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THE FIRST BWT SYSTEM TO BESUCCESSFULLY RETROFITTED TO A VLCC

June/July 2014 � TANKEROperator 01

ContentsMarkets� POOLCON B introduced

Profile� Concordia changes direction� EDCIS Ltd’s expansion

Law� STS dispute resolution

Denmark Report� Weathering the storm� Owners opt for chemical/products� Leading designer’s tanker portfolio

Anti-Piracy� West Africa on the agenda

Front cover - For more than eight years, Severn Trent De Nora’s patented BALPURE electrolytic disinfection ballast water treatment system hasundergone extensive testing and received third-party verification for meeting rigorous standards for performance, corrosion and safety. The system is type-approved to meet IMO regulations for ballast water, which was achieved in July 2011 (BSH Germany). In addition, BV Type Approvalwas received in May 2012, ABS Certificate of Design Assessment was received in June 2012, while the US Coast Guard Alternate Management System(AMS) certification was received in April 2013.Type approval applications are also ongoing with other class societies.

BALPURE®

BALLAST WATER MANAGEMENT

Severn Trent De Nora has over 35 years of leadership and expertise in providing electrolytic disinfection treatment solutions. Setting new standards with the Type-Approved BALPURE® ballast water treatment system, we have created a simple, reliable and cost-effective solution for both retrofits and newbuilds.


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04

06

24

23

11

Technology 24 Ballast Water Treatment � Awaiting ratification

� Ballast tank coatings effect

Emissions� Fuel quality addressed� MDT’s new engines

Shiprepair/Maintenance� Improving vessel efficiency� Retrofitting arguments

Efficiency� Monitoring/performance software

Tank Servicing� Cargo overpressure contained� Tank equipment package offered

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TANKEROperator � June/July 201402

COMMENT

All eyes on the Middle East- again

TANKEROperatorVol 13 No 6Tanker Operator Magazine Ltd

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Printed by PRINTIMUSUl.Bernardynska 141-902 Bytom, Poland

Just as shipping analystspredicted a possible turnaroundthe in the large tanker marketlater this year, along comesanother world event that couldcompletely undermine theiroptimism.

We are talking of course of the rapid

deterioration in the situation in Iraq. Although

Iraqi oil is primarily produced and exported to

the south of the country, at the top of the

Arabian Gulf, there is a production area in the

North (Kirkuk), which is connected to the

South via a pipeline - and we all know how

vulnerable that is.

To gauge what could happen to the tanker

market, you only have to go back to the

Iraq/Iran war in the 1980s to see what

devastation any conflict in the Arabian Gulf

might cause.

That well known US commentator T Boone

Pickens said on Friday 13th June (note date)

that the crude oil price could hit $150-200 per

barrel, if Iraqi oil exports are hit. He said that

in the long term there was plenty of oil around

the world and one solution for US consumers

would be to form an energy alliance with

Canada and Mexico.

OPEC opted to maintain its crude oil output

ceiling at its Vienna meeting in June, despite

world tensions over Iran, Iraq and Libya, plus

to a lesser extent, the Ukraine. One analyst

reportedly said that the cartel was ‘happy’ with

Brent trading at around $110 per barrel, which

benefited its member oil producers. However,

global supply was still outstripping demand.

Apart from Iraq, Libya remained in a state

of unrest with output slashed to less than

200,000 barrels per day from a possible 1.5

mill barrels per day by the middle of June.

Iran’s oil output could reach 4 mill barrels

per day in “less than three months” if Western

sanctions are lifted over its nuclear energy

programme, Oil Minister Bijan Zanganeh said

at the OPEC meeting. That compares with

Iran’s current production of about 2.7 mill

barrels per day, according to OPEC’s data.

At the same time as the Iraq crisis was

escalating, BP released its ‘Statistical Review

of World Energy 2013’ in which the oil major

said that global energy demand accelerated

last year but, reflecting the weakness of the

global economy, growth of 2.3% remained

slightly below the historical average.

Within this global picture, however, shifts in

energy consumption mirrored those in the

world’s economic patterns, BP said.

Strong US growthEnergy consumption in the emerging

economies grew below their long-term average

rate, rising by 3.1%, driven by slower growth

in China. However, consumption in the mature

OECD economies grew by a higher-than-

average rate of 1.2% - entirely as a result of

strong US growth. As a result, the gap

between growth in the OECD and non-OECD

narrowed to levels not seen since 2000, BP

said.

Nonetheless, the emerging economies

continued to dominate the growth in global

energy demand, accounting for 80% of growth

last year and nearly 100% of growth over the

past decade.

The review pointed out how geopolitical

events in a number of countries continued to

impact oil production in 2013, with Libya

suffering the largest single decline in the face

of renewed civil unrest.

However, the disruptions were offset by a

big increase in US oil production – driven by

the massive investment in shale and other

‘tight’ formations production. As a net result,

average oil prices remained unusually stable –

albeit at levels exceeding $100 per barrel for a

third consecutive year.

In other words, the disruptions seen last

year were by and large balanced by new

sources of oil and according to BP Group

CEO Bob Dudley: “This underlines the

importance of continuing to secure these new

supplies through continued access to new

resources, policies to encourage markets and

investment and the application of new

technologies worldwide.”

The developments also highlighted the

critical importance of both policy and market

forces in delivering new supplies. As BP Chief

Economist Christof Rühl noted: “The huge

investments seen in the US have been

encouraged and enabled by a favourable

policy regime. And this has resulted in the US

delivering the world’s largest increase in oil

production last year. Indeed, the US increase

in 2013 – up by 1.1 mill barrels per day - was

one of the biggest annual oil production

increases the world has ever seen.”

If Iran is allowed to ramp up exports, if the

US is allowed to become an exporter of crude

oil, if Russian oil eventually flows from the

Arctic and to a lesser extent, if Kurdistan

ramps up oil exports via a pipeline to Turkey’s

Ceyhan Terminal, then the world’s energy

demands could easily be met - but at what

price?TO

INDUSTRY - MARKETS


BIMCO introducesPOOLCON B

agreement formPOOLCON B, the second of two standard pooling agreements for use by tramp pools

operating in dry and liquid bulk trades, was recently published by BIMCO.

This form was developed to provide

a clearly worded basis for

establishing pool arrangements

with resulting economic benefits

and efficiencies for participants and their

customers, the organisation said.

In contrast to POOLCON A, where

participants timecharter vessels into the pool,

which operates as a self-standing entity,

POOLCON B is modelled on widely-used

agency agreements where pool managers act

as vessel operators and undertake commercial

management, BIMCO explained.

However, all contracts for the use, or

employment of a vessel, including charters

under a contract of affreightment (coa), are

fixed by the managers acting as agents on

behalf of pool participants who are, therefore,

principals in contracts with pool

counterparties.

Full account has been taken of competition

legislation, which is largely based on the same

underlying concepts in many jurisdictions.

Nevertheless, provisions, especially

prohibitions, vary between states and regional

economic groupings. Users should therefore

investigate applicable local requirements and

issues, such as market share, market

concentration, structure and turnover before

committing to a pooling agreement, the

organisation warned.

BackgroundAs for the background, in October 2012,

BIMCO published POOLCON (since renamed

POOLCON A) as the first of two specialist

documents setting out the basis for contractual

arrangements between owners participating in

a pool and the pool managers.

Under POOLCON A, the pool is constituted

as a self-standing entity where owners

timecharter their vessel(s) to the pool and the

pool contracts in its own name with third

parties.

However, this is not the only model. Owners’

commercial needs, together with

administrative and practical considerations,

have resulted in the widespread use of agency-

based arrangements where pool managers act

on behalf of participants with participants as

principal in any contract for the use of a

vessel, or carriage of goods.

In response to this need, work was

undertaken to develop a second document to

address the special requirements of agency-

based arrangements. The outcome, POOLCON

B, was adopted at BIMCO’s documentary

committee’s meeting in Copenhagen in

November 2013.

BIMCO said that it was grateful to the

following members for their work in the

development process:

� Francis Sarre (chairman), CMB

INDUSTRY - MARKETS

June/July 2014 � TANKEROperator

(shipowner)

� Stathes Kulukundis, R&K (shipowner)

� Georg Scheel, Nordisk (club member)

� Ms Marjorie Holmes (lawyer -Reed Smith) (adviser)

Competition law is often modelled on the European regime. As with

POOLCON A, the importance of avoiding creating restrictions on

trade has been at the forefront of the working group’s consideration of

the issues. Full account has therefore been taken of EC guidelines on

horizontal co-operation agreements (2011/C11/01), together with

similar regulatory implications in jurisdictions around the world.

BIMCO has also published guidelines as to the provisions set out in

POOLCON B. Basically, it governs the relationship between owners

(participants) entering a vessel(s) into the pool and the pool managers

and regulates administrative and procedural matters covering pool

operations together with the allocation of respective party liabilities

and obligations.

As an agency agreement, there is no timecharter relationship

between participants and pool managers. Nevertheless, in order to

calculate the participants’ entitlement to any share of pool profits, the

Reference Charter listed must set out the basis for determining when

the vessel is deemed to be on hire and periods, such as breakdown,

maintenance, or repairs, when no notional hire accrues.

Pool managers undertake marketing and fixing arrangements, but all

contracts (including individual charters under coas) for employment

are concluded by the managers ‘on behalf of and acting as agents for’

participants. However, additional tonnage chartered in, or chartered

out to meet or supplement pool commitments, is fixed in the

managers’ own name.

As agents, managers should not be exposed to charterers’ claims.

However, to guard against the possible risk of a ‘misdirected arrow’,

participants are required to name the managers as co-assured on their

insurance policies, if possible without liability for calls in the event of

owners’ failure to make payments due.

POOLCON B follows BIMCO’s traditional style, ie Part I contains a

box layout for variable information to be inserted by the parties, while

Part II sets out terms and conditions. Four supporting annexes are

included for pool specific arrangements and a fifth annex, an

Accession Agreement, is designed to facilitate procedures for bringing

new participants into the pool.

GUARDCON GuidelinesFollowing a period of close consultation with the International Group

of P&I Clubs concerning the practical application of the BIMCO

Guidelines on GUARDCON adopted in November 2013, a special

circular was published.

The Guidelines serve as a ‘health warning’ to those owners

contemplating using the GUARDCON contract for the provision of

guard services in the Gulf of Guinea. National law in the affected

countries prohibit foreign security guards from carrying firearms on

board merchant vessels within their territorial waters.

Effectively, it means the owner is required to employ local security

personnel (commonly marine police, or naval personnel) under strict

agreements, BIMCO said.

The Guidelines set out the main issues concerned with the

recruitment of security guards in the Gulf of Guinea and highlights a

number of caveats of which owners should be aware.

Clubs in the International Group of P&I Clubs have issued circulars

to all their members giving further advice regarding approved

amendments to GUARDCON for West African trades.

international expertise

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TO


INDUSTRY - PROFILE - CONCORDIA MARITIME

Concordia Maritimechanges tack

Majority owned by the Stena Sphere grouping of companies, tanker owner Concordia

Maritime is changing its philosophy of locking in vessels on period charters to playing

the spot market.

Primarily set up to own units of the

Stena Group’s tanker fleet 30 years

ago, the listed company has moved

most of its vessels into the spot

market, since coming off their respective

timecharter commitments.

CEO Kim Ullman, who took up office on

1st January this year, explained that with

future prospects looking positive for the

products tanker sector, now was the time to

start following the spot market and not lock

into long term deals at today’s levels.

Today, Concordia Maritime owns 11

tankers. Included in the 11 are 10 P-MAX

types and one Suezmax. In addition there are

two IMO II type MRs under construction.

Thus far, nine of the 10 P-MAX tankers are

operating on the spot market with only one on

timecharter. The Suezmax is operated in the

Stena Sonangol Suezmax pool, also on the

spot market.

In 2010, all the P-MAXes were operating on

long term charters, but today that figure stands

at only one - Stena Paris - which is on charter

to Total.

The spot market P-MAX types are

commercially operated by Stena Bulk (three in

heavy products), Stena Weco (three in light

products/edible oils) and Shell Singapore (two

in light and heavy products). The entire fleet is

ice classed, either 1A, or 1B.

The rationale behind Concordia Maritime’s

thinking on the charter market going forward

is that there will be around 4-5% net increase

in the fleet size per year, given the current

orderbook, but demand is likely to rise by 5-

6% primarily on the back of increased

tonne/miles, as refining capacity moves to the

Middle East and Asia and the world’s

economic recovery gains momentum.

Explaining the difference, Concordia’s open

market vessels generated an average income of

around $16,000 per day, compared with

$13,000 per day TCE for the whole of 2013.

However, the spot market tends to be very

fragile in nature. This led to Concordia

Maritime and other analysts to believe that

activity in the newbuilding market over the

past 12 months indicated a future trend of

lower peaks in the spot market, compared with

the strong years 2007–2008. At the same time,

underlying demand will make the market’s

troughs shallower than those seen, for

example, in 2010–2012.

As well as in Europe, refineries have, or are

due to close in Australia, which gives the

products trades more opportunities for the

import of petrochemicals into areas where

refinery capacity has all but diminished.

Products will be exported from the newly built

refineries in the Middle East, Asia and India.

Vessel conversionsThree of the P-MAXes have been converted

into IMO III types, meaning that they can lift

edible and palm oils and two others have been

prepared for possible future conversions.

Ullman explained that the company would

keep a few P-MAXes in the DPP trades to

give greater flexibility in chartering options.

The P-MAXes were designed for a

deadweight of 65,200 tonnes on a relatively

shallow scantling draft of 13 m but have a

post-panamax beam of 40 m. They are

described as small Panamaxes, or large MRs,

having 30% more carrying capacity than an

average MR.

Ullman recently embarked on a road show

to explain the company’s new chartering

strategy and said that the results of the change

in philosophy would be analysed at the end of

this year before the company embarks on any

more acquisitions.

Concordia is somewhat unique in that the

company operates with only six employees,

based in Gothenburg, Zug and Bermuda. All

of the commercial operations are handled by

Concordia Maritime’s Kim Ullman.

Concordia Maritime and Stena Bulk have 10 IMO2MAX MRs on order at GSI.

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INDUSTRY - PROFILE - CONCORDIA MARITIME


Stena Bulk, Stena Weco, Stena Sonangol

Suezmax pool and Shell. Handling the

newbuilding, conversion, R&D and

procurement is Stena Teknik, while Stena’s

wholly-owned third party shipmanagement

concern Northern Marine Management looks

after the technical operations, management

and maintenance of the vessels.

Stena Bulk operates around 100 vessels

from offices in Gothenburg, Houston and

Singapore to give the company 24-hour world

coverage. The vessels include Suezmaxes,

MRs, Panamaxes, shuttle tankers and coastal

tankers.

Stena has set up a series of joint venture

commercial operating companies, including

Stena Weco, which will operate the MR

newbuilding series, of which Concordia has

two due for delivery later this year/beginning

of next from Guangzhou Shipyard

International (GSI).

At present, Stena Weco, a joint venture

between Stena and Dannebrog, has a fleet of

around 50 MRs and claims to be the world’s

largest operator of tonnage able to carry edible

and palm oils. Ullman explained that Stena

Weco was an expert at triangulation, thus

significantly reducing the tankers’ ballast legs,

by maximising cargo opportunities worldwide.

Stena Bulk’s and Concordia Maritime’s 10

so called IMO2MAX MR newbuildings were

designed by Stena Teknik in conjunction with

the shipyard. They will be fitted with 18 cargo

tanks, able to handle 10 double valve grades

and adhering to the IMO Type II requirement

in that no tank is larger than 3,000 cu m in

capacity. Each tank will be able to carry a full

IMO II cargo.

Their cargo piping systems are constructed

of stainless steel in order to comply with

FOSFA recommendations and the chemical

trades. A Framo deep well hydraulic pumping

system will be fitted, which can be run and

controlled individually and simultaneously. A

nitrogen inert gas system will also be installed.

As for coming up to the charterers’

expectations, Ullman pointed out that while

the number of vetting inspections was

growing, the number of observations per

inspection was falling.

Concordia’s first quarter 2014 results

showed a profit of SEK12.2 mill and Ullman

predicted a final profit for the full year,

buoyed by the sale of two jointly owned ice

class LR1s to a Canadian consortium, which

will be reflected in this year’s second quarter

results.

The decision to sell the LR1s StenaPoseidon and Palva, owned in a joint venture

with Neste, was down to the Finnish energy

giant’s wish to sell certain shipping operations,

resulting in Neste asking to break the charter

agreements, which still had three years to run.

Concordia said that although the market for

secondhand tonnage was rising, the price for

the vessels and the charter contract settlement

terms with Neste were okay, so the decision

was taken to sell the vessels.

The company claimed that the sale was

something of a textbook example. The ships

were ordered on the basis of the customer’s

needs, they were placed on long-term contracts

and gave the company a decent return during

the charter. As a vessel’s value is written down

over the years, when a good opportunity arises,

it enables the company to sell at a profit.

By the end of March this year, Concordia

boasted $465 mill of assets by way of vessels

operating and under construction. Cash and

cash equivalents amounted to $29 mill and

other assets were valued at $30 mill.

� Founded in 1984 by Stena Sphere.

� Listed on NASDAQ OMX Stockholm.

� Stena Sphere owns 52% of the shares and 72% of the voting rights.

� Six onshore employees and 388 seagoing staff.

� Fleet- 10 P-MAX, one Suezmax, two MR newbuildings.

� Commercial partners - Stena Bulk, Stena Weco, Stena Sonangol

Suezmax pool, Shell.

� Technical management- Northern Marine Management.

� CEO- Kim Ullman, formerly CEO Stena LNG, executive vice president

Stena Bulk, managing director Stena Weco, among other posts within

the group.

Concordia Maritime fact file

The P-MAX Stena Perros seen leaving Gothenburg.

TO

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INDUSTRY - PROFILE - ECDIS LTD

Six years of solidgrowth

UK-based training establishment ECDIS Ltd has come a long way sinceits formation in 2008.

About 75% of the company’s

turnover now emanates from

outside the UK and the company’s

original service, generic and type

specific ECDIS training, today only makes up

a small percentage of around 2-3% the

turnover, managing director Mark Broster

said.

He explained that the company now has two

distinct offerings- the training courses and a

simulator construction arm, which includes the

integration of all the sensors needed.

Starting operations with generic and type

specific ECDIS training, the company has

since diversified into bespoke navigation

simulator design and construction for clients

with specific needs, such as tug owners and

ports, as well as shipping companies wishing

to set up their own training facilities.

Simulation and ECDIS/e-Navigation

consultancy and auditing is also undertaken

when requested. One example of bespoke

simulation undertaken was for bridge wing

operations, as distinct from the central bridge

navigation centre.

Also offered is training on board ship where

an instructor will join a vessel and undertake

bridge team management and/or navigation

equipment training, such as with a type

specific ECDIS, plus unofficial navigation

team auditing. Sometimes it proves cheaper

for a company to undertake training on board

a vessel than send their navigators away for a

week to a training centre, Broster said.

He also said that he was looking to diversify

into other training areas, such as for

engineering disciplines, however, he admitted

that recruiting experienced people was proving

to be difficult.

Thus far, the company has undertaken more

than 100 major shipments of simulation

equipment, all of which were manufactured in

the UK. A 360 deg bridge simulator can be

tested, flattened down for transportation and

reconstructed on site in four days. Obviously

this does not include the simulator design and

original construction.

A 3D design department has been set up,

which is responsible for building bespoke

simulation models in great detail by area

mapping, gathering reference points, client

testing and the delivery process.

At its UK training centre (The Enav

Centre), located near Fareham, Hampshire,

which has been significantly expanded

recently, the company offers STCW training

courses, ranging from bespoke bridge team

management, crew resource management,

human element and command assessment.

HELM coveredFor example, MCA required bridge team

training courses at management level on

human element, leadership and management

(HELM) are offered. Other courses are also

offered, including bridge team management

and a bridge procedures and resource

management courses. A bespoke, company

specific bridge team management course is

also offered.

In addition, anti-piracy courses are available

in co-operation with Edson Tiger, which can

involve maritime security operatives

and simulation training packages.

Within the Enav centre are six mini-

simulators in cubicles for ECDIS

skills development, or interactive rule

of the road training, plus a full

mission bridge simulator and various

classrooms and instructor locations.

The reason for IMO mandated type

specific ECDIS training is that there

are around 36 manufacturers whose

equipment may vary considerably.

“While one set of basic instructions

would be the ideal approach to

operating an ECDIS, the horse has already

bolted, so we are here to pick up the pieces,”

the company said at its recent open day.

At the open day, speakers said that there

were up to 50% of Masters who did not

understand an ECDIS and tended to delegate

its use to a junior navigating officer. This is

more often than not an age situation, whereby

a younger person is more likely to be used to

electronic gadgets and not be phased when

faced with a digital navigation tool.

ECDIS benefits outlined by the company

included route planning, which should take

considerably less time when using a system

and the ability to define the safety contours,

that is setting limits on water depth, etc.

Richard North, the UK’s Marine Accident

Investigation Branch (MAIB) technical

manager, said that the accident bureau had

noted recurring themes of inadequate training,

primarily on ECDIS, plus complacency.

“There is an over reliance on aids to

navigation,” he said, mentioning ECDIS, radar

and AIS overlay in particular.

He called for the ECDIS manufacturer’s

handbook to be simplified, as they all tended

to be totally different. The menu structures

should also be standardised, as the various

operating menus were very convoluted and

type specific training was absolutely critical.

“There has to be a balance between

technology and looking out of the window,”

he stressed. The full mission bridge simulator.

The Enav centre includes a Transas ECDIS.

TO

INDUSTRY - LEGAL MATTERS - STS


Withholding vesselSTS approval

rejectedA recent decision by the Court of Appeal will provide reassurance to the tanker

transhipment trade.

The Court of Appeal ([2014] EWCA

Civ 713) considered the issue of

whether owners had acted

unreasonably in withholding their

consent for the use of two nominated VLCCs

in a ship to ship (STS) transfer of crude oil

from another VLCC at the port of Pasir

Gudang.

At first instance ([2013] EWHC 3678

(COMM)), the judge had found in favour of

the charterers, Arcadia Energy Pte Ltd

(represented by Clyde & Co), ruling that the

owners, Falkonera Shipping Co, had acted

unreasonably in withholding their approval.

The owners obtained permission to appeal

this judgment, the hearing of which took place

on 27th and 28th January, this year. Judgment

was handed down on 5th June, 2014 in which

the Court of Appeal upheld the High Court

decision in favour of charterers.

The facts behind this case were that

Falkonera Shipping had chartered the 1991-

built VLCC Falkonera and the VLCC storage

vessels to Arcadia Energy to perform a

voyage, carrying crude oil from Yemen to the

Far East. Charterers nominated two VLCC

storage vessels to receive the cargo at the

discharge port by way of STS transfer.

Owners withheld their approval of the

proposed VLCCs and the cargo therefore had

to be discharged into smaller vessels, which

shuttled between the Falkonera and the VLCC

storage vessels, causing delay. The owners

brought a claim for demurrage. However, the

charterers denied liability for demurrage and

counter claimed for additional expenses

incurred.

The charterparty contained a specific clause

covering STS transfers: "if charterers require a

ship-to-ship transfer operation.... then all

tankers and/or lightering barges to be used in

the transhipment/lightening shall be subject to

the prior approval of owners, which not to be

unreasonably withheld...all ship-to-ship

transfer operations shall be conducted in

accordance with the recommendations set out

in the latest edition of the ICS/OCIMF ship-to-

ship transfer guide (petroleum)."

The charter also contained the standard

clause 8.1 of BPVoy4: “Charterers shall have

the option of transferring the whole or part of

the cargo... to or from any other vessel

including, but not limited to, an ocean-going

vessel, barge and/or lighter... All transfers of

cargo to or from transfer vessels shall be

carried out in accordance with the

recommendations set out in the latest edition

of the ICS/OCIMF Ship to Ship Transfer

Guide (Petroleum).”

AppealThe owners submitted at first instance that

discharging a VLCC cargo by STS transfer

into another VLCC of materially identical size

is not a routine or standard operation and that

it therefore was not unreasonable for them to

refuse approval of the vessels nominated by

charterers, on the basis that they had concerns

about the STS operation itself.

The judge, however, found that their

withholding of approval was unreasonable.

The owners argued on appeal that their

submission was well founded and that the

judge had been wrong to reject it. The owners

also appealed on the grounds that the judge

had misconstrued the STS Lightering clause

by constraining owners' freedom beyond the

simple requirement that they should not

behave unreasonably.

The Court of Appeal agreed with the judge's

findings, in particular holding that:

� While there might be some force in the

proposition that a VLCC/VLCC transfer

was in a sense 'non-standard', it did not

follow that the owners had acted

reasonably in withholding their approval of

the VLCCs. Rather, it was necessary to

consider what particular reasons, if any,

there might be for owners to withhold their

approval.

� The right to transfer was a right to transfer

to any vessel, including a VLCC. The fact

that the proposed transfer could be

regarded as non-standard was not of itself a

reasonable ground for refusal. If that were

so, the charterers' right to perform such an

operation would be illusory. The owners

must be taken to have contractually

accepted such risks as are inevitably

attendant on any VLCC/VLCC transfer.

� What owners were required to approve was

the vessel and not the STS operation itself.

However, owners were not required to

consider the nominated vessel's

characteristics in a vacuum, but in the

context of the operation contemplated.

� The judge had been right to dismiss

owners' submission at first instance that the

OCIMF Guide, in its then form, made no

mention of VLCC/VLCC transfers, and that

such operations were therefore not

permitted by that publication. The owners

had (as the judge had found) "a settled

policy or at the lowest had reached a clear

position that they simply would not allow

such a transfer," supporting the inference

that owners' refusal was based on their

aversion to VLCC/VLCC transfers in

principle rather than any particular

characteristics of the transferee vessel.

� The judge was also right to find that the

owners would not be justified in

withholding approval of the vessels simply

because there was uncertainty as to whether

a suitable plan of operation could be

devised, or indeed whether there was


INDUSTRY - LEGAL MATTERS - STS

sufficient time in which to plan any STS

operation. The required approval, as stated

above, related to the vessel and it was not

the function of the STS Lightering clause

to allow owners to vet the plans for the

transfer operation before deciding whether

to approve that vessel.

� The owners' specific criticisms of the

mooring plan did not make a withholding

of approval reasonable. The judge had

found that the proposed arrangement was

safe in principle and that the absence of

head lines and stern lines was not

something which gave any reason for

concern. Further, owners' concerns

regarding the vertical aspect of the mooring

lines were found to be without foundation.

The appeal was therefore dismissed. The

owners have indicated that they will be

applying to the Supreme Court for permission

to appeal.

CommentIt is worth noting that about a year after the

first instance trial, on 22nd November, 2013 a

new edition of the OCIMF Guide was

published containing a section dealing with

ship-to-ship transfers involving vessels of a

similar length. The Court of Appeal decided

not to admit the new edition in evidence, but it

was noted in a postscript to the judgment that

the Court of Appeal regarded it as

underscoring the judge's decision that the

previous version upon which owners had

relied, did not intend to outlaw VLCC/VLCC

transfers.

The following comment from the Clyde &

Co legal update of July 2013 following the

first instance decision remains applicable

following the Court of Appeal judgment:

‘The Court construed owners'

reasonableness by reference to both the charter

terms and the specific facts of the case.

Although each case will be fact-dependant,

this decision provides useful guidance as to

how the Court is likely to construe similar

contentions made by owners in the future. For

example, an argument that there is insufficient

time to plan the STS transfer as a basis for

refusal to permit a STS transfer is unlikely to

succeed as this is a factor relevant to the

operation itself rather than being relevant to

owners' right to approve the nominated

vessel.’

Owners should be aware that if they do not

act reasonably when considering charterers'

requests to perform STS transfers, they risk

finding themselves in breach of charter. This

case will give comfort to charterers that the

industry practice of VLCC to VLCC STS

transfers is not to be regarded as inherently

suspect, but must be properly considered by

owners on a case by case basis.

It also gives some guidance to owners about

the basis upon which they can and cannot

exercise their right to withhold approval. It

may, therefore, have wider implications for

other situations involving the requirement that

owners act reasonably in relation to their right

to withhold approval for operations that are

apparently permitted (subject only to such

approval) by the charterparty.

*A referewnce to this article apeared in arecent issue of Maritime Advocate and it alsoavailable on Clyde & Co's website. It waswritten by the law firm's Hatty Sumption andPeter Ward.

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INDUSTRY - DENMARK REPORT


Danish fleet expandson the back of

political investmentThe majority of Danish shipping companies appear to have weathered the

storm better than most.

Asympathetic government, flexible

labour relations a very active

maritime cluster involving most

of the segment players are just

some of the driving forces behind Denmark’s

success.

The development of new technology by

Danish equipment manufacturers and

designers has also helped to reduce vessel

operating costs at a time when impending new

regulations threaten to swamp the world’s

shipowners with debt.

The year 2009 was particularly bad for the

Danish shipping industry, however, by the

following year, most of the losses suffered had

been recouped. Record foreign exchange

earnings were posted in 2012 and 2013 of

DKK195 bill and DKK201 bill, respectively,

according to figures produced by the Danish

Shipowners’ Association (DSA).

Shipping industry figures amounted to just

shy of 20% of total Danish exports for those

years and more than 50% of Danish services

export. Thus, shipping continues to be the

largest export industry in Denmark by a large

margin, the DSA claimed.

The ability of Danish shipping companies to

sustain that position can be attributed to the

companies quickly reconfiguring their

business models for lower global growth and

increasing their cost effectiveness, even as the

economic growth did not pick up as forecast in

the second half of 2013 and rates remained at

historical lows across most segments.

This is proof that politics actually does work

and further underscores the need to ensure that

the conditions to conduct maritime business

for Danish shipping companies to maintain

their current position as some of the world’s

most effective shipping companies, the DSA

said.

The Danish merchant fleet has never been

larger. This also applies to the employment in

the industry, both at sea and onshore, in

Denmark, as well as abroad. Almost 80,000

people are working directly in the maritime

industry, nearly 30,000 of them within

shipping. With another 35,000 persons

working in related sectors, altogether 115,000

people are employed in the maritime cluster in

around 11,600 shipping related companies.

Companies relocatingDenmark has been reasonably successful in

attracting shipping companies to relocate to

the country, most notably Swedish tanker

concerns, especially in the chemical sector.

Third party shipmanagement concerns are also

being targeted worldwide and the Danes

recently welcomed Thome Ship Management,

who set up a subsidiary in Copenhagen and

has since signed up its first vessel- a Danish

owned LPG carrier newbuilding.

The establishment of a new business is

claimed to be quick, cost efficient and easy

with online incorporation available. In 2016,

the corporate tax rate will be lowered to 22%

and there are no residency requirements

needed for a company’s management, main

board, or supervisory board.

According to figures produced by the DSA,

After 17 years with NORDEN, of which for almost 10 years he was the as CEO, CarstenMortensen has resigned to take up the position of Group CEO at BW Group.NORDEN’s board said that it is in the process of finding a successor, however, Mortensenwill be available in the interim. He was head of NORDEN during a period when the company has developed into one of thelargest and best operated drycargo and product tanker companies in the world.Mortensen is also the chairman of the DSA.



the size of the Danish flagged merchant fleet

increased from November 2013 to May 2014

in gt terms, however, in dwt, the total was

largely unchanged at 14.7 mill.

Denmark is ranked 16th in the world’s flag

state listing with 420 vessels. For direct

ownership, the country comes in at No 11 with

772 vessels and for vessel operating, Denmark

climbs to No 7 with 1,742 vessels.

The Danish newbuilding programme grew

significantly between November and May with

105 vessels on order in May, totalling 4.7 mill

dwt, compared to 83 in November. Danish

domiciled tanker owners accounted for 40

vessels of 1.44 mill dwt.

Some 25% of the Danish fleet is engaged in

the tanker trades. As of 1st May, 2014, Danish

companies controlled 168 tankers of 4.9 mill

dwt of which four were oil tankers, 93 product

tankers, 70 chemical tankers and one LPG

carrier, the DSA said.

SOx - major concernHowever, there is one major concern on the

horizon for Danish shipping and that is the

question of the SOx regulations. TankerOperator highlighted the DSA’s stance on the

matter in the May issue (see page 2), but since

then, the DSA chairman - NORDEN’s CEO

Carsten Mortensen - has added his weight to

the argument as the association’s annual

general meeting in May.

He said that the authorities were gambling

with both the environment and Danish

competitiveness if they fail to enforce the

upcoming sulphur standards. The rules

governing the use of shipping fuel containing

sulphur will be significantly tightened for

ships in the North Sea and the Baltic Sea from

1st January next year.

Unfortunately, it cannot be taken for granted

that enforcement of the reduction will go hand

in hand with the stringent rules, which will

increase the price of a single trip across the

Baltic Sea by an estimated DKK1 mill in low-

sulphur fuel costs. Only very few ships are

currently subjected to port state controls,

almost none of which include checking the

ships’ fuel, he warned.

‘The Danish shipping industry supports

ambitious environmental legislation, even

when it is financially costly. However, if ships

can continue sailing on traditional, sulphur-

containing fuel at virtually no risk and if the

penalty for discovery is a fine that in no way

matches the savings, some shipowners will

find it hard to resist temptation.

“This poses a huge competitive problem for

Danish shipping companies – and eliminates

the environmental benefit that was the whole

point of the legislation,’ he said.

He thought that Danish shipowners were

already losing long-term contract customers

who were choosing cheaper solutions that

deliberately neglect to take the future sulphur

requirements into account.

The DSA has long been in dialogue with

national and international decision-makers and

authorities. In April, together with other

organisations, such as the Danish Maritime

and the Danish Ecological Council, the

association went to the Danish Minister of the

Environment, Kirsten Brosbøl.

The Minister said that she understood the

industry’s concern and is committed to

working to ensure that the rules are adequately

enforced not only in Denmark but also in the

EU, where many national authorities were

giving the upcoming rules scant attention.

‘We appreciate the government’s

responsiveness when one of Denmark’s biggest

industries raises the alert. However, 2015 is

right around the corner and we are still

seriously concerned that the authorities have

failed to understand the magnitude of the

problem and its tangible consequences in terms

of the environment and Danish shipowners’

competitiveness,’ Mortensen concluded.

Trident Alliance, the shippingindustry initiative for robustenforcement of maritime sulphurregulations, is well on track forlaunch.

At a full-day meeting in Copenhagen on

28th May, hosted by Maersk Maritime

Technology and Wallenius Wilhelmsen

Logistics (WWL), representatives from a

dozen shipping companies negotiated the

basis for the new Trident Alliance.

The companies agreed that the Trident

Alliance will be a coalition of shipowners

and operators who share a common interest

in robust enforcement of maritime sulphur

regulation and are willing to collaborate to

help bring it about. The Alliance will partner

with other groups who share its interest in

robust enforcement, collaborating on

initiatives that support this objective.

The Trident Alliance principles and terms

of reference were agreed. The

representatives also agreed to work towards

the vision of a shipping industry with

effective enforcement of sulphur regulations

to ensure their intended effect is reached and

to eliminate the risk of distortion to the

competitive landscape.

In advance of the meeting, the initiative

received encouragement and support from

the EU's Commissioner for Climate Action,

Connie Hedegaard, along with the Danish

Minister for the Environment, Kirsten

Brosbøl.

"The meeting in Copenhagen was highly

constructive and we all agree that the Trident

Alliance is the right way to handle this

challenge. The public support and attention

we received really added urgency and

focused the discussion. None of us want to

see this evolve into a coffee club; this is an

initiative that will get the work done,”

said Roger Strevens, VP Environment

of WWL. �

Trident Alliance on track forlaunch

A pubic/private partnership hasbeen set up between the DSAand, the Danish MaritimeAuthority and Danish Maritime.

Called Danish Maritime Days, it is an event

that is due to take place between October 6th

-10th. During the week, a series of

conferences, briefings, exhibitions, symposia,

company visits, receptions and dinners will be

held.

At the heart of the week will be the Danish

Maritime Forum, which is due to take place

on 8th and 9th of October, which will bring

together maritime leaders, policy makers and

experts.

The objective will be to focus on the major

global trends affecting the maritime industry,

both short and long term, such as the

changing economic and geopolitical

landscape, new technologies, shifting energy

outlook, environmental pressures and

demographic developments, the organisers

said. �

Danish Maritime Days

TO



Northern Europeantanker capital

As mentioned many times in Tanker Operator Magazine, Denmark is the Northern

Hemisphere capital of tanker operations.

In Copenhagen alone, there are some of

the world’s most influential tanker

owners and operators, especially in the

products and chemical segments, while

LPG/Ethylene carrier operation is another

growing area.

Starting with Maersk Tankers', its fleet of

product tankers is managed under three

different brands: LR2s through the LR2 Pool

with TORM, Handys and MRs through 100%

managed Handytankers and intermediate

tankers through the Swedish tanker company,

Broström, which was acquired in 2009.

Despite selling 15 VLCCs to Euronav for

$980 mill en bloc, Maersk still operates

around 150 tankers through the various pools.

The APM Moller-Maersk subsidiary benefited

from improved market conditions during the

first quarter of this year and posted a profit of

$28 mill, compared with posting a loss of $15

mill in the same period of 2013. The tanker

concern also managed to slash administrative

costs by 17%.

During the quarter, Maersk Tankers firmed

up orders for two more MRs at Sungdong,

bringing the total up to six to be delivered in

2016-2017. The company said that its core

business from now on in the wet trades will

focus on the product tanker market, having

sold its LNG and LPG interests and now most

of the VLCCs.

Thus far, two VLCCs have been delivered

to Euronav and the remaining 13 are to be

handed over starting in the second quarter of

this year through December.

As reported in the May issue of TankerOperator (page 43), a couple of years ago,

Maersk Maritime Technology (MMT)

analysed every vessel owned, which resulted

in the VLCC Maersk Ingrid undergoing tests

to establish how to reduce the fuel bill.

The vessel was fitted with a combination of

so called fuel saving devices, including a VTI

turbocharger, propeller boss cap fins (PBCF)

and ducts. Following several months of trials,

both with and without the enhancements, a

Mewis Duct together with a PBCF was

calculated to give a 6.2% saving. With all the

enhancements fitted and various other

equipment re-configured, including the de-

rating of the main engine, an 8% fuel saving

was claimed.

With the VLCC sailing at an average of

12.5 knots, the return on investment was two

and a half years, MMT said. The in-house

consultancy also advised that it was more

efficient in fuel saving terms to operate a

VLCC at a steady 13 knots, rather than vary

the speed between say 12 and 14 knots.

Maersk Tankers has been incorporated into

a new APM division- Services and Other

Shipping - with a profit target of $500 mill by

2016. The new division is headed by Morten

Engelstoft who took up the reins as CEO on

1st January this year. He was also appointed

CEO of Maersk Tankers, replacing Hanne

Sorensen who was switched to CEO of

Damco, another APM group company.

Services & Other Shipping consists of

Damco, Maersk Tankers, Maersk Supply

Service and towage and salvage concern

Svitzer. Around 65-70% of the latter’s revenue

comes from harbour towage, although the

company said that the area of salvage

preparedness was growing along with pre-

aligned training, standby and response related

services.

Also promoting their core product tanker

businesses are NORDEN and TORM. Both

companies also have drybulk interests,

although TORM’s exposure to the drybulk



trades has been reduced down the years.

Both operate pools, TORM with Maersk and

others, while NORDEN operates the Norient

Product Pool (NPP) with Interorient of

Cyprus, which is commercially operated from

Copenhagen.

NORDEN owns and operates both Handys

and MRs in NPP and similar to other tanker

operators, NPP is switching its chartering

policy to the spot market, as rates rise, rather

than be locked into long term deals. For 2013,

the company reported that its tanker earnings

were 7% above 12-month timecharter rates.

As at the end of last year, NORDEN owned

24 tankers and operated 46 in the range of

37,000 - 53,000 dwt. The vessels’ employment

and commercial operations have been

outsourced to NPP, which at any one time,

could operate up to 75-80 product tankers, of

which 80% are IMO II/III types.

In addition, NORDEN has another six

tankers on order - four in China and two in

South Korea - as part of the company’s $1 bill

plus investment programme, which consists of

37 vessels overall.

NPP’s charterers are roughly split between

oil majors (28%) and traders (72%). By using

the pool method, Lars Christensen, executive

vice president of NORDEN’s tanker division,

said market presence could be increased with a

greater coverage strategy, economy of scale

reduces operating costs, higher vessel

utilisation reduces ballast legs, plus the ability

to cover several geographical markets. He

claimed that these advantages gave the fleet

around 80% laden legs by being able to

operate in all geographical markets.

He admitted that the earnings for first

quarter of this year had been slightly

disappointing due to the warm winter in

Europe. However, he was optimistic going

forward pointing to increased US exports

driven by the shale gas revolution, refinery

closures in Europe and OECD Asia, which is

leading to higher trading levels and the

continued 5% fleet growth, which he

described as “under control.”

Christensen gave an example of jet fuel

being cheaper to refine at Jamnagar, India and

ship to Europe, rather than refine in Europe,

which resulted in a significant increase in

tonne/miles. The Middle East is emerging as a

major exporting hub for refined products, he

said. He also pointed out that today, oil majors

tend to charter vessels of no older than 12-15

years and that vetting of older tankers is

becoming much more stringent.

Supply codeIn 2009, NORDEN and J Lauritzen

collaborated to start a a uniform ‘responsible

supply chain management’ (RSCM) process.

This move was brought about by complying

with the UN Global Compact and UN Guiding

Principles (UNGP). The aim was to create a

Supplier Code of Conduct (SCoC), which

would become an industry standard.

Two years later, the partners sold the

concept to IMPA and it is now called IMPA

ACT. It offers a collaborative programme

between buyer and supplier and is a six step

process. In essence, it is aimed at collaborating

with suppliers to identify impacts on human

rights and to assist the suppliers in addressing

any failures. A database is currently under

development. Thus far, some five to six

suppliers have signed up to the idea,

NORDEN said.

SCoC is aimed at human rights,

environmental protection and anti-corruption

and is claimed to be the first of its kind. It

represents best practice and is aligned to the

UNGPs.

Last year, NORDEN contracted five

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suppliers under the scheme and said it had

received a positive response. The company

intends to engage with five suppliers per year

and a new clause will be inserted in a

supplier’s contract with the company.

Also in 2013, tanker, drybulk and gas

carrier owner J Lauritzen made a strategic

decision to exit the tanker market and

concentrate on its drybulk and gas carrier

operations.

As a result, by the end of the first quarter of

this year, Copenhagen-based newcomer

Hafnia Tankers had taken over the 10 former

J Lauritzen owned MRs, which were sold to

Hafnia in October last year for $305 mill en

bloc.

Following this, the three shuttle tankers

were committed to Knutsen NYK Offshore

Tankers (KNOT) for $191 mill en bloc. They

were due to be handed over between April and

May of this year, once the various approvals

were given.

The Lauritzen MR fleet, both owned and

chartered in, were already operating in Hafnia

Tankers’ sister company Hafnia

Management’s MR pool. Hafnia Management

was set up over three and a half years ago as a

commercial operation concentrating on MRs

and LR1s.

Thus far, Hafnia Management commercially

operates 25 MRs and 28 LR1s. The LR1s are

in a the Straits Tankers pool, which is a 50:50

joint venture operating concern with MOL. It

is the world’s largest LR1 pool, according to

Hafnia Management CEO Anders Engholm.

Members of the MR pool include

Gotlandsbolaget, LGR di Navigazione, Kirk

Shipping and Hafnia Tankers, which now

owns 40% of Hafnia Management. The LR1

pool members include MOL, Marinvest,

Nordic Shipholding, Hafnia Tankers, Tailwind,

Oldendorff Overseas Operations and Reederei

NORDEN’s Handysize Nord Mermaid.



Nord. Marenave is due to join the MR pool

soon and Hafnia USA will be formed based in

Houston by 1st October this year.

Engholm explained that last year, the MR

pool earned $15,000 per day gross to the

owners of the vessels. He calculated that ECO

types commanded an extra $2,200 per day in

2013.

The management operates on a unique net

commission system, which is based on net

earnings (gross freight minus brokers

commissions, port expenses, bunker cost, etc)

whereas other existing pools base their

commisison/fee structure on the actual gross

freight.

This means - based on $15,000 per day

Hafnia Management’s commission is (2.25%

of net earnings + $250 per day per vessel)

$588 per day per vessel, compared to just

under $1,000 per day per vessel charged by

other pools, Engholm said. The pool’s ballast

ratio for last year was 19%.

The first quarter of this year proved to be

disappointing with MRs averaging $13,461

per day and LR1s averaging $15,369 per day,

primarily due to a mild winter in Europe.

However, the operating expenses for the MRs

averaged only $6,500 per day.

He explained that the pool’s net commission

structure gives the manager the incentive to

minimise voyage related costs, whereas other

models focus only on the top line freight.

Engholm also said the the MR pool’s critical

mass is in the region of 50 vessels and the

LR1 pool’s critical mass would be in the

region of 35-40 vessels.

Hafnia Tankers was formed last year out of

Tankers Inc and CEO Mikael Skov emabarked

on a US road show to raise funds for vessel

acquisitions. Since then, nearly $500 mill was

raised, including $235 mill private placement

and funds managed by Blackstone and Tufton

Oceanic, as well as the Hartmann group.

This private placement enabled Hafnia

Tankers to fund the acquisition of J

Lauritzen’s 10 MRs and complete the order for

eight Eco MRs at Guangzhou Shipyard

International (GSI).

In January of this year, Hafnia Tankers

announced the finalisation of the purchase of

the BTS fleet of seven Handysize and two

LR1s in return for shares in the company. This

gave the fledgling company 19 vessels - seven

Handysize, 10 MRs and two LR1s, plus 14

newbuildings - eight MRs at GSI and six

Handysize product tankers at Hyundai Mipo.

The current fleet is technically managed by

Donnelly and Wallem’s Hamburg office.

Hafnia has yet to decide where to place the

technical management for the newbuildings.

Engholm was bullish for the future of

product tankers, due to refineries switching to

the Middle East and closing in Europe and

certain parts of Asia, which will increase

tonne/miles.

For example, the capacity from refinery

closures in Japan, Taiwan and Australia is

expected to be replaced by new capacity in the

Middle East and Asia. The new capacity will

also crowd-out old capacity, resulting in an

increase of refined products transported over

longer distances, hence more tonne/miles of

demand.

The number of newbuilding MRs peaked in

2008-2009, while there is little, or no yard

capacity left before the end 2016. Vessels

coming up to their third (15 year) or fourth (20

year) special surveys will probably be

scrapped, as ballast water equipment will cost

at least $2 mill to retrofit and drydocking costs

will be high, he said.

Each of the pools has a performance

department and each vessel is being tracked by

satellite. The information on vessel

performance is shared with the pool members

through a technical committee.

Gas carriersAs already mentioned, J Lauritzen had decided

to concentrate on the drybulk and LPG

markets. The latter comes under the banner of

Lauritzen Kosan (LK), which operated a fleet

of 13 fully pressurised, 18 semi-pressurised

and 11 ethylene carriers at the end of last year.

There were no newbuildings on order,

although another gas carrier joined the fleet

this year, bringing the total up to 43, of which

29 are owned, or bareboat chartered.

The fleet ranges between 3,000 cu m and

10,000 cu m in capacity. Going forward, LK

said that it will concentrate on fully pressurised

and ethylene markets. Last year’s earnings were

mainly derived from shipping petrochemical

cargoes, such as ethylene, propylene and

butadiene, plus LPG cargoes, including propane

and butane.

Technical management for 39 vessels is

conducted by LK fleet management, while

another four are looked after by Tokyo-based

Star Management. These activities are

maintained at a high level due to the various

regulatory and vetting requirements, including

adhering to TMSA and the CDI regulations.

A performance management department was

formed this year and a LK fuel saving project-

REJUICE is being implemented across the fleet

(see Tanker Operator, May, page 44).

REJUICE was started at the beginning of 2012

in co-operation with DNV.

LK is also co-operating with new Danish

ballast water treatment provider Bawat, by

which the 8,000 cu m ethylene carrier HenriettaKosan is being used to test a BWT system for

IMO approval. LK said that the Bawat

technology was one of several suitable for its

vessels.

Drybulk and tanker concern TORM has

appeared to have weathered the storm that

nearly brought the company to its knees

recently.

It had to take drastic measures just to survive

following the loss of most of its top

management. These included offering its

stakeholders a share in the company to reduce

its exposure.

Although posting a loss before tax of $222

In November 2013, Claus Winter Graugaard joined Lauritzen Kosan as vice president andhead of fleet management.



mill for the first quarter of this year, this figure

included an impairment charge of $195 mill,

which is a non-cash item. This compares with a

loss of $16 mill reported for the same period in

2013 when no impairment charge was

registered.

The tanker division’s operating result (EBIT)

was a loss of $203 mill, which also included

the $195 mill impairment charge.

For this year, TORM has adjusted the

forecasts to a positive EBITDA of $70-100 mill

and a loss before tax of $260-290 mill. The

forecasts were made before any possible further

vessel sales, or impairment charges. In addition,

TORM said that it expected to be operating

cash flow positive after full interest payments.

As at 31st March, 2014, TORM had covered

12% of the remaining tanker earning days in

2014 at $15,337 per day and 60% of the bulk

earning days in the same period at $11,466 per

day.

TORM’s tanker division achieved LR2 spot

rates of $12,415 per day in the first quarter of

2014, which was 13% lower than in the same

period last year. The LR1 spot rates were

$15,579 per day, down by 7% year-on-year and

the spot rates in TORM’s largest segment, MRs,

were at $15,207, which was a decrease of 14%

year-on-year. The one bright spot was the

Handysize spot rates, which were at $15,633

per day- up by 3% year-on-year.

During the first quarter of 2014, TORM

delivered two MRs that were sold in 2013 to

entities controlled by Oaktree Capital

Management. Oaktree has placed these vessels

under TORM’s commercial management in a

revenue sharing scheme and under the

company’s technical management.

Subsequently, TORM sold three LR2 and 10

MRs product tankers to Oaktree with deliveries

scheduled in the second quarter of 2014. Again

Oaktree will place the 13 vessels under

TORM’s commercial control and technical

management.

As of 31st March, 2014, TORM’s owned

fleet consists of 58 product tankers and two

drybulk vessels. Of these, 15 vessels were

classified as assets held for sale.

In addition to the 60 owned vessels, TORM

had chartered-in four product tankers and six

bulk carriers on longer timecharter contracts

(minimum one year) and one drybulk vessel on

a shorter timecharter contract of less than one

year. Another 28 product tankers were either in

a pool, or under TORM’s commercial

management.

Nordic Shipholding Group is another

company to have thus far survived despite

having to deal with mounting debt.

For the first quarter of this year, the group

narrowed its loss before tax to $1.1 mill,

compared to a loss of $2.5 mill before tax in the

same quarter last year.

This was due to lower interest expenses of

$1.3 mill and no contribution in 1Q13 from

Nordic Ruth as she underwent repair and as a

result, was off-hire. Coupled with improved

freight rates, TCE earnings rose 27.9% to $7.3

mill in 1Q14, compared with $5.7 mill in 1Q13.

Nordic Shipholding managed to successfully

refinance its loans, which resulted in its net

finance expenses being lower at $0.8 mill in

1Q14, compared with $2.2 mill in 1Q13.

As at 31st March, 2014, two vessels -NordicHanne and Nordic Agnetha- had been

transferred to two separate wholly-owned legal

entities in Singapore. A month later, NordicAmy, Nordic Pia and Nordic Anne were

transferred to another three wholly-owned legal

entities in Singapore.

Save for Nordic Ruth, a change of technical

managers for five vessels was completed with

Columbia Shipmanagement managing two

vessels and Thome Ship Management

managing three vessels.

On 19th May, 2014, the company’s main

shareholder announced that it had established a

joint venture with BW Group in the product

tanker segment. Nordic Shipholding stressed

that it was not a party to this venture and it was

too early to say whether the company will be

impacted to any extent.

The board said in its report that it was

continually seeking suitable investment

opportunities in the product tanker segment to

grow the company.

Skangass is to undertake the LNG bunkering of the Temtank vessels using STS transfers from an LNG bunker tanker.



One of the original Swedish Donsö based

chemical carrier owners Tärntank Rederi

celebrated its 50-year anniversary in 2008.

However, in order to be able to compete in a

global market, a year later, the company decided

to move to Denmark.

This move enabled the company to compete

at the same conditions as most of the shipping

companies around worldwide. Owner Olle

Kristensson and his family moved to Denmark

and in June 2009, Tärntank was established in

Skagen. In June 2012, a cross border merger

was completed and Tärntank Rederi became

Terntank Rederi.

In April of this year, Terntank acquired the

product tanker Sakarya, which was renamed

Ternvind. She was built 2008 in Daersan

Shipyard, Turkey, is of 11,258 dwt and is a

sister vessel to the Tarnbris. She will be re-

flagged to Denmark and will be chartered in-

house. The fleet now consists of nine product

tankers.

Late last year, the company hit the headlines

by ordering two LNG-powered 15,000 dwt

tankers with delivery in February and May

2016. The order also includes an option for two

more vessels.

With a newly developed Wärtsilä dual-fuel

main engine and an advanced hull design from

Rolls Royce, the new vessels will be able to

meet all future regulations upon their delivery.

The vessels particulate matter emission will be

reduced by more than 90%, NOx by 80% and

CO2 by 35% and the vessels will be built in

accordance with IMO Tier III regulations, the

company said.

“We will be using a large propeller together

with a large main engine that only needs 65% of

the maximum effect to reach a service speed of

14.5 knots. With LNG having a 10 to 15%

better energy value compared to marine gasoil

and with an optimised underwater hull design,

the vessels will have a fuel consumption of

between 13.5 and 14 tonnes per day, compared

to today’s 22 tonnes for existing vessels of

similar size,” said Jens Buchhave, Terntank

Rederi’s managing director at the time of the

announcement.

In order to cope with the higher building cost

for these vessels Terntank is, together with other

parties, working with ports and governmental to

gain a 90% reduction in port costs and fairway

dues.

The two tankers will be powered by a 2-

stroke, low pressure dual-fuel Wärtsilä RT-

flex50DF engine and will mark the first

installations of this new engine (see TankerOperator, November/December 2013, page 24).

The selection of the Wärtsilä RT-flex50DF

engine is a central feature of Terntank’s ’Into the

future - Baltic SO2lution’ project, which is in

response to the European Commission’s TEN-T

2013 initiative whereby ‘Motorways of the sea

actions’ are identified to promote the

sustainability and safety of transport and to

improve either existing, or new maritime links.

This project supports the development of

more environmentally sustainable and energy

efficient shipping in the Baltic Sea region and

the building of an LNG infrastructure, as this

area has been designated an Emissions Control

Area (ECA).

“These newbuild tankers will be among the

world’s most environmentally sustainable ships

and we are very proud of this. With the Wärtsilä

engine technology they are Tier III compliant in

gas mode, which of course means that we can

operate in the Baltic Sea ECA without

restrictions. Moreover, we expect considerable

fuel cost savings. Conventional product tankers

of this size have an average bunker consumption

of 22 to 25 tonnes per day. With these

newbuildings we expect daily bunker

consumption of just 14 tonnes,” said Tryggve

Möller, Terntank board member.

LNG bunkeringThe Norwegian gas distributor Skangass will

deliver LNG to Terntank. The bunker

operation will conducted by ship-to-ship

transfer using the hybrid gas carrier Coral

Anthelia, which will start to operate for

Skangass this autumn, said Roger Göthberg,

sales and marketing manager at Skangass.

Finally, Nordic Tankers operates around 100

double-hull chemical tankers of between 1,500

dwt and 25,000 dwt transporting chemicals,

feedstock, vegetable oil, mineral oil, etc.

Following recent acquisitions, 33 tankers are

fully owned.

Headquartered in Copenhagen, Denmark,

Nordic Tankers has offices in Herning

(Denmark), Riga (Latvia), Golfe-Juan (France),

Stamford (Connecticut, US), Houston (Texas,

US), Bogota (Colombia), Mumbai (India) and

Singapore, the latter two through its pool

partnership with Womar Nordic.

Nordic Tankers was formed by amalgamating

a number of tanker operators, including herning

shipping, Clipper, Wonsild and Copenhagen

Tankers. herning was formed in 1963 and

acquired by the investment fund Triton in 2011.

A year later, Triton also purchased all the

chemical tanker activities from Nordic

Shipholding Group and amalgamated them with

herning shipping under the Nordic Tankers

brand.

As part of the consolidation strategy, some of

the vessels are operated in pools - the Nordic

Tankers 19,000 dwt stainless steel pool and the

Nordic Womar pool operating coated vessels in

the 10-25,000 dwt range. Nordic Tankers

claimed to have a relatively high contract

coverage in the chemical tanker market, thus

balancing the risks in a cyclical and volatile

tanker market.

The company operates stainless steel vessels,

plus MarineLine and epoxy coated vessels.

Technical management of the owned and long

term chartered vessels is handled by Nordic

Tankers and herning. Also some of vessels

operated are technically managed by third party

concerns and commercially managed by Nordic

Tankers.

Nordic Tankers is continuing its policy of

adding to the fleet and on 23rd May took over

the 14,732 dwt chemical tanker Clipper Ann.

She is fitted with 28 stainless steel tanks and has

been renamed Nordic Ann. The 2010-built

tanker was taken over in Houston and will

remain operating in the area under Nordic

Tankers’ technical and commercial management.

Earlier in the same month, Nordic Tankers

took delivery of the Turkish 5,606 dwt chemical

tanker Ayse S. She is an Ice Class 1A tanker

fitted with 12 stainless steel cargo tanks. To be

renamed Nordic Henriette. the vessel has been

registered under Maltese flag. She will undergo

upgrading work at FA Yard in Munkebo,

Denmark and was due to enter service in early

June.

In June, Nordic Tankers announced that it had

just completed the transactions for the

acquisition of the Clipper Mari and the ClipperAki.

The Clipper Mari was taken over in

Brunsbüttel on 4th June, 2014 and has been re-

named Nordic Mari.She is a 2010 Fukuoka-built, 19,355 dwt

stainless steel chemical tanker, ice class 1B,

with 20 cargo tanks.

Clipper Aki was taken over in Houston 10th

June, 2014 and was renamed Nordic Aki. She is

a 2011 Fukuoka-built,14,701 dwt stainless steel

chemical tanker, with 28 cargo tanks.

Both vessels will continue under technical

and commercial management of Nordic

Tankers.

"This completes our acquisition of four

stainless steel chemical tankers in less than three

weeks, strengthening our strong presence in the

higher end of the marked for sophisticated

chemical tankers," the company said in a

statement.

In February of this year, Per Sylvester Jensen

was appointed President & CEO. He replaced

Claus Thornberg who left the company. Jensen

has held senior executive positions with Eitzen

Chemical, Clarkson Shipping Services and

Odfjell. TO



Tanker designstailored for specific

requirementsLeading Danish independent naval architects, designers and marine engineers Knud E.

Hansen (KEH) has down the years put together a portfolio of tanker designs.

These include 6,300 dwt (internal

project) 14,250 dwt, 16.000 dwt

(being re-designed and optimised),

19,999 dwt (pending) and 24,000

dwt IMO II types. The company also offers

designs for IMO I tankers and product tankers,

for example the basic design package for the

Stolt-Nielsen parcel tankers now being built at

Hudong Zhonghua. In addition, the company

can offer tanker designs, either with coated, or

stainless steel tanks.

The KEH design knowhow is based on

many years of experience mixed with very

experienced senior engineers, who were

heading up the design work for the Stolt-

Nielsen tankers. The company’s senior

engineers have been managing chemical and

product tanker projects through their previous

work at Maersk Ship Design, KEH head of

machinery and systems Brian Bender Madsen

explained.

KEH is also working on the design of a

medium size LNG carrier for undisclosed

European interests and has also designed a

14,000 dwt asphalt/black oil/IMO II chemical

tanker powered by LNG for operations in

Canadian waters (St Lawrence River and the

Great Lakes).

The Canadian owner and KEH are currently

awaiting quotes from various shipyards to

build the vessel. This is a continuation of

KEH’s strong market position in Canada, as

the company has been involved in specialised

designs for operating in the St Lawrence and

the Great Lakes. For example, in early 1965,

Ralph Misener commissioned KEH to design

the largest vessel in the fleet and the

company’s first self-unloader. At that time, the

deck mounted self-unloading system was

unique on the Great Lakes, Madsen said.

Taking the 24,000 dwt IMO II type design

as an example, KEH said that the design

method is based on long term experience on

ship design and is undertaken in in co-

operation with leading tanker operators.

Using advanced software tools for

predicting optimum propulsion power, hull

lines, stability, energy efficiency, cargo

capacity, segregations and hull structural

scantlings, KEH claimed to be able to

guarantee a low EEDI.

As an example, the new ultra long stroke 2-

stroke engines have to some extent changed

the way of designing vessels/hulls, as today

the aft part of the vessel is more, or less

designed around the main engine with the

focus on the interaction of propeller geometry

to maintain overall propulsion efficiency.

This design is in compliance with IACS

Common Structural Rules, IBC code and

OCIMF. The vessel is optimised at the lowest

energy consumption for a number of different

drafts/cargo capacities considering optimal

cargo volume, hull structural mass and ballast

tank layout.

An example of a KEH designed tanker in

service is the 6,300 dwt IMO II type chemical

tanker Inge Wonsild, since renamed NordicInge, which was completed in 2005.

The vessel was designed by KEH for

Wonsild & Søn (now part of Nordic Tankers)

as a stainless steel chemical carrier, IMO II

and III, and for oil products, capable of trading

worldwide.

KEH undertook the conceptual and basic

design, including general arrangement, outline

and building specifications, lines plan, speed

and power prediction and verification,

stability, midship section and other structural

drawings.

For optimisation projects, Madsen explained

at Tanker Operator’s recent Copenhagen

conference that for old and bad designs there

are many solutions, as there are for larger

tankers. But for smaller and newer tankers,

there are only a few enhancements that can be

undertaken.

He said that the general characteristics of a

full-form/high block coefficient vessel such as

a tanker are;

� 60-80% of the hull resistance is in the form

of viscous resistance.

� 10-20% can be attributed to wave

resistance.

� 5-10% to hull roughness.

� Up to 5% to air resistance.

The largest areas for improvement here lie in

optimising the hull form (optimising carrying

capacity), applying smooth coatings and

keeping the hull and propeller clean. For

tankers already in operation, hull form

optimisation has very limited applicability.

However, for newbuildings it has a high value,

he added.

Madsen advised owners to quantify the

operating costs of a vessel before embarking

on an optimisation programme. He listed the

operating parameters and approximate costs

for a 300,000 dwt VLCC, plus the savings that

could be accrued -

� Specific fuel consumption at sea = 175

g/kWh

� Specific fuel consumption in harbour = 200

g/kWh

� Power consumption at sea = 22,050 kW/h

� Power consumption in harbour = 500 kW/h

� Days at sea = 295

� Days in harbour = 70

� HFO fuel cost= $650 per tonne

� LSFO cost = $950 per tonne

� Average daily consumption = 92.61 tonnes

� Overall annual cost at sea = $17,757,967

� Overall annual cost in harbour = $159,600

� Total overall annual cost = $17,917,567

� A 2% design optimisation annual saving =

$355,159

� A 6% design optimisation annual saving =

$1,065,478

� A 10% design optimisation annual saving

=$1,775,797

For a 110,000 dwt Aframax, the 2% design

optimisation annual saving would amount to



$224,693; 6% =$674,078 and at 10%=

$1,123,463.

� A 50,000 dwt MR at 2% = $115,970; 6% =

$347,911; 10% =$579,852.

� A 30,000 dwt Handysize at 2% = $86,978;

6% = $217,445; 10% = $434,889.

� A 19,999 dwt Handysize, at 2% = $50,737;

6% = $152,211; 10% = $253,685.

� A small 6,500 dwt design at 2% = $36,241;

6% = $108,722; 10% = $181,204.

Madsen outlined a case study of retrofitting

ducts on six VLCCs. The client needed a

simplified approach with a minimum saving of

5% per vessel with a maximum return on

investment of 12 months. In addition, the

vessels had to remain in service. The

quantified savings equal to 5% was calculated

at $900,000 per year. Other energy saving

devices were considered, but didn’t comply

with the ROI request.

Breaking down the costs involved-

� Duct manufacturer’s design fee =

$175,000.

� Duct’s materials = $500,000 per vessel.

� Project handling = $25,000.

� Finance costs = $20,000 per vessel.

� Total cost per vessel = $555,000.

Model test results had shown an annual saving

of 6-10%, depending on speed and trim.

Fitting a duct on newbuildings would also

be applicable, as could a waste heat recovery

system with a ROI of 12 months.

Another case study looked at a duct retrofit

on a 24,000-30,000 dwt chemical tanker. The

client required retrofits on six vessels with a

minimum saving of 5% per vessel and an ROI

of one year and again, the vessels must remain

in operation.

The amount of saving quantified for a 5%

saving was around $215,000 per year. The

total cost similar to that outlined above would

be $242,000 per vessel. The estimated results

showed a 3-6% saving, depending on speed

and trim and the ROI would fall within the

one year time frame.

Answering the question- why should tanker

owners involve a design house- Madsen said

that KEH’s business model is that it does not

believe in standard vessels, as owners

demands are different even though they are

competing in the same world. Therefore, the

company tailors each vessel design to fit each

specific owner’s requirements.

Historically (before fuel prices became a

game changer), cargo vessels were optimised

for quite a high design speed. For example, for

tankers it was not unusual that they were

optimised for 14 - 16 knots. The selected

speed was for some time only based on

traditions and ‘nice to have’ .

When KEH starts to tailor a vessel for a

specific owner, the company strongly

recommends that the owner collects actual

operational data. This data is a very important

input to find the optimum design speed for a

vessel. Experience shows that in many cases,

the optimum design speed is much less than

the design speed of an owner’s existing

vessels, Madsen said.

With the vessel’s operational profile,

KEH is able to run its unique iterative design

spiral.

The output files define design criteria, such

as :

� General arrangement.

� Cargo layout.

� Cargo tank configuration

� Structural configuration and integrity.

� Machinery configuration analysis.

� Optimum main dimension analysis.

� Initial stability check.

� Vessel overall efficiency.

� Future legislation.

Given the forthcoming SOx and NOx

limitations, owners can gain a big advantage

by renewing their fleet now, Madsen warned,

as many of KEH’s projects show that

retrofitting for compliance for future SOx

limits is very costly compared to fitting same

equipment on a newbuild.

Length, oa.............................................................................163.50 m

Length, bp.............................................................................159.00 m

Breadth, moulded...................................................................27.00 m

Depth to main deck................................................................14.00 m

Displacement..........................................................................31,650 t

Draught......................................................................................9.20 m

Service speed, loaded................................................................15 kn

Delivered power (85% MCR, sea margin 15%)..................6,910 kW

Tank capacities

Cargo................................................................................30,500 cu m

Heavy fuel oil.....................................................................1,000 cu m

Diesel oil................................................................................150 cu m

Luboil.......................................................................................50 cu m

Fresh water............................................................................200 cu m

Ballast water.....................................................................11,900 cu m

Principal Particulars - KEH 24,000dwt IMO II Chemical Tanker

KEH’s 24,000 dwt IMO II chemical tanker design.

TO

INDUSTRY - ANTI-PIRACY


The shipping industry and coastal

countries in West Africa should

increase levels of training and co-

operation to prevent maritime

crime from spreading in the region, warned a

maritime security company.

Nick Davis, CEO of GoAGT, said: “When

there was instability of this type in East

Africa, piracy began spreading rapidly in the

waters off Somalia. Simply put, piracy offered

a viable economic alternative. In West Africa,

the persistent threat to shipping and

infrastructure is widespread, costly, and

dangerously under reported, and with few

barriers to entry other than speedboats,

weapons and desperation, it could spread to

the north.

“The situation demands a co-ordinated

response like the UKMTO and MSC-HOA for

the whole of West Africa. This idea has been

floated for a while, however, the multilateral

naval co-operation that exists between coastal

nations around the world, which has helped

enormously in Somalia, seems to be far from

reality off the West coast of Africa. Countries

in the region don’t seem to be willing to co-

operate, or even agree on a structure for a

reporting system, and this is essential to tackle

maritime crime at source before it becomes a

major problem.,“ he said.

GoAGT has also called for maritime security

to be regulated through an EU wide policy to

avoid a costly plethora of national standards.

Gerry Northwood OBE, GoAGT, COO said:

“At the moment EU member states are

legislating independently and creating an

incoherent patch work of regulations across

Europe for private maritime security services.

Collectively, these are expensive to implement

and this additional cost is inevitably passed

onto the shipping companies.”

His comment follows the recent decision by

a political faction in the Netherland’s House of

Parliament to block the cabinet’s plan to allow

security on Dutch vessels sailing in the waters

off Somalia, where piracy is still a latent threat.

Northwood said: “Just as the EU has

provided a clear and transparent policy for

managing aviation matters across the region,

there is a good case for it becoming more

involved in member states’ maritime transport

policy. The reputable maritime security

companies have good training standards and

flag states therefore have less to fear than they

did when this industry started out back in

2008/09.

“With ISO/PAS 28007, we have an

international standard that distinguishes those

private maritime security companies that are

capable of delivering a professional service.

However, ISO/PAS 28007 still needs to be

broadly adopted as ‘the’ international

regulatory standard, and flag states should start

to recognise this so that there is a uniform

criteria, ” he said.

� Videotel has unveiled a new programme –

Working with Maritime Security Guards –

which was developed in conjunction with

the Security Association for the Maritime

Industry (SAMI) and BIMCO and was

produced in association with Steamship

Mutual.

“There are legal and safety risks associated

with the use of armed guards and so it is vital

to choose a PMSC that offers highly competent

and professionally trained guards who have

demonstrable experience in protecting ships

against pirate attacks,” explained Nigel Cleave,

CEO of Videotel.

“Once the guards are on board they must be

successfully integrated with the crew on both a

personal and a professional level. To reinforce

this message we have used first-hand accounts

from a company security officer (CSO), a

PMSC operations manager and a guards’ team

leader,” he said.

The course provides shipping companies and

personnel on board ship with useful guidance

on how to engage and work successfully with

armed guards, from selecting the PMSC

through to the guards’ disembarkation at the

end of their deployment.

Voices raised incondemnation of

West Africansituation

In the wake of yet another tanker hijacking off West Africa, momentum is gaining to try to sort this problem out.

TO

Guards are difficult to place around the Gulf of Guinea.


TECHNOLOGY - BALLAST WATER TREATMENT

Owners fearful ofBWTS installationsbefore ratification

Although the number of countries needed to ratify the IMO’s Ballast Water Convention

has been exceeded, the total tonnage needed remains short of the target.

Thus far, 38 flag states (30 required)

have signed up to the convention

aggregating 30.38% of the world’s

tonnage. The percentage required

is 35%.

It is now 10 years since the convention was

passed at the IMO. However, there has been

strong resistance to signing up to the

convention due to -

1) An unrealistic implementation schedule.

2) The type approval procedure for a ballast

water treatment system (BWTS) is not deemed

robust enough with shipowners saying that

they cannot reply on type approved equipment

to undertake the task needed.

According to Danish pump and BWT

technology concern Desmi, the

implementation problem was largely covered

by an IMO resolution in December last year.

However, the problem with robust type

approvals still persists, but could be easily

solved, Desmi said. The company said that all

the systems on the market have their

limitations, which mainly concerns salinity, or

temperatures, or UV transmissions, while

some type approved systems will fail under

fairly normal conditions, which could cause

shipowners to suffer expensive detentions and

heavy fines.

Desmi proposed what the company claimed

was a simple, yet effective, solution - IMO

should create and maintain a simple overview

of each type approved systems limitations and

then based on the operational profile of the

vessel, a shipowner can select a system to suit

and which will meet the D2 discharge

standard.

If the problem is not resolved quickly, then

the industry faces the nightmare scenario of a

patchwork of regional legislation, Desmi

warned.

According to Goltens Green Technologies,

once the convention enters into force, some 12

months after it is ratified, a $30 bill retrofit

market will be created, which includes some

13,722 tankers out of a total of 77,768 vessels.

At a presentation in Copenhagen recently,

Desmi explained that in 2009, the company

formed a joint venture to design and

manufacture BWTS with AP Moller-Maersk

and water resource technology concern

Ultraqua. As a result, Desmi Ocean Guard was

formed.

To date, two patented systems have been

developed - OxyClean and RayClean. The

former, designed for extremely challenging

water conditions, received various type

approvals last year, including the first system

to gain a USCG’s alternate management

system (AMS) acceptance in October 2013 for

all salinities.

As for RayClean, IMO and DNV type

approvals were expected in June of this year.

It has also been tested under USCG

requirements and has been designed for use in

fresh, brackish and seawater, the company

said.

Global sales and a service network is

conducted in close collaboration with Desmi

Pumping Technology and though agents in

Greece, Turkey, Singapore, US and Japan.

Despite a slow take up, mainly due to the

convention not being ratified, by the second

quarter of this year business had picked up,

with 16 systems on order and quotes out

valued at more than €35 mill, the company

said.

Desmi CEO Rasmus Folso told TankerOperator that the company was currently

working with a German concern to develop an

X-proof version by the end of this year. The

company has a manufacturing facility at its

base in Aalborg, but could move to China in

the future, he said.

Contamination test� Goltens has signed an exclusive

distribution agreement with Cambridge UK

based BACTEST to sell its portable

contamination test Speedy Breedy into the

ballast water testing market.

Under the agreement Goltens will sell

Speedy Breedy through its global network of

stations to shipowners, BWTS manufacturers,

port state authorities and ultimately the US

Coast Guard.

In anticipation of ratification of the IMO

convention, over 2,000 ships have installed

BWTS and Speedy Breedy is claimed to be

the only instrument on the market that can be

used on ships, or in port, to test for

compliance with the IMO standard for the

three bacteria as set out - Vibrio Cholera, E

Coli and Enterococci.

Commenting on the new relationship,

Goltens Rotterdam managing director Maarten

Jeronimus said “We have been looking for a

product like Speedy Breedy for some time to

complement our BWTS business. Speedy

Breedy is quite unique. We will be actively

promoting Speedy Breedy to both our

customers and colleagues in the maritime

industry.”

BACTEST is a Cambridge UK based

venture backed company, which launched

Speedy Breedy last year. It is claimed to be

the world’s most versatile portable microbial

contamination test kit and weighs only 3 kilos

and is about the size of a bread loaf. It does

not require laboratory conditions, or experts,

to interpret test results, the company said.

Legal minefieldAt the recent Dubai BIMCO annual

conference, ballast water management (BWM)

was one of the main topics on the agenda.

As well as case studies from Wärtsilä, Alfa

Laval and ClassNK, Ince & Co also warned

about crucial contractual issues that owners

should be aware of.

The technical speakers highlighted that the

critical decisions for shipowners were not just

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which type of system they should choose, but

when to invest and implement the system.

It’s clear that during the last 10 years since

the adoption of the convention, development

of the management systems has been rapid –

and that flexibility was a byword – flexibility

both in terms of the capacity that can be

provided and in terms of the space the system

can fit into, which is crucial for retrofits. The

choice of system depends on the type of ship,

its operation and the route of its voyages, the

speakers said.

However, the question of USCG type-

approval remained a clear reason for

shipowners to wait a little longer before

investing. No BWTS has yet been type-

approved by the USCG – as it has only

approved products to the level of an AMS.

As one speaker pointed out, any AMS

installed now might have to be removed, if it

does not obtain final USCG type-approval

when the convention comes into force.

Speakers expected that most owners will

therefore wait to benefit from further

development and invest in a fully approved

system.

Fionna Gavin from Ince & Co gave a

warning to shipowners about the contractual

issues that may arise with upcoming

regulatory requirements. Mrs Gavin said that

many shipbuilding contracts were not detailed

enough in this area, requiring only that a

BWM system compliant with current

regulations is installed – not considering the

differences in the system that might be

required depending on the proposed usage and

route of the new ship.

She also identified an important issue for

the trading limits of timecharters – for

example the decision of when to invest in a

BWTS – to do so before being certain of its

efficiency and USCG approval, or to wait and

take the risk that trade will then be limited

when the ship is no longer in compliance with

regulations?

The example of the past case of the ‘Elli’

and the ‘Frixos’ (The "Elli" and The "Frixos")

[2008] EWCA Civ 584: 23 May 2008) was

shared with delegates, which illustrated this

problem very clearly.

A timecharter stated that the ships were to

be in every way fit to carry crude and/or dirty

petroleum products – and to be in every way

fit for service when the vessels were delivered.

These stipulations were met, but the charter

was still running with 18 months left when

MARPOL was amended, leaving the ships no

longer in compliance for carrying that type of

cargo and not eligible for an extension.

The charterers then found it difficult to

obtain contracts and were forced to do less

lucrative work and in time withheld from the

owners part of the hire that would have been

calculated based on the profits from their

intended type of contracts.

The owners then claimed that part of the

hire, arguing that the charterers were

contractually obliged to ‘restore’ the vessels,

taking any steps necessary to carry dirty crude

under the new regulations.

The charterers won the case, claiming that

the change in regulation meant that a major

refit was required to carry dirty crude – and

therefore it was not a case of ‘restoring’ the

vessel to that condition. Despite an appeal

from the owners, the High Court held that the

vessel should be physically and legally fit

when returned to charter, leaving the owner

liable.

Significantly, no judgement has yet

overruled this and so the session concluded

with a warning that shipowners should not

assume that if a ship has been delivered under

timecharter, they will not need to invest to

move it into future compliance, she stressed.

Mobile BWTSDamen Shipyards Group unveiled its new

mobile BWTS at Posidonia.

The new in-house technology bolsters

Damen’s so called ‘ballast water centre of

excellence’, which advises fleet managers on

total BWT solutions for retrofits and

newbuilds worldwide.

The fully containerised, mobile Damen

InvaSave BWT unit provides shipowners with

a cost-effective alternative to retrofitting fixed

BWTS. In addition, Damen has developed the

world’s first mobile treatment vessel to operate

in ports and support ship de-ballasting

operations.

The first of these customised Damen barges,

fitted with the InvaSave units, is now under

construction for service in the Dutch ports of

Eemshaven and Delfzijl.

Gert Jan Oude Egberink, Damen manager

BWT, said: “We have been looking into what

we can do to help our customers regarding

BWT and finding alternatives for those owners

that may not want to retrofit a BWTS, perhaps

because their ships operate on fixed routes, or

their ships are too old and make the

investment in a system prohibitively

expensive. Ports may also need to provide

back-up, in case a ship’s on board treatment

systems fail.”

As well as avoiding considerable retrofit

investments, the mobile solution means ballast

water only needs treating at the point of

discharge, in contrast to fixed on board BWTS

that also need to treat ballast water at intake.

Damen said that it is able to deliver the

system as a separate mobile container, which

can be put on board, or moved around the port

on a truck. Each InvaSave container unit

handles 300 cu m per hour and is claimed to

be easy to scale up if required by using

multiple container units.

The system has been tested in the

challenging waters of the Wadden Sea and the

IJsselmeer in the Netherlands and is currently

being certified by the Dutch flag state.

“This is all in-house technology and is very

simple to use – essentially it is a plug & play

system in one container,” Oude Egberink

continued. “Vessels only need to have a deck

connection. Using this mobile treatment unit,

owners and operators will be fully compliant

with both the IMO and US regulations.”

He told Tanker Operator; “Our InvaSave

mobile ballast water discharge technology is

aimed at all vessel types that need to comply

with Ballast Water Management regulations.

We can scale up the capacity to match the

need of tankers.”

Retrofit solutionIn addition to its own mobile BWTS, Damen

can also advise on type-approved BWTS for on

board retrofitting, as well as retrofit

engineering and installation. Damen Shiprepair

& Conversion has 16 repair and conversion

yard facilities with 40 drydocks worldwide.

Damen can undertake the on board survey,

3D scans, onsite surveying and pre-

engineering, the integration plan, purchasing,

manufacture the piping, make all the

preparations, do the installation and

commissioning, carry out the trials, plus

provide training and supply the BW

management plan.

“If vessels are coming in for their special

survey when the system has to be installed, we

can do both things at once, providing a turnkey

solution,” Oude Egberink said. “We can install

Damen selected technology, or our customer’s

choice of unit at a Damen, or a non-Damen

yard, or afloat. I think there is no other

company that has this one-stop-shop, with both

the yard and engineering capacity and a vast

knowledge of shipbuilding. We can be the

BWT total solution provider and our customers

have a trusted partner and peace of mind.

“Our One Stop Retrofit Service is also aimed

at tankers. Pending IMO BWMC ratification,

there have not been so many BWT refits in the

market yet. But with the deadlines of USCG

approaching in 2016, many operators are

starting to make their reparations,” he told

Tanker Operator.TO

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USCG CERTIFIED ALTERNATE MANAGEMENT SYSTEM (AMS)



BWTS – potentialeffect on ballast tank

coatings Hempel has circulated an open letter on the possible effect of ballast water management

systems (BWMS) on ballast tank coatings.

Numerous BWMS are being

developed and marketed to meet

the future demands for such

systems according to the BWM

Convention.

Today more than 70 different systems are

commercially available, or under development.

Every BWMS must be type approved by the

flag state (G8 approval process) and further, in

case the system makes use of an ‘active

substance’, an additional approval procedure

(G9 approval process) is to be followed,

whereby the approval is granted by IMO.

The methods for achieving the required

quality of the treatment of the ballast water

differ among the systems and often a

combination of methods is used.

It is virtually impossible for paint

manufacturers to readily assess the possible

influence of all such systems – particularly

those involving chemicals – on the ballast tank

coating systems without detailed information

and maybe testing of each individual BWMS.

The general anticipation, however, is:

� BWMS relying solely on mechanical

treatment (physical separation)

technologies will not adversely affect the

installed ballast tank coating. ·

� BWMS relying on physical treatment

technologies should not adversely affect the

ballast tank coating.

� BWMS using UV light might produce, eg,

ozone, which rapidly reacts with seawater

compounds, or other organic matter. Such

systems may require testing to fully assess

their eventual influence on ballast tank

coating systems.

� BWMS using (generation and) addition of

chemicals to the ballast tank water in

general should be tested for assessing the

compatibility with the ballast tank coating

system.

It is the responsibility of the BWMS

manufacturer to assess the compatibility

between the system and the ballast tank

coating.

Information assisting such assessment is

available in the public domain, but until

recently there was no commonly accepted way

of assessing the potential influence of BWMS

on ballast tank coatings by testing.

Standard testThis changed after MEPC 66 (31st March-4th

Apr 2014), where a standardised test

procedure was agreed with a view to be

employed for BWMS type approvals.

Hempel has carried out such testing of its

ballast tank coatings especially against the

most commonly used active chemical in G9

systems - hypochlorite.

During this testing,

which comprised constant

immersion in hypochlorite

treated seawater at 30 deg

C with weekly addition of

freshly prepared

hypochlorite, damage to

the coating in way of rust,

blister formation,

bleaching, or decrease in

hardness, was not

observed at concentrations

up to 10 ppm of free

chlorine.

Hempel therefore

recognises that BWMS

working solely with

chlorine as an active

ingredient with maximum

concentration of 10 ppm of

free chlorine can be

accepted without further

need for testing of

potential effect on ballast

tank coatings.

This is also in

accordance with IMO

MEPC 64/INF.21

submitted by the

International Paint and

Printing Ink Council

(IPPIC).

Further information about the effect in

ballast tank coating of BWMS using other

active ingredients than chlorine and/or using

chlorine in higher concentrations than 10 ppm

must be provided by the BWMS supplier and

may require further testing according to the

above mentioned agreed test procedures for

proper assessment of the compatibility

between the BWMS and the ballast tank

coating system.

Hempel is available for advising and/or

assisting in carrying out such testing, the paint

manufacturer said. TO

International Registries (U.K.) Limited��

tel: +44 20 7638 4748 | [email protected] | www.register-iri.com

THE MARSHALL ISLANDS REGISTRY

service and quality are within your reach

TECHNOLOGY - EMISSIONS - FUEL QUALITY


Managing fuelquality - meeting

regulatoryrequirements

For shipowners and operators, maintaining fuel quality at a time of tightening regulation

requires a clear understanding of the challenges.*

It’s a hard but inescapable fact that the

quality of marine fuel used across the

world’s shipping fleet has been

deteriorating over many years. This has

largely come about as a result of changes to

the refining process, which have had a serious

impact on fuel quality and consistency.

At the same time, environmental legislation

designed to reduce sulphur emissions is

presenting technical challenges to bunker

suppliers and owners, since both low sulphur

residual fuels and ultra-low sulphur distillates

can exhibit specific problems, which can

potentially cause problems in operation.

Taken together, these changes will have a

profound impact over the next 10 to 15 years

as refinery output shifts towards new fuels and

the next wave of pollution regulations begins

to bite.

Across the maritime industry, the pressure to

increase efficiency, reduce operating costs and

limit environmental impact is bringing vessel

speeds down. The effect of increased costs for

the low sulphur fuels needed to operate in the

ECAs is being felt at the same time as freight

rates remain low for many operators, forcing

the requirement to adopt slow steaming

procedures.

It is now widely understood that slow

steaming can reduce the amount of fuel

consumed during a voyage and at the same

time reduce carbon emissions significantly. A

speed reduction of 20% can lead to more than

30% cost saving on the fuel used and bring a

similar reduction in the amount of CO2

emitted.

Yet against these positives, the primary

disadvantage associated with slow steaming is

that ships’ engines were not always designed to

operate under these conditions for long

periods. The result can be poor combustion in

the engine at low loads, which can reduce

efficiency through a build-up of soot deposits

in the engine and exhaust gas economiser.

Such problems are exacerbated by the

overall decline in fuel quality. When shipping

companies buy fuel from bunker suppliers, the

product they receive is generally a blend of

residual fuels and various cutter stocks. The

suppliers must meet the owner’s specification

and ISO standards for bunker fuel and as long

as the product meets the agreed specifications,

their contractual obligation has been met.

These specifications, however, are not a good

guide to the real quality of the fuel when

presented to the engine or boiler for

combustion.

An unstable blend Because low sulphur residual fuels are today

mostly blended to specification from a residual

source that has gone through a secondary

conversion in a refinery, the fuel’s stability is

in many cases very poor.

A particular problem is the increased

severity of the viscosity-breaking process used

by petroleum refiners to meet the increasing

demand for automotive and aviation fuels. The

blending process can cause severe instability

problems in the fuel, which may not be

apparent immediately, but which can cause

severe problems with asphaltenic sludge in

tanks, filters and from the purifier.

The accepted, mechanical means of treating

fuels on board ship are by settling, separation

and filtration, all of which have a limited

physical effect on fuel combustibility. Fuel

problems that begin in the refining process can

be aggravated during shipping and blending.

For owners who want to protect their

investments, many of these issues can be

solved by chemical treatment, which has

proven to be an economic solution to

improving the quality of the fuel and improve

its properties to a reliable level.

Fuel treatment chemicals can be divided into

three categories, pre-combustion, combustion

and post-combustion additives. The types of

additives available today are sometimes

combinations of these categories, designed to

solve the different problems end users are

experiencing.

The issues discussed above relating to

residual fuel will continue to apply on a global

basis, even after the global sulphur limit drops

to 0.5% in either 2020, or 2025. However,

inside the ECAs, where the sulphur content of

the fuel used can be no more than 0.1% after

1st January, 2015, a more radical change will

take place. Owners face the choice of

WSS’ Jonas Östlund.


TECHNOLOGY - EMISSIONS - FUEL QUALITY

complying with the ECA rules through the use

of distillate fuels, or alternative abatement

methods, such as sulphur scrubbers.

Quality problems when using distillate fuels

are fundamentally different from those of

residual fuels and focus around lubricity,

storage stability and microbial contamination.

Lubricity problems are most likely to happen

in the fuels with a lower sulphur content than

0.1%.

The reduction of sulphur is often blamed for

the problems of lubricity with modern fuels.

But this is not entirely true, as the same

refining process during which sulphur is

removed also removes other natural lubrication

components. This means that fuels with similar

sulphur levels can have different lubrication

properties and sulphur level is not always a

safe indicator for lubricity properties of a fuel.

Most distillate fuels are vulnerable to

degradation through a range of reactions. The

results of this degradation can include colour

change, as well as gum and sediment

formation. These can have a severe effect on

quality during long term storage and can also

induce corrosion of the fuel system.

What is not widely known is that distillate

fuel is treated by the refinery with a stabiliser

to protect it against deterioration for six

months. When the six months have elapsed, the

fuel is more or less unprotected from further

deterioration. Owners should consider carefully

the addition of a multi-function fuel stabiliser

during bunkering, which will add protection

against oxidation, sedimentation, colour change

and corrosion.

Practical solutions Understanding marine fuels at a time when

their regulation and performance are subject to

so much change is an additional challenge to

shipowners already facing higher costs and

pressure to slow steam in order to maximise

earnings.

Given the variable quality of residual fuels

today and the lubricity and storage issues

around low sulphur distillate fuels, there is a

clear need for regular testing and treatment to

ensure that maximum value can be extracted

from the fuel. And it is critical to understand

that many of the problems encountered on

board ship are not related to operation of the

engines, but to the fuels used. This clearly

underlines the need for fuel treatment to be

integrated into the vessel’s maintenance

schedules.

Building on 30 years’ of experience

delivering fuel treatments to the maritime

industry, Wilhelmsen Ships Service’s (WSS)

Unitor FuelPower range applies the most

advanced technologies to make certain today’s

fuels can be used with confidence, regardless

of fuel stability, or slow steaming.

The range for use with residual fuels

includes FuelPower Demulsifier, an updated

demulsifier designed to cope with high water

levels in oil emulsions; FuelPower Conditioner,

a new treatment for unstable and incompatible

fuels, which improves fuel reliability and

FuelPower SlowSteam, a low dosage

combustion enhancer and stabiliser.

To help manage the unique challenges of

distillates effectively, WSS has also developed

a new product range, Unitor

DieselPower, specifically for

this fuel type. A series of

advanced formulations helps to

keep fuels bright, stable and

trouble-free, with fewer

problems resulting in lower

costs in operation.

Summing up, Östlund said

that distillates behaved

completely differently to HFO

and the latter’s quality was

changing for the worse. He

thought that there were four

markets drivers -

� Price, which is increasing

and will

continue to do so.

� Quality, which is declining.

� Regulations, which have

added extra

pressure on

shipowners/operators.

� Market rates - owners and

operators are

earning less money.

And then there is the question

of uncertainty of supply of

distillates and low sulphur

fuels. In total only about 1.8%

of the world’s refined products is used for the

marine industry. Will the refiners be interested

in producing a commodity in low demand,

compared with other products? This could lead

to more use of biofuels, which bring there own

problems to the table.

*This article was taken from a paper writtenby Jonas Östlund, product marketing managerfuel, product management, WSS and from arecent presentation he gave in London.

As well as introducing its fueltreatment offering, WSS alsounveiled its new integratedwelding safety products andservices at this year’sPosidonia exhibition.

Combining the latest Unitor welding

equipment with professional support from

product specialists and on board welding

safety inspections, WSS’ enhanced

welding solutions are perfectly in tune

with the current challenges customers face

while maintaining their vessels, the

company claimed.

Danny Ingemann, business director for

marine products outlined the benefits.

“Maintenance and repair welding on board

ships represents a huge challenge for crew,

as they may have little preparation time,

lack suitable modern equipment and work

in confined, often dangerous spaces.

“As a provider of welding solutions we

can build closer relationships with

customers by offering our equipment as

packages and becoming more involved

with safety inspections,”he concluded. �

Welding safety products

TO

THE FOUNDATION FOR SAFETY OF NAVIGATION

AND ENVIRONMENT PROTECTION

SHIP HANDLING RESEARCH

AND TRAINING CENTRE

ILAWA

Our Training Centre offers you:

SPECIALIZED COURSES IN HANDLING OF

LARGE TANKERS!• Two fully equipped manned models representing

tankers of capacity 150 000 DWT and 280 000 DWT

are available;

• STS operations, approaching SBM and FPSO are

included in the programme;

• Harbour manoeuvres are supported by manned

models of large ASD and tractor tugs.

For further information please contact:

Ship Handling Research and Training Centre,

Ilawa, Polandtel./fax: +48 89 648 74 90 or +48 58 341 59 19

e-mail: [email protected]

www.ilawashiphandling.com.pl

For example - How can we improve

efficiency? Shall we use fuels not

containing sulphur, or remove the

SOx? Shall we meet Tier III by

using selective catalyst reduction (SCR) for

NOx reduction, or exhaust gas recirculation

(EGR) for NOx prevention technology? How

about cold corrosion? Can the new

technologies be retrofitted?

These are just a few of the questions being

addressed to MAN Diesel & Turbo (MDT).

MDT’s Ole Groene explained that the ‘G’

engine series reduces CO2 and the fuel bill by

offering a larger stroke, lower rev/min, the

fitting of a larger propeller, which combined

give a higher efficiency. Thus far, some 600 ‘G’

type engines have been ordered, he said.

As for cold corrosion, Groene said that this

had occurred primarily at low speed operations

in combination with high fuel efficiency

optimising methods.

For NOx reduction, the EGR technology was

recommended for vessels spending some time

trading in ECA areas, while the SCR

technology was considered to be more

advantageous for vessels spending only a short

time within an ECA area. One reference for the

EGR technology was for two 6G70ME-C9.2

engines fitted on board a pair of Chevron

Suezmaxes built by Samsung.

Turning to MDT’s ME-GI type 2-stroke

engine, Groene described this engine as the

only diesel cycle high efficiency 2-stroke dual-

fuel engine. He said that it negates the need to

de-rate the engine, while the engineers do not

have to worry about load ramps, low efficiency,

methane slip, fuel gas quality, ambient

temperature variations, rough seas, or engine

detonations.

Groene also said that all of MDT’s ME

engines could be easily converted to ME-GI

types without loosing power, or efficiency. In

the future, owners will probably use low

sulphur, or flash point fuels, or scrubbers, to

meet forthcoming SOx limits. For example,

engines, such as MDT’s ME-GI, or ME-LGI

types, or SOx scrubbers will be used.

The ME-GI and LGI engines were described

as high pressure dual-fuel diesel engines, which

can run on gas as a fuel. With an EGR, the

engines will be Tier III compliant and will

deliver high efficiency running on gas and/or

fuel.

Low pressure dual fuel engines are gas

engines that can run on fuel. However, they are

not Tier III compliant when operating with fuel

alone but will be when running on gas, or both

fuel and gas, but with low efficiency.

The main difference between the ME-GI and

the ME-LGI engine types is the gas injection

TECHNOLOGY - EMISSIONS - ENGINES


MDT addresses theforthcoming

emissions limits withnew engines

With the countdown to SOx and NOx limits well and truly on, there are

many questions that shipowners are constantly asking.

GAS FUELS USED

Source: MAN Diesel & Turbo.

Gas fuel Supply conditions Supply pressure Supply temperature

LNG NG Gas 300 bar 45 +/- 10 deg CMethane

LEG ethane Gas 600 bar 45 +/- 10 deg C

LPG Liquid 30-40 bar 35 +/- 25 deg C

Ethanol Liquid 8-10 bar 35 +/- 25 deg C

Methanol Liquid 8-10 bar 35+/- 25 deg C



and supply system. Basically, the ME-GI

engine has a high pressure supply system, a

common rail type injection system, a

necessary injection pressure of 300 bar

(methane) and 600 bar (ethane), both ethane

and methane can be used as fuel.

As for the ME-LGI types, these act on low

pressure supply systems, an ME type

injection, necessary injection pressure of 500-

600 bar and they are suitable for methanol,

ethanol, LPG, or DME, as fuel.

ME-LGI fuel properties need to be of a

low viscosity, hence the need to lubricate the

moving parts, the flash point must be below

60 deg C, at atmospheric conditions, LPG

and DME is in the gas phase, while the

injected volume is 60% higher with LPG

when compared to diesel fuel.

Finally, Groene said that even with SOx

and NOx limitations, heavy fuel will not go

away. “Diesel engines will prevail,” he

stressed.

New engines developedThis year, MDT will continue its engine

programme evolution with the new ME-C

engines - the G45ME-C9 and G40ME-C9

types. The liquid gas injection (LGI) engine

type will also be introduced. A new

designation ‘.5’ will be given to all of the

engine types.

As for monitoring engine performance,

MDT has introduced standardised technical

initiatives, which at times are ignored, but are

included in the technical specifications given

to the shipyard. These include:

� PMI autotuning.

� Bearing wear monitoring.

� Main bearing temperature monitoring.

� Water in oil monitoring.

� Liner wall temperature monitoring.

Addressing the problem of cold corrosion,

Groene said that this had occurred primarily

at low speed operations in combination with

high fuel efficiency optimising methods. As

the piston moves down during, or after

combustion, the acid is exposed and attacks

the liner surface. As a result, the cylinder

liner can become worn out after a few

thousand hours.

Not sufficientBN 100 luboils were recommended for newer

engines, as the mid-range luboils were

deemed not sufficient to cope with this threat.

One of the procedures for early detection of

cold corrosion is by establishing the

correlation between the cylinder luboil feed

rate, the residual BN in the drain oil and wear

particles, ie iron, ferrous, etc, in the drain oil.

Diesel engineswill prevail.

“

”Ole Groene, MDT

TO



Last year, Vancouver-basedWaterfront Shipping confirmedthat its methanol carrier projectinvolving a series of 50,000 dwtmethanol carriers, will each bepowered by an MAN B&W ME-LGImain engine running onmethanol.

A Letter of Intent between the two parties

was signed in July last year. MDT officially

designated the ME-LGI engine as ME-B9.3-

LGI.

At the time, Waterfront reported that it was

behind the 2+1 × 6G50ME-LGI engines

ordered by Westfal-Larsen, the 2+1 ×

7S50ME-B9.3-LGI by Mitsui OSK Lines

(MOL), and the 1+1+1 × 6G50ME-LGI

engines with Marinvest/Skagerack Invest.

Hyundai Mipo Dockyard (HMD) will

build the Westfal-Larsen and

Marinvest/Skagerack Invest vessels, while

HHI-EMD, Hyundai Heavy Industries’

engine and machinery division, will construct

the engines. For the MOL contract, Minami

Nippon Shipbuilding will construct the

newbuildings, while Mitsui Engineering &

Shipbuilding (MES) will build the engines.

MDT announced the development of a new

MAN B&W ME-LGI dual fuel engine on 1st

July, 2013. The engine manufacturer

subsequently signed a Letter of Intent – less

than two weeks later – with Vancouver-based

Waterfront Shipping for the use of ME-LGI

engines on board its methanol carriers. The

engines will eventually run on 95%

methanol, ignited by 5% pilot oil.

“Methanol is a sulphur-free fuel and

provides many environmental and clean-

burning benefits. In using methanol-based

marine fuel, we can reduce emissions and

fuel costs at the same time,” said Jone

Hognestad, president, Waterfront Shipping, at

the time of the signing of the Letter of Intent.

A Mitsui 4-cylinder engines was on test in

April of this year at the manufacturer’s

facility in Japan and a field test of one

cylinder on an S50ME-B8/9 engine was

successfully completed the same month.

MDT said that the new engine would be

launched early next year.

The first ME-GI engines ordered will be

fitted on board US shipping company,

TOTE’s two containerships ordered at

NASSCO. The company also has three more

options at the San Diego yard. The vessels

will each be powered by 8L70ME-GI dual-

fuel gas-powered engines. �

Gas engine orders confirmed


TECHNOLOGY - SHIPREPAIR / MAINTENANCE

Improving ship

operating efficiencyQuantifying true ship performance is a very complex, if not impossible task.*

Ships are designed, built and

operated to carry cargo as

efficiently as possible. However,

the desired level of efficiency is

often difficult to achieve during a ship’s

operating life.

The exact causes of the efficiency losses

that occur may be difficult to pinpoint, as there

are numerous contributing factors interacting

with each other.

Traditional methods of monitoring

performance largely rely on data entered in the

ship’s deck and engine logs by officers on

watch. However, these recordings of ship

speed, horsepower, propeller rev/min, slip and

fuel consumption only indicate significant

efficiency losses due to hull and propeller

fouling when there is a significant increase in

propeller slip, or daily fuel consumption.

Since vessel resistance from bad weather, or

deeper drafts can also cause increased power

and fuel consumption, it can be difficult to

isolate the cause of reduced efficiency and to

correct it through hull cleaning, propeller

polishing, or engine tuning.

Today, a performance monitoring system

has to identify the degradation in ship

efficiency and translate this trend or

performance metrics into recommendations for

improving overall fuel efficiency. This paper

attempts to explain some of the issues

involved in developing such a system.

A ship is subjected to wind, waves and

current while in transit. The engine converts

the fuel into propeller torque, which produces

thrust to overcome the resistances and

maintain desired speed. The resistance can

come from the environment as well as rudder

movements and hull and propeller fouling.

The condition of the engine, hull and propeller

can deteriorate over time, thereby requiring

increased power to maintain the same speed.

All these factors, plus the effects of

changing environmental and loading

conditions (draft and trim) are interrelated,

making it difficult to isolate the causes.

Before addressing the question of how to

improve ship efficiency, we need to properly

define efficiency and establish a reasonable

benchmark as the basis for comparison.

Efficiency can be loosely defined as “useful

work done per energy unit consumed.” In

naval architecture, we have:

� Engine efficiency = delivered

HP/fuel consumed.

� Propeller efficiency = thrust HP/delivered

HP.

� Hull Efficiency = effective HP/ thrust HP.

� Propulsive efficiency = engine x propeller

x hull.

During the ship design phase, these

efficiencies are estimated and optimised for a

specific size, service speed and vessel type in

order to configure the size and design of both

engine and propeller. The performance of the

entire ship system is then confirmed during

sea trials and accepted by the shipowner.

SFOC unchangedDuring actual ship operation and loading, the

weather can differ significantly from the calm

and controlled conditions of the sea trials.

However, the specific fuel consumption at

various power outputs should not change

compared to the test results, unless the engine

is out of tune, or the quality and calorific

value of the fuel are in question. As such,

specific fuel consumption is a good metric to

use in detecting degradations in engine

efficiency.

On the other hand, trying to separate the

effects of hull fouling, propeller roughness,

wind, waves, and draft/trim on ship

performance requires extensive

instrumentation. A more cost-effective

approach is to take an aggregate measurement

and compare it with a series of established

benchmarks based on model tests, theoretical

calculations or past records taken at the time

when the hull was clean.

In this case it becomes more interesting to

detect the trends over time rather than the

quantitative values. We now introduce the

following operational efficiency benchmark:

Operational efficiency = actual tonnes permile/baseline tonnes per mile

Operational efficiency is an aggregate

measure of ship performance at a certain speed

and draft/trim, corrected for wind, waves, and

current. Plotting the same metric across the

entire speed range and loading conditions over

time would show the trend in performance

degradation since hull fouling would affect the

ship performance under all these conditions.

To evaluate the effectiveness of weather

routing and speed management in minimising

fuel consumption, we introduce the voyage

efficiency benchmark:

Voyage efficiency = actualconsumed/optimal consumed for the sameloading and schedule.Voyage efficiency is another aggregate

measure of ship performance for a particular

passage. Since weather, current, ship loading

conditions and schedule requirements are

different for each passage, it is necessary to

normalise the performance to the best scenario

one could achieve for the same departure and

arrival times, as well as loading and

environmental conditions during the same

period.

Combining customised ship performance

models with optimisation software, such as

Jeppesen’s Voyage and Vessel Optimization

Solution (VVOS), can help achieve optimised

voyage performance.

*This article was written by Dr Henry Chenwho is a Boeing Associate Technology Fellow,currently employed as chief naval architect atJeppesen Marine. He was formerly thefounder and CEO of Ocean System. whichBoeing/Jeppesen acquired in 2008.

TO

TECHNOLOGY - SHIPREPAIR / MAINTENANCE


During the past few months, MANDiesel & Turbo’s (MDT) PrimeServhead of retrofits and upgradesChristian Ludwig and Jan Jensen,head of retrofit sales, have givenpresentations at different times onthe upgrading possibilities on MDTdiesel engines to save fuel.

For example, fuel savings of between 10-

15% can be made by de-rating the engine, 6%

by refitting a more efficient propeller, 4% by

load load tuning and 2% by using a pressure

mean indicator (PMI) auto tuning device. The

alpha lubricator could also be upgraded. A one

bar drop in pressure could equal between 0.2

and 0.25 g/kWh fuel loss.

PrimeServ has developed what it calls the

EcoCam, which is a low load tuning method for

engines fitted with one turbocharger, aimed at

achieving flexible exhaust valve timing. It is

claimed to be easy to install and easy to

operate. Its operating range is between 10% and

60% of the load.

It is available for MDT’s S50MC-C and

S60MC-C engines and the intention is to roll

the EcoCam out for other engine types at a later

date, MDT said. Testing on an 6S50MC-C8.1

engine at Mitsui’s engine test bed showed that a

payback time of between 6,000 and 12,000

running hours can be expected and savings of

more than 6 g/kWh SFOC for 10% and around

1.75 g/kWh at 60% load

can be achieved.

Another fuel saving

device tested on an

S50MC-C type engine in

Japan in May was a fuel

atomiser optimisation

programme for MDT

engine designs. This is

claimed to be NOx

compliant by class and is

compatible with the

combustion chamber and

the atomisers can be

delivered for the full load

range.

It is scheduled to be

ready for delivery for

selected S50MC/MC-C

engines by the third

quarter of this year.

Following this roll out, it

is expected to be ready

for other engine types by

the fourth quarter of

2014.

The savings claimed

are around 3-4 g/kWh,

while low load atomisers

can deliver savings of

between 2-3 g/kWh. An

atomiser is claimed to be a simple and low cost

retrofit product enabling the crew to undertake

the work involved.

Engine de-ratingAs mentioned on page 45 of the May issue of

Tanker Operator, de-rating the engine can offer

significant savings, but at a cost of €1.3 mill

and once accomplished, the conversion is very

difficult to reverse. The savings can be

increased by the fitting of a Kappel type

propeller, which comes in all sizes and in both

fixed and controllable pitch mode, MDT said.

Various ship type specific studies have been

undertaken, both for optimised and low speed

solutions.

ME engines can also be retrofitted to ME-GI

types. MDT has evaluated indicative costs for

ME-C and MC- C engines ranging from 50

bore to 98 bore (see table above) and has given

examples of the cost breakdown in percentage

terms. By far the largest cost component is the

shipyard work, including the installation, which

will total around 40% of the overall cost

involved.

Making up 25% each are the project

management and the fuel gas supply system,

while the engine retrofit will take up the

remaining 10%.

A major project currently underway is the

retrofitting QatarGas STASCO-managed Q-

MAX LNGCs’ twin 7S70ME-C type engines.

The engines are being replaced by ME-GI

types. The project started around three years

ago as a pilot ABS/MDT scheme.

Retrofitting and upgrading to save fuel

Engine type Components Installation

6S50ME/ME-C 0.83 0.30

6S50MC/MC-C 1.80 0.50

6S60ME/ME-C 0.83 0.30

6S60MC/MC-C 1.90 0.50

6S70ME/ME-C 0.87 0.30

6S70MC/MC-C 1.96 0.50

6K80ME/ME-C 1.12 0.30

6K80MC/MC-C 1.63 0.50

6S90ME/ME-C 1.06 0.30

6S90MC/MC-C 1.75 0.50

12K98ME/ME-C 2.00 0.60

12K98MC/MC-C 3.60 1.00

Indicative prices for engine modifications (Eur mill)

Source:MDT.

TO

Source: MDT.


TECHNOLOGY - EFFICIENCY

SeaEngine will join SeaTrim,

SeaPlanner, SeaTrend and

SeaLogger later this year.

SeaEngine’s performance

monitoring trials are currently underway, the

company said.

At present, each of the modules are being

marketed as an independent system, however,

from this summer, the suite will be offered as

one integrated unit, as well as standalone

software.

SeaEngine is a tool for monitoring and

improving the performance of 2 - and 4 -

stroke engines on board vessels. It includes an

on board data collection software guiding the

engineers through an effective performance test

protocol, taking all the relevant parameters for

engine performance into account.

After submitting the relevant parameters,

data is checked and analysed automatically and

then the performance test results are made

available from a web reporting portal from

where the those ashore can monitor the

performance of each vessel’s engines in detail,

eg a slowly deteriorating performance like

turbocharger efficiency can be traced

In addition to the web reports, a full review

of the engine condition with suggestions for

additional adjustments, or improvements, is

provided quarterly by FORCE Technology’s

team of engine experts.

SeaEngine is currently being tested on board

12 vessels representing different vessel types.

It was developed within a project called EEOS

(Energy Efficient Operation of Ships), which is

partially funded by The Danish Maritime Fund.

This project combines FORCE Technology’s

experience of on board system software

development, theoretical research from the

Technical University of Denmark (DTU) and

operational experience from a group of the

leading Danish shipowners, including

Lauritzen Bulkers, Evergas and Uni-Tankers.

The EEOS project is still ongoing and as an

end product, an integrated, holistic ship

performance monitoring and optimisation

decision support tool -SeaSuite - will be

launched later this year.

SeaSuite will include modules for voyage

optimisation (SeaPlanner), trim optimisation

(SeaTrim), hull and propeller performance

(SeaTrend), the engine performance

(SeaEngine) and a performance data logging

system (SeaLogger).

FORCE

Technology said

that only the latest

engine types are

fitted with

monitoring

systems, so the

majority are not

fitted with

technology, such

as SeaEngine,

thus far.

Today, more

than 500 ships are

sailing with, or

have ordered one,

or more of the

ship performance

systems, the company claimed.

The company is a firm believer that

standalone systems will soon be a thing of the

past. The trend going forward is for increased

data sharing and the utilisation of knowledge

gained from other applications, due to

increasing fuel prices and the technical

advances now becoming available.

The most obvious advantage of data

integration is that the customers is the

enhanced and automated use of cross-platform

data exchange. Officers will avoid having to

note, evaluate ad transfer data manually

between separate systems, as with integration,

this will happen automatically.

Data capturing will have a flexible, but most

often higher, degree of automation built in,

thus making the data feed more consistent,

more frequent and less dependent on the

quality of interpretation by individuals, the

company said in a recent article.

Some 65-70% of the company’s business

now involves retrofitting and optimisation. One

example is FORCE Technology’s co-operative

venture with Becker Marine for the Mewis

Duct development. The company is now the

major test bed for the system. Thus far, about

15 projects have been tested.

The scope of the test incorporates two

phases -

� Optimisation of the pre-swirl fin system

(definition of the final setting angle).

� Subsequent full speed range comparison of

the propulsive performance against the base

case - vessel without a duct fitted.

Thus the results serve as a basis for

confirmation of the predicted power saving

effect.

Based on the above, FORCE Technology

documented the predicted power savings of an

average of 5-6%. A few projects were also

tested in full scale sea conditions both with

and without a duct fitted to verify the power

savings.

On board monitoringand performance

toolsCopenhagen-based FORCE Technology’s suite of fuel saving on board systems is soon tobe increased to five. These modules were designed to maximise fuel efficiency and thus

reduce CO2 emissions.

TOTurbocharger efficiency graph. Source: FORCE Technology.

TECHNOLOGY - TANK SERVICING


Under the terms of this new

legislation, which came into force

in July 2013, all vessels carrying

hazardous cargoes are required to

be fitted with a secondary pressure valve

system to provide backup in the event of a

failure in primary valves to avoid cargo

overpressure.

The consequences of cargo overpressure are

serious. Changes in air pressures during

loading, or unloading, or variations in the

temperature of gases, or vapours, while at sea

can compromise the integrity of the tank,

causing extensive and costly damage. In

addition, there is a risk of fire, or pollution,

where breaches lead to dangerous gases, or

liquids, being released.

The recognition of pressure sensor and alarm

systems, such as PSM’s VentSafe solution, as

an alternative means of protecting cargo tanks

from overpressure offers a fast and cost-

effective alternative for shipowners who need

to modify their vessels to comply with the new

legislation.

Meeting the requirements of both the latest

guidance and the original Solas II regulations

(SOLAS II-2/59.1 1998), PSM’s ict 1000

pressure transmitters offer an economical

retrofit solution as part of the end to end

VentSafe pressure measurement system.

In the UAE, PSM has already assisted one

shipowner to conform with the new

regulations, working in partnership with its

locally-based accredited sales and engineering

partner Tile Marine. Following an initial

survey carried out on an Aframax locally by

Tile Marine, PSM was asked to design and

supply a complete system. An end-to-end

project, including installation, commissioning

and testing, the work was completed in

February of this year.

An initial survey was carried out to establish

the precise mechanical and electrical

requirements for monitoring cargo tank

overpressure in the vessel, providing input as

part of the system specification process.

Individual ict 1000 pressure transmitters

were installed for each of the 12 cargo tanks

and the two slop tanks. These were connected

to a PC in the cargo control room that runs the

VentSafe specific monitoring, display and

alarm software using the transmitters’ integral

Modbus communication system. Providing a

central monitoring station, the PC display

indicates the status of each tank, as well as the

actual pressure in a single co-ordinated source.

Pre-configuredThe PC was pre-configured with the tank

details and descriptions, as well as the four

alarm setpoints required by the regulations. In

the event of a pressure hazard, the system

alerts the crew by issuing local audible and

visual warnings. Where required, optional relay

outputs can be provided for remote alarm

control.

For fully protected submersion, the ict 1000

transmitters are available with a choice of

flanged, or threaded, fittings for installation

direct to the tank top, or piping, into the

Cargo overpressuresolution - a case

studyOne of the latest environmental regulations introduced to affect

tankers is the IACS UI SC 140.*

Pressure transmitter and protective conduitfor the signal cable.

Man overboard safety and rescue is our concern and speciality

Hvaleyrarbraut 3 Hafnarfjordur, IS-220

Iceland Tel: +354 5651375

Main partners:

UK: Energy Marine Ltd. Tel: +44 (0)1525 851234

USA: Marine Rescue Technologies Inc. Tel: +1 772 388 1326

Markusnet Type MS is designed for man overboard recovery on all types of ships, offshore installations and dams with less than 40 metre height from water level upto rescue deck or platform.

Markus Scramble net Type SCN6 is a mobile light weight scramble-net / cradle recovery system for deck vessels and offshore installations with either rail or special fastenings inside bulwark where they are to be used. Less than 1/6 of the weight of traditional scramble-nets.

Markus MOB boat rescue-net is light, quick fastening, takes little space, provides easy and fast method to place the casualty in the net, is soft but firm around the casualty, provides easy lift by one or two persons and is easy to repack after use.

Markus MOB boat rescue-net

Markus Scramble-net

Markusnet Type: MS [email protected] - www.MarkusLifenet.com



TV screen shot of VentSafe.

venting system. The system can accommodate

multiple individual transmitters, with

connection via one data bus to simplify the

installation and reduce cable costs. The sensor

design ensures protection against overload and

shock pressure conditions, while a stainless

steel body provides protection against the

toughest operating conditions.

Providing real-time monitoring, the system

allows seafarers to monitor tank conditions

continuously and make a timely interventions,

unlike secondary pressure systems where

problems are only apparent when the system is

triggered by failure of the primary valve.

Crews are able to observe and acknowledge, or

reset alarm conditions via the PC unit.

The ict 1000 transmitters are designed to be

flexible. Specific changes to setpoints, delays

and hysteresis settings can also be made prior

to installation during factory configuration

where pro-indicated by the initial survey of

requirements and detailed specification

process.

The installation process is simple and fast. as

the connection of the ict 1000 transmitters

requires only one small diameter pressure

connection and electrical cable per tank.

For vessel owners, the appeal of systems

such as the ict 1000 is that it offers a complete

package based on proven and fully approved

equipment designed to conform with the

requirements of many different marine

societies. Their robust design is highly suited

to hazardous areas when installed with the

appropriate RFM safety barriers with

certification to ATEX regulations, PSM said.

Costing up to 80% less than a secondary

pressure relief valve, pressure management

systems offer a practical alternative for fleet

owners struggling with the mounting challenge

of compliance.

� This case study was based on the

installation on board the Bangladesh-

controlled 1997-built Aframax Omera Queen.

*This article was written by Mark Jones, salesdirector, PSM.

Deck area of the Aframax Omera Queen.

TO

Fast, intuitive route planning and navigation monitoring

FMD-3300 [23.1" LCD]FMD-3200 [19" LCD]

�Multifunction display capability, featuring ECDIS, Conning Information Display, Radar/Chart Radar and Alert Management

�Instant chart redraw delivered by FURUNO’s advanced chart drawing engine, making redraw latency a thing of the past

�Task based operation making the ECDIS operation simple and intuitive

�Fast, precise route planning, monitoring and navigation data management

FURUNO provides thoroughgoing ECDIS training:

FURUNO’s ECDIS training programs consist of:

• Generic ECDIS training in accordance with IMO ECDIS Model Course 1.27. Presently, the generic ECDIS training is available at INSTC Denmark only.

• FURUNO type specific ECDIS training. The FURUNO type specific ECDIS training is available at INSTC Denmark, INSTC Singapore and through the NavSkills network of training centers:

• FURUNO Deutschland GmbH (Germany), Thesi Consulting (Italy), GMC Maritime Training Center (Greece), OCEAN TRAINING CENTER (Turkey), RHME/Imtech Marine (UAE), Odessa Maritime Training Center (Ukraine), A.S. Moloobhoy & Sons (India), FURUNO Shanghai (China), COMPASS Training Center (Philippines), VERITAS Maritime Training Center (Philippines) and Pivot Maritime International (Australia).

Please contact INSTC Denmark at [email protected] for further details.

9-52 Ashihara-cho, Nishinomiya, 662-8580, JapanPhone: +81 (0)798 65-2111 • Fax: +81 (0)798 65-4200, 66-4622

www.furuno.com

FURUNO ELECTRIC CO., LTD.

Visit us at:

Hall B6, stand no. 100



Tank equipment product ranges combineScanjet Marine and Scanvent arecombining their product range tocreate what is claimed to be themost comprehensive internal tankequipment package available fortankers and FPSOs.

Scanjet’s current product range consists of

tank cleaning equipment, tank management

solutions, including monitoring, control and

alarm system for cargo and service tanks,

while Scanvent offers a range of VOC

efficient dual nozzle high velocity valves,

suitable for barges up to VLCCs and FPSOs,

plus MSC/Circ. 1324 flame screen upgrade

spares for most existing p/v valves.

The combined product ranges cover all in-

tank equipment bar cargo pumps. The two

companies are already supplying numerous

projects individually to shipowners, such as

JO Tankers and Stolt-Nielsen.

By combining their efforts, they will boost

efficiency and customer services by offering a

single point of contact for the combined

product range, the companies said.

Scanjet’s factory in Sweden will assume

manufacturing of Scanvent p/v valves next to

its tank cleaning machine production line.

The two sales and R&D organisations will

integrate with Scanjet’s sales network

becoming a single point of contact for

customers over the course of the next few

months.

Scanjet has also introduced the latest

addition to its range of tank cleaning

equipment.

It is a water driven portable gas freeing fan,

the SC F150W, which means that the whole

tank cleaning package - fixed, portable and

fans - is available from one manufacturer.

The SC F150W is designed as a high

performance (up to 15,000 cu m per hour),

deep penetration unit suitable for use on all

types and sizes of vessels. It is portable, as it

weighs under 20 Kgs and by using layflat

hoses, this means that it can beset up by one

person.

Fans are presently available from stock in

Sweden, Rotterdam and Singapore and

enquiries should be sent to Scanjet direct, or

via the local agent.

Scanjet’s portable gas freeing fan.

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keeping the course9 – 12 september 2014

hamburgthe leading international

maritime trade fair

53° 33‘ 47“ N, 9° 58‘ 33“ E

hamburg

9 sept environmental protection day

8 sept fi nance day

Pirates, Ports & Policies, what capabilities do we need in the future to secure maritime trade?

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book your conference ticket and get

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Tanker Operator 2014 06 June

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