the end of the tunnel on costs, given the fall in bunker costs which form a substantial part of owners’ operating costs.

Much depends on how the trade with China develops, amid some concerns that there has been a slow down.

Few doubt that China will call the shots, not least in the commodities trades but also in terms of the use of tonnage to ship them when China requires them.

This seems to argue that China will not share concerns on over-tonnaging because if they need the ships they will want to ensure they are not paying the high prices that were a feature of the boom times that came to an abrupt end in 2008.

Some analysts suggest that the main driver for trade in the coming years will be intra-Asia trade between the more developed countries like South Korea, Japan and China and the developing Asian companies like Indonesia, Malaysia and Vietnam, to name but three.

A recent Citibank report suggested that intra-Asia trade in the region would outstrip Asia’s trade with Europe or the US. Countries like Australia have also been strengthening their links with the Chinese market.

Australia has recently signed a free trade agreement with China. China is already the country’s largest goods export destination.

Commodities giant Rio Tinto has also been discussing the next stage of its joint venture with Sinosteel which covers iron ore production.

Environmental issues have also been high on the agenda this year, with the entry into force of the Ballast Water Convention edging closer and the introduction of new low sulphur requirements in emission control areas that came into force at the beginning of the year. It remains to be seen how shipping companies will tackle the issues, and training will become ever more important to ensure that crews operate vessels safely.

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05

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Contents

44

05 NEWS ROUND UP

34 shipbuilding

Regulation is high on the agenda this year for an industry that ended 2014 with shipping confidence at a two-year low

Record-breaking capacity increases and an orderbook that remained unchanged were the two main factors that characterised 2014, according to the Baltic and International Maritime Council

Challenging times

10 INTERVIEW

Growing ships

36 legal

Emission control

Sandra Speares talks to Hong Kong Shipowners Association managing director about emissions, ECAs and what Hong Kong has to offer

Watch your step

12 finance

38 regulation

The financial position in Asia is very different to what has been the case in Europe and the US

There have been a number of regulatory developments in recent months, with more to come this year, in particular the entry into force of new low-sulphur rules

Finance focus

Owners will need to be careful now that emission control areas are in force

Sulphurous reception

15 MArket dry bulk

40 green shipping

Iron ore takes centre stage in a market fuelled by China’s import demand, while animal feeds and oilseeds are likely to lead the grain trade

There is plenty of activity by equipment suppliers as the industry gears up for the Ballast Water Convention to come into force

Ruled with a rod of iron

Ballasting on

16 MArket containers

44 Australia

This highly competitive market only returns a positive margin if the cost base is extremely low, warns Bimco

Australia has been building its partnerships with China

Proceed with caution

Commodities focus

46 CHINA

17 MArket tankers

China talk

Blue skies ahead?

West Africa has seen exports shift from the US to the Far East, creating many more tonne-miles and large gains for tanker owners

Commodities and cruising are just two aspects of Chinese development at the moment

49 INDIA

20 education

Recycling challenge

Safety at sea

Whether China will take over as the main market is a key issue at the moment

The dangers faced by migrants and asylum seekers at sea have been a major concern for the industry recently

54 GIBRALTAR

24 insurance

Asian expansion

Gibraltar is keen to promote financial and shipping links with Asia

Self-assessment

New hands-on approach by UK P&I Club members

58 CANADA

26 classification

Asian Focus

Canada has also been looking at strengthening its links in Asia

Structured approach

Common structural rules for tankers and bulkers come into force this year

28 IT SOFTWARE SOLUTIONS –

shipBROKING AND TRADING Trading up

There have been a number of developments as far as broking and trading systems are concerned

60 PORT FOCUS SINGAPORE Getting greener

There has been a good deal of activity at the Port of Singapore, and the Maritime and Port Authority has been collaborating with Singapore Management University to promote green initiatives

64 EVENTS

31 registries

Marshalling its achievements

The Marshall Islands has achieved substantial growth recently.

In a question and answer session. APS talks to Annie Ng, head of Asia

Asia Pacific Shipping 2015 Spring

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News round-up

Challenging times Regulation is high on the agenda this year for an industry that ended 2014 with shipping confidence at a two-year low

“Top of the list of things which shipping cannot change is the relentless march of regulation

Operating costs will go up in 2015

Asia Pacific Shipping 2015 Spring

Compliance concerns Moore Stephens’ latest shipping confidence survey, released in November, revealed increasing concern about the high cost of achieving compliance with new regulations, and ongoing doubts about overtonnaging. But it was not all bad news, with charterers, managers and brokers all more confident than they were three months previously of making a new investment over the coming year.

In November 2014, the average confidence level expressed by respondents in the markets in which they operate was 5.7 on a scale of 1 (low) to 10 (high), down from the 6.1 recorded in August 2014. This compares with the record high of 6.8 when the survey was launched in May 2008.

All categories of respondent recorded a fall in confidence this time, most notably charterers (down to 5.4 from a record high of 6.7 three months ago) and owners (down from 6.2 to 5.5). Confidence on the part of managers, meanwhile, fell marginally from 6.2 to 6.1, while for brokers it was down from 5.3 to 5.0. Geographically, confidence was down in Asia and Europe to 5.8 and 5.6 respectively from the levels of 6.0 and 6.1 recorded three months previously. Confidence in North America, however, held steady at 6.2.

5

STORY CONTINUED

with shipping. There will be increased interest in risk management, without which there will be still more newbuilding disputes of the type currently sitting on the desks of arbitrators, and more companies following the unhappy route into bankruptcy taken at the end of last year by OW Bunker.”

Greiner concludes: “Shipping embarks on a new year with confidence in a fragile state. The industry is volatile, and will be looking for improved political stability and a stronger global economy. But it should not underestimate its proven ability to endure throughout crises. The biggest danger may lie not in setting the targets too high and falling short but in setting the targets too low and achieving them.” t

“

International accountant and shipping adviser Moore Stephens says shipping needs to adopt a can-do attitude in order to successfully meet the challenges that are likely to come its way in 2015.

Moore Stephens shipping partner Richard Greiner says: “Shipping confidence started 2014 on a six-year high and ended it on a two-year low. It is difficult to predict with any certainty what the next 12 months will bring, beyond further uncertainty. To paraphrase an old adage, shipping goes into 2015 needing to accept the things it cannot change, to change the things it can change, and to make sure it understands the difference between the two.

“Top of the list of things which shipping cannot change is the relentless march of regulation. In 2015 this will assume still more onerous proportions with the inception of new regulations governing emission control areas, and a further step towards ratification of the ballast water treatment convention.

“Overtonnaging, meanwhile, is top of the list of things that shipping can change.

Accelerated scrapping is needed, together with an acknowledgement that there are already too many ships on the market and that, without some form of rationalisation, freight rates will not pay the bills.

“One area where shipping can demonstrate that it knows the difference between what it can and cannot change is in its attitude to private equity. Does private equity not know what the rest of us know, or does it know something the rest of us do not? Rather than bemoaning the short-term commitment of private equity, shipping should be looking to tick the boxes that attract such investors.

“Operating costs will go up in 2015, along with the cost of regulation, while it would be no surprise if oil prices were to go up faster than freight rates over the course of the year. Environmentalists will be happier

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“People are spending less money, which results in fewer cargo movements

“

A number of respondents referred to continuing uncertainty in the markets, resulting from a variety of factors. One said: “The market remains directionless. It needs accelerated scrapping, which would make economic sense for owners of older tonnage. But, given the recent drop in fuel costs, such owners could elect to hold on to their ships for the time being.”

One respondent predicted: “Most sectors will continue to struggle along the bottom, kept alive by low interest rates.”

Meanwhile, another felt: “There is still too much capacity and an unreasonable expectation of performance levels, given all the new ordering that is taking place.”

Not everybody was quite so pessimistic, however. One respondent said: “The global markets are expected to pick up around mid-2015,” but warned that the viability of shipping depended on the scrapping of 60% of all vessels over 20 years old and on a drastic reduction in the number of new vessels being built.

One respondent predicted: “The shipping market will improve slightly over the next few months as it mirrors the slow improvement in global markets.” But not everybody agreed.

“The road to recovery is very long and very hard,” said one respondent. “Europe is still struggling and it seems unlikely that things will improve soon, even if demand for shipping increases in other parts of the world where the economy is faring better.”

Another noted: “The world economy is not as healthy as expected. China has changed its growth model, while Europe is struggling under austerity measures and a lack of investment. The US may be in better health, but it is not able to drag shipping out of the doldrums in the short term.”

Elsewhere it was noted: “We are heading for a low level of activity in all markets. With sanctions on Russia and Iran, and fighting in Iraq and Syria and elsewhere, people are spending less money, which results in fewer cargo movements.”

The cost of meeting the growing regulatory burden in the shipping industry was high on the list of concerns expressed by respondents, one of whom noted: “The ballast water treatment legislation hangs like a dark cloud over all technical shipmanagers.

This represents a huge investment accompanied by a high level of risk.”

Another observed: “Regulation is We are heading for a low level of activity in all markets

Asia Pacific Shipping 2015 Spring

becoming stricter, and now accounts for a greater slice of operational expenses than it did a few years ago. This is bad. But it is the only way to push older tonnage out of the market.”

Another respondent emphasised: “There seems to be a lack of willingness to acknowledge the negligible level of pollution caused by shipping in relation to the volume of merchandise which is shipped globally.” Other comments included: “New EU environmental regulations will have a knock-on effect beyond the primary maritime industries,” and “Freight rates will not compensate completely for the additional cost involved in operating on lowsulphur fuel.”

Responses to the survey were completed before the announcement that OW Bunker, the industry’s largest fuel supplier, was filing for bankruptcy. But a number of comments referred to the significant role played by fuel costs in the fortunes of the shipping industry, such as the respondents who noted that “High fuel costs and operating costs kill small shipowners,” and “Bunker rates will fall still further.” Another pointed out: “Bunker prices are currently low, but, with new sulphur regulations coming in, customers are receiving a very mixed message. Nobody knows what the fuel price will be in six months’ time.”

Elsewhere it was noted: “New fuel types developed to achieve environmental compliance will have a major impact on vessel operations, but there is great uncertainty about how many incompatible variants will be available on the market.

Vessels operating on a worldwide basis will face fuel compatibility challenges.”

Turning to the freight markets, there was a fall in the number of respondents anticipating higher rates in the tanker, dry bulk and container ship trades.

The number of respondents overall expecting higher rates in the tanker sector over the next 12 months fell by one percentage point to 40%. The views of owners (up 10 percentage points to 51%) differed greatly in this regard from those of managers (down 7 percentage points to 36%), charterers (down 5 percentage points to 33%) and brokers (down by 28 percentage points to 30%).

Geographically, the prospects for increased tanker rates were up in Asia (by one percentage point to 41%) and in North America (from 29% to 44%) but down in Europe, from 42% to 38%.

One respondent said: “Overtonnaging in the tanker sector will greatly affect rates for

7

STORY CONTINUED

News round-up

News round-up

Passenger musterS New requirements for musters of newly embarked passengers prior to or immediately upon departure came into force on 1 January 2015. Further amendments entering into force address enclosed space entry and rescue drills and the code for recognised organisations.

The amended regulation III/19 in the International Convention for the Safety of Life at Sea (SOLAS) was adopted in 2013 in the wake of the Costa Concordia incident, to ensure that passengers undergo safety drills, including mustering at the lifeboat stations, before the ship departs or immediately on departure. Previously, the requirement was for the muster of passengers to take place within 24 hours of their embarkation.

8

An amendment to SOLAS regulation III/19, on emergency training and drills, makes mandatory the carrying out of enclosed space entry and rescue drills, which will require crew members with enclosed space entry or rescue responsibilities to participate in an enclosed space entry and rescue drill at least once every two months.

The International Code of Safety for High-Speed Craft (HSC code), the Code for the Construction and Equipment of Mobile Offshore Drilling Units (MODU code) and the Code of Safety for Dynamically Supported Craft (DSC code) have been similarly amended. The aim is to try to reduce the fatalities that could occur if crew entered enclosed spaces without adequate training or protection. t

“There is oversupply in the world bulker fleet. If demand for raw materials does not increase, we can write off another year

“

years to come, even if there is real economic growth of the sort we need. The market is ever more unpredictable.”

In the dry bulk sector, meanwhile, there was a 12-percentage-point fall, to 35%, in the overall numbers anticipating rate increases. Just 36% of charterers, compared with 64% last time, thought that dry bulk rates would go up over the coming year. The numbers for all other main respondents were also down, in the case of brokers by 24% to 19%, and in the case of managers by 10% to 33%. Fifty per cent of owners, compared with 55% last time, expected rates to increase.

Geographically, the prospects for increased dry bulk rates were down in Asia by 17 percentage points to 38%, and in Europe, from 47% to 35%. Such prospects in North America, meanwhile, were unchanged at 14 per cent.

“There is oversupply in the world bulker fleet for the available cargo supply,” noted one respondent. “If demand for raw and or semi-raw materials does not increase, we can write off another year.”

In the container ship market, meanwhile, the number of respondents expecting rates to increase over the coming 12 months was down by 6 percentage points to 25%. The number of charterers anticipating higher rates was down by 15 percentage points on last time to 25%, while for owners the drop was from 42% to 40%. Managers (up from 18% to 22%) were the only category of main respondent more confident this time than in August 2014 of higher container ship rates over the coming year. Geographically, expectations of improved container ship rates were unchanged in Asia at 32%, but down in Europe from 34% to 23%. t

Code for Recognised Organisations The Code for recognised organisations (RO code) becomes mandatory on 1 January 2015 under SOLAS, the International Convention for the Prevention of Pollution from Ships (MARPOL) and the Protocol of 1988 relating to the International Convention on Load Lines, 1966.

Administrations (flag states) may delegate certain responsibilities for surveying and certification of ships to “recognised organisations” (often the classification societies), which can act on behalf of the flag state. The RO code provides flag states with standards mechanisms for the oversight, assessment and authorisation of recognised organisations and clarifies the responsibilities of such organisations. t BIBBY ALLIANCE Bibby Ship Management has formed a strategic alliance with Singapore-based United Ship Management to capitalise on business opportunities in the growing Chinese market. The joint venture, to be known as Bibby-USM Shipping Pte Ltd, has been set up as an independent company by both companies to help diversify operations into the North Asia region, targeting China and Taiwan for specialist sectors such as offshore, oil and gas, liquefied petroleum gas (LPG) and liquefied natural gas (LNG).

Bibby Ship Management is a prominent player in the offshore market; a sector which is highly specialised owing to its complexity.

United Ship Management offers strategic

Raw material mining

Asia Pacific Shipping 2015 Spring

News round-up partnerships with owners across the North Asian markets. Drawing on each company’s areas of expertise, Bibby-USM Shipping Pte Ltd will offer a series of comprehensive, one-stop-shop marine services, such as technical management, consultancy, crew management, offshore training, surveying and marine travel.

Arvind Mohan, managing director of Bibby Ship Management’s Singapore operation, said: “We are looking forward to working with United Ship Management to venture into the Chinese market through Bibby-USM Shipping Pte Ltd. We believe the alliance will open up new opportunities for us in this fast-moving and important shipping region. It is an exciting time for our business and for the maritime industry as we expand further afield.”

Kelvin Sun, managing director of United Ship Management, added: “Bibby Ship Management brings a wealth of knowledge and industry expertise to Bibby-USM Shipping Pte Ltd and we look forward to working with them. With the new joint venture, we are confident and determined to be one of the major shipmanagers in these specialised and niche sectors.” t KR MOU Class society the Korean Register of Shipping (KR) has signed a memorandum of understanding (MOU) governing the delegation of statutory certification services for vessels registered in the Grand-Duchy of Luxembourg. KR is now fully authorized by the government of Luxembourg to deliver “statutory services” and is Luxembourg’s seventh recognised organisation.

KR is now able to conduct relevant surveys, audits and issue certificates to Luxembourgflagged ships for SOLAS, MARPOL, International Tonnage Certificate, International Load LIne (ILL), the International Safety Management (ISM) Code, the International Ship and Port Facility Security (ISPS) Code, and the Maritime Labour Convention (MLC). t Migrant concerns Speaking at a high-level Dialogue on Protection at Sea, hosted by the United Nations High Commissioner for Refugees (UNHCR) in Geneva, the International Chamber of Shipping (ICS) has called on governments to address the growing refugee and migrant crisis in the Mediterranean.

ICS secretary-general Peter Hinchliffe said: “The shipping industry fully accepts its humanitarian obligation to assist anyone at sea whose vessel is in distress. But the

situation in the Mediterranean has been spiralling out of control, and may well get worse after the end of the winter weather as thousands more people may attempt to get to Europe from North Africa by sea.”

ICS says the crisis has already required over 600 commercial ships to rescue tens of thousands of migrants during the past 12 months, as people attempt to get to Europe in dilapidated craft that are unfit for purpose, not seaworthy, and often grossly overloaded.

He added: “Large-scale rescues at sea are not routine events and pose enormous challenges to ships that may only have accommodation and resources for a crew of perhaps 25 people. Recovering 200 or sometimes even 400 anxious and distressed people onboard a merchant ship, and administering to their immediate needs, places huge demands on the crew, and there is a compelling need for governments to ensure disembarkation as soon as possible to a place of safety ashore.”

The shipping industry is not in a position to solve the root causes of the crisis and recognises that governments face an enormous challenge. “But far more can be done by governments to ameliorate the current desperate situation at sea in the Mediterranean,” suggested Hinchliffe.

ICS believes that the coastal authorities in North Africa should prevent the migrants’ craft from setting out to sea in the first place, especially where traffickers and people smugglers are involved. However, the European Union and its member states also need to assist the authorities in North Africa and meet their moral responsibility as governments to support search and rescue operations and those merchant ships that are often the first on the scene. ICS suggests that more rescue resources need to be committed to the region by all EU member states and that disembarkation facilities need to be provided without equivocation.

Illegal and inhumane trafficking and deliberate abandonment of migrants in shipping lanes needs to be urgently stamped out. Hinchliffe praised the proposal by the secretary-general of the International Maritime Organization (IMO) for those UN agencies concerned with the plight of migrants and refugees at sea to combine their resources in an inter-agency approach. t USMRC MOU The United States Maritime Resource Center (USMRC) in Middletown, Rhode Island, and ClassNK, have signed a memorandum of

Asia Pacific Shipping 2015 Spring

understanding (MOU) laying out a framework for future technical cooperation to carry out joint research and development activities for the maritime industry. This will mark the first time a major ship classification society has teamed with a prominent marine operations simulation centre engaged in specialised training and research in North America.

“Our goal is to support the safety of ships from not only from the technological point of view but also the human factor perspective.

The need for qualified seafarers who are familiar with the latest maritime technology is essential for the sustainable development of the shipping industry,” said ClassNK executive vice-president Koichi Fujiwara. “USMRC not only has the specialised knowledge to address these issues but also has rich experience in maritime training. I am sure that this collaboration will greatly contribute to future maritime education and training.”

USMRC president Brian Holden added: “We are truly honoured and enthusiastic about working alongside such an innovative and highly respected ship classification society. ClassNK shares our goal of engaging in activities that focus on the safety of mariners; ships and their cargoes; and protection of the marine environment.”

The initial joint project will focus on the development of practical liquefied natural gas (LNG) bunkering simulation tools to further enhance USMRC’s existing niche portfolio of LNG bunkering training programmes.

This type of training, augmented with highfidelity simulations, better prepares mariners and shore-based personnel to safely handle LNG as a marine fuel. “We were the first to offer LNG bunkering safety training in the US,” said Holden. “The signing of this MOU will allow us to take another leap forward in this area by developing practical, hands-on LNG bunkering simulation tools to make this training even better.”

As a recognised expert and industry leader in developing national and international training standards for LNG bunkering operations and employing simulation to improve the development of maritime human capital, USMRC’s role will be to oversee the execution of the project.

The MOU also calls for USMRC and ClassNK to work together to offer dynamic positioning and other critical training capabilities to meet the needs of the offshore energy sector. ClassNK has also agreed to support USMRC’s technical research and other activities related to maritime cybersecurity – an emerging and significant risk to maritime safety. t

9

APS Interview

Emission control Sandra Speares talks to Arthur Bowring, managing director of the Hong Kong Shipowners Association, about emissions, ECAs and what Hong Kong has to offer

“ The Fair Winds Charter was a purely voluntary scheme to try to cut emissions of sulphur in Hong Kong

“

Getting closely involved in the process of cutting air emissions in Hong Kong has been one of the key tasks undertaken by the Hong Kong Shipowners Association in recent times, and its work has raised the profile of the shipping industry there.

Managing director Arthur Bowring explains that in 2010, after much discussion, it was decided to put in place a voluntary fuel switch programme for ships alongside or at anchorage in Hong Kong. Called the Fair Winds Charter, this took effect from 2011 through 2012.

“That was a purely voluntary scheme to try to cut emissions of sulphur in Hong Kong. We had very good support in those two years, and, in September 2012, the government came in with an incentive scheme offering 50% off port charges.”

That covered around 40% of the cost of the change in fuel. The three-year incentive scheme finishes in September this year.

Part of the association’s discussion with the government has been to extend the scheme to Guangdong Province. In September last year, Shenzhen came out with a similar incentives-based scheme, which should have taken effect from 1 October 2014 but has been delayed. This involves a 75% refund for extra fuel costs for 0.5% sulphur or less, or 100% for 0.1% or less. The scheme is evidently more attractive than the Hong Kong scheme but was based on it, Bowring says.

The government has been working on legislation that was supposed to come into effect on 1 January to mandate fuel switching alongside or at berth in Hong Kong to 0.5% or less. “Unfortunately, the legislation has been held up and we are now probably looking at the middle of 2015 for that legislation to come into place.” The problem with voluntary schemes, he says, is that those who comply with them seem less competitive than those Hong Kong Shipowners Association managing director Arthur Bowring

10

Asia Pacific Shipping 2015 Spring

who don’t comply, and that is why the legislation is so important. “We are trying to give every support to get this in place.”

Air pollution is still an issue in Hong Kong, although not as much as it was, and the industry is being proactive in its approach to cutting emissions, he says.

“With the work we have done, I think we have positioned ourselves, unusually for the shipping industry, very much on the side of the good guys in trying to find a solution.”

Bowring says that, when environmentalists write papers on air pollution in Hong Kong, “they don’t see us as the enemy and very much see us as being on their side”.

Turning to the issue of emission control areas (ECAs), Bowring says the association has had concerns about them, although is seen to be taking both sides because it wants to see one in the Pearl River Delta.

“We don’t like ECAs and we think it’s the wrong way to go, but it is the only way we can go.” He sees ECAs as “regional regulation wrapped up in global regulation”.

“It is very obvious that the countries that have the resources to cut emissions ashore and to do research to apply to the International Maritime Organization (IMO) for ECA status are more likely to be developed countries, not developing countries.”

By putting the ECA regulation within a global regulation, he adds, “you are not allowing for the health of people living in developing countries. You’re producing a global regulation which, in fact, improves the health of people in developed countries, which to my mind is not the right message”.

The second reason he gives is the risk of engine breakdown. The entrance to the English Channel is now “the most dangerous place to be, because you have a large number of ships changing fuel at the last possible moment”, he says. “As California has shown, changing fuel can be managed, but it can be mismanaged, which can result in main engine breakdown.”

“We think it is much better to go for a global limit,” he says. Ports can

APS Interview then put in place an internal limit but to a set standard. Another concern is enforcement, he continues. “How do you enforce an ECA? How do you know that ships are changing fuel at the entrance to the English Channel?”

Bowing says that Hong Kong is working with Shenzhen on the Pearl River Delta ECA with a view to making a submission to IMO in 2018. “The IMO might be persuaded that China or an Asian country coming in with an ECA submission might be worth encouraging.”

One issue that the association is discussing with the Coastguard and the The Paris Memorandum of Understanding on Port State Control is the fuel-switching legislation in Hong Kong. There are exemptions in the local rules for ships that are unable to switch fuels because they could not source supplies, but a criminal offence for ships that are deliberately not burning the right fuel, knowing it is wrong but hoping to get away with it, is a different matter. “A criminal offence for the master of a ship is career ending,” he says. It is the same, he adds, with the International Convention for the Prevention of Pollution From Ships (MARPOL). “Here in Hong Kong we will have quite an effective regime set up within the legislation to make sure people do comply.”

Another issue, he said, was the recent decision of the informal trialogue of the European Parliament, the Council of the European Union and the European Commission to proceed to seek the

approval of a regulation of the European Parliament and the European Council on the monitoring, reporting and verification (MRV) of emissions of carbon dioxide from maritime transport.

The association issued a statement last year saying it believed this decision was going in the wrong direction. “It is regional legislation, which we don’t like. We have been working very hard to try to get IMO to adopt monitoring and reporting of CO2 emissions, and it is working on that. It is just a pity that Europe feels it has got to move ahead.”

“It is like pushing a child. You tell the child to do something and the child is going to turn around and say ‘no’. You have to encourage them to think about doing it.

If diplomatically you want something to happen, you don’t try to force them to do it. We would certainly like all regulation to go through IMO and be properly debated with proper cost benefits, rather than being forced by premature action by a region.”

So far as ballast water issues are concerned, he says that, while the last Marine Environment Protection Committee meeting did agree to look at concerns raised by the International Chamber of Shipping (ICS) and industry over the forthcoming convention, this has yet to happen. “The ICS position really is on the understanding that the concerns will be looked at and addressed properly, and I hope that the IMO member states live up to that confidence.”

Turning to the position in Hong Kong,

Bowring says the government is interested in the maritime industry and believes it is currently “punching below its weight”. It sees maritime as being a major part of the economic development of Hong Kong.

“We have a lot of work we are doing here with different government departments,” he adds. Like any association, this includes educating and trying to drive policy revision forward. Immigration, insurance and training are very important issues.

The association started a cadet training scheme some 10 years ago and a lot of those cadets are now reaching Class 1, with a very high retention rate. He cites the example of the Hong Kong Pilots Association. Five years ago, it faced an ageing issue, with nobody to replace staff as they grew old. “Now they have a waiting list of fully qualified people, so it’s working,” he says.

The cadet programme was supported by a government incentive scheme, which pays cadets a top-up salary until they get to Class 3, when they are earning a proper salary as an officer. Bowring says a large number of cadets have enlisted and that there is a renewed interest in the maritime studies higher diploma, seafarer training and university students going to sea and doing the higher diploma at the same time.

The main thing is that the jobs existed before the people were recruited. “That’s worked really well, and we haven’t had a large number of recruits coming out with no job and being turned off. People are interested because they get a job.”

There are areas of education and training that still need to be worked on, and the association has been highlighting people, quality and location. The maritime industry in Hong Kong will not get the tax breaks and incentives available in Singapore, for example. “But what we will get,” says Bowring, “is changes to policy, to regulation and to legislation that keep Hong Kong a very competitive place to be for global trading companies. That is what we are aiming towards.”

The registered tonnage of the Hong Kong Shipping Register is now over 93 million gt, which compares with 5 million gt in 1997. “The fleet is still growing and Hong Kong is still very much on the radar, despite Singapore. What we have here is a very attractive product.” t Emissions control is an important issue for Hong Kong

Asia Pacific Shipping 2015 Spring

11

aps FINANCE

Finance focus The financial position in Asia is very different to what has been the case in Europe and the US

“I haven’t noticed any major shortfall when good owners in the Far East need to raise money

“

The Far East is probably the last area to be hit by the banking crisis in relation to ship finance, says Harry Theochari, global head of transport at law firm Norton Rose Fulbright.

The banks in the Far East are still lending for shipping and are relatively strong, he says. These include the likes of HSBC and Standard Chartered, which have a presence there as well as a large global presence.

Japanese banks are also very active still, Theochari says, adding: “There is plenty of money there.” Chinese export credit agency banks have also been very busy.

“I haven’t noticed any major shortfall when good owners in the Far East need to raise money. They have generally been able to use normal bank finance. It is we in the West that have been far more badly hit by the banking crisis.”

“We haven’t seen much of private equity [in the Far East], certainly nowhere near as much as in the US and Europe, but there is an increasing trend for private equity to become involved in Asia,” he adds.

Clearly, Asia hasn’t seen the level of distress present in the US and Europe, and private equity investors tend to be attracted to distressed companies where they can buy assets at a good value and hopefully ride the market up as it comes out of recession. However, in cases where there have been collapses in the Far East, private equity has shown some interest.

According to Theochari, the bond markets haven’t taken off in Asia. In the US and Europe, there has been a big influx of private equity and the bond markets have been volatile, particularly in countries like Norway. “What we haven’t seen in Asia is any real bond activity, any real private equity activity and any real capital markets activity.”

He says he had hoped that, in terms of

Bimco standard The Baltic and International Maritime Council (Bimco) has announced its intention to develop a standard term

Harry Theochari, global head of transport at law firm Norton Rose Fulbright

12

capital market activity, Shanghai or Hong Kong might “step up to the plate”, but there are very few listed companies. There are probably more family-owned and family-run shipping companies in the Far East than in Europe. Meanwhile, there has been a lot of consolidation in the US, with companies going to the capital markets or merging, such as Oaktree’s investment in Star Bulk last year.

Japanese companies are big corporates already, and the family-run companies very much follow the old-fashioned Greek model and can still raise a lot of money from trading houses. They also still value their independence.

A recent report by Citibank suggested that by 2020 trade between developed Asia – China, Korea and Japan – and developing Asia – for example, Indonesia, Malaysia, Thailand and Vietnam – would outstrip trade going from Europe to the US or Asia to Europe or the US. Another market that has gone from strength to strength in recent times is the Australian market, and Norton Rose Fulbright’s shipping and transport practice is now the biggest in the country. Australia has no national fleet to speak of, but there is a lot of shipping and ports activity and that is really expanding.

Mining, in particular, is very important as natural resources are being shipped to China, and ports like Australia’s Newcastle have doubled in size in the space of the past decade. Chinese interests are buying mines in the country, and Theochari says Norton Rose Fulbright is largely involved in “shipping logistics”, advising on private railway systems, for example.

There is a lot of port development as well as LNG development on both the east and west coasts. t

Asia Pacific Shipping 2015 Spring

aps FINANCE

Business confidence Moore Stephens’ most recent report on shipping confidence suggested that the likelihood of respondents making a major investment or significant development over the next 12 months was down marginally on the previous survey, from 5.4 to 5.3 on a scale of 1 to 10. This is the lowest figure recorded in this category since August 2012. Despite this, the figures for brokers, managers and charterers were all up, the first two by two points to 4.7 and 5.8 respectively and the latter by one point, from 5.5 to 5.6. Expectations on the part of owners in this regard, meanwhile, were down from 5.6 to 5.1.

Forty per cent of managers, as opposed to 38% last time, rated the likelihood of making a new investment over the next 12 months at 7.0 or higher out of 10.0, while 38% of charterers (up from 21% in August 2014) were of like mind. Meanwhile, the 36% of owners anticipating making a new

investment over the coming year was down this time on the previous figure of 41%.

Geographically, expectation levels of major investments were unchanged in Asia at 5.2, but down from 5.4 to 5.2 in Europe and from 5.6 to 5.3 in North America, where 33% of respondents rated the likelihood

“The likelihood of

major investment or significant development over the next 12 months was down marginally on the previous survey

“

sheet to assist the shipping industry in the creation of ship financing documentation.

The aim is to offer lenders and borrowers a comprehensive and simple standard that would become well-known – and could replace the many individually drafted term sheets developed by banks and other financial institutions. As a result, this standard would have the potential to facilitate the provision of ship financing, increase predictability and reduce cost.

A term sheet usually contains a number of provisions for a term loan facility, revolving credit facility, or a combination of both, and further provisions on particular issues such as currency, interest, fees, guarantee, security, prepayment and cancellation.

Angus Frew, secretary-general of Bimco, commented: “This decision is an important step towards developing a standard term sheet that will simplify ship financing documentation for our members and users of Bimco documents, saving them time and money.

“We think that both lenders and borrowers will see the benefits of having this kind of standard available.

“Bimco will now set up a dedicated sub-committee to draft the term sheet.

“Our goal is always to provide clearly drafted and balanced documents for industry to use and so the sub-committee will include both bank and shipowner representatives and their lawyers.

“We expect the first meeting of the subcommittee to be in spring 2015.” t

of making a new investment over the next 12 months at 7.0 or higher out of 10.0, as opposed to 22% in the previous survey.

Comments from respondents in this regard focused largely on the growth of private equity funding in shipping. One said: “The ongoing attack on shipping by private equity investors and outsiders is still active.

Until this stops, shipping does not stand a chance of producing decent returns for the historic shipowner who invests in shipping for the long term.

“With low yields still in place around the world, returns required by public companies and private equity investors are tragically low, so they invest in projects that they really shouldn't be investing in. In addition, the new master limited partnership (MLP) structure is reducing required returns still further. Shipping has no place in the MLP world.”

Demand trends, competition and finance costs, in that order, once again featured as the top three factors cited by respondents overall as those likely to influence performance most significantly over the coming 12 months.

The number of respondents overall who expected finance costs to increase over the next 12 months was up by one percentage point to 40%. For both charterers and managers, the increase was 9 percentage points to 38% and 45% respectively, while for owners there was a 1 percentage point increase to 40%. Brokers (down from 44% to 36%) were the only category of main respondent to record a lower expectation of increased finance costs.

The number of respondents in Asia anticipating an increase in the cost of finance was up by 3 percentage points to 48%, Europe was unchanged at 35%, and in North America there was an 11 percentage point fall to 56%.

One respondent said: “In some cases, little if any of the financing loan will have been paid off against ships that are now approaching their first special survey and which will have suffered a huge depreciation in value owing to age and the current low market.”

Another noted: “There is concern about the influence wielded by irresponsible hedge funds that do not understand the nature of the business and the risks involved.” t There is concern about the influence of hedge funds that don’t understand shipping

Asia Pacific Shipping 2015 Spring

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MARKET dry bulk

Ruled with a rod of iron Iron ore takes centre stage in a market fuelled by China’s import demand, while animal feeds and oilseeds are likely to lead the grain trade

“ The strong iron ore demand in 2014 was somewhat neutralised by weaker coal demand from China

“

A report by The Baltic and International Maritime Council (Bimco) expects dry bulk demand to slow in 2015 to a rate of 4-5%.

Iron ore demand will again be the centre of attention. In recent years, demand growth has been biased heavily towards the Capesize segment. In 2014, 70% of the total volume growth came from increased iron ore demand driven by China.

“Bimco expects this trend to continue, with Capesizes outperforming the smaller sizes relatively. The strong iron ore demand in 2014 was somewhat neutralised by weaker coal demand from China. Meanwhile, the Indonesian ban on exports of unprocessed bauxite and nickel ore resulted in a weak Supramax market in the Far East.

“Towards the end of the year, the late arrival of strong exports of iron ore out of Brazil proved to be insufficient to deliver on the promise of 2013, when rates for all segments went up. While earnings had hit the floor in 2012, Bimco expected 2014 to build on the optimism of 2013 and continue on the road to recovery. That did not materialise.

Dry bulk shipping is expected to continue its recovery, thanks to declining excess capacity, increasing iron ore shipments and rising grain trade, according to the latest edition of the Dry Bulk Forecaster, published by shipping consultancy Drewry.

The dry bulk market rebounded in the third quarter, thanks to the encouraging performance of the Capesize segment, which thrived on strong demand for iron ore from China and high production in Brazil. China’s hunger for imported ore led to a 25% increase in the Baltic Dry Index during the third quarter. However, the Ebola virus outbreak has reduced the number of vessel calls at West African ports, which has disrupted export shipments of major cargoes such as bauxite, aluminium and iron ore from the mineral-rich region.

Dry bulk shipping is expected to continue its recovery

Asia Pacific Shipping 2015 Spring

“China’s import demand is likely to drive the iron ore trade over the next few years, while animal feeds and oilseeds are expected to lead the grain trade,” said Rahul Sharan, Drewry’s dry bulk shipping lead analyst. “Meanwhile, the overall grain trade will remain low in the last quarter of the year because of seasonal factors.”

DNV GL’s latest Container Ship Forum and Bulk Carrier Forum looked at a broad spectrum of topics, including environmental regulations, trends in ship design as well as the new DNV GL rule set.

DNV GL’s bulker expert Sönke Pohl emphasised the value of vetting schemes for dry cargo vessels, explaining which factors are vital to assessing the quality of a ship.

Ship vetting is a risk assessment process carried out by charterers and terminal operators to establish whether a ship is suitable to be chartered. “This can be a very reliable risk management tool, but, unlike certification or classification, vetting is a private, voluntary system that operators may opt to use,” he said. DNV GL’s condition assessment programme (CAP) is already well established within the tanker industry and could also improve risk assessment in the bulker sector, the classification society believes. It examines the ballast tanks, cargo holds, machinery and the cargo system in depth – rating the quality of the vessel in a comprehensive, reliable way and calculating its strength.

Holger Jeffries, programme manager class development at DNV GL, spoke about the new rule set that is due to be published in July 2015 and will come into force in January 2016. “It will be a comprehensive rule set that is easy and intuitive to use.

Ship type rules summarise requirements specific to ship types, and additional class notations are grouped to make them more transparent,” he explained. Shipmanagers are welcomed to interact in technical working groups, participate in hearings and take part in trainings for rules and tools during the implementation process.

15

Market containers

Proceed with caution This highly competitive market only returns a positive margin if the cost base is extremely low, warns Bimco

Strong demand growth on the largevolume trades from the Far East to the US and Europe has brought lower volatility in freight rates on key trades while re-activating most previously idle ships, according to a report by the Baltic and International Maritime Council (Bimco).

“However, during peak season, the steep drop in freight rates on the Far East to Europe trade lane made it clear that the utmost care is constantly required for the supply side, while the introduction of ever-larger ships continues,” the association said.

“Improved industry earnings currently rest on one central requirement: slow steaming and defence of individual market share. This highly competitive market only returns a positive margin if the cost base is extremely low.”

Bimco expects containership supply to continue to grow at its “new normal” level of around 6%, making the demand side a focal point. “European demand has been stronger than private consumption figures indicated, and we may well see further improvement for US demand. The US East Coast could build further on a remarkable year as the ports prepare for the imminent arrival of ultra-large container ships.”

Enlargement projects in the Panama Canal and Suez Canal will further influence the deployment of ships.

Maersk Line and Hamburg Süd are ranked as the two most reliable container shipping carriers, according to performance rankings published by shipping consultancy Drewry in its Carrier Performance Insight.

Maersk Line and Hamburg Süd were by far the most reliable carriers in the three months to October 2014, with overall on-time performances of 80.4% and 78.5% respectively. The next best performing carrier was Cosco at 69.9%, with its CKYHE Alliance partners, Evergreen, “K” Line, Hanjin Shipping and Yang Ming, not too far behind in that order, according to Drewry.

16

Drewry has developed a new online version of its Carrier Performance Insight in collaboration with shipment management software solutions provider CargoSmart, using automatic identification system (AIS) data to measure on-time port arrivals against schedules on 350 different port pair combinations.

“The service provides carrier performance benchmarking on a port-toport, trade lane, service and industry-wide basis, and is updated every month.”

Industry-wide containership reliability improved gradually in the three-month period to October, according to Drewry.

“The latest data shows that aggregate on-time performance for the Asia-Europe, Transpacific and Transatlantic trades improved to 64% in October, up from 63% in September and 55% in August.

“It is a positive to see reliability improving, but the industry’s on-time performance is still unacceptably low for many shippers,” said Simon Heaney, senior manager of supply chain research at Drewry.

Despite the steady monthly improvement, the rolling three-month performance (August-October) was lower than for the previous three months at 60.6% versus 61.1%.

The average deviation between the scheduled day of arrival (ETA) and actual day of arrival (ATA) remained at 1.1 day for the same period.

The Asia-Europe trade was the least reliable during August-October, with only 58% of ships arriving on-time, compared with 62% in the Transpacific and 77% in the Transatlantic.

Looking ahead, the recent drop in fuel prices could have some positive influence on reliability. Heaney elaborated: “Lower fuel costs won’t immediately see containerships running at their design speeds. But, at the very least, carriers should now be more willing to speed up if they fall behind schedule.”

Asia Pacific Shipping 2015 Spring

Container rates Container freight rates for cargoes moving under contracts on major East-West routes have continued to erode, but at a slower pace than previously, according to the results of Drewry’s Benchmarking Club in December.

The Drewry Benchmarking Club contract rate index, based on Transpacific and Asia-Europe contract freight rate data provided confidentially by Asian, American and European retailers and manufacturers, decreased by just 1% between July and November. Between March and July, the Benchmarking Club had seen a 4% average reduction in contract rates.

“It is too early to say whether the smaller 1% fall in costs since July signals the potential end of the downwards trend of the past few years, or reflects the fact that only a small proportion of contracts were renegotiated recently,” said Philip Damas, director of Drewry Supply Chain Advisors.

Under its statute, the Benchmarking Club of importers and exporters can provide current anonymised freight rate market data to its members, but it cannot discuss contract negotiations or rate expectations.

The Benchmarking Club, an initiative of the logistics consultancy arm of Drewry, comprises shippers with annual freight volumes ranging from 5,000 teu to more than 300,000 teu. Through the club, members can confidentially compare their anonymous contract rates with those of other shippers. They are also able to make comparisons against predefined categories of small, medium and large shippers who are moving cargo on the same routes.

“Many large shippers and carriers are currently tendering and negotiating their 2015 Asia-Europe and transatlantic contracts. We will know in February, when the first-quarter contract rate index is released, whether container freight rates have stopped falling,” added Damas.

MARKET tankers

Blue skies ahead?

West Africa has seen exports shift from the US to the Far East, creating many more tonne-miles and large gains for tanker owners

as oil prices slid and demand for imported oil picked up in the US. Meanwhile, in other bulk shipping sectors, activity was subdued.

The recovery in October earnings followed two consecutive months in which the index slumped 32%, caused by declining earnings by tanker and liquefied petroleum gas (LPG) owners. The index is an average of time charter earnings for dry bulk, tankers and LPG markets, weighted according to estimated market share.

“Near term, activity will remain strong in the tanker market on a seasonal increase

“Falling oil prices stirred some positive unrest in the tanker market

“

The crude oil tanker market started 2014 on a very positive note, with a five-year high for earnings in the first quarter, according to a report by the Baltic and International Maritime Council (Bimco). The market’s strength showed clearly in early autumn and in the current winter market. The export of crude oil from West Africa has shifted from West to East as the US has reduced its imports to almost zero. This has given the demand side momentum, as West Africa now exports more to the Far East, creating many more tonne-miles.

“For product tankers, the final quarter of 2014 contrasts greatly with the dull and flat market we had seen for most of the year. Despite US oil product export growth slowing down, it remains a positive story overall. Demand growth just managed to match supply growth, as the positive events arrived late in the year for the shipping market as well as in global economics,” the association said. “Falling oil prices stirred some positive unrest in the tanker market, with rising tonnage demand in their wake. In spite of the price drop arising from weak oil demand and oversupply in the market, the current low and volatile commodity price is good for trading and shipping.

“With a dramatic fall in bunker prices, it is vital for a continued industry recovery that all shipping segments resist higher speeds. Failure to do so may compromise improvement of the fundamental balance, which is essential to bring prosperity back.”

The Drewry All Earnings Index, which covers the main bulk shipping markets, jumped 53% in October to stand at 200 points on account of large gains for tanker owners, according to the Shipping Insight report published by shipping consultancy Drewry in November.

Suezmax tankers registered a remarkable 400% gain on West Africa-US East Coast routes The crude oil tanker market saw a welcome boost last year

Asia Pacific Shipping 2015 Spring

in crude demand,” said Drewry’s lead bulk shipping analyst Rahul Sharan. “However, looking further ahead, supply disruptions associated with civil unrest in Iraq and Syria, as well as slackening economic growth in China, risk adversely impacting cargo demand.”

A fully updated edition of the definitive industry guidance on the safe operation of chemical tankers has just been published by the shipping industry’s global trade association, the International Chamber of Shipping (ICS).

The new edition of the ICS Tanker Safety Guide (Chemicals) replaces the previous version issued in 2002. ICS recommends that a copy is carried onboard every tanker engaged in the carriage of chemical cargoes, and that copies are also held within shipping company technical departments.

ICS secretary-general Peter Hinchliffe explained: “The production of this new edition has been a major project, taking many years and drawing on expertise throughout the industry. As well as taking account of the latest best practice, large sections have been totally rewritten to assist comprehension.”

The updated guide takes full account of the adoption by the International Maritime Organization (IMO) in May 2014 of important amendments to the International Convention for the Safety of Life at Sea (SOLAS) , following a major IMO review of tanker safety.

These amendments to SOLAS include new mandatory requirements for the inerting of chemical tankers. Together with recent changes made to the IMO Fire Safety Systems (FSS) code, these SOLAS amendments are fully reflected in the new edition of the ICS guide.

Hinchliffe said: “Attention has also been given to the question of how to inculcate an effective safety culture amongst everyone involved in chemical tanker operations.”

The ICS Tanker Safety Guide (Chemicals) should be regarded as a companion to the International Safety Guide for Oil Tankers and Terminals (ISGOTT), jointly published by ICS and the Oil Companies International Marine Forum (OCIMF).

17

DNV GL joins Nanyang Business School and the Lorange Institute of Business to develop leadership in the maritime sector.

Dating back thousands of years, the shipping industry could lay claim as the world’s first truly global trade.

The industry has grown steadily since the mid-1950s with the introduction of container shipping, a practice that currently accounts for 60% of the total value of goods shipped via sea.

Singapore serves as the ideal Asian gateway for global leaders in shipping finance, ship-broking, risk management and marine insurance. Its thriving maritime industry comprises over 5,000 establishments that employ more than 170,000 people. Given its strategic importance, Singapore is the choice venue for the headquarters and representative offices of numerous international maritime organisations and associations.

Nanyang Business School, Lorange Institute of Business Zurich and DNV GL have joined forces to develop a unique programme specifically designed for managers in the maritime sector: the Advanced Management Programme in Shipping & Offshore Management.

The programme is aimed at senior level managers in the maritime sector who seek to enhance their leadership

potential, explore the latest industry trends and network with other top level industry peers. Developed in a 4 week modular format, the programme allows maritime managers to gain vital insights with minimal interruption to their careers. This is a unique industry-focused curriculum ensures maritime professionals will stay one step ahead of the game.

“The programme’s unique content and rich multicultural environment broadened my perspective, enhanced my leadership skills and provided a solid base to take my career to the next level. The opportunity to network and learn with other maritime professions was also immensely rewarding.”

Renier van den Bichelaer, EMBA Class of 2013 Chief Commercial Officer, SVITZER

The AMP in Shipping & Offshore Management includes residential modules at Nanyang Technological University in Singapore; DNV GL in Oslo, Norway and the Lorange Institute of Business in Zurich, Switzerland.

The full time 4 week programme addresses key maritime concerns such as: • Innovation & Strategy in Shipping (LIB & DNV GL) • Port Development & Management (LIB & DNV GL) • Port Supply Chain Management (LIB & DNV GL) • International Contracts & Maritime Law (NTU) • Project Management (NTU) • Shipping Accounting & Finance (NTU) The knowledge participants stand to gain will anchor their global leadership skills and provide exactly what is required for this specialised industry.

This is an opportunity to travel from a high potential manager to a highly capable leader as participants will: • Develop global leadership skills for executives working in the maritime sector • Understand how senior executives within the shipping industry can manage their organisations • Gain insights into maritime strategies, maritime law, port logistics and management, and innovation processes • Apply up-to-date research and theory when analysing strategies of shopping companies

Extend your professional reach and take the Nanyang Executive MBA Shipping & Offshore Management Track Ranked 8th in the world, the Nanyang Executive MBA is a 12 month part time modular programme that offers high potential industry specialists the chance to accelerate their leadership potential while acquiring universal best practices.

Far from a “one size fits all” approach, the Nanyang Executive MBA offers a solid general management core and multiple industry tracks so participants can customise the programmme to their needs.

The Shipping & Offshore Management track equips participants with global leadership skills and an in-depth understanding of critical management issues in the shipping industry, including business development strategy, port logistics, risk management, innovation and the value chain of the maritime industry.

The 12 month programme is divided into five segments: four core modules on NTU’s Singapore campus, one at the DNV GL’s campus in Oslo and Lorange Institute of Business in Zurich.

By taking the Nanyang Executive MBA participants will: • Bolster understanding of critical business areas while acquiring action orientated insights from recognised authorities in their field

For more information on our Shipping & Offshore Management programmes please visit www.nanyangemba.com/shipping or call +65 67906413

• Maximise leadership potential under the guidance of acclaimed faculty experts from the world’s most prestigious universities • Deepen understanding of the most relevant management tenets and global best practices • Form lifelong bonds with an outstanding network in a wide array of sectors • Gain international exposure through overseas modules that span at least two continents • Benefit from a uniquely Asian curriculum that interweaves Eastern and Western business principles

Nanyang Business School

APS education

Safety at sea The dangers faced by migrants and asylum seekers at sea have been a major concern for the industry recently

rescue. The ICS guidelines also contain useful references to relevant advice produced by the World Health Organization and the International Maritime Organization (IMO).

ICS emphasises that masters should not be expected to become involved in decisions about the legal status of the people they have rescued or whether they intend to apply for asylum.

“Notwithstanding the shipping industry’s legal and humanitarian obligations to

“

Crews may be involved in rescuing as many as 200 people at a time

“

In response to the continuing crisis in the Mediterranean, necessitating commercial ships to rescue tens of thousands of migrants and refugees during 2014, the International Chamber of Shipping (ICS) has published new guidance, entitled Large Scale Rescue Operations at Sea, which can be downloaded free of charge via the ICS website.

ICS secretary-general Peter Hinchliffe explained: “The shipping industry fully accepts its humanitarian obligation to assist anyone at sea whose vessel is in distress. But the scale of the crisis involving thousands of people attempting to get to Europe in craft that are neither fit for purpose nor seaworthy has raised real concerns about the safety and health of ships’ crews that may be involved in rescuing as many as 200 people at a time.”

The challenges involved in rescuing large numbers of people and then accommodating them onboard ship prior to disembarkation are enormous compared with conventional rescue operations. The ICS guidelines are therefore intended to help shipping companies prepare for this eventuality, while taking full of account of the safety and security of the ship should such large-scale rescues be necessary.

ICS says that experience has shown that advance preparations, and the development of effective procedures supported by regular drills, will prepare masters and their crews to manage large-scale rescue operations safely and successfully.

The issues covered by the ICS guidelines include the provision of additional personal protective equipment for ship’s crew and the safe management and accommodation of large numbers of people onboard, with an emphasis on sanitation, hygiene and ship security. The guidelines also refer to the need for companies to take full account of crew welfare in the aftermath of a large-scale

ICS secretary-general Peter Hinchliffe

20

Asia Pacific Shipping 2015 Spring

rescue people in distress at sea, it remains incumbent on the governments to find a solution to the current crisis, which is placing a very difficult burden on ships’ crews and the companies that have a duty of care for them,” said Hinchliffe.

Along with the IMO secretary-general, Hinchliffe will be participating at a high-level meeting on the migrants at sea crisis being hosted by the UN High Commissioner for Refugees in Geneva. t Working together Videotel, a KVH company, has developed a new programme – entitled Working with Multinational Crews…It’s a Cultural Thing! – aimed at teaching crew aboard a vessel how to work together as a cohesive unit regardless of nationality differences.

Ships’ crews today invariably include seafarers from many different nationalities.

While this mix of cultures can bring great benefits, it can also have the potential to create misunderstandings and possible disharmony owing to a lack of awareness of differing cultural values.

The programme features seafarers of eight different nationalities who enact a range of typical onboard scenarios. The programme includes an accompanying workbook.

Language issues are addressed, showing how basic unfamiliarity can lead to confusion and even dangerous misunderstandings, putting crew safety at risk. This is often further complicated by people, in some cultures, not always saying what they mean.

The programme also covers the importance of understanding that body language, gestures, hand signals and postures can mean entirely different things to people from diverse cultures. The various scenarios examine the assumptions we make about others based on our own upbringing and values.

The workbook contains further information about the topics covered in the programme, with notes on how best to run the training session. t

APS education Ebola advice Videotel’s new video about Ebola safety is being distributed free to mariners worldwide in an effort to increase awareness of the vitally important prevention measures that can keep seafarers safe. Ebola, a severe and often fatal illness for which there is no vaccine or cure, has been ravaging parts of West Africa since March in the largest outbreak ever known.

“The Ebola epidemic is a crisis of worldwide proportions, where seafarers are at risk given the global nature of their jobs

“

The World Health Organization has declared the current outbreak a public health emergency, and it is critical that everyone working in the global maritime industry understands the steps they can take to prevent the further spread of the disease.

KVH has created a website from which mariners can download the free video and an accompanying workbook. In addition, KVH has delivered the entire video programme to its IP-MobileCast customers on vessels across the globe, who will automatically receive the video for immediate viewing onboard. “This is a perfect example of why it is sometimes necessary to send out urgent training updates without delay and not wait for the annual update process,” says Nigel Cleave, chief executive officer of Videotel.

“The Ebola epidemic is a crisis of worldwide proportions and one where commercial ships and seafarers are at risk given the global nature of their jobs,” says Martin Kits van Heyningen, KVH chief executive officer. “Distributing the free video by digital means enables us to get the information to all mariners quickly, especially seafarers who may be in or near a port in the affected region, where it is unsafe to go ashore.”

The 15-minute training programme was produced in association with Steamship Mutual P&I Club and a panel of medical and subject matter experts. “The Ebola training film covers matters of life and death, much

like many of our other programmes in our 900-course training library,” says Cleave.

“It has to be accurate, engaging and well designed so that mariners of all cultures and backgrounds understand it.

Our shipowner and shipmanager clients are facing Ebola-related decisions every day as their ships approach and leave affected ports, and at Videotel our first instinct is to support them.”

KVH’s initiative to distribute the video to seafarers around the globe is companywide: Videotel is providing the video free as part of its regular updates for its training programme subscribers on more than 11,000 vessels; KVH Media Group, a leading provider of commercially licensed news, music, TV and movie entertainment content for the maritime industry, is directing its customers to the download site; and Crewtoo, KVH’s online seafarer network, is informing its 100,000+ seafarer members via social media.

KVH is being aided in its video distribution efforts by seafarer agencies, including the International Seafarers’ Welfare and Assistance Network (ISWAN), which is promoting the video to some 450 seafarer centres around the world.

KVH provides maritime broadband connectivity to vessels worldwide through its TracPhone V-IP series satellite communications antenna systems and mini-VSAT Broadband service. Earlier this year, KVH launched IP-MobileCast, which utilises multicasting technology to enable affordable delivery of news, entertainment and operations content to vessels at sea. t Kongsberg’s new bridge simulator Kongsberg Maritime has unveiled its latest generation ship’s bridge simulator, K-Sim Navigation, which meets the requirements of the most demanding navigation training for merchant, offshore and naval vessels.

Designed for the future of advanced and integrated simulation training, K-Sim Navigation is based on a new cutting-edge technology platform, enabling more realistic training scenarios and enhanced user benefits for both instructors and students.

K-Sim Navigation features an advanced physical engine and state-of-the-art hydrodynamic modelling, allowing vessels, objects and equipment to behave and interact as in real life. To enhance the realism further, a sophisticated new visual system is included, bringing vessels and objects in all possible weather conditions to life.

Asia Pacific Shipping 2015 Spring

According to Terje Heierstad, global product manager at Kongsberg Maritime Simulation, the result of these improvements is “a fully immersive and optimum quality simulation experience”.

“It’s a step change in maritime simulation.

The shipping sector doesn’t stand still, and neither do we. Using our 40 years of simulation experience, it was our goal to take ship’s bridge simulation to the next level,” Heierstad adds.

K-Sim Navigation has been developed with the user experience firmly in focus.

In addition to the realistic environment for students, instructors benefit from an awardwinning instructor system designed to facilitate ease of use. It features an intuitive and modern educational tool utilising a modified electronic chart display and information system (ECDIS) as a starting point, with drag and drop function for creating exercises. The instructor system also includes automatic recording and an advanced assessment system for ensuring optimal training and feedback standards.

“Instructors are perhaps the key link in the training value chain, so we wanted to give them the ability to create the most advanced training scenarios, with the utmost efficiency and ease,” explains Heierstad. “Flexibility is also crucial, giving instructors the capacity to adjust exercise parameters before and during simulations to provide the best-quality training for every individual student.”

K-Sim Navigation’s flexibility extends to hardware, with a fully scalable range of options available – from a PC-based desktop system to a full mission bridge simulator. The system, built on the same core technology platform as the market leading K-Sim Offshore simulator, can easily be integrated with other Kongsberg Maritime simulators (including crane, offshore, engine, cargo, ballast and dynamic positioning) to enable a comprehensive range of training scenarios.

Already approved to DNV GL Class-A standards, K-Sim Navigation allows maritime schools and academies to extend their portfolio of courses, while providing them the controlled environment necessary for undertaking valuable research projects.

“We believe that the new functionality and realism we have developed for K-Sim Navigation is an essential building block for enhancing sea skills and thus providing safe, secure and reliable vessel handling. Which, at the end of the day, is what maritime simulation is all about,” concludes Heierstad. t

21

CBS EXECUTIVE MBA IN SHIPPING & LOGISTICS

EXECUTIVE MBA IN SHIPPING AND LOGISTICS (THE BLUE MBA) Fulfil your ambition to reach the top with the world’s premier Executive MBA designed specifically for busy professionals in the shipping and logistics industry.

Work through the internet from anywhere in the world on this unique module-based Shipping and Logistics E-MBA, joining up for just 8one-week sessions spread over 22 months.

Class starts September 2015. www.cbs.dk/mbs, ir.mba@cbs.dk

Executive MBA in Shipping and Logistics The leading part-time executive MBA in the world directly addressing the challenges for the maritime sector, including:

For further information please contact Irene Rosberg by e-mail: ir.mba@cbs.dk or phone: +45 3815 6007.

• Market understanding • Leadership • Information technology • Globalization

www.cbs.dk/mbs

• Environmental issues • Strategic planning

Programme Overview The programme consists of eight one-week modules, all dealing with leadership issues and personal development, plus an Integrating Strategy Project (ISP). Each module presents theories,

gives a thorough introduction to the reading material and motivates you for your independent studies.

You will study the material in between sessions and write an assignment for each module, which will be focused on a problem related to your

own business. For the ISP, topics should be chosen for their strategic purpose and integrating nature, ensuring that your organisation gains a valuable and practical analysis and directly benefits from your studies.

Pre-MBA (optional) 16-18 Sep 2015

Copenhagen, Denmark

21-26 Sep 2015

Copenhagen, Denmark

Supply Chain Management – New Logistical Challenges

30 Nov – 04 Dec 2015

Copenhagen, Denmark

International Economics and Market Analysis + Leadership

08-13 Feb 2016

Copenhagen, Denmark

(1) Ship Design (2) The Maritime Legal Framework

04-08 Apr 2016

Singapore

Operational Management and Information Technology + Leadership

20-25 Jun 2016

Copenhagen, Denmark

Investment Analysis, Risk Management and Finance

05-09 Sep 2016

London, UK

(1) International Marketing (2) Organisation + Leadership

07-12 Nov 2016

Copenhagen, Denmark

Managing Strategy and Change – Introduction to ISP Process

16-20 Jan 2017

Copenhagen, Denmark

Presentation of Industry Analysis

16-18 Mar 2017

Copenhagen, Denmark

Presentation of the ISP with Implementation Plan (oral defence)

08-10 Aug 2017

Copenhagen, Denmark

Module 00

Accounting and International Economics

Shipping as a Business and a Market Module 01

Shipping as a Business and a Market + Leadership

Understanding the Global Environment Module 02 Module 03

Focus on Maritime Issues Module 04 Module 05

Core Management Issues Module 06 Module 07 Module 08

Integrating Strategy Project (ISP/Thesis) Presentation of Company and Issue Analysis

Graduation

18-20 May 2017 12 Aug 2017

Copenhagen, Denmark

Copenhagen, Denmark

APS Insurance

Self-assessment New hands-on approach by UK P&I Club members

The UK P&I Club is trialling a new selfassessment scheme for its entered ships. The scheme is designed to help the club’s shipowner members take a more hands-on role in identifying and controlling the risk of accidents on their vessels – which, in turn, could help to reduce their insurance premiums.

The trial is the latest development in the club’s new claims-based approach to ship inspections. Launched four years ago, the new approach focuses specifically on measures needed to control the most likely accidents on a ship, as determined by the club’s unrivalled database of 12,000 major claims.

Using ‘bow-tie’ risk diagrams, the database reveals seven primary hazards and 76 common threats which, if not controlled in one or more of 450 ways, could result in a major claim. For instance, a primary hazard for cargo ships is carrying cargo at sea. Water ingress is a threat and, if not controlled by measures such as watertight hatch covers, the shipowner will be sued for wet damage.

Loss prevention director Karl Lumbers says: “Our bow-tie approach has proved very popular with members, with our inspectors being able to help them identify and control threats much more effectively.

We have now modified the approach so that members can start using it and benefiting from it directly.”

Initially, the club will provide selfassessment facilities for up to 20 members, whose crews will score the effectiveness of 450 shipboard controls from 1 to 5.

Each member’s scores will be analysed by the club, with the effectiveness of each control being benchmarked. A formal risk assessment report will be provided to the member showing the overall risk percentage. Claims prevention advice will

be made available to discuss any particular findings in the assessment.

“Where a members’ assessment of a ship reveals little difference in scoring with a gap analysis conducted by the club, there will be a reduction in the mandatory surveys required by the club on that ship,” says Lumbers.

He adds: “We hope the self-assessment scheme will enable participating members to harness the wide experience gained by the club in many years of claims handling to the benefit of their own businesses.

Additionally, we believe members will find that this practical and simple system will encourage crewmembers to take more pride in their professionalism and their ships.” t

Loss prevention director Karl Lumbers

24

Asia Pacific Shipping 2015 Spring

Concern persists over unpaid wages Specialist marine insurance intermediary Seacurus says that overall confidence in the successful implementation of the Maritime Labour Convention 2006 (MLC) should not conceal the fact that there is continuing concern over the risk of abandonment and the timely payment of crew wages.

Thomas Brown, managing director of Seacurus, says: “Recent figures from the Paris Memorandum of Understanding (MoU) on Port State Control indicate that the MLC Convention is being well enforced, with 113 ship detentions relating to MLC deficiencies recorded since MLC 2006 entered into force on 20 August 2013.

“Overall, it seems that progress is being made and that MLC can deliver on its promises. But the Paris MoU figures also show that detainable MLCrelated deficiencies were most frequently recorded in the areas of ‘payment of wages’ (39.5%) and ‘manning levels for the ship’ (28.6%).

“Moreover, a survey earlier this year [2014] by seafarer website and employment agency Crewtoo appears to bear out the Paris MoU data. Almost half the respondents to the survey, which gathered the views of over 1,000 seafarers, said they had had to wait at some point for delayed wage payments to be made by their employer.

“The same survey also revealed that 36% of seafarers had been forced to work without pay, while 17% had been abandoned.

“Overdue salaries are one of the red-flag indicators of financial distress for shipping companies, and many seafarers are being subjected to undue stress, frustration and uncertainty over wage payments. MLC 2006 states that wages should be paid at least every month, so it is disappointing to see that so many seafarers have experienced delays. There are clearly reasons for concern in this regard.

APS Insurance “It seems that seafarers feel positive about the effect that MLC 2006 is having on their day-to-day existence, reflecting both the spirit and the letter of the convention.

Seafarers are aware of the protective systems in place, such as the Seacurus CrewSeacure cover, and are willing to research the subject before sailing. This could be something of a tipping point for the industry. But it is not quite time for pats on the back and high-fives. There are still problems which need to be addressed.” t

“ Errors such as these put pressure on commercial relationships. Attention to detail is important

“

Agent errors Careless errors by ship agents are resulting in costly claims, according to ITIC. In the latest issue of its Claims Review, ITIC cites the case of a ship agent which incorrectly calculated two pro-forma invoices in respect of port dues, using the cheaper rate for a cargo of malt, rather than the rate for the cargo of wheat booked for discharge from two ships. The wheat cargoes had been discharged, and the final invoices for port dues sent out, before the error was discovered.

The difference between the invoiced port dues and the correct port dues totalled e14,000. But the owner refused to make up the shortfall because, relying on what it had been told, it had in turn charged the lower amount to the charterer. The claim was settled by ITIC. Another case referenced by ITIC involved the submission by a port agent of all relevant cargo declarations in respect of a ship which had tendered notice of readiness in a Middle East port. These declarations included a document which the agent had translated into Arabic and English, and which described the cargo and the names of the consignees.

When the ship arrived, the only berth at which it could discharge was not available for a further 10 days. The mistakes in the translation of the cargo declarations were subsequently noticed, resulting in a threeday delay in clearing the ship for berthing, which coincided with the last three days of the overall 10-day delay.

The owner claimed against the port agent for the full 10-day period of delay, arguing that the ship had not legally been able to berth due to the document error.

ITIC helped the agent negotiate a settlement based on 50% of the overall delay of $110,000, which ITIC paid.

ITIC says: “Errors such as these put pressure on commercial relationships.

Attention to detail is important.”

The London P&I Club has advised its members on precautions to adopt to detect the presence of cappuccino bunkers.

In the latest issue of its StopLoss Bulletin, the club explains that the cappuccino effect is essentially the frothing or bubbling effect caused by compressed air blown through the delivery hose. The aerated bunkers when sounded will give the impression that the fuel is delivered as ordered. In fact, after some time, when the entrapped air in suspension settles out of the fuel oil, the oil level drops and a shortfall is discovered.

The club says: “There are a number of ways in which cappuccino bunkers may be identified. These include signs of froth/foam on the surface of the fuel in the barge tanks when opening the gauge, and excessive bubbles on the sounding tape prior to, during and after bunkering. The bunker hose may also jerk or whip around, delivery rates may be slower than those agreed, and there may be a gurgling sound in the vicinity of the bunker manifold. There may also be fluctuations in pressure on the manifold pressure gauge, and unusual noises from the bunker barge.”

Outlining precautions that should be taken before fuel transfer takes place, the club explains: “During usual gauging of bunker barge tanks, fuel oil from ullage hatches should be visually checked for any foam on the surface. Foam may also be detected on the ullage tape. If entrained air is suspected on the tape or fuel surface, obtain a sample and pour it into a clean glass jar and observe carefully for signs of foam or bubbles. If the suspicion is confirmed, the chief engineer should not start bunkering and should notify the owners/charterers immediately.”

With regard to precautions during and after fuel transfer, the club notes: “Air can also be introduced in the fuel during the pumping period, so it is important to continue gauging the ship’s tanks, as air bubbles would be readily seen on the sounding tape. As stripping and line blowing can also introduce air, stripping should only be performed at the end of the delivery for a short period of time, and line blowing kept to a minimum.

The ship’s bunker manifold valve should be checked shut before gauging of the ship’s tanks.” t Careless errors by ship agents are resulting in costly claims

Asia Pacific Shipping 2015 Spring

25

Classification societies

Structured approach Common structural rules for tankers and bulkers come into force this year

26

were taken to publicise these items to industry participants and this continued at the council meeting, where plans for future cooperation were discussed with industry representatives. t Japanese first for ABS International classification society American Bureau of Shipping (ABS) has added the first Japanese-flagged vessel to its classed fleet after having been awarded ‘Recognized Organization’ (RO) status by the Japanese government.

“ We are the first

foreign class society to include a Japaneseflagged vessel in our fleet

“

Common structural rules for bulk carriers and tankers were on the agenda at the International Association of Classification Societies (IACS) council meeting on 11 December.

Chaired by Philippe Donche-Gay of Bureau Veritas (BV), the flagship Common Structural Rules for Bulk Carriers and Oil Tankers project was discussed and a presentation delivered to industry representatives who attended the closing session. The rules will enter into force on 1 July 2015.

The IACS expert group on structural safety of containerships reported on a review it carried out after the MOL Comfort incident. This work has resulted in the development of two new IACS unified requirements (URs): URS11A, which is a longitudinal strength standard for container ships, and URS34, dealing with functional requirements and load cases for direct analysis of containerships. These important requirements will be delivered during the first quarter of 2015.

URs are minimum technical requirements adopted by all IACS members that refer to specific class rules requirements. They are not intended to address all strength aspects of hull structures, as that is the function of the class rules of individual members.

Two new IACS initiatives were also discussed: the first one on liquefied natural gas (LNG) bunkering guidelines and the second dealing with complex onboard systems.

LNG bunkering guidelines are presently being considered by a number of organisations, and the IACS initiative will seek to build on what has already been introduced.

Complex systems is a topic of crucial importance for the industry as onboard systems develop rapidly in complexity. IACS is currently focusing on this subject with the formation of a dedicated expert group.

At the last tripartite meeting (shipowners, shipbuilders and classification societies) in Shanghai in October, steps

Yamatogawa, a 302,488 dwt very large crude carrier owned and managed by Kawasaki Kisen Kaisha (“K” Line), recently transferred flag, a move which made ABS the first foreign classification society to class a vessel flying the Japanese flag.

“We are honoured to become the first foreign class society to include a Japanese-flagged vessel in our fleet. This is testament to our long-term commitment to delivering the high levels of professionalism that are demanded by the top Japanese shipowners,” said Derek Novak, president and chief operating officer for ABS’ Pacific division. “We look forward to providing our best-in-class technical services and global support to a growing part of the Japanese commercial fleet in the coming years.”

ABS, which gained status as an RO in Japan in December 2012, is the largest foreign class society in the country. It opened its first office in Japan in 1949 and has been

Asia Pacific Shipping 2015 Spring

supporting global shipowners there ever since. Earlier this year, ABS was selected to serve as the first foreign classification society for a new construction Japanese-flagged vessel when Offshore Japan Corporation, a joint venture between Kawasaki Kinkai Kisen Kaisha (“K” Line Kinkai) and Offshore Operation Co, announced the construction of a new anchor handling tug supply vessel to ABS’ standards.

The RO designation allows ABS to provide statutory certification services to Japaneseflagged vessels on behalf of the government and it allows ABS to verify the compliance of those vessels with international safety and environmental requirements, such as the International Convention on Load Lines, the International Convention for the Safety of Life at Sea (SOLAS) and the marine pollution (MARPOL) convention.

Novak says choosing to class with ABS for ships being built in Japan will make owners eligible for the most knowledgeable technical support and regulatory guidance when calling in US waters. t New chairman at KR The Korean Register (KR) has elected Dr Park Bum-shik, formerly chief operating officer of the Korea P&I Club, as its new chairman and chief executive.

Dr Park graduated from Korea Maritime and Ocean University with a bachelor’s degree in navigation science and later gained a doctorate degree in business administration from the same school. Dr Park’s career has included being head of the maritime division at Pan Ocean Shipping Co, and executive vice-president of Wilson Korea Insurance. He was appointed chief operating officer of Korea P&I Club in 2006.

On being elected, Dr Park said: “It is my job to build on the continuing success of KR and drive its growth to become one of the top-performing classification societies in the world. I plan to achieve that through facilitating a flexible organisation culture, a global business infrastructure

Classification societies and sustainable growth through financial stability. My role is to provide the support our staff members need to enable them to perform at the top of their game. I am delighted and honoured to be elected and I look forward to leading the Korean Register into the next phase of its ongoing growth and development.” t ClassNK developments Accessing the latest research findings or information on new technologies and incoming regulations as they emerge can prove challenging. To help make this easier, classification society ClassNK announced the release of its technical review articles through the ClassNK homepage.

This comes in response to growing demand from the global maritime community for the latest technical information reports and articles. ClassNK’s technical experts review a wide variety of topics, covering new international conventions, technical concepts as well as the latest research and development (R&D) projects, which are compiled and released in regular reviews.

Meanwhile, ClassNK and leading global maritime software company NAPA have announced a joint project to reduce the time and cost of designing vessels in accordance with the new International Association of Classification Societies (IACS) harmonised Common Structural Rules (CSR). The project will enhance data linkage between ClassNK’s PrimeShip-HULL (HCSR) design support software and NAPA’s 3D-modelbased integrated design software NAPA Steel. This will greatly improve the efficiency of ship design and reduce the cost of designing vessels in accordance with the new rules.

Adopted in 2013, CSR will be applied to all tankers over 150 metres (m) and all bulk carriers over 90m contracted after 1 July 2015. The rules include new requirements for more comprehensive structural analysis at the design stage, including finite element analyses covering the entire range of cargo hold structures, as well as formulae for buckling, fatigue and residual strength criteria. This will enhance safety and reliability, but will also greatly increase the overall time needed for vessel design.

In order to help reduce the burden of the new rules on ship designers, ClassNK released PrimeShip-HULL (HCSR), a multifunctional vessel design support tool that makes it easy for yards and designers to carry out rule calculations and optimise their designs in accordance with the new rules.

According to ClassNK executive vicepresident Yasushi Nakamura, PrimeShipHULL (HCSR) is the world’s first design support software to incorporate the requirements of the harmonised CSR. “With PrimeShipHULL (HCSR), we have already succeeded in reducing the additional time needed for HCSR vessel design by roughly 50%, but our goal is to reduce the workload and, in turn, costs for ship designers and builders around the world.

By improving the link to NAPA Steel and other design software we believe we can achieve even greater results.”

Today, 95% of the world’s vessels are built by yards using NAPA’s ship design software, including NAPA Steel. NAPA Steel allows yards to greatly rationalise their ship design processes, reduce calculation time and rapidly create high-quality finite element models.

NAPA president Juha Heikinheimo says: “Many of the world’s leading shipyards already use NAPA Steel to improve their design processes, and we see this improved data linkage as offering even greater benefits to users. Improved linkage between NAPA Steel and ClassNK’s PrimeShipHULL (HCSR) will allow yards building CSRcompliant vessels to even further streamline their design process while also eliminating the need for designers to input duplicate data into multiple programmes.” t New FPSO design ClassNK has granted approval in principle to a new design for a H2/CO2 floating production, storage and offloading (FPSO) vessel developed by Mitsubishi Heavy Industries (MHI) and Chiyoda Corporation.

FPSO vessels are commonly used in the offshore oil and gas industry process and store crude oil and liquefied gas from offshore wells until it can be transported via pipelines to shore or via ship-to-ship transfer. This new concept, however, uses steam reforming and shift conversion to extract hydrogen (H2) and carbon dioxide (CO2) from the associated gas produced as a byproduct of oil well production.

There is growing interest in the use of hydrogen as a fuel as it is exceptionally environmentally friendly and readily available, and research is ongoing around the world. However, the storage and transport of hydrogen continues to present a number of difficult technical challenges for industrial and commercial use.

In order to address these challenges, the H2/CO2 FPSO uses a new organic chemical hydride method to convert hydrogen into highly stable methylcyclohexane (MCH), which can be stored in liquid form at an ambient temperature and pressure.

As MCH can be transported in standard chemical tankers, converting hydrogen into MCH not only reduces the risks and challenges related to hydrogen storage but also optimises it for transport via existing networks. MCH produced by the H2/CO2 FPSO could then be transported by chemical tankers to hydrogen demand sites and converted back to hydrogen using a dehydrogenation reactor developed

by Chiyoda.

The carbon dioxide extracted by the unit would be stored onboard and used for enhanced oil recovery (EOR), a commonly used process that uses gas injections to displace and subsequently extract residual oil from subsea reservoirs.

The facility’s topside plant and floating body were developed by Chiyoda and MHI respectively with support from ClassNK’s R&D for Industry programme. The new design is understood to be world’s first H2/ CO2 FPSO design, as well as the first such facility to receive approval in principle (AIP).

AIP is an essential step in developing conceptual designs for practical application in the maritime and offshore industries.

ClassNK conducted an extensive review of the concept design, including both risk assessment and a thorough review of structural and topside plans for the H2/ CO2 FPSO to ensure compliance with both ClassNK’s independently developed rules and international standards. t

Hydrogen (H2) and carbon dioxide (CO2) could be extracted from oil well byproducts

Asia Pacific Shipping 2015 Spring

27

IT SOFTWARE SOLUTIONS ShIPBroking and trading

Trading up There have been a number of developments as far as broking and trading systems are concerned

“Additionally listing CLTX fertiliser contracts at EEX will enable access to these products for an even wider network of partners

“

The European Energy Exchange (EEX), in cooperation with Singapore-regulated Cleartrade Exchange (CLTX) launched an extension to its trade registration services for fertiliser contracts on 6 January 2015.

The product offering includes six derivatives contracts for fertilisers, based on urea, diammonium phospate (DAP) and urea ammonium nitrate (UAN), for different delivery points in the US, Europe and North Africa. All products are cash-settled agreements settled against market indexes, published by Argus Media Limited, Fertecon Limited and CRU International Limited in “The Fertilizer Index” report. Owing to the small contract sizes of 25 tonnes, compared with the standard size of 500 tonnes, this move promotes increased flexibility for EEX customers.

“Additionally listing CLTX fertiliser contracts at EEX will enable access to these products for an even wider network of partners,” says Richard Baker, chief executive of CLTX. “At the same time, it will be possible to clear transactions at a further clearing house, European Commodity Clearing (ECC).”

“The launch of fertiliser contracts constitutes the entry of EEX into the agricultural derivatives segment, which we will complement with further products in May 2015,” says Peter Reitz, chief executive of EEX. “Furthermore, EEX will launch its offering for freight futures in January, which provides significant benefits for participants who are also active on the fertiliser markets.”

With the clearing of freight and fertiliser products on one platform, market participants can hedge price fluctuations in the physical fertiliser markets and eliminate counterparty credit risk while at the same time optimising transport costs Richard Baker, chief executive of Cleartrade Exchange (CLTX)

28

Asia Pacific Shipping 2015 Spring

for fertilisers. By holding all positions at the same clearing house, participants benefit from netting effects, since ECC provides cross-margining across various markets and exchanges, including the CEGH Gas Exchange of the Vienna Stock Exchange, EEX, EPEX Spot, the Hungarian Power Exchange (HUPX), Powernext and PXE. EEX is the leading energy exchange in Europe. It develops, operates and connects secure, liquid and transparent markets for energy and related products on which power, natural gas, CO2 emission allowances, coal and guarantees of origin are traded. Through its majority shareholding in CLTX, EEX additionally offers the markets for freight, iron ore, fuel oil and fertilisers. Clearing and settlement of all trading transactions are provided by the clearing house ECC. EEX is a member of Eurex Group.

Cleartrade Exchange also recently announced that it will provide trade registration and execution services for the full suite of LCH.Clearnet’s EnClear futures contracts. CLTX will be the only exchange to offer futures and options contracts on freight, fertilizer, iron ore, steel, coal and container freight for clearing at LCH. Commenting on this new phase of change in the longstanding relationship between LCH and CLTX, Baker said: “CLTX and LCH first collaborated in 2011, and since then we have enjoyed a close and successful relationship, which has seen over 1.5 million forward freight agreement (FFA) and fertiliser lots of CLTX transactions novated and cleared at LCH. CLTX has advanced straight-through-processing (STP) connections to the EnClear systems and this affords 95% of trades to be novated instantly, thus significantly reducing time between execution and clearing.

“This exciting new development removes regulatory complexity for the dry bulk freight portfolio, and increases choice, opportunity and competitive advantage for our customers and the market as a whole. I am certain that the evolution of these markets

IT SOFTWARE SOLUTIONS ShIPBroking and trading will create an even closer co-operation between LCH and CLTX and will allow us not only to boost volumes and liquidity but also to extend the outstanding service that our relationship provides to many more organisations in the future.”

Isabella Kurek-Smith, director and head of freight and commodity markets at LCH. Clearnet, said: “Improving efficiency is at the heart of regulatory change. Teaming up with exchanges such as CLTX means that our members benefit from the efficiencies associated with using regulated trading venues. The transition from over-thecounter (OTC) contracts to futures is a significant milestone for the industry, giving our members and customers even greater regulatory oversight.”

In November, Cleartrade made available its daily settlement price feed for partner clearing houses. This is part of the exchange’s continued mission to add stability and transparency to the critical daily settlement process for its commodity futures contracts.

LCH.Clearnet website

Asia Pacific Shipping 2015 Spring

29

IT SOFTWARE SOLUTIONS ShIPBroking and trading

30

“Improving efficiency is frequently at the heart of regulatory change

“

CLTX’s daily settlement methodology captures activity on its markets through a transparent process, with the output data available to central counterparties (CCPs) via a secure FTP link. As many of the products listed by the exchange have previously been opaque OTC markets, this is the first time that the industry has had a standardised and transparent system for calculating these prices.

Scott Sweden, business development manager at CLTX, said: “For some time, our members have been asking us to provide a venue and methodology for establishing daily settlement prices. Interest has been particularly strong from the markets where, currently, futures contracts are less liquid.”

Shahnawaz Islam, steel derivatives trader at Stemcor, voiced his support for the initiative. “This is great news for the European steel futures industry. Providing a transparent forward curve through a futures exchange will help Stemcor and others to boost market participation. CLTX has been active in seeking the market’s input on their methodology and I am confident that the output will deliver an efficient and transparent mark for our positions.”

Antonio Novi, senior trader at Levmet, said: “In a developing derivatives market, there can sometimes be disconnection between the reported settlement curve and recent trades in the market. The effect of this cannot be understated. The perceived benefits of hedging are undermined if new market participants, not overly familiar with financial markets, place trades and then find themselves immediately marked out of the money against an erroneous closing price. The transparency of CLTX’s market window enables all users to see the inputs which formulate the end-of-day number, a fact that we hope will help us to continue building this market.”

The Baltic Exchange’s electronic trading platform, Baltex, launched a block trade facility in December, which allows brokers to continue using LCH.Clearnet’s clearing services now that the London-based clearing house has reclassified its dry bulk freight derivatives as futures contracts.

Baltex, which is regulated by the UK’s Financial Conduct Authority, is being used

by FFA brokers Clarkson Securities, SSY Futures, ICAP Shipping and GFI Group to report their clients’ trades. It is only by being reported to a suitably regulated trading venue like Baltex that these trades can be considered as futures. The overall objective is to increase post-trade transparency in the dry FFA market.

The new facility will allow Baltex members to track their own trades throughout the trading day and to view and export a complete list of all trades reported to Baltex at the end of the day.

The list of all trades will also be available on the Baltic website and, in due course, will be made available via quote vendors.

In addition, the facility will help traders to satisfy their European Market Infrastructure Regulation (EMIR) reporting requirements without compromising anonymity.

Baltex chief operating officer Paul Stuart-Smith said: “We are delighted to be working with most of the main brokers on this initiative and that Baltex is playing a vital role in helping the FFA market to adapt to regulatory changes. In order to make the transition to futures as straightforward as possible, brokers can continue to submit their trades for clearing in the usual way, but these are now simultaneously reported to Baltex in real time via straight-through processing. This initiative also helps to ensure that the Baltic Exchange retains its position at the heart of the global freight derivatives market and its importance in a rapidly changing regulatory environment.”

Baltex and CLTX will be the first platforms to register dry bulk FFA trades.

CLTX will also process iron ore, steel, coal, fertiliser and container trades. Offering a choice of trading venues demonstrates LCH.Clearnet’s commitment to working with multiple exchanges to provide optimum choice to its members.

LCH’s Kurek-Smith said: “Improving efficiency is frequently at the heart of regulatory change. Teaming up with Baltex and CLTX means that our members and customers benefit from the efficiencies associated with using regulated trading venues. This is a further example of our commitment to provide an open and horizontal clearing model to our members.”

CLTX chief executive Baker said: “This project extends the collaboration between CLTX and LCH.Clearnet, bringing real value to our clients, who seek efficient and unencumbered integrated trading, broking and clearing solutions.

“The classification of futures and our STP link with LCH.Clearnet extends trading opportunities, removes risk and enables regulatory certainty for our global client base,” he added. t “Improving efficiency is frequently at the heart of regulatory change

Asia Pacific Shipping 2015 Spring

APS Registries

Marshalling its achievements The Marshall Islands has achieved substantial growth recently.

In a question and answer session. APS talks to Annie Ng, head of Asia

“

Establishing compliance with legislation without compromising the marine environment is a delicate balance

“

APS: Can you give an update on recent developments at the registry, including new ships entered?

AN: The Republic of the Marshall Islands (RMI) Registry is the third largest registry in the world, surpassing 113 million gross tonnes and 3,320 vessels at the end of November 2014. This substantial growth has created high expectations from the shipping community, and is met by the registry’s 26 worldwide offices, the largest network among any registry, allowing it to effectively manage the increasing number of RMI-flagged vessels and to maintain the expected high level of service and quality.

The RMI celebrated the registration of its 200th vessel in the Korean market at Marine Money’s Korea Ship Finance Forum in Busan in November 2014, showing the sustainable growth of the RMI and the increase of Asian owners in the RMI fleet.

The RMI has seen an increase in the registration of energy and offshore tonnage, with many new supply ships and drilling rigs entering the registry. In an effort to meet the needs of these owners and operators and ensure that first-class technical and support services are provided, the RMI has hired additional personnel with a background in liquefied natural gas (LNG) carriers and the unique vessels serving the offshore industry.

What are the challenges facing ship registries in the current climate?

New rules and regulations, which are continually entering into force, are a challenge to flag states as well as owners and operators. Establishing compliance with international and national legislation without compromising the safety, security, and protection of the marine environment in favour of commercial operations irrespective of market conditions is a delicate balance. The registry will continue Annie Ng, Head of Asia, Marshall Islands Registry

Asia Pacific Shipping 2015 Spring

to monitor the present maritime, economic, regulatory and technological environment to ensure that it is in line with modern technology and is properly and adequately resourced worldwide. It is important that the registry is able to stay in close contact with the owners and operators and keep the same level of first-class service.

How do you see the registry’s position going forward, and what are your expansion plans?

The RMI is represented by a network of 26 offices and, recently, the amount of International Registries Inc (IRI) staff outside the US has surpassed those in the US. By continuing to strengthen its team worldwide, IRI ensures a high level of service and continuous improvement to the decentralisation of registry-related services.

Recently, IRI established a second fullservice office in Hong Kong, and expanded seafarer documentation services in the Mumbai and London offices. Increased inspection and technical resources have also been added in the Long Beach, Baltimore, New York (downtown) and Houston offices. While the largest shipowning group remains the Greek shipping community, the US is the second largest, followed by Norway, Republic of Korea and Germany. IRI’s Piraeus office seeks to continue the expansion of the registry’s fleet while maintaining the same quality and timely service. In terms of staff numbers, Piraeus is exceeded only by the IRI headquarters in Reston, Virginia, and the increasing infrastructure in the London and Hong Kong offices, which are central to the European and Asian markets.

The RMI Registry sees its customers and staff as its most important assets and IRI strives to provide full service from any office, 24 hours a day. By expanding its model of decentralisation, IRI provides owners and operators with the quality service they expect, regardless of time zone, in order to “keep the ships moving”.

31

service and quality are within your reach

International Registries (Far East) Limited

in affiliation with the Marshall Islands Maritime & Corporate Administrators

tel: +852 2526 6641 | hongkong@register-iri.com

www.register-iri.com

APS Registries

“ This news is testament to the strong links which have existed between Greek shipping and the Liberian flag

“

Liberia Liberia has 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 ’70s.

Figures produced by the Greek publication Shipping & Finance, which bases its findings on data from the Marine Information Services database for Greek and Cypriot shipping companies, confirm that the Greek merchant fleet now includes 800 Liberian-flagged ships, 10 more than registered under the Greek flag, and 300 more than are registered under the flag of Panama.

Scott Bergeron, chief executive of the Liberian International Ship & Corporate Registry (LISCR), the US-based manager of the Liberian Registry, says: “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 oil tanker World Peace, owned by Stavros Niarchos, 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) SA in Piraeus, and to the continuing support of Captain Nick Soutos, president of the Soutos Group of Companies and consulgeneral 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.”

Panama There was a reorganisation of the Panama Maritime Authority (AMP) after Juan Carlos Varelain, was sworn in as the country’s new president in July last year. Jorge Barakat was appointed administrator of AMP, while Alejandro Agustin Moreno was made deputy administrator. Barakat holds the title of minister of maritime.

Moreno is a prominent international maritime lawyer and graduated from Panama’s Universidad Católica Santa

María La Antigua. He has a postgraduate qualification in contracting specialization and international financial markets from Universidad Castilla-La Mancha in Spain; he also took an Introduction to the American Legal System course at Yale University.

The new administrator has designated former PMLA president and ship registration expert Tomas Avila as the new AMP secretary-general.

At the head of AMP’s Merchant Marine Directorate and the Panama Register is lawyer Fernando Solorzano, whose career in maritime affairs and the Panama Ship Registry span over 20 years. Solorzano held the position of chief of the register from 2004 to 2007, when he became administrator of the Panama Maritime Authority until 2009. During his tenure, AMP established Segumar’s 24/7 service and the revision of maritime legislation.

Solorzano’s confirmation will guarantee continued stability to the administration of the registry and to Panama as a flag state, the AMP said.

Alfonso Castillero, former directorgeneral of the Panama Registry, joined the Liberian Registry as vice-president at the time of the reorganisation.

Castillero worked for 16 years in the Panamanian maritime sector, rising through the ranks to become head of the registry and director-general of the merchant marine.

Commenting at the time of his appointment, he said his departure from the Panama Registry had been amicable.

“Shipping is a highly competitive – and, on occasions, political – industry. I am leaving what is currently the world’s largest ship registry to join the world’s second largest registry. But it is not necessarily about size. It is about quality.

Ship registries have a vital role to play in the safe and efficient conduct of world seaborne trade, and change and renewal is part of the process of continuing improvement. Competition is fierce, and I am looking forward to using my experience to help develop still further the expertise and service offering of the Liberian Registry.

Liberia’s unprecedented growth and envied reputation for safety, innovation and seafarer welfare continues to be attested to by respected independent arbiters throughout the world.”

Scott Bergeron, chief executive, Liberian International Ship & Corporate Registry

Asia Pacific Shipping 2015 Spring

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Shipbuilding

Growing ships Record-breaking capacity increases and an orderbook that remained unchanged were the two main factors that characterised 2014, according to the Baltic and International Maritime Council

“ Container ships keep getting bigger, breaking previous size records

“

After concern about over-supply of newbuildings, the Baltic and International Maritime Council (Bimco) says that the fact that the orderbook remained unchanged last year “signals that the industry is now realising that more new orders may not be the right thing to do after all”.

“The fundamental oversupply of capacity in all of the major shipping segments has not changed much over the past year,” says Bimco, reflecting on 2014 and the coming year. “A higher level of demand has only just matched the net supply of new tonnage coming on stream.”

“Crude oil tankers are the only exception to the general status quo in the balance of freight markets. A multi-year low inflow of new crude oil tankers has stimulated earnings growth of some 20% compared with 2013. Meanwhile, the growing supply pressure in product tankers neutralised most of the growing demand side, with earnings coming in just a little shy of 2013’s.

Container ships keep getting bigger, breaking previous size records for both individual ships and the average size across the fleet. The CSCL Globe, with a capacity of 19,000 teu, was launched in November, and the average capacity of a 2014 newbuild increased to 7,400 teu, up from 6,600 teu in 2013. Next year the scheduled average is 8,000 teu.

Looking forward to 2015, Bimco expects the dry bulk fleet to have found a new “normal” level of supply side growth, expanding by 5.1% (5.5% in 2014).

“Regrettably, the level is still too high to reduce the glut of ships in the market. For tankers, Bimco expects the dirty segment to grow by 1.7% (1.3% in 2014). Three years of low supply growth has led to more positive short-term prospects for crude oil tankers. In the clean segment, the estimated

A higher level of demand has only just matched the net supply of new tonnage coming on stream

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Asia Pacific Shipping 2015 Spring

supply growth for 2015 is 4.6% (4.3% in 2014). Supply growth in the container ship segment is expected to drop to 5.8% in 2015 (6.2% in 2014) Innovation in the shipbuilding industry continued apace last year. In December, BW Pavilion LNG, a joint venture between BW Group and Pavilion Energy, held a ship-naming ceremony at Hyundai Heavy Industries Shipyard in Ulsan, South Korea, for two Singapore-flagged liquefied natural gas (LNG) newbuildings, the BW Pavilion Vanda and BW Pavilion Leeara.

The vessels will add to BW Pavilion’s fleet currently on water. Classed by DNV-GL, the newbuildings feature industry-leading ecologically friendly specifications. These include: low boil-off rates (BOR); hybrid low-duty (LD) compressors that reduce the amount of fuel needed to cool the vessel’s liquefied natural gas cargo; and a ballast water treatment system that is fully compliant with the International Maritime Organisation’s performance standards. Both vessels are designed to comply with new Panama Canal requirements and are certified for possible future transit through the canal.

BW Pacific signed shipbuilding contracts with STX Offshore and Shipbuilding Co Ltd for four Long Range 1 (LR1) product tankers on 11 December 2014. The agreement with STX includes options for additional vessels.

The four firm newbuildings will be delivered in late 2016 and early 2017 and form part of a fleet renewal programme. Andreas Sohmen-Pao, BW Pacific chairman, said: “BW Pacific looks forward to receiving high-quality and technologically advanced newbuildings from STX Offshore and Shipbuilding. By renewing our current fleet with well built vessels, BW Pacific will continue to strive for outstanding service to customers. We have strong ambitions in the product tanker segment and these vessels will continue our steady growth in the sector.” The newbuildings will increase BW Pacific’s product tanker fleet to 43 vessels.

Shipbuilding Meanwhile, the American Bureau of Shipping (ABS), a leading provider of classification services to the maritime and offshore industries, has been chosen to class the world’s first contracted series of very large ethane carriers (VLECs).

The class contract for the ships, which will be built in Korea by Samsung Heavy Industries (SHI) for an Asian shipowner, represents another gas ship milestone for ABS. “We are delighted to have received the class contract for the world’s first very large ethane carriers,” says ABS vice-president of global gas solutions, Patrick Janssens.

“As a result of the shale gas boom in the US, ethane is developing as an exciting new market with great potential, requiring the development of new ship types. This award is an industry testament to the diversity of ABS’ technical knowledge and our commitment to remain at the forefront of classification for gas carriers.”

The contract is for six 87,000m3 VLECs and available options. The ships will be built at SHI’s main shipyard in Geoje, Korea.

ABS, which currently has the largest share of the global orderbook for liquefied natural gas (LNG) vessels being constructed to its class, has built a large team of qualified gas surveyors at shipyards across Korea.

ABS has extensive technical experience with the full scope of gas-related assets, ranging from LNG bunker barges to floating liquefied natural gas (FLNG) units and was recently awarded the classification of the first compressed natural gas (CNG) carriers.

In May 2014, ABS announced its first classification contract for a floating LNG facility from PETRONAS, Malaysia’s national oil company.

The VLEC award marks one year since ABS unveiled its Global Gas Solutions team, a multidisciplinary group of gas specialists formed to respond to the rapidly escalating

number of gas-related projects, including LNG and liquefied petroleum gas (LPG) transportation, and the growing use of LNG and LPG as fuel for the commercial fleet.

Completion of the Rowan Resolute ultra-deepwater drillship finished recently.

This newbuild, the second in a series for global offshore drilling contractor Rowan Companies Inc, was built in the Hyundai Heavy Industries (HHI) yard in Ulsan, South Korea. It joins sistership Rowan Renaissance as the next high-specification drillship to earn ABS’ integrated software quality management (ISQM) notation.

“Reliance on computer-controlled systems has increased. And verifying software programs – including their integration – is vital to safe and efficient operations,” says ABS chairman, president and chief executive Christopher Wiernicki.

“ABS identified software verification and integration as construction issues several years ago and developed ISQM to address these problems so the time to first production could be reduced.”

ISQM represents a change in focus for classification societies that previously focused on physical assets. ABS’ ISQM notation is the first proven approach to providing a clear process for minimising software-related risk throughout the life of an asset.

Rowan Companies, a first mover among drilling contractors in applying a structured software quality management approach, is pleased with the process and has seen the results in the commissioning of the first ISQM drillship, Rowan Renaissance, which left the HHI yard early last year and began operating in late April.

The experience gained by HHI places the yard in a unique position. “By working with ABS and Rowan Companies on this project, we have built up a knowledge base

that allows us to offer experience with a new process that will benefit our other clients,” says Sang-Sik Yoon, ISQM team leader at HHI. HHI will follow the ISQM process in the construction of the remaining two drillships in the four-unit series.

HHI held a naming ceremony for CSCL Globe, the world’s largest containership, in November. It is the first of five 19,000 teu containerships ordered from China Shipping Container Lines (CSCL) in May 2013.

Measuring 400 metres (m) in length, 58.6m in width and 30.5m in depth, the containership is as large as four soccer fields and will be deployed on the AsiaEurope trade loop after being handed over to the owner.

The CSCL Globe will feature a 77,200 brake horsepower electronically controlled main engine to enhance fuel efficiency by automatically controlling fuel consumption according to the ship’s speed and sea conditions. With the installation of this highefficiency engine, the containership will burn 20% less fuel per teu compared with 10,000 teu containerships.

HHI built the world’s first 10,000 teu containerships in 2010 and since then it has built 82, the greatest number of containerships carrying more than 10,000 containers in the world.

Also in November, HHI signed a contract for a $1.94 billion order for the second phase of the Nasr Full Field Development Project from Abu Dhabi Marine Operating Company (Adma-Opco).

HHI will undertake engineering, procurement, construction, installation and commissioning work for the supercomplex, which will lie 131km north-west of Abu Dhabi city. This will comprise a gas treatment platform, a separation platform and an accommodation platform and will involve laying 144km of subsea power and 55km of infield cables from power distribution facilities at the existing Das Island. A manifold tower and two wellhead towers in Nasr oil field, 131km north-west of Abu Dhabi, will also need to be modified.

Scheduled to be completed within the first half of 2019, the facilities will increase the oil production capacity of the offshore field to 65,000 barrels per day from a current total of 22,000 barrels per day. t

HHI signed a contract for $1.94 billion

© Marinelog

Asia Pacific Shipping 2015 Spring

35

APS Legal

Watch your step Owners will need to be careful now that emission control areas are in force

Much heralded new sulphur regulations are now in force, and the question will be how owners react to them in the months to come.

Ships trading in designated emission control areas (ECAs) have to use onboard fuel oil with a sulphur content of no more than 0.10% as of 1 January 2015, against the limit of 1.00% in effect until 31 December 2014.

There have been suggestions that port states will not have the necessary infrastructure to police the new requirements.

On the other side of the coin, owners may try to ‘wing it’ rather than lay out large sums of money for scrubbing systems.

Speakers at a seminar organised recently by law firm Norton Rose Fulbright suggested that if owners were seen to be trying to comply with the new rules, they might be treated more tolerantly by the authorities in the event of having difficulties in obtaining supplies of low-sulphur fuel than those who had made no attempt to comply. On the reverse side of the coin, those owners who are caught in a non-compliant situation and are shown to have made no serious efforts to comply are likely to face large fines. This is particularly likely with early cases as a means of ‘encourager les autres’.

Skuld P&I Club has warned that the new ultra-low-sulphur fuel “will require more than shipside preparations, they will also require existing and future charterparties to be reviewed and claused appropriately in order to reduce the risk of disputes between owners and charterers from a number of angles”.

Skuld, which has taken advice from New York-based law firm Chalos & Co on legal aspects, says there are a number of issues that could give rise to disputes between owners and charterers that have their root in the new Annex VI of the International

Convention for the Prevention of Pollution from Ships (MARPOL).

According to Skuld, those issues include: trading warranties; readiness of the vessel to enter an ECA; fuel specifications; delays and fines if a violation is alleged; and deviations to avoid ECAs or limit time therein. “Charterers 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. Indeed, this is very important or the shipowner may find the charterer at liberty to trade without limit.

“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 areas that are ECAs. Should such a decision be made then, in particular, the shipowner will have to 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 she previously was employed for, [except for] special factors or contractual variations.

English and US legal positions will be similar on this”.

Other issues include the readiness of the vessel. “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, condition and equipment to encounter the ordinary perils of the voyage, to follow and perform

Low sulphur regulations are now in force

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Asia Pacific Shipping 2015 Spring

Aps Legal

“Ultra-low-sulphur fuel will, in all likelihood, have to be kept carefully segregated from any residual high-sulphur fuels

“

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 1 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 ultra-low-sulphur fuel (ULSF). The club says: “Given that the ULSF will, in all likelihood, have to be kept carefully segregated from any residual highsulphur fuels, or risk cross-contamination and possible MARPOL violation, vessels will have to check whether tank and line arrangements as well as capacity will allow this to be done safely.

“Modern ships may have the luxury of numerous fuel tanks with separate lines, but older vessels may have less capacity that can be dedicated to the use of ULSF, and, indeed, tanks that previously carried residual fuels are likely to require extensive cleaning prior to switch to the ULSF. Modifications and cleaning are likely to mean cost and time and it is not a straightforward question as to who would be responsible.

According to Chalos’ advice to the club, while these issues may yet be tested in arbitration or litigation, it is likely that, under both 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. Bunker clauses clearly need to be carefully drafted.

“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 that 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,” the club says.

“If a vessel is inspected by port state control (PSC) or other authorised government agency (such as the US Environmental Protection Agency) and fuel onboard is found to violate the MARPOL standards, then it is not unlikely 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.

“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 0.10%, and the relative ease with which the ULSF could be contaminated at some stage, this is an area of concern.”

The Baltic and International Maritime Council (Bimco) has launched the Bunker Non-Lien Clause, aimed at reducing bunker suppliers’ reliance on ship arrest as a means of resolving claims for bunkers ordered but not paid for by time charterers, often as a result of bankruptcy.

If a time charterer goes out of business during the currency of a charter, owners can sometimes face a “double whammy” of loss of hire for the balance of the contract and then subsequent arrest of their vessel by bunker suppliers pursuing a claim for unpaid bunkers. Bunker suppliers are able to arrest a vessel (in some, but not all jurisdictions) by enforcing a right of lien or retention over the bunkers for the money they are owed, even though the owners, under a time charter, are not a party to the bunker supply contract. The Bunker Non-Lien Clause is an attempt to change this by requiring time charterers to notify their suppliers prior to purchasing bunkers that they will be bought solely on their own account, not the shipowners’, and that no lien will arise against the vessel.

Although bunker delivery notes are frequently stamped by masters with a statement that the bunkers have been purchased by the charterers and that there is no lien against the vessel, because the delivery of fuel has already taken place this notice is often ineffective.

Grant Hunter, chief officer, legal and contractual affairs, at Bimco, explained: “This clause acts as a useful safety net for shipowners because solid time charterers should have no problem agreeing it – they fully expect to pay for the bunkers they order.

“If the financial standing of a charter is in doubt, they may be more reluctant to accept the responsibilities and liabilities imposed by the clause – acting as a warning flag to shipowners.

“Ultimately, if a charterer fails to comply with this clause, a master has the right to refuse to take delivery of the bunkers – so it is a provision with some teeth.” t Much heralded regulations to limit sulphur in fuels are now in force

Asia Pacific Shipping 2015 Spring

37

APS Regulation

Sulphurous reception There have been a number of regulatory developments in recent months, with more to come this year, in particular the entry into force of new low-sulphur rules

Ships trading in designated emission control areas will have to use onboard fuel oil with a sulphur content of no more than 0.10% from this month, as opposed to the limit of 1.00% that was in effect until 31 December 2014.

The stricter rules came into effect under the International Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI (Regulations for the Prevention of Air Pollution from Ships), specifically under regulation 14, which covers emissions of sulphur oxides (SOx) and particulate matter from ships. These requirements were adopted in October 2008 by consensus and entered into force in July 2010.

The emission control areas established under MARPOL Annex VI for SOx are: the Baltic Sea area; the North Sea area; the North American area (covering designated coastal areas off the United States and Canada); and the United States Caribbean Sea area (around Puerto Rico and the United States Virgin Islands).

Outside the emission control areas, the current limit for sulphur content of fuel oil is 3.50%, falling to 0.50% m/m on and after 1 January 2020. The 2020 date is subject to a review, to be completed by 2018, as to the availability of the required fuel oil. Depending on the outcome of the review, this date could be deferred to 1 January 2025.

Ships may also meet the SOx requirements by using gas as a fuel or an approved equivalent method, for example, exhaust gas cleaning systems or “scrubbers”. t

Ballast water Governments attending the International Maritime Organization (IMO) Marine Environment Protection Committee (MEPC) in October made real progress towards agreeing solutions to major issues that have previously impeded ratification of the IMO Ballast Water Management Convention, according the International Chamber of Shipping.

Speaking at IMO headquarters, ICS secretary-general Peter Hinchliffe remarked at the time: “We are very pleased that IMO member states have fully acknowledged the shipping industry’s concerns by agreeing to start work immediately on a revision of the G8 type-approval guidelines to make the process for approving ballast water treatment equipment more robust.

“In the meantime, it has also been agreed, in principle, that any shipowner that has invested in first-generation treatment equipment, type-approved under the current G8 guidelines, should not be penalised, provided that the equipment is operated and maintained correctly. The adoption by IMO of new port state control guidelines reflecting a fair and pragmatic approach to inspection is also an important additional step.”

Hinchliffe added: “While some of the details still need to be finalised by the MEPC next year, an MEPC resolution adopted at this meeting should do much to build confidence in the Convention amongst both shipowners and IMO member states.” t

Emission control

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Asia Pacific Shipping 2015 Spring

Polar Code The International Maritime Organization (IMO) has also adopted the International Code for Ships Operating in Polar Waters (Polar Code), and related amendments to the International Convention for the Safety of Life at Sea (SOLAS) to make it mandatory, marking an historic milestone in the organisation’s work to protect ships and people aboard them, both seafarers and passengers, in the harsh environment of the waters surrounding the two poles.

The Polar Code and SOLAS amendments were adopted during the 94th session of IMO’s Maritime Safety Committee (MSC) at the IMO’s London headquarters from 17 to 21 November 2014.

The Polar Code covers the full range of design, construction, equipment, operational, training, search and rescue and environmental protection matters relevant to ships operating in waters surrounding the two poles.

Ships trading in the polar regions already have to comply with all relevant international standards adopted by IMO, but the newly adopted SOLAS chapter XIV “Safety measures for ships operating in polar waters”, adds additional requirements, by making mandatory the Polar Code.

The Polar Code highlights the potential hazards of operating in polar regions, including ice, remoteness and rapidly changing and severe weather conditions, and provides goals and functional requirements in relation to ship design, construction, equipment, operations, training, and search and rescue, relevant to ships operating in Arctic and Antarctic waters.

As well as mandatory provisions, recommendations are also included in Part 1-B. The expected date of entry into force of the SOLAS amendments is 1 January 2017, under the tacit acceptance procedure. It will apply to new ships constructed after that date. Ships constructed before 1 January

APS Regulation 2017 will be required to meet the relevant requirements of the Polar Code by the first intermediate or renewal survey, whichever occurs first, after 1 January 2018.

Because it contains both safety and environment-related provisions, the Polar Code will be mandatory under both SOLAS and the International Convention for the Prevention of Pollution from Ships (MARPOL). In October 2014, IMO’s Marine Environment Protection Committee (MEPC) approved the necessary draft amendments to make the environmental provisions in the Polar Code mandatory under MARPOL. The MEPC is expected to adopt the Code and associated MARPOL amendments at its next session in May 2015, with an entry-into-force date to be aligned with the SOLAS amendments. t Reducing red tape The Baltic and International Maritime Council (Bimco) has announced its support for a report identifying ways to reduce red tape for shipping, which was presented to the International Maritime Organization in December 2014.

The report came from the Ad Hoc Steering Group for Reducing Administrative Requirements (SG-RAR), set up by the IMO in 2012, and contains the group’s findings and conclusions on the best ways to lessen administrative burdens associated with mandatory IMO conventions and codes.

The report also contains the results and analysis of the first-ever public consultation undertaken by the IMO between May and November 2013.

The key findings of the report included calls for: • Electronic certificates and similar documents to have equal weight as original paper certificates.

• An electronic “single window” information exchange system should be introduced to fulfil multiple reporting requirements. Ship owners, administrations, classification societies and commercial parties etc to accept electronic or software solutions as a suitable replacement for paper documentation.

• Identifying and reducing possible administrative burdens before approving new or existing IMO regulations.

• Bimco offered its full support to the report and its 13 recommendations ahead of its presentation at the 113th session of the IMO Council (C 113).

Lars Robert Pedersen, Bimco’s

deputy secretary-general, commented on the report: “If the recommendations of this report are put into practice, they will establish an enhanced and modern platform for simplifying the daily work onboard ships as well as ashore.

“Shipping needs to be able to use the latest technology for its reporting – and recognition of electronic certificates ought to be a prerequisite in this day and age.

“Bimco therefore urges the IMO Council to make firm decisions on the basis of the recommendations and remove unnecessary administrative burdens.” t Be aware of new refrigerant regulations Shipowners with EU-flagged vessels who incur unnecessary operating costs need to ensure that their onboard refrigeration units are leak-tight, says Svenn Jacobsen of Wilhelmsen Ships Service (WSS).

The new EU regulations on fluorinated greenhouse gases (F-gases) look to fundamentally change the use of refrigeration gases onshore and at sea, with estimated cost increases at 5-10 times their current level.

“At the moment, testing for gas leaks is purely a maintenance issue, but the impact of leaks from land-based and ship sources has grabbed the attention of regulators. In short, owners need to start paying attention because the future costs of compliance will far outstrip what owners are paying for these gases today,”Jacobsen says.

Refrigeration gas is a commodity like motor fuel but is not a consumable and therefore should not need replacing.

Jacobsen says owners who are paying to recharge gas systems should recognise they have a fault and take action: “Owners need to be asking themselves, are my new ships going to be delivered with gases that are compliant over their trading life and how can we remain compliant on existing tonnage once the regulations come into force?”

Adopted by the Council of the European Union in 2014, the regulations are specifically designed to reduce the use of F-gases, also known as fluorinated refrigerants or HFCs, within the European Union, by introducing a quota system, limiting the amount of refrigerants with high global warming potential (GWP) available on the market.

According to Jacobsen, the main impact of the F-gas regulation will be felt between 2018 and 2020. All vessels

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today have some requirement for onboard refrigeration or climate control and the regulations are weighted against highGWP refrigerants, with R-404A among the hardest hit. Used in air conditioning and refrigeration systems, an average ship requires 200-300kg of this gas.

With the phase-out of high-GWP HFCs on the horizon, the shipping industry needs to begin thinking about the options available to replace them. Jacobsen says many chemicals manufacturers are already running their research and development departments in high gear in order to have proved and certified solutions available when the regulation is in force.

“One thing is for sure; these new refrigerants will be expensive. The days of easy availability, simple products and cheap prices will soon be history. In order to maintain the same expenditure for refrigerants in the future, present leak rates will need to be reduced by 50%-90%.”

Achieving these levels of reduction will mean that much will have been done to protect the environment, with focus in the short and long term on encouraging owners to increase their testing for leaks.

Jacobsen says: “Owners could be spending a fraction of the costs they already incur by simply keeping their systems leak-tight. Even though R-404A will be illegal on EU flag ships from 2020, a ship launched today will trade for 25 years, so owners need to act now.”

“Ask 10 shipyards what they recommend and you will find that very few have any idea,” says Jacobsen. “Not all of them have done their homework. Many will recommend R-404A, which will lead to a costly retrofit before the ship is due for recycling.”

One immediate priority will be to improve maintenance routines and save money while increasing environmental protection.

Better maintenance means fewer leaks, and the technology is readily available: WSS, for example, already sells fixed leak detector systems that offer around-theclock monitoring.

But Jacobsen’s advice is to neither panic nor ignore the changes.

“The truth is that some refrigerants are more environmentally unfriendly than others, but none have an impact until they leak out. The simplest way to keep a control on environmental performance and operational costs is to keep refrigeration systems leak-tight.” t

39

Green Shipping

Ballasting on There is plenty of activity by equipment suppliers as the industry gears up for the Ballast Water Convention to come into force

already “wellWe’re established in Japan, with around 20 contracted BWT systems

“

OceanSaver, a leading manufacturer of ballast water treatment (BWT) systems for large and medium-sized vessels, has selected Kashiwa as its new sales agent in Japan. Kashiwa, which has specialised in manufacturing and supplying marine hazard prevention equipment since 1947, will now aim to build awareness of the OceanSaver brand and technology in the country’s newbuild and retrofit segments.

Based in Drammen, Norway, OceanSaver is a dedicated BWT specialist, providing systems worldwide for vessels such as bulk carriers, crude oil tankers and liquified natural gas (LNG) carriers, to name but a few. The firm has over a decade of proven success with its simple, reliable, efficient and safe solution – attributes Kashiwa will now point to as it looks to leverage fresh market share.

“Kashiwa is a trusted and respected name in Japanese shipping, with an acknowledged mission of protecting the oceans, and the people and assets that work on them,” states Tor Atle Eiken, vice-president, sales and marketing, at OceanSaver.

“We’re already well established in Japan, with around 20 contracted BWT systems, but we believe that, with the ratification of the International Maritime Organization’s (IMO’s) Ballast Water Management Convention on the horizon, a partner of Kashiwa’s stature will help us drive added growth and build our presence in this major shipping nation.”

OceanSaver’s BWT solution offers customers a small footprint, is modular in nature, making it easy to install, and is simple to maintain. The system is type-approved, Ex-approved, and compliant with both IMO standards and US Coast Guard AMS approval.

OceanSaver has now contracted 143 of its BWT units worldwide. t Kashiwa is the sales agent for OceanSaver ballast water treatment systems in Japan

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Trojan Marinex Canada-based Trojan Marinex announced last year that Damen Shipyards has selected the Trojan Marinex ballast water treatment (BWT) system for a fleet of platform supply vessels (PSVs) it is building for Atlantic Towing Limited – a Canadian-owned marine transportation company.

“It’s been an exciting year for us,” says Marvin DeVries, president, Trojan Technologies. “Our entire product suite achieved IMO type approval in March, AMS acceptance in August, and we are on course for US Coast Guard (USCG) type approval.

Now, alongside our partners at Damen, we are pleased to announce this order for Atlantic Towing.”

When launched, the vessels will operate in the challenging, subarctic waters of the Hibernia and Hebron oil fields, off Newfoundland and Labrador.

“These PSVs will be sailing in extremely tough conditions,” explains Jan van Hogerwou, manager, North America, Damen Shipyards Gorinchem.

“The Trojan Marinex system has been tested and approved in tough conditions and under stringent protocols. This was an important factor in our decision.”

Trojan Marinex BWT system testing was conducted under the supervision of DNV – a USCG-certified independent laboratory.

Testing was conducted in accordance with the United States Environmental Protection Agency’s Environmental Technology Verification (ETV) Ballast Water Protocol. The ETV protocol is a key testing requirement for systems to obtain USCG type approval. The system is tested and approved to the lowest UV transmittance value in the industry under full flow conditions, and in all three salinity ranges – freshwater, brackish water and marine water.

“In addition,” continues van Hogerwou, “we required an extremely compact ballast water treatment system for these vessels. We were quite impressed with the integrated design of the Trojan Marinex

Green Shipping system, and its low power draw.” The Trojan Marinex BWT system is up to 50% smaller than others in the industry. This provides additional installation flexibility for both newbuilds and retrofits. In addition, it offers the lowest installed power draw of other systems in the industry. t Alfa Laval contract in South Korea Alfa Laval has won an order to supply Alfa Laval Packinox heat exchangers to a petrochemical plant in South Korea. The order, booked in the energy and process segment, has a value of approximately SEK85 million and delivery is scheduled for 2015.

The Alfa Laval Packinox heat exchangers will be used in the production of mixed xylenes, ingredients in the manufacturing of synthetic nylons and PET bottles.

“This order for our highly energy-efficient Alfa Laval Packinox heat exchangers confirms that our customers value their superior performance in the demanding petrochemical and refinery applications,” says Lars Renström, president and chief executive of the Alfa Laval Group, which has been present in South Korea for 35 years. t

Further, the cleaning operations can be carried out while the vessel is alongside for loading or unloading and, as it does not use divers, the risk to human life is eliminated.

GAC EnvironHull managing director Simon Doran says: “Sohar was a natural choice for the next base for HullWiper due to its strategic location just outside the Middle East Gulf and close to international trade routes. As such, it is a port of call for many ships carrying general cargo, liquid shipments and containers – all of which can benefit from the increased efficiency and cost-savings that come with a foul-free hull.

Sohar is also home to a branch of GAC Oman, which provides a range of shipping, logistics and marine services for local, regional and international clients.” t

GAC contract Oman’s Ministry of Environment and Climate Affairs has granted GAC EnvironHull permission to conduct underwater hull cleaning operations using the brush-anddiver-free HullWiper system at the port of Sohar, just outside the Gulf of Hormuz. It is the fourth port in the Middle East at which the revolutionary remotely operated vehicle (ROV) is now available to provide fast, efficient, safe and eco-friendly hull cleaning services for ships.

This latest expansion adds Oman to the growing GAC EnvironHull network, which already covers Dubai, Fujairah and Sharjah in the United Arab Emirates, as well as Gothenburg in Sweden.

The green hull-cleaning solution uses adjustable pressure sea water jets as the cleaning medium rather than brushes or abrasives, resulting in minimal damage to the antifouling surface. Residues and harmful marine growths captured during cleaning are disposed of in an environmentallyfriendly manner instead of being discharged into the sea as with traditional methods.

Sohar is the latest port to use HullWiper

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Hempel coatings Building on the industry proven GLOBIC and DYNAMIC range of antifouling systems, leading marine coatings manufacturer Hempel has announced the launch of two new antifouling products for dry-dockings and newbuildings, which deliver fuel savings of up to 3% and provide added flexibility to shipowners and yards.

GLOBIC 8000 is a brand new hydrolysing self-polishing antifouling product that fits neatly between the existing GLOBIC 6000 and GLOBIC 9000 antifouling systems.

It builds on proven GLOBIC technology to deliver premium performance at a reasonable price. It incorporates Hempel’s nano acrylate technology, which delivers a fine polishing control mechanism to bring the integral biocides to the surface at a stable rate ensuring a clean hull.

GLOBIC 8000 can be used on all vessels at all speeds, but its nano acrylate technology binder makes it particularly effective for slowsteaming operations because of its instant activation of polishing and biocide leaching.

DYNAMIC 8000, also recently launched, extends the current DYNAMIC range utilising silylated acrylate technology to deliver an outstanding antifouling service at higher speeds.

Announcing the launch, Andreas Glud, Hempel’s group product manager, said: “These two new products offer a wider choice for owners and yards and deliver exceptional value for money. They comprise 58% volume solids and can be specified up to a 90-month dry docking interval. This, together with a 3% fuel saving, means that these antifouling systems offer an unparalleled return on investment.”

He added: “Our GLOBIC technology has been widely accepted and well tested by the market and our 6000 and 9000 products are in demand for all vessel types. GLOBIC 8000 provides an added dimension to this technology and offers a great alternative for those seeking a top-tier antifouling at an industry leading price.”

Completing the suite of new products is BASIC, which is Hempel’s most economic antifouling offering, suitable for up to a 36-month dry docking interval. It comes with 60% volume solids and a sufficient biocide package to deliver an optimal price/ performance match.

All three new products also make use of Hempel’s innovative micro-fibre reinforcement technology that enhances the mechanical strength of the coating to reduce cracking and peeling. t

41

Corporate viewpoint

Taking marine technology to new heights “Asia as a region is important to us. The world’s leading shipbuilding countries, China, Korea and Japan, are booming and as a world-leading supplier of pressure swing adsorption (PSA) nitrogen inert gas systems for this sector, of course we have to be present out there,” says Grit Holm, Oxymat’s marine business unit manager. “China’s marine market is supplying many newbuildings as well as retrofits. Our numerous references in Asia set the standard and include Formosa Plastics Marine Corporation in Taiwan and Sinopacific Offshore & Engineering in China, to name just a few. We see a continued positive growth in the region and we have great expectations of the future,” she adds.

For several months now, the production plants at Oxymat have been occupied to the very last square metre with projects for the marine sector, and last month the company secured orders with Sinochem and others, which will keep the production plants full throughout 2015.

Oxymat has more than 35 years of experience in inert gas systems and, over the years, the marine division has serviced a wide range of chemical carriers, carriers for liquefied natural gas (LNG) and liquefied petroleum gas (LPG), multipurpose carriers, oil tankers and supply vessels.

The nitrogen inert gas systems remove oxygen and are used to prevent explosions and fires on board tankers such as crude oil carriers and chemical tankers. Compared with traditional inert gas plants, nitrogen is a pure product, without particles and with a low dew point, which makes it very suitable for lowtemperature freight. PSA technology is widely recognised as leading both in terms of energy efficiency, purity output and life-time costs.

We are Oxymat “We have been designing, engineering and manufacturing PSA generator systems since 1978 and we are now the largest PSA manufacturer in Europe. Design, development and production of PSA generators is our core business. This is what we do and it is our mission to be the preferred supplier of PSA generators in the marine sector!

“While we have firsthand knowledge of the market and understand the demands and possibilities of PSA technology, we know that shipowners and operators have unrivalled knowledge and expertise of the ships, the market and all the challenges involved. Why not join forces? We would like to invite our partners, existing and potential ones, to join us in a dialogue about how, together, we can improve the product and reduce energy levels even further,” Holm says.

“In the future, we will be intensifying our presence in Asia with more opportunities to meet our marine specialists from Oxymat Europe. We encourage our partners, new as well as ‘old’, to contact us and set up a meeting.”

Contact: marine@oxymat.com

Increasing performance – reducing footprint New results from the ongoing research and development work in-house take Oxymat marine technology to new heights! The new exclusive design integrates the product accumulation vessel in the product manifold, which allows the user to switch from electron ionisation purging at 95% pure nitrogen to blanketing at 99.9% pure nitrogen in only 15 minutes.

According to Holm, the Oxymat Multiple Purity Function permits the user to change the purity at a push of the button. The product performance is increased and prices in terms of E/m3 are thereby decreased. “In fact, in terms of improved performance and increased capacity, you can say that unit footprints are reduced by 10%,” she adds.

To meet the need for quick and easy servicing, the unit design has also been optimised.

As space for servicing onboard is usually limited, the required service space has been reduced dramatically.

All piping and valves are accessible from one side of the unit, keeping the other side and inbetween the pressure vessels completely service-free.

Furthermore, as a result of market demand, Siemens controls have been implemented as standard and the valve types have been upgraded from axial valves to EU-made maintenance-free, angleseated valves. This change reduces the need for maintenance and servicing significantly.

1000Nm3/h at 95%. Including dry air and multiple purity. Chemical carrier retrofit.

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Asia-Pacific Shipping 2015 Spring

Corporate viewpoint 1580Nm3/h at 99.5%. Including dry air and multiple purities. For very large gas carrier newbuilding.

Special colour.

PSA technology – down to detail Oxymat’s generators are based on the well-known pressure swing adsorption technology (PSA) using two pressurised columns with molecular sieves to ensure continuous production.

Dry compressed air is blown through a valve to the vessel, where the pressure is built to reach 5 to 7 bar(g). Oxygen is tied to a molecular sieve during the building of pressure and the nitrogen is allowed to pass through to the accumulation tank.

While pressure is built in vessel, the second remains without pressure. Part of the produced gas is used to regenerate the molecular sieve, which, in the case of nitrogen, is a carbon molecular sieve (CMS). The molecular sieve is fully regenerative and has a lifespan of up to 40,000 operational hours.

1400Nm3/hour at 99,5%. Including dry air and multiple purities. For VLGC new building

Asia-Pacific Shipping 2015 Spring

43

Country focus Australia

Commodities focus Australia has been building its partnerships with China

44

“Already, two-way trade between Australia and China stands at $150 billion a year

“

Rio Tinto and Sinosteel Corporation have announced plans to advance discussions for a second extension to the Channar Mining iron ore joint venture in Western Australia’s Pilbara region.

This followed the signing of a heads of agreement at Parliament House in Canberra by Rio Tinto chief executive Sam Walsh and Sinosteel Corporation president Xu Siwei. Chinese president Xi Jinping and Australian prime minister Tony Abbott attended the signing.

The original Channar joint venture was signed in 1987 and provided for the production of 200 million tonnes of iron ore. It was extended in 2010 to produce a further 50 million tonnes of iron ore.

Walsh said: “The Channar joint venture was a groundbreaking partnership formed in the early stages of the development of the Chinese steel industry.

“It’s now one of China’s longest running and most successful partnerships with Australia and a model for economic co-operation between our two countries.

“The signing demonstrates the commitment by Rio Tinto and Sinosteel to continue exploring opportunities that build on a mutually beneficial partnership that has developed over many years.”

Xu said: “The signing of this agreement is another milestone in 27 years of successful cooperation between Sinosteel and Rio Tinto. As a large international enterprise providing comprehensive services for the Chinese iron and steel industry, Sinosteel is committed to developing broader and deeper cooperation with Rio Tinto.”

The Channar joint venture (Rio Tinto has a 60% share, Sinosteel 40%) owns the Channar mine, 60km south of Tom Price in the Pilbara region. The operation is managed by Rio Tinto. Sinosteel has 100% offtake rights to Channar joint venture production (Channar ore feeds into Pilbara Blend).

The original Channar joint venture was one of the largest Chinese investments in the world and it was the first overseas mineral resource project entered into by a Chinese enterprise.

The timetable for reaching a mutually acceptable agreement for a second extension is before the end of the current extension term, which is currently expected to be during 2016. t Free trade agreement China and Australia have recently signed a free trade agreement, which is expected to boost trade between the two countries.

Commenting on the agreement, Tony Abbott, Australian prime minister, said at the signing: “Already, two-way trade between Australia and China stands at $150 billion a year. China is our largest goods export destination at $95 billion in 2013. China is Australia’s largest services market at $7 billion in 2013.”

More than 85% of Australian goods exports will be tariff-free upon entry into force, rising to 93% in four years, Abbott said.

Some of these goods are currently subject to tariffs of up to 40%. On full implementation of the agreement, 95% of our exports to China will be tariff-free.

Tariffs will be abolished for Australia’s $13 billion-a-year dairy industry.

Beef and sheep farmers will also gain from the abolition of tariffs, ranging from between 12% and 25%. Tariffs on sheep meat will be removed. These range from 12% to 23 per cent.

The 8% tariff on aluminium oxide will be abolished, as will the coking coal tariff.

Tariffs on Australian wine of between 14% and 30% will be gone within four years.

Restrictive tariffs on sea foods will be gone within four years.

Tony Abbott, Australian prime minister

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Country focus Australia services. PBTA and Smit Lamnalco share the same safety, quality and customerfocused values, which will ensure a good fit and smooth transition. We look forward to welcoming to our group PBTA’s team of experienced staff and crew, and to offering continued excellent service to PBTA's customers – current and new.”

Pacific Basin Shipping Limited is a leading owner and operator of modern Handysize and Handymax dry bulk vessels. The company is listed and headquartered in Hong Kong, and operates in two main maritime sectors under the banners of Pacific Basin Dry Bulk and PB Towage. The dry bulk fleet (including newbuildings on order) comprises over 250 vessels directly servicing blue-chip industrial customers. The towage fleet will comprise 19 ocean towing and offshore vessels on completion of the transaction with Smit Lamnalco. t

“We are excited by

the acquisition of PB Towage Australia, the second largest player in the country, which will enable the expansion of our footprint into Australia

“

Pacific Basin Pacific Basin Shipping Limited, one of the world’s leading dry bulk shipping companies, and Smit Lamnalco, a leading provider of international terminal towage and marine services to the oil and gas industry, announced the sale to Smit Lamnalco in December of Pacific Basin’s entire shareholding in PB Towage Australia (PBTA) including all its harbour towage operations and 16 harbour tugs; and two additional assets (one harbour tug and one barge) currently owned by other PB companies.

The transaction is expected to be completed this month and will constitute the sale of Pacific Basin’s entire harbour towage assets and activities.

Mats Berglund, chief executive of Pacific Basin, said: “Pacific Basin has been engaged in the harbour towage business since 2007. PB Towage Australia has done a great job for its customers, establishing itself as a leading provider of harbour towage services with a good reputation as a safe and quality-conscious operator.

As we have previously stated, however, our strategy is to enhance our focus on our cornerstone dry bulk business. We are happy that, through this agreement with Smit Lamnalco, we are making good progress on our strategy while ensuring that the PBTA business and its excellent team can continue to operate as a going concern under the ownership of a highly reputable towage group.”

Tony Cousins, managing director of PB Towage Australia, added: “This is a very welcome development for all employees and clients of PB Towage Australia.

Acknowledging the excellent role Pacific Basin has played in establishing a quality harbour operation over the past seven years, Smit Lamnalco now brings the specialist towage capability and coverage necessary to compete on an international scale. We look forward to continuing to develop and grow our Australian business to provide a stable, long-term and sustainable towage option to the Australian ports and shipping community.”

Smit Lamnalco chief executive Daan Koornneef concludes: “We are excited by the acquisition of PB Towage Australia, the second largest player in the country, which will enable the expansion of our footprint into Australia. Smit Lamnalco will be active in eight ports in Australia, with a total of 29 vessels offering a combination of harbour towage, terminal and floating production, storage and offloading-related

Climate bond DNV GL has verified Australia’s first bankissued climate bond to finance renewable energy facilities.

In December, National Australia Bank (NAB) launched a climate bond raising AUD300 million for renewable energy facilities. It was the first time an Australian issuer has brought a certified climate bond to the local market.

NAB engaged DNV GL to provide assurance of its climate bond under the Climate Bond Standard, thus providing robust and verifiable means of assuring that bond proceeds are used only on investments that contribute to a low-carbon future.

The climate bond issued by NAB introduces a new benchmark in sustainable

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investment products in the Asia Pacific region, where other leading financial institutions have already expressed interest in pursuing the Climate Bond Standard certification. In Australia, NAB’s sevenyear benchmark issue climate bond will be ringfenced for financing a portfolio of renewable energy assets, including wind farms and solar energy facilities across the country. These renewable energy assets are expected to have an installed capacity of over 1.5 gigawatts of electricity in aggregate – the equivalent of an estimated 3.9 million tonnes of avoided greenhouse gas emissions, and sufficient to power 730,000 average Australian households for one year.

DNV GL continues to work with the Climate Bonds Initiative team, which developed the Climate Bond Standard, to support its growth as a leading benchmark for sustainable investment products.

Climate bonds are addressing stakeholder demands for investments that have a genuine, positive environmental return and are experiencing strong year on year growth. “NAB’s climate bond issuance demonstrates the key role debt markets now play in delivering new and innovative financing solutions to address climate change. I am glad DNV GL can contribute to a lowcarbon future by our independent verification services, which help ensure investor confidence is maintained as these new models sweep across global renewables markets,” said Mathias Steck, Asia Pacific regional manager at DNV GL – Energy. t BG Group BG Group announced recently that it had loaded the first cargo of liquefied natural gas (LNG) from its Queensland Curtis LNG facility, with further cargoes to follow.

Queensland Curtis is the world’s first LNG project to be supplied by coal seam gas. The start of production from the plant’s first LNG train is the result of more than four years of development and construction on Curtis Island.

Andrew Gould, interim executive chairman, commented: “This is an immense achievement, which demonstrates the company’s ability to deliver a highly complex LNG project.”

The project will expand further with the start-up of the second train in the third quarter of 2015.

At plateau production, which is expected to occur during 2016, Queensland Curtis will have an output of around 8 million tonnes of LNG a year. t

45

Country focus China

China talk Commodities and cruising are just two aspects of Chinese development at the moment

China’s apparent oil demand in November rose 3.5% year on year to 42.18 million tonnes, or an average 10.31 million barrels per day (b/d), according to a Platts analysis of Chinese government data.

In the month from October to November 2014, the country’s apparent oil demand increased 2.2%. Meanwhile, total apparent oil demand was 9.99 million b/d during the first 11 months of 2014, an increase of 2.3% over the same period in 2013, according to Platts.

The official data also showed China turning into a net exporter of oil products during the period from January to November 2014, with oil product exports surpassing imports by 70,000 tonnes.

Stimulus measures implemented by the Chinese government and a seasonal upturn in year-end demand helped buoy consumption in November, Platts said.

“Chinese refiners requested more oil product quotas from the government for the fourth quarter,” said Platts’ senior writer for China, Song Yen Ling. “This was mostly to accommodate additional jet fuel exports because of robust production growth.”

Crude throughput by refineries in November was up 5.5% year over year to 42.25 million tonnes, or an average 10.32 million b/d, according to data released by the National Bureau of Statistics of China (NBS) in December.

China’s oil product imports fell 16% year on year to 2.37 million tonnes in November 2014, while exports climbed 15.6% to 2.44 million tonnes, according to data released by the General Administration of Customs.

From January to November, net oil product imports fell 26.1% to 26.78 million tonnes, while oil product outflows rose 3.8% to 26.85 million tonnes, Platts said.

Apparent demand for gas oil in November was up 4.4% from a year ago to

14.97 million tonnes. Gas oil accounts for the largest volume across all oil products.

Up to 70% of the fuel is used in the transport sector.

Lower consumption, particularly by the bunker sector and independent “teapot” refineries, has resulted in lower import volumes this year, according to Platts.

“Month-to-month demand in China is generally viewed to be subject to shortterm anomalies, which are of interest and important to note but often fail to reveal the country’s underlying demand trends.

Year-on-year comparisons are viewed by the marketplace as more indicative of the country’s energy profile.” t

Oil spill response The International Group of P&I Clubs has been revisiting spill response contracts in the light of Chinese regulations on the prevention and control of marine pollution from ships. In particular, it has examined the requirement that owners/operators of any ship carrying polluting and hazardous cargoes in bulk or any other ship above 10,000 gt should enter into a pollution clean-up contract with a Maritime Safety Agency-approved ship pollution response organisation (SPRO). According to Skuld P&I Club: “The International Group (IG) has since reviewed the recommended IG spill response contract wording in the light of the experience gained over the last

China became a net exporter of oil products between January and November 2014

46

Methanol production Soaring Chinese methanol expansion will boost demand for chemical tanker shipping on intra-Asia export trades out of China but will check import traffic, according to the latest edition of the Chemical Forecaster, published by shipping consultancy Drewry.

China’s methanol production and domestic consumption have grown in tandem at an annual rate of 18% a piece since 2008, according to Drewry estimates.

Production is expected to reach 32 million tonnes per annum, while the country’s consumption will reach 35 million tonnes.

The rise in production is expected to boost exports up to 850,000 tonnes per annum.

“This trend will drive increasing demand for chemical shipping, mainly in the coastal tankers sector, as most of China’s methanol exports are destined for North-East and South-East Asia,” said San Naing, Drewry’s chemical shipping analyst.

However, the country’s fast-expanding methanol production has dampened import demand from traditional production centres such as the Middle East. For instance, imports from this region into China fell 15% in the two years to 2013 to 4.1 million tonnes. t

Asia Pacific Shipping 2015 Spring

Country focus China two years and in discussion with different interested parties.”

“The wording of the new recommended contract remains consistent with the regulations and the Maritime Safety Agency’s detailed rules, and takes account of concerns raised with regard to the payment period to SPROs under contract for undisputed sums during the course of an incident, whilst ensuring that the period continues to provide sufficient time to check invoices and documentation provided as evidence of costs incurred,” the club says.

“Since many owners will be signing new spill response contracts with SPROs in the near future, it is recommended that owners sign on the basis of the new IG recommended contract wording. It will not be necessary for owners to change existing spill response contracts with SPROs (that are based on the current IG sample agreement wording with the footer “IG Sample Agreement dated 20 November 2012”) where such contracts have not yet expired.

Any member requested to agree to a variation of the attached recommended contract is advised to check with the club to ensure that such variations do not cause the contract to fall outside the scope of the IG guidelines, Skuld says. t

and CSSC. The potential joint venture would be the first three-nation collaborative effort to build the first-ever, world-class cruise ships constructed in China.

As part of this, Carnival Corporation would work closely with CSSC and Fincantieri to provide its ship design and shipbuilding expertise to create the vision, definition and overall specifications for the China-built cruise ship for the Chinese market. Fincantieri and CSSC would work closely together in the proposed venture on shipbuilding production capacity in China. Based on Fincantieri’s broad experience as the largest shipbuilder in the world, the company would provide specialist services to help augment CSSC’s world-class shipyards that have a strong track record of delivering quality industrial vessels.

Carnival MOU Carnival Corporation announced in November that it has signed a memorandum of understanding (MOU) with shipyard Fincantieri to explore the possibility of a shipbuilding joint venture aimed at accelerating development and growth of the cruise industry in China.

The MOU between Carnival Corporation and Italy-based Fincantieri outlines the framework for evaluating and exploring a potential shipbuilding joint venture for constructing cruise ships for the Chinese market.

The MOU with Fincantieri followed the news that Carnival and the China State Shipbuilding Corporation (CSSC), China’s largest shipyard, had signed an MOU in mid-October to work together on a potential collaborative joint venture focused on shipbuilding in China.

Both MOUs involving Carnival Corporation include the possibility of forming a shipbuilding joint venture that could become a three-way arrangement between Carnival Corporation, Fincantieri

“Building on our groundbreaking MOU signed with CSSC last month [October 2014], this new agreement with Fincantieri gives us the opportunity to work with our longtime partner to further explore a formal joint venture that could forever change the landscape of shipbuilding in China,” said Arnold Donald, chief executive of Carnival Corporation. “After working diligently to get a deep understanding of China’s aggressive cruise ambitions, we’re collaborating with two of the world’s top shipbuilders in Fincantieri and CSSC to establish a framework for a world-class Chinese shipbuilding venture designed to help accelerate growth and demand for cruising in China in the years to come.”

Fincantieri’s chief executive, Giuseppe Bono, said: “This agreement with Carnival – to which we are bound by a consolidated partnership – and with CSSC testifies our determination in pursuing a strategy that increasingly establishes Fincantieri as a global and reference player in the sector, with strong presence in all the markets that can ensure a future in our business.

joint venture “ This could forever change the landscape of shipbuilding in China

“

Asia Pacific Shipping 2015 Spring

Indeed, new international scenarios are emerging, and with them new challenges arise in addition to existing ones, and we are glad to contribute together with Carnival to develop the cruise shipbuilding capacity in China for the Chinese market.

For this reason, our commitment must be ever-stronger in order to enable us to take advantage of such opportunities and continue to be an example of Italian style in the world.”

The Chinese Ministry of Transport (MOT) projects that in the next several years China will become the second largest global cruise market after the US. This is based on economic growth, the increased spending power of Chinese consumers and growing demand for cruise vacations.

China could see 4.5 million cruise passengers by 2020, according to the MOT, and is expected to eventually become the world’s largest cruise market.

Potential partnerships like the ones being explored between Carnival, Fincantieri and CSSC are aimed at supporting the MOT’s pro-growth cruise policies and the rise of overall tourism in China.

As part of the MOU signed with CSSC in October, Carnival Corporation will explore other joint venture opportunities beyond shipbuilding, including the potential to form a domestic cruise company, port development, talent development and training as well as supply chain and logistics. The company will continue to pursue every opportunity to support the growth of cruising in China, while continuing to provide memorable cruise vacations for guests already sailing on its brands in China.

Carnival Corporation recently announced its plans for immediate capacity growth in China in 2015 to meet growing demand. With Costa Cruises adding the Costa Serena in China in April 2015, Carnival Corporation will be the first global cruise company with four ships homeported in China. Costa Serena joins Costa Atlantica, Costa Victoria and Sapphire Princess. Carnival Corporation is growing its leading market presence by 140% from 2013-2015 and expects to carry 500,000 cruise passengers in China in 2015.

The MOT will explore investments in infrastructure and developing a strong domestic cruise presence to help spur growth in cruising. t

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Barbados

®

Maritime Agencies Pvt. Ltd. Barbados Maritime Agencies Pvt Ltd is a leading shipping name engaged in serving all major ships owners of the world, with their well establishment all west Coast of Indian Ports.

We provide efficient and hassle free services which are related to various shipping and cargo handling, Ship Agency, Protective Agency as well as Clearing & forwarding. At all Ports of West coast of Indian ports.

103, First Floor, Cams Corner, Bedi Port Road, Jamnagar - 361 002 GUJARAT, INDIA Phone : +91 288 2673982 / 2553982 Fax : +91 288 2663982 E-mail : barbados@barbados.co.in Web : www.barbados.co.in

Country focus India

Recycling challenge Whether China will take over as the main market is a key issue at the moment

‘chicken and egg’ situation if there is no financial motivation to the yards

to an abrupt end through the ill-advised efforts by the waste management unit of the European Commission’s DirectorateGeneral for the Environment to ban ship recycling by beaching.

“We can only hope that the administrations of right-thinking European states will avert the tragic mistake that has been brewing in Brussels through the regulator’s lack of understanding on international shipping and ship recycling.”

He added: “Progress could also slowly come to a halt if yard owners who are investing in improvements do not realise any financial gain through the custom of responsible shipowners seeking safe and clean recycling in the period prior to the entry into force of international requirements. As entry into force of the Hong Kong Convention is practically subject to accession by India, we have a classic ‘chicken and egg’ situation if there is no financial motivation to the yards.”

Dr Mikelis said the corporate social responsibility (CSR) policy of a responsible shipowner who cares that ship recycling standards are sustainable across the industry and not only within his company “must encourage, through his custom, yards which have invested in safety and environmental protection, regardless of whether these yards are located in South Asia or elsewhere”. t Murray Fenton Murray Fenton India, the technical services division of Bibby Ship Management (India), was appointed last year by a consortium of banks as independent engineer for the prestigious ABG Shipyard project.

This project will require the Murray Fenton India team to monitor the construction of vessels, ship lift projects and expenditure at the ABG shipyards – Magdalla and Dahej – as well as to oversee financial disbursements to the yard.

Bibby Ship Management has mobilised a team of experts, including naval architects,

Dr Nikos Mikelis, non-executive director of GMS

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STORY CONTINUED

“We have a classic “

Shipping companies have been watching the Indian market closely, not least since the change of administration, to see where the country will go and whether the market for ship recycling will be overtaken by China.

Global Marketing Systems Inc (GMS), the world’s largest cash buyer of ships for recycling, has recently challenged the European Commission’s intention to ban ship recycling by beaching, by inviting the Commission and a major representative group of top-level shipping industry stakeholders to India to witness the recycling process firsthand at one of the country’s best yards.

Addressing a high-level industry conference in London recently, Dr Nikos Mikelis, non-executive director of GMS, said ship recycling yards were improving in South-East Asia and the best way to see this was to visit the yards in person.

GMS also used the conference to call on Panama and the Marshall Islands to accede to the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships in order to satisfy calls by the International Chamber of Shipping and the European Community Shipowners’ Associations (ECSA) for a level playing field in global recycling. Ratification by these two large flags would speed up the convention’s entry into force.

GMS said it would be willing to invite officials from EU member states; experts on hazardous materials; representatives of shipowners or shipowner associations; the IMO secretariat and the European Commission to see the improvements that have taken place in Indian recycling yards.

The observers would then be requested to compile a report of their findings.

Dr Mikelis said that while progress was being made in Indian yards, it could “come

Corporate viewpoint

Work more than others and expect less than others Barbados Maritime Agencies Pvt Ltd is managed by Mr Sanjay Chauhan, who is very experienced in shipping / agency / stevedoring / chartering / brokerage. For the past 25 years, he has worked at numerous ports on the west coast of India and attended vessels in various principals’ interests.

What we can do....

• Act as agents on behalf of owners and charterers at all major and minor ports in India

As an agency, we work for both charterers and owners for vessels calling at any of India’s west coast ports. Our associate branch offices can also handle vessels at any of India’s east coast ports.

• Husbandry agents / crew changes / ship spares delivery / CTM delivery

In addition, we handle oil / crude / chemical / product tankers at the Sikka Reliance Terminal. We can handle all types of tankers at Vadinar oil terminal or any of the west coast ports.

• Clearing and forwarding, custom house agent license holder (under our group)

We are widely recognised as a specialist in all kinds of shipping services at both major and minor ports on the east and west coast of India, providing tugs, barges and other offshore operation-related services.

• Towage and salvage

We provide quality services, where our customers have total confidence in our ability to manage everything needed for shipping.

We arrange for efficient dispatch of vessels, and personal, continuous supervision by trained, experienced and dedicated staff ensures that every voyage reaps the maximum possible profits for the principal. We liaise round the clock to keep the concerned parties regularly and promptly informed of the ship’s operations, thus avoiding unnecessary complications.

Should one or more of your ships visit a port in Gujarat or the west coast of India, we would be happy to protect your most valued assets efficiently and honestly.

• Act as charterers’ nominated agents

• Stevedoring, liner in / liner out • Handling of project and heavy lift cargoes • Attending vessel for offshore industries / research vessels • Grabs on hire • Tugs and barges on hire basis • Logistics services • Offer the best freights and carriers

Our services include…

We aim to offer you trouble-free, efficient, economic and devoted services. We are ready with the latest equipment to meet all your requirements and take care of all your needs.

• Ships’ agency

We have a reputation for high quality and efficient customer service, and maintain good and close relationships with all government concerns and departments.

• Freight tax clearance from income tax

Our offices are manned by senior marine personnel and highly experienced staff, who are equipped to handle all kinds of issues pertaining to a vessel’s port call. Our continuous in-house training gives our operations executives useful knowledge of relevant charter party clauses, enhancing their understanding of a principal’s expectations of an agent.

• Chartering and brokerage

• Shipping consultant for government projects • MMD consultant • Customs consultant and clearing and forwarding • Port agency and stevedoring

Centralised control from our head office in Jamnagar on the west coast of India ensures that our principals benefit from fluent communications and a single point of contact for all matters, including operations, finance and any other vessel requirements. All queries are handled promptly by our competent staff in close liaison with the relevant port office.

• Salvage and loss assessment • Reactivations of laid-up vessels • Logistics solutions • Arrangement of ship’s supplies (provisions, stores and bunker/fresh water throughout all of India)

103, First Floor, Cams Corner, Bedi Port Road, Jamnagar - 361 002 GUJARAT, INDIA Tel: +91 (0) 288 2673982 / 2553982 Fax: +91 (0) 288 2663982 E-mail: barbados@barbados.co.in Website: www.barbados.co.in

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Asia-Pacific Shipping 2015 Spring

Country focus India shipyard specialists and procurement personnel to work on the contract.

Captain Purnendu Shorey, head of technical services at Murray Fenton India, said: “We wish to establish ourselves as experts in this field and provide such services to financial institutions and shipyards in the near future.” Captain Kapil Dev Bahl, director, added: “It is a very commendable achievement and very satisfying to see the young team taking the company ahead.”

Prakash Agarwal, managing director, said when the agreement was signed last year he was confident that the team would deliver the desired level of service to clients.

“It is the beginning of a new chapter in Bibby’s 207-year-old history,” he said. “This contract will take Bibby Ship Management (India) into a new league. It is a significant achievement indeed.”

Bibby Ship Management (India) has grown over the past 10 years into a highquality provider of services in the areas of mariner and offshore training; ship and crew management; travel; marine and offshore surveying as well as port agency. t Reliance agreement with MOL Reliance signed a shipping agreement with Mitsui O.S.K. Lines (MOL) for transporting liquefied ethane from North America to India in December. MOL will supervise the construction of six very large ethane carriers (VLECs), ordered by Reliance Industries Limited. MOL will also operate and manage the vessels after they are built and delivered.

Reliance, with this strategic tie-up with MOL, has achieved a key milestone for the successful implementation of the ethane import project to feed crackers in India.

Reliance is India’s largest private-sector company, with a consolidated turnover of 4,46,339 crore (US$ 74.5 billion), cash profit of 33,980 crore (US$ 5.7 billion) and net profit of 22,493 crore (US$ 3.8 billion) for the year ended 31 March, 2014.

This will make MOL the first shipping company that is dedicated to continuous liquefied ethane transportation by VLECs. Ethane will be transported by six VLECs from North America to India. The carriers are being specifically built by Samsung Heavy Industries and are expected to be delivered in the last quarter of 2016 and enter into service thereafter. The vessels are designed to meet the latest safety and

environmental regulations and will have superior design parameters.

MOL will supervise the construction of the six VLECs initially at the yard and thereafter operate and manage the vessels during the charter period for Reliance.

While MOL has said it wants to allocate management resources earlier, particularly to businesses where the company expects high growth and stable long-term profits, taking advantage of the shale revolution.

Its link-up with Reliance is in line with these objectives, it adds.

“VLECs, being a hybrid of a liquefied natural gas (LNG) and a liquefied natural petroleum (LPG) carrier, required the expertise of both LNG carriers and LPG carriers. Considering MOL’s rich experience for both type of carriers, it is in a better position to leverage its existing capabilities to tap this new opportunity.”

“MOL will, in response to increasing demands for energy transportation, continue its effort to provide with high -standard safe and stable sea transportation services.” t Mexican MOU Reliance and the Mexican state-owned company, Petróleos Mexicanos (PEMEX) have entered into a memorandum of understanding (MOU).

Under the terms of the MOU, Reliance will cooperate with PEMEX for assessment of potential upstream oil and gas business opportunities in Mexico and jointly evaluate valueadded opportunities in international markets.

Reliance and PEMEX will also share expertise and skills in relevant areas of the oil and gas industry, including for deep-water oil and gas exploration and production.

The MOU envisages sharing Reliance’s pioneering expertise in deepwater

development and best practices on the east coast of India and its experience in shale gas in the US. t Bulk carrier record In December, Adani Ports and Special Economic Zone Ltd, India’s largest port developer and part of the Adani Group, successfully berthed at Mundra Port the largest bulk carrier to call at any port on the west coast of India, thereby making history in the Indian maritime sector.

MV Orange Phoenix, a Panamaregistered vessel with an overall length of 299 metres (m) and a draft of 16.7m, was berthed at Mundra Port’s west basin coal terminal on 2 December 2014 by the port’s marine team. The vessel has a dead weight tonnage (dwt) of 207,529 tonnes and was carrying 179,741 tonnes of Indonesian coal.

Mundra port is designed to handle bulk vessels up to 250,000 dwt.

Speaking on the occasion, the chairman of the Adani Group, Gautam Adani, said: “It is yet another proud moment for everyone at Adani Group as Mundra Port, which is the flagship of Adani Ports and Special Economic Zone, sets another record in the history of the Indian maritime sector. The berthing of MV Orange Phoenix at Mundra Port reaffirms our position as the port of choice on the west coast of India. It is testimony to the world-class infrastructure and operational efficiency which has been consistently synonymous with Mundra Port.”

In 2014, Mundra Port made history by handling 100 million metric tonnes of commercial cargo in a year. The port today has the capacity to handle over 200 million tonnes of cargo, with the West Basin Coal Terminal designed to handle vessels of 250,000 dwt and above. t

Caption Adani Ports and Special Economic Zone has broken west India’s bulk carrier record

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Corporate viewpoint

GIBRALTAR – A CENTRE OF From its vantage point at a key position for global trade, the Rock of Gibraltar has established a solid reputation as an important staging post for the international shipping community. More than 70,000 ships sail through the Strait of Gibraltar every year and a significant number of these stop in the port and make use of Gibraltar’s excellent services.

As a result of its strategic location, the Rock is also a major bunkering port – the largest in the Mediterranean and, in spite of the recent world economic downturn, more efficient ships and a more financially minded community, the Rock’s bunkering companies continue to go from strength to strength. Just under four million tonnes of bunkers were delivered in 2013, compared with just 0.84 million tonnes in 1990, and bunkering is still the main activity within the Port of Gibraltar.

Around 9,146 vessels called at Gibraltar last year and, of these, two-thirds were supplied with bunkers.

But is it not just about the location of the Rock. Commodore Bob Sanguinetti, the recently appointed chief executive and captain of the port, feels that because of its size, history, politics and culture, and the closeness of the community, Gibraltar is unique. This uniqueness allows for vessels transiting the Strait of Gibraltar to use Gibraltar’s quick turn-around times as a one-stop shop. Gibraltar’s agents, chandlers and other service providers pull together to give the best comprehensive product or service. Commodore Sanguinetti is extremely proud of this fact and would challenge anyone to find anywhere else in the world where these factors come together in quite the same way.

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Gibraltar also offers an extensive service in ship repair work and maintenance by a private operator at the other end of the harbour.

The local airport is just a few minutes from the harbour and offers several daily flights to various destinations in the UK, and experienced agents are on hand to obtain spare parts, supply provisions and effect crew changes.

Ships come to Gibraltar from all over the world – from the Far East and both sides of the Atlantic – and the Gibraltar Port Authority takes its environmental responsibilities very seriously. It adheres to international and local legislation on environmental issues and is also a member of the Green Port Association, offering discounts to ships conforming to certain environmental standards. Gibraltar Port also offers waste reception facilities to discourage ships from dumping their rubbish at sea. And when it comes to bunkering, Commodore Sanguinetti is keen to point out that the port provides the highest levels of governance and oversight.

The development and implementation of a very strict code of practice, which other ports are now emulating, is an indication of very high standards. Gibraltar is also a market leader in quality control, where the fuels in the supply chain are frequently analysed through random testing by the Port Authority.

Asia-Pacific Shipping 2015 Spring

Corporate viewpoint

MARITIME EXCELLENCE A similar code of practice also regulates ship-to-ship operations – a service often taken advantage of by oil majors, under the supervision of the Gibraltar Port Authority, and within its territorial waters.

The Port of Gibraltar is not complacent, however, and is always looking at further consolidating its position as a leading port in the Mediterranean. A recent reduction in its tariffs for vessels anchoring on the eastern side of the Rock to allow them to make better use of Gibraltar’s services and facilities is just one example of the port’s efforts in increasing its competitiveness regionally and, more widely, across the Mediterranean.

The Hon Neil Costa, MP, minister for tourism, commercial affairs, public transport and the port, is pleased to highlight that Her Majesty’s Government of Gibraltar has given renewed impetus to the robust promotion of the port, which represents a vital part of Gibraltar’s economic success. It has also invested in ensuring that Gibraltar has the necessary technical capability to enhance security, safety and crisis response and provide a better service to customers and port operators alike.

“In summary, shipowners, brokers, charterers and operators using Gibraltar’s excellent port can be confident that they will receive an efficient but, equally important, safe service, which is second to none,’’ he says.

In addition to the reduction in tariffs, the Gibraltar Port Authority has also engaged in a wide-ranging marketing campaign to raise its profile. As part of this campaign, the government of Gibraltar and its representatives will shortly be hosting several meetings and receptions in Hong Kong, with the intention of meeting shipping owners, associations and operators to attract more shipping business to Gibraltar.

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53

mediterranean gibraltar

Asian expansion Gibraltar is keen to promote financial and shipping links with Asia

“There has been a tremendous interest in the quality professional services that the Port of Gibraltar provides

“

Gibraltar has been making considerable efforts to strengthen its ties with the Far East in recent months, with some highprofile visits to Hong Kong.

Neil Costa, Gibraltar’s minister for tourism, commercial affairs, public transport and the port, is confident of the Port of Gibraltar’s potential for further expansion, following an official visit to Hong Kong.

Costa attended meetings with key strategic stakeholders and decisionmakers, as part of a campaign to build on the common ground and interests between the influential Hong Kong shipping community and the Port of Gibraltar. The ministry plans to develop and strengthen the newly established relationships, so that the Port may better serve the significant fleet, owned or operated by companies in the Far East, transiting the Straits of Gibraltar every day.

The minister expressed satisfaction at seeing how much business is channelled through Gibraltar in the maritime industry and declared that the meetings with the key stakeholders of the Hong Kong shipping community had been highly engaging and constructive, providing very useful insights as to the experience had by clients of the ports and how Gibraltar can best position itself to generate even more business.

Costa said: “There has been a tremendous interest not only in the Gibraltar flag but also in the other quality professional services that the Port of Gibraltar provides, including the provision of spares, stores, crew changes and other husbandry services, apart from bunkering.”

The government delegation led by the minister included captain of the port Commodore Bob Sanguinetti and Diana Soussi from the Gibraltar Maritime Administration.

Before leaving on the trip, the minister reiterated that the Port of Gibraltar was a

Neil Costa, Gibraltar’s minister for tourism

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Asia Pacific Shipping 2015 Spring

vital component of the Rock’s economic success and that he was keen to give renewed impetus to the efforts of both the government and the private sector to achieve further economic activity.

Gibraltar has also been keen to promote itself in the area of financial services.

Albert Isola, minister with responsibility for financial services, also visited Hong Kong recently to address the 17th Hedge Funds World Asia conference. The aim was to position Gibraltar as a gateway to the European Union for Asian funds and hedge funds.

Isola also covered the dynamics of Gibraltar’s economy, regulatory regime and competitive personal and corporate taxation as well the government’s absolute commitment to the financial services sector.

Outside the conference, Isola, together with officials and a private-sector delegation from Gibraltar, had a further series of meetings with prime brokers, hedge funds and law firms located in the central business district. The minister also paid a courtesy call at the offices of the Hong Kong Securities and Futures Commission.

Isola said: “This visit to Hong Kong over a full four-day period has exceeded my expectations not only in terms of the number of professionals that we have interacted with but also the degree of interest shown by everyone we have met. The key factor now is that we and the private sector in Gibraltar follow up on the relationships that we are building so as to ensure that this translates into new business development for Gibraltar.”

Her Majesty’s Government of Gibraltar has recently opened its own office in Hong Kong. The new facility will be a showcase for Gibraltar and will serve as a stepping stone into the ever-growing Chinese market, not only for Gibraltar’s financial services industry but also as a shop window for many other sectors of the economy.

The reverse is equally true. It is expected that the new office will encourage Chinese investors to use Gibraltar for both direct

mediterranean gibraltar investment on the Rock and as an entrypoint into the European market.

Jason Cruz, a Gibraltarian who has lived in Hong Kong for over 20 years, will be appointed as Gibraltar’s representative and director of the new office.

Grimaldi’s Grande Angola left Gibraltar yard Gibdock recently following the on-time completion of a scheduled package of repair works. The project covered work on the second vessel in a two-vessel contract between Gibdock and Grimaldi Group, the multinational logistics group that specialises in the operation of roll-on/ roll-off vessels, car carriers and ferries.

Commenting on its decision to return to the Gibraltar-based yard, Giancarlo Coletta, Grimaldi Group corporate purchasing director, said: “This is another example of how reliable services and competitive value form the basis of expanded business co-operation.”

The 26,881dwt ro-ro multipurpose vessel, built in 2008, underwent a full hull blasting and new silicone application. In total, a surface area of approximately 9,000m2 was renewed, including additional spot blasting to the topsides, cranes, accommodation block and ramp. Gibdock employs the latest equipment and best available techniques in the application of marine coatings, including the use of environmentally-friendly wetgrit blasting. The yard also benefits from a climatic advantage, with year-round temperate weather minimising downtime for vessels undergoing coating work.

While the coating renewal formed the critical path work, concurrent maintenance was carried out to the vessel’s ramp, sea valves and rudder, while hot-dip galvanised large diameter pipe work was replaced.

Around 5.5 tonnes of steelwork was performed, with the addition of doublers to the anchor pockets.

Sister vessel Repubblica del Brasile visited the yard in July. Built in 1998, the 23,882dwt ro-ro multipurpose vessel also underwent full blasting and silicone application. The project also covered the splitting of the ramp and replacement of the main bearings, pipe work renewal and replacement of around 4.5 tonnes of steelwork to the vessel’s tanks.

Gibdock’s managing director, Richard Beards, said: “We are always pleased to welcome a returning customer as it reaffirms the fact that the service, quality and competitive value received at Gibdock is really hitting the mark. Gibdock has been working with the Grimaldi Group since 2010, and that partnership has strengthened over the years, particularly during 2014. We hope that the relationship will continue to develop and we anticipate further projects in the foreseeable future.”

Piraeus-based Aegean Maritime Petroleum Network Inc (AMPNI) has recently contracted Gibdock to carry out repairs to three of its vessels. The Aegean Princess, Halki and Nisyrus were all docked within the space of just over a month, underlining the yard’s growing success in attracting business from the important Greek shipowner sector, based on quality of service, re-delivery time and its location.

AMPNI is an international marine fuel logistics company that markets and physically supplies refined marine fuel and lubricants to ships in port and at sea.

The company has a fleet of around 65 vessels, eight of which operate in and around Gibraltar.

Gibraltar’s bunkering superintendent John Ghio has recently been seconded by the Gibraltar Port Authority to act as a consultant for the developing bunker industry in the island nation of Mauritius.

The request to the local authority came from the State Trading Corporation of Mauritius (STCM), a government-owned entity that regulates all trading activities in the country. STCM expressed an interest in contracting Ghio’s services to examine and advise on how best to develop the industry and, in particular, the underlying regulatory framework and operational controls for bunkering in Mauritius.

The government of Mauritius, through STCM, has been very keen to develop its excellent relations with Gibraltar by drawing on the Rock’s experience in this field and applying the excellent regulatory framework and enforcement mechanism already in place locally, which is widely acknowledged to be at the forefront of regulations in this field.

Costa commented: “The government of Gibraltar was delighted to accept this request, as this initiative once again highlights the reputation and standing of Gibraltar as one of the biggest bunkering ports in the Mediterranean, and recognises the industry-leading standards which we have in place.”

The secondment will also serve to enhance the knowledge and experience of the Gibraltar Port Authority, as it will provide Ghio with an opportunity to study the bunker industry in a different context, as an external observer in a friendly country, and analyse the challenges faced by this industry and its regulators in other locations. t

Repubblica del Brasile visited Gibdock for full blasting and silicone application in July

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Corporate viewpoint

The Only Surveying Company You Need to Know IMS was established in January 1992 and has grown to become one of Western Canada’s largest independent marine surveying and cargo inspection organisations. IMS has earned a reputation as being unbiased, objective and professional. Based in Vancouver, Canada’s largest port, IMS offers a comprehensive range of professional consulting, superintendence, inspection, testing and marine surveying services across Canada, USA and worldwide for International Traders, Brokers, Producers, Buyers, Charterers, Owners, Insurances and Legal Entities.

The company has developed sophisticated computer software for different kinds of surveys and is fully compliant with relevant international standards. IMS has been ISO certified from 2001 and is currently certified under the ISO 9001:2008 standards by BSI. NOTE: There are no qualifications requirements for being a Surveyor in Canada, so you may be in for a big surprise if you go for the lowest bidder. A fancy website is no longer a guaranty that it is qualified Surveyors behind it, nor that there are offices in the locations the web-sites and/or E-Mail addresses indicates. If one “GOOGLE” the fancy Addresses, you may find that several dozen companies sharing the same place – Alarm bells should now be ringing loudly.

IMS is also the Flag State Ship Inspector for Bahamas, Barbados, Cyprus, Marshall Islands and Panama, and Class Surveyor for CR Taiwan, OMCS Panama & Qualitas Panama. IMS is the only certified ultrasonic Hatch Cover Tightness Testing firm on the West Coast and we are also a certified IICL Container Inspector.

The company is widely used by most major P&I and H&M Clubs for their various surveys. In today’s highly competitive and challenging shipping industry, losses can materialise in many ways. Lost time, damage, leaking hatch covers, cargo contamination, unprofessionally performed inspection/surveying work, unfamiliarity with local conditions etc. can be major cost factors. IMS could reduce your exposure to costs and claims by being your on-site representative, providing experience, prompt, factual, and competitively priced marine surveys, cargo inspections and testing.

IMS Analytical Laboratory is providing professional testing, certification and consultation in the grain, oilseed, meals, fats & oils, biodiesel, chemicals, marine, environmental and food related fields, and offers a first-class, reliable and rapid analytical service based on modern instrumentation and cutting-edge techniques, which facilitate International Trading according to governing standards and legal requirements. IMS Laboratory is a FOSFA Analyst L1 (the highest level & the only one in Canada), COPA referee Laboratory and also Certified by GAFTA for Grain & Feed Stuffs. IMS’s achievements in research and method development have been recognised by USA and Canadian authorities and producers in chemistry and oil testing. The application for direct testing for sulphur and phosphorus by ICP-OES has quickly become one of the most widely-used methods in North America for the quality of vegetable oil, beef tallow and biodiesel testing. At this time, IMS is the only laboratory in Canada and probably in North America that can carry out all CIQ required testing ”in House” on Vegetable Oils for export to China.

Bulk Liquid Services Supervision, inspection, sampling, quantity calculation and testing of bulk liquids, by providing our clients’ with reliable, fast and professional services, including among others the following: • Quality Surveys • Quantity Surveys • Loss control • ROB Surveys • Certificates and Documentation • Petroleum and By-Products Inspections • Bunker Surveys • Intermodal Tank Equipment • Software • Mobile Office Units • Edible Oils and Fats • Vegetable Oils • Other Oils – Fish Oil • Fats – Tallow • Biodiesel Testing

Container Surveys • • • • • •

Container Surveys - Cargo Damage Sea Containers - Cargo Securing Container Cleanliness and Condition Survey Container Cargo Surveys - Loading / De-vanning Container Inspections - IICL & CSC IMDG Surveys including Class 7

Marine Cargo & Technical Services IMS offers a full range of commercial survey, inspection, sampling and testing services with supporting Certificates and other relevant documentation, including, but not limited to the following: • Hold and Tank Cleanliness/Condition Surveys • Vessel’s of On/Off Surveys • Compliance Surveys

For more information visit: www.ims-van.com or E-Mail: admin@ims-van.com For Survey matters: Captain Jostein Hoddevik, President For Lab matters: Dr. Tatiana Hoddevik, Head of Laboratory

• Cargo Pre-Loading Surveys • Loading, Handling and Stowage Advice • Grain Stability Separations, and Stress Calculation • Heavy-Lift and Project Cargo Surveys • Pre-Shipment Surveys • Out-turn Surveys • Draft Surveys • Dead-freight Surveys • Hatch Sealing • Damage Surveys • Stevedore and Terminal Damage Cargo Quantity & Quality • Quantity - Scale Verifications / Draft Survey • Quality - Lab Testing • Cargo Measurement

& MARINE SURVEYORS & 56

Asia-Pacific Shipping 2015 Spring

Corporate viewpoint

Marine Technical Services • Flag State Surveys • Condition Surveys • Hull and Machinery • Pre-purchase Surveys • Non-Destructive Testing • Hatch Tightness Testing - UT Certified • Railroad Freight Claims • General Average (GA) Consulting • Foreign Trade Supervision (FTS) • Fish Farms

Other Services IMS can also provide a number of other marine and cargo related services, such as: • Superintendency and Consultancy • Supervision of the entire cargo operation or some of its various stages, with a view to ensure a smooth and expeditious turn-around.

• Safety Audits and ISM Consultancy • Expert Witnesses – assisting law firms, P&I Clubs, Owners, or other involved parties with investigation, preparation and substantiating their case.

• Foreign Trade Supervision (FTS) • Analytical Laboratory - testing of vegetable oils, fats, biodiesel, meals and feed stuff and grain, among others.

• Loading / discharging documentations and certificates.

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Country focus Canada

Asian Focus Canada has also been looking at strengthening its links in Asia

equipment and aircraft. Sales of the first class of goods, which tend to be priced in relatively competitive markets, may be buffeted by sudden changes in competitiveness induced by exchange rate adjustments, or by the imposition or removal of a regulatory barrier either by Canada, by a customer, or by a competitor.” t

“We are very excited to be launching a project that focuses on Atlantic Canada

“

The Asia Pacific Foundation of Canada (APF) last year launched a new research project aimed at exploring the opportunities and challenges for Atlantic Canadian business and trade with Asia.

The project will conclude in September 2015.

“We are very excited to be launching a project that focuses on Atlantic Canada,” said Eva Busza, APF vice-president, research. “There are vast opportunities in Asia for New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador, as well as unique challenges that increased engagement presents, and our project will aim to help the region chart a strategy for Asia that suits its unique strengths and needs.”

Many businesses headquartered in Atlantic Canada have seen success in Asia, and there is still much room for growth, both for investment in Atlantic Canada from Asia and for Atlantic Canadian businesses to expand their operations in Asia. Recent visits from the Chinese and South Korean ambassadors indicate that there is interest from Asian leaders in exploring business opportunities with the Atlantic provinces.

The new APF project, entitled The Asia Factor in Atlantic Canada, is funded in part by the Atlantic Canada Opportunities Agency, and it will be the first comprehensive study of the current impact and future opportunities that Asia presents to the Atlantic Canadian economy.

According to APF, “Canada’s trade with Asia is quite volatile. There are some simple explanations for this variability, however, relating to the composition of our trade.

Canadian exports to Asia feature a relatively heavy reliance on natural resource-based items, especially wood, and agricultural goods, and on big-ticket, infrastructurerelated items like telecommunications Many businesses headquartered in Atlantic Canada have seen success in Asia

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Gazprom contract Gazprom Marketing & Trading Singapore (GM&T) has signed a four-year sale and purchase agreement for liquefied natural gas (LNG) with Canada’s Pacific Rubiales Energy Corp. GM&T will be the offtaker for approximately 0.5 million tonnes per annum of LNG from an offshore terminal located in Tolu, on the Caribbean coast of Colombia.

Vitaly Vasiliev, chief executive of GM&T, commented: “We are thrilled to partner with Pacific Rubiales and to bring our technical, commercial and shipping expertise to this exciting project, which remains on track to become the world’s first floating gas liquefaction plant in operation.”

Pacific Rubiales, a Canadian company and a producer of natural gas and crude oil, owns 100% of Meta Petroleum Corp, which operates the Rubiales, Piriri and Quifa heavy oil fields in the Llanos Basin. It also owns 100% of Pacific Stratus Energy Colombia Corp, which operates the La Creciente natural gas field in the north-western area of Colombia.

Pacific Rubiales had previously acquired 100% of three other companies – Petrominerales; PetroMagdalena Energy Corp; and C&C Energia Ltd. Petrominerales owns light and heavy oil assets in Colombia and oil and gas assets in Peru.

PetroMagdalena Energy Corp owns light oil assets in Colombia, and C&C Energia owns light oil assets in the Llanos Basin.

In addition, the company has a diversified portfolio of assets beyond Colombia, which includes producing and exploration assets in Peru, Guatemala, Brazil, Guyana and Papua New Guinea.

RINA expands into Canada Italy’s growing engineering, testing, marine services and ship classification group RINA Services has acquired a majority stake in Montreal-based marine survey company Hayes Stuart. The move gives RINA a platform for further expansion into the growing market in Canada.

Stefano Socci, Rina Services’ general manager for the Americas, says: “Hayes Stuart is a well-established Canadian marine survey company with expertise that complements ours. We see the marine market growing in Canada, and Hayes Stuart together with RINA will be well placed to expand with it.”

Hayes Stuart has offices in Montreal, Toronto, Quebec City and Halifax and employs 15 full-time marine experts. It provides a range of commercial marine services, including hull and machinery surveys, condition surveys, bunker and cargo surveys and loss prevention surveys.

Hayes Stuart will maintain its brand and operate as a RINA group company.

The acquisition reflects RINA’s strategy of growing by acquiring high-quality companies with complementary expertise that also provide access to new markets.

Richard Breton, president of Hayes Stuart, said: “I am very excited to join forces with the RINA Group as this marks a new chapter in Hayes Stuart’s marine history. I am confident that this strategic move will prove to be very successful in expanding RINA’s wide range of services throughout Canada and worldwide.” t Chantier Davie contracts Chantier Davie Canada announced the signing of two new contracts in October, one with CSL Group and the other with the Canadian Coast Guard.

CSL Group’s MV Baie St. Paul will arrive in the shipyard this month for a period of six weeks in order to perform repair and maintenance activities.

The award of the contract for the vessel CCGS Des Groseilliers was carried out with the cooperation of Babcock Canada Inc and involves the completion of phase one of the life extension of this Canadian Coast Guard icebreaker. The CCGS Des Groseilliers is a 1200 medium class icebreaker measuring 98 metres long. The vessel is already alongside at Quebec’s Davie shipyard, and work scheduled to last three and a half months began on 1 November.

Alan Bowen, Davie’s chief executive, said: “These two contract awards are a testament to the high-quality works carried out here at Davie. It is an important step for our shipyard that adds to the accomplishments of the past few months. Using our multiple dry dock facility for ship repair is a core business stream for us. Operating Canada’s largest docking and repair facility means we can meet the needs of our clients’ diverse docking requirements. We are very proud of the work accomplished by our teams and are convinced that our proven knowhow and professionalism will once again be demonstrated during these works.”

Commenting on the contracts, Steven Blaney, Canadian minister of public safety and emergency preparedness and MP for Lévis, Bellechasse and Les Etchemins, said: “I am proud to see that our region will benefit from investments related to the renewal of the Canadian Coast Guard fleet. Davie workers are talented, dedicated and skilled, and I am convinced that other opportunities will arise in the future.”

2014 was a busy year at Port Metro Vancouver (PMV), Canada’s largest and most diverse port. During the course of the year, the port highlighted a number of achievements, including investing in supply-chain infrastructure improvements to ensure port reliability in anticipation of increased trade.

2014 is also expected to emerge as a record year for cargo volumes through the port when year-end statistics are released.

The port completed nine infrastructure projects worth nearly $450 million, and announced a new truck licensing system, which is expected to stabilise port container trucking operations. Together, these accomplishments will help facilitate the efficient and reliable movement of goods through the gateway.

PMV’s Land Use Plan was updated to set out how the port authority will manage the land over the next 15 to 20 years. It unveiled new patrol vessels and other operations and security assets that will help maintain the safe, secure, efficient and reliable movement of marine traffic and cargo within PMV’s jurisdiction.

The 2014 Alaska cruise season ended in October with strong performance on par with the 2013 season, the port said. The 2014 season saw 812,095 passengers on 243 calls by 29 cruise ships, reflecting Vancouver’s selection as top homeport in North America for 2013 by Trip Advisor’s 2014 Editors Choice Awards. It also won two Cruise Insight Awards for most efficient terminal operation and best turnaround port operations in 2013.

The port authority launched its NonRoad Diesel Emissions programme during the course of the year, which will reduce diesel particulate matter emissions in cargo handling equipment. And, in collaboration with government agencies, First Nations, marine industry users, non-government organisations and scientific experts, it launched the Enhancing Cetacean Habitat and Observation programme to better understand and manage the potential impact on whales, porpoises and dolphins of commercial vessel activities throughout the southern coast of British Columbia.

Environmental reviews were conducted on more than 250 projects.

The port authority teamed up with Metro Vancouver to improve the monitoring of air quality on the Burrard Inlet. “We have committed to fund the purchase and installation of several new air quality and meteorological monitoring sites, to supplement existing monitoring stations operated by Metro Vancouver,” the authority said.

A two-year consultation process on the port’s Sustainable Gateway Definition was finalised and launched the updating of the Port 2050 scenario-planning process. t Chantier Davie Canada has announced two new contracts

Asia Pacific Shipping 2015S Spring

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STORY CONTINUED

Country focus Canada

port focus Singapore

Getting greener There has been a good deal of activity at the Port of Singapore, and the Maritime and Port Authority has been collaborating with Singapore Management University to promote green initiatives

More than 90% of the world’s trade is carried out by sea. With its central role, achieving sustainable growth has become a key challenge for many in the international maritime industry.

To better prepare for the challenges ahead and to encourage the adoption of sustainable initiatives within the maritime community, the Maritime and Port Authority of Singapore (MPA) organised the second Singapore Registry of Ships (SRS) Forum at the Sheraton Towers Hotel recently.

With the theme of sustainable shipping, the forum focused on the importance of sustainable maritime development.

MPA announced at the SRS Forum its collaboration with Singapore Management University (SMU) to promote research and innovation for a clean and green nextgeneration port. A memorandum of understanding (MOU) was signed by MPA chief executive Andrew Tan and SMU viceprovost (research) Steven Miller.

The MOU outlines areas for collaboration on research and development (R&D) between MPA and SMU. Topics include clean energy and environment, energy management, simulation and data analytics for maritime applications that support Singapore’s position as an efficient, green and sustainable port, MPA says.

The MOU extends beyond R&D and covers partnerships in education and public outreach programmes, as well as the provision of advisory services by SMU. Tan said: “Singapore is committed to promoting a maritime industry that is not only competitive but also efficient, responsible and sustainable. Today’s forum brings together stakeholders to discuss ways to leverage information and communications technologies to enhance the efficiency and sustainability of shipping and port operations. In this regard, we are pleased to collaborate with SMU to harness its strengths in environment and energy management, as well as data analytics, to improve the efficiency and sustainability of our port.”

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“We are also pleased that 30 more companies have come onboard to sign the Maritime Singapore Green Pledge since the scheme was launched. This is the largest group for a signing so far, and brings the total to 90 companies,” he added.

Miller commented: “Aligning data analytics with managerial decision-making helps to [elevate] resource deployment efficiency to new levels. This is crucial in support of green port operations but also a tough one to achieve. SMU is delighted to work with MPA as it embarks on the transition, overcoming challenges together.” t

OW Bunker The fall-out from the collapse of OW Bunker has been enormous and law firms have been very busy trying to help those affected by the situation.

At a recent industry dialogue with close to 50 companies from the Singapore Shipping Association (SSA), it was established that there had been no report of disruption to bunker supply and bunkering operations in Singapore in the wake of the OW Bunker collapse.

Co-organised by the Maritime and Port Authority of Singapore (MPA) and SSA, the participants gathered for updates and discussed ways to minimise any impact on the local bunkering scene following the recent announcements made by OW Bunker.

The attendees were advised to carefully inspect their contractual obligations, and to work closely with their stakeholders to avoid or minimise disruption in their operations.

“The bunkering industry here is a wellregulated one. While I urge my members to seek professional and legal advice as necessary, I also hope that those affected by this event would remain calm and not resort to knee-jerk reactions that may rock the stability and reputation of Singapore’s bunkering industry. My association will be working closely with MPA to ensure that there will not be any unnecessary disruption in bunker supply and operations here,” said SSA president Patrick Phoon.

According to MPA chief executive Andrew Tan: “This has been a useful session for the shipping and bunkering community to come together to understand the current situation and to discuss practical steps going forward. MPA will continue to work closely with SSA to manage the situation.

We will also work with our licensed bunker suppliers to minimise any disruption to bunkering operations in Singapore.” t

SSA president Patrick Phoon

Asia Pacific Shipping 2015 Spring

POrt focus Singapore one of the flagship programmes developed for overseas port and maritime officials by the recently re-positioned MPA Academy.

The first run of the programme in December was attended by 15 officials from maritime and port authorities around the world.

The five-day programme has been developed for port masters, harbour masters and middle managers. It covers a broad range of topics facing the maritime industry and “underscores our commitment to share our knowledge and experiences with the international maritime community”, according to the MPA. MPA chief executive Andrew Tan commented: “Developing maritime talent

“MPA works closely with classification societies to undertake research activities in Singapore

“

ABS MOU Class society American Bureau of Shipping (ABS) and the Maritime and Port Authority of Singapore (MPA) recently signed a memorandum of understanding to promote maritime research and development and innovation.

Over the next five years, ABS and MPA will collaborate on maritime research and development (R&D) in the areas of alternative/clean fuel and developing resilient, next-generation port systems.

Both parties will also promote and share maritime thought leadership on technology.

“For more than 50 years, ABS has been committed to working alongside the MPA, industry and academia to foster the safe and environmentally responsible growth of Singapore’s marine and offshore industries,” said ABS chairman and chief executive Christopher Wiernicki.

“This MOU is a further sign of our commitment to work with all stakeholders in this growing hub of global trade to further R&D efforts that provide practical solutions to today’s most pressing challenges,” he added.

MPA chief executive Andrew Tan added “MPA works closely with classification societies to undertake research activities in Singapore. This MOU with ABS will strengthen Singapore’s R&D capabilities in the areas of green shipping, future port and maritime technologies. It also aims to promote Singapore’s position as a global maritime knowledge hub.”

The ABS-MPA MOU covers: • Alternative/clean fuel research and technology, such as in liquefied natural gas (LNG) bunkering, covering both operational configuration studies and risk assessment and safety.

• R&D on resilient, next-generation port systems relating to the safety and security of new port facilities and where processes have to be continuously and effectively assessed and updated – ie traffic management, safe navigation, security measures, situational awareness, decision making and consequence management measures.

• Promotion of technology to the Singapore maritime community through thought leadership forums, such as workshops and dialogue. t Port management programme MPA Academy, the training arm of the port authority, has launched its inaugural Port Management Programme. The course is

is a common denominator that cuts across different maritime nations. This will help to ensure that the global maritime workforce is well prepared to meet the industry’s current and future needs. Hence, we are happy to share our experiences and insights in port operations and management, as well as the opportunities and challenges we face as a global hub port, quality flag state and coastal state of a key waterway.

At the same time, we can mutually benefit through the sharing of best practices and exchange of ideas with participants and industry professionals.”

The programme covered a wide spectrum of topics, such as master planning for container terminals, maximising efficiencies in container/cargo terminal operations, vessel traffic management, emergency planning and response, port security and crisis communications.

One of the lecturers was Captain Mark Heah, a trainer from the MPA Academy, who shared Singapore’s experience in handling major marine incidents.

Heah said: “MPA Academy’s Port Management Programme will allow participants to understand how MPA prepares for and deals with major oil spills and other marine incidents, and the various initiatives to maintain a safe, secure and efficient port. The sessions will allow participants to discuss the success factors and the pitfalls.”

Saungaki Rasmussen, harbour master at Cook Islands Ports Authority, was one of those attending the programme.

He said: “I am excited to have this great opportunity to attend the first Port Management Programme. It will assist the development of small island ports in the Pacific and in the Cook Islands.”

As well as lectures, participants visited facilities such as PSA Terminals, MPA’s port operations control centre, the Integrated Simulation Centre as well as Oil Spill Response Limited to gain insights into Singapore’s maritime operations.

The academy conducts training for MPA officers as well as overseas officers under various multilateral and bilateral technical assistance programmes. Through its programmes, the academy seeks to share knowledge and experience with its partners for the benefit of the international maritime community. t

MPA chief executive Andrew Tan

Asia Pacific Shipping 2015 Spring

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Asia-Pacific Shipping 2015 Spring

APS Events 4-5 February 2015 V TRAKS London

Promoting interoperability for maritime safety, security and environmental efficiency

24-25 February 2015 LNG Shipping Conference 2015

2-6 June 2015 Nor Shipping

London

Financing structures, trade routes and technical solutions for the LNG carrier fleet

2-6 March 2015 European Shipping Week Brussels

European Shipping Week will take place over the course of the week of 2-6 of March 2015 and will feature a variety of events. European Shipping Week is intended to be a platform where policy-makers from the main EU institutions will meet and engage with European shipowners and other stakeholders from the shipping sector.

The focus will be on shipping, in all its different aspects.

11-15 March 2015 Europort Istanbul Istanbul

Exposhipping - EUROPORT ISTANBUL 13th International Maritime Exhibition is being organised between 11th and 14st March 2015 at the Istanbul Exhibition Centre on behalf of the IMEAK Turkish Chamber of Shipping with the cooperation of UBM NTSR International Exhibition and Congress Organisations and AHOY ROTTERDAM.

23-25 March 2015 FUJCON FUJAIRAH

FUJCON is the pre-eminent & most prestigious bunker forum for the Middle East bunker markets. The anchor event held during the “Fujairah Bunkering Week”, it has grown to enjoy international recognition and attendance from over 45 countries covering the full supply chain of the bunkering industry.

23-25 March 2015 CMA

Oslo

Nor-Shipping is the leading maritime event week. Its top-quality exhibition, high-level conferences and prime networking opportunities attract the cream of the international maritime industry to Oslo every other year.

23-25 September 2015 INMEX INDIA SMM MUMBAI

INMEX-SMM India is the number one meeting place for the maritime and shipping community in South Asia. The event attracts over 650 exhibitors from around the world including international pavilions from Germany, Singapore, Holland, Norway, Korea, Finland, and The Netherlands.

7-9 October 2015 INDONESIA MARITIME EXPO JAKARTA

IME is the most anticipated exhibition and conference in Indonesia for the world's maritime players. It's where you need to be to connect with 4,105 decision makers, shipowners, shipbuilders and other key players from the maritime and offshore communities to buy, sell and network over 3 days in Indonesia.

27-30 October 2015 Gastech Singapore

One of the world’s largest and most prestigious LNG and natural gas conferences and exhibitions, Gastech, is coming to Singapore in 2015, reflecting the country’s growing strategic importance as a regional hub for the Asian gas market.

2-5 November 2015 IBIA Convention

Stamford

Where experts from around the world speak on many issues that will shape the future of the maritime industry.

Cancun

More details will available soon.

21-3 April 2015 Sea Asia

3-5 November 2015 Europort

"Since its launch in 2007, Sea Asia has firmly established its place in the marketplace as the platform for industry to do business, network and unveil new products and services in the Asia Pacific region.

A record number of attendees in 2013 further reinforced the exhibition and conference as the region’s leading shipping and maritime event, paving the way for another edition in 2015."

From 3 - 6 November 2015 Europort, organised in the world port city of Rotterdam, will be the international maritime meeting place for innovative technology and complex shipbuilding. Europort has a strong focus on special purpose ships including offshore vessels, dredging vessels, construction vessels, naval vessels, workboats, inland vessels, fishery vessels and super yachts. With almost 30,000 professional visitors and 1100 exhibiting companies Europort belongs to the world’s leading maritime meeting places.

Singapore

Rotterdam

19- 21 May 2015 IMDEX ASIA Singapore

IMDEX Asia is Asia Pacific's premier international maritime defence show and a must-attend event in the global naval and maritime security calendar. Comprising of an exhibition, strategic conferences and warships display, the event has gained recognition as a global platform for stakeholders from the military, government, industry and academia to address challenges facing the industry, co-create solutions, and update themselves on the latest trends and technologies.

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16-18 March 2016 Asia Pacific Maritime Singapore

Meet 15,000 decision makers, shipowners, shipbuilders and other key players from the maritime and offshore community in 3 days.

Network, learn industry trends and build brand awareness at Asia’s premier maritime and offshore platform where 1,500 international exhibitors and 16 international pavilions congregate in one single conducive platform.

Asia Pacific Shipping 2015 Spring

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