TANKER OPERATOR MAGAZINE Aug/Sept 2008

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Transcript of TANKER OPERATOR MAGAZINE Aug/Sept 2008

AUGUST/SEPTEMBER 2008 www.tankeroperator.comFeatures:zKGs attract overseas investorszShipmanagement consolidationzHybrid gas carrierzScience of tank cleaningzEquipment fit for purpose?zDischarge requirements examinedTANKEROperator EMS New Building & Projects provides plan approval,design approval, new building supervision and commis-sioning services. EMS Ship Management provides technical and commercial management services. EMS Crew Management provides crew management and training services. EMS Shipping Agencies provide agency, grab leasing and stevedoring services.EMS Ship Management maps the globe with 22 oIfces in12 different countries. Our team of more than 250 people ashore and a dedicated pool of more than 6000 seafarers work towards maximizing your earning potential by takingcare of your assets as our own.At EMS Ship Management we believe in ship management with a ship owners approach and through dedication and innovation we will make a difference.Please logon to: www.ems-shipmanagement.com for further informationShip Management with a ship owners approachEMS Ship ManagementEitzen Maritime Services ASA www.ems-asa.comAt EMS Ship Management- we provide complete lifecycle services for your ships...Shipmanagement New BSM set up explained InterManager wants pay rise Kristen and the environment GL and Ulysses offer softwareCharteringCargo contamination in spot lightTechnology43 Ship descriptionNew gas hybrid47 Gas detectionEnsuring its fit for purpose52 Chemical tanker discharge - should be made easier55 Tank gauging- a new name emerges57 Tank cleaning- the Achilles Heal?SMM Preview This years exhibition is set tobreak recordsAugust/September 2008 zTANKEROperator 01Vol 7 No 8Tanker OperatorMagazine Ltd213 Marsh WallLondon E14 9FJ, UKwww.tankeroperator.comPUBLISHER/EVENTS/SUBSCRIPTIONSKarl JefferyTel: +44 (0)20 7510 [email protected] CochranTel: +44 (0)20 7510 [email protected] SALESDavid JeffriesOnly Media LtdTel: +44 (0)20 8674 [email protected] CheeTel: +44 (0)20 8995 [email protected] and leasebackopportunitiesSpot or timecharter?UKHO profile ENCs will be in place on time German ShippingReview KG schemes face lack of bank funding Tanker owners still expanding Germany attracts overseas players GL and DNV expand academies in Hamburg Training centres re-emerge GL and Lindenau research the breaking point044111SUBSCRIPTION6 months (4 issues)$142 /Eur110 /751 year (8 issues)$237/Eur185 /1252 years (16 issues)$398/Eur310 /210Subscription hotline:Tel: +44 (0)20 7510 4935Fax: +44 (0)20 7510 2344Email:[email protected] cover photo Blenheim Shipping's Aframax StarLady seen recently at Fos. She isone of four sisters, which theLondon-based company outsourcesthe technical management toScinicariello. Another Aframax and twoSuezmaxes are currently under construction.The company also owns drybulk carriers.Printed by FISCHER Poligrafiaul. Dabrwki 1040-081 KatowicePoland6043TANK CLEANINGWe assist Tanker Operators with:x Chemical Tank Cleaning during cargo changeover from DPP to various CPP, CPP to Water White Standard, removal of MTBE residues, Inert Gas Soot, Dye, Veg. Oil etc. x Preparation and assessment of the required tank cleaning x Tank Cleaning Advice and Recommended Tank Cleaning Procedure x Delivery of newly IMO-approved Marine Tank Cleaners from stocks world wide x Delivery of chemical injection and special spraying equipment x Supercargo and Supervision during the cleaning at sea by experienced expertsNAVADAN Hojvangen 13 P.O.Box 35 DK-3060 Espergaerde Denmark www.navadan.com Tel. +45-4917 0357 Fax +45-4917 0657 E-mail: [email protected] IMO-approved Chemicals in accordance with MEPC.1 / Circ.590 1028The bi-ennual fun of rushing headlong throughexhibition halls knocking countless people out ofthe way to make an appointment is nearly upon us.This, as if it would need any introduction, willshortly be SMM week."Bigger, better, more visitors, more stands, more halls" - appear onevery press release. And indeed, ever since your Editor first attendedthe show, which was longer then he cares to remember, it has indeedbecome bigger and better.Fed by the gigantic world orderbook, the equipment suppliers havenever had it so good. In fact, the only worry seems to be how tomanufacture and deliver that piece of equipment on time and within budget.'Where will it all end?' the cynics ask. Will the economic situationcause a slowdown in vessel ordering? But, with most yards hanging the'full up' sign outside until 2011-2012, the suppliers are still sitting pretty.Many have also signed lucrative after sales deals. One manufacturertold TANKEROperator a couple of years ago, that after sales andservice etc accounted for more than 50% of the company's turnover. With all the various rules and recommendations from the manyregulators on the horizon, the equipment industry will doubtlesscontinue to reap the rewards of retrofitting and installing newequipment on newbuildings - ballast water treatment plants being theprime example just now.Like the Greeks highlighted in our June issue, the Germans havebeen major investors in new tonnage, but mainly in box ships.However, the various KG funds have now opened up to other types ofvessels, including tankers.All is not rosy, however, as in what could turn out to be the shape ofthings to come, the German banks have almost ceased lending to KGfund investors, leaving the shipping companies who rely on KG typefunding bereft of investment for their projects. Without the proper finance for these projects, the shipyards willslowly run out of orders, which in turn will have a knock-on effect onthe equipment suppliers. However, this is the 'worst case' scenario. Wedo not appear to have reached such a low point thus far, although themoney men (and women) are warning of 'doom and gloom' next year. There are many problems facing the shipping industry, most notablyoperating costs. Most of them if not all will be discussed at SMM andsolutions found, but havn't we been talking about similar problems formany years to varying degrees?I admit to being old enough to remember slow steaming in the 1970sand 1980s when the price of fuel rocketed, resulting in the NorwegianFjords being awash with VLCCs and ULCCs. It was difficult to getfinance in those days, due to low earnings, leading to negative equity. At the time, some even blamed to banks for the shipping crisis forbeing too free with their money and not undertaking proper creditchecks. We can't accuse them of that in today's credit crunch aftermath. Two problems stand out above all- the perceived lack of experiencedseafarers and the environment. In Germany, positive steps are beingtaken to recruit and train not only seafarers, but also office staff in themaritime field. Environmental issues are also being addressed, mainly by thoseseeking to reduce emissions and the polluting of the oceans, althoughlike many things, opinions vary not necessarily for the right reasons. Will we be in time to address these issues for the better of theshipping industry and even more important- for mankind? Time alonewill tell.The atmosphere at this year's SMM could be rather strange as on theone hand there is still a state of euphoria over the shipping industry'srecent strength and on the other apprehension over what the next year or so will bring.COMMENTWill SMM be the turning point, or will it be business as usual?TOTANKEROperator zAugust/September 2008 02Product tankers in demandIt would seem the consolidation bug has struckthe product tanker industry yet again.Following relatively closely on TORM/OSG's buyout of OMI,Moller-Maersk has shaken the industry with an agreed bid forBrostrm.Interestingly, the offer was formally made through a companycalled Maersk Product Tankers AB, a wholly owned subsidiary ofAP Mller - Mrsk. "The scale of the combined operation will enable us to offer asuperior worldwide service through a large, modern andhomogeneous fleet. We need scale to ensure our organisation is costeffective and for customers to have easy access to chartering officesglobally. "Combining Maersk Tankers and Brostrm's scale with skilled anddedicated employees will further enhance our competitive positionand create the world's leading product tanker company", Sren Skou,Maersk Tankers' ceo said when announcing the deal. Until this announcement, the No 1 position in product tankers washeld by TORM, following the OMI buyout, but with more than 130vessels both owned and long term chartered, the new combinedoperation will claim that title. Maersk also said that the demand for energy transportation wasexpected to continue to grow, which together with the IMO's phaseout of single hull tankers by 2010, underlined the positive businessenvironment for the tanker market. It was in this light that AP Mller- Maersk had previously stated its intention to invest in MaerskTankers as one of the growth areas within the group. Of course, the regulation authorities will have a look at the dealbefore it is allowed to go through, but this will probably be aformality.Once it is rubber stamped, Maersk said it would evaluate how thevarious partnerships and agreements could be integrated into thebusiness structure. One partnership was with Hamburg-based Offen Tankschiffreederei,which was to put eight Hyundai Mipo type 37,000 dwt producttankers into Brostrm's fleet, adding to the eight already operated bythe Gothenburg-based concern. Both companies are in favour of operating in poolingarrangements and this move will no doubt considerably strengthenMaersk Tankers' Handytankers pool. Other pool partners also operate the now standard Hyundai Mipo37,000 dwt type tankers, most notably another Copenhagen-basedoperation, Norient Product Pool, managed jointly by Interorient and Norden. First Class tankers: a new perspectiveTankers are like a work of art the more quality they offer, the more valuable they are. Welcome to GL, your First Class partner in improving the operational safety and profitability of your tankers!Germanischer Lloyd AktiengesellschaftVorsetzen 35 20459 Hamburg, GermanyPhone +49 40 36149-0 Fax +49 40 [email protected] www.gl-group.comTAKINGSERIOUSLYTANKERSSee you at SMM 2008Stand No. 150, Hall B4INDUSTRY - MARKETSTANKEROperator zAugust/September 200804As anybody in the shipping industry can attest, prices for shipping assets have been experiencing their highest levels in recent memory. Sale & leaseback as afinancial tool in freight &credit markets - part 1By Basil M Karatzas*Asset appreciation has been moreaccentuated in the last four years,as Graph 1 depicts for five-year-old tankers - VLCCs, Aframaxesand MRs. The data is provided by the BalticExchange Sale & Purchase Assessment Index(BSPA) for which Compass Maritime Servicesis a panel member. Although the asset appreciation is welcomeby shipowners who have had the good fortuneand perspicacity to acquire assets in time, thereis always the strategic consideration of how theshipowner should be utilising the current stateof the markets by unlocking and deploying thecapital appreciation and optimally positioningthe company for the future.The selective sale of assets (older vintage,lower quality vessels, etc) is one obviousanswer. However, for tonnage built in theearly 1990's, the consideration is ofmaintaining control of the (still modern) assetsin a strong freight market, and keeping accessto tonnage in order to serve strategic accounts(charterers with their own cargoes) andgenerate operating profits.One such approach of unlocking capitalgains that has been successfully employed byseveral shipowners is the sale & leasebacktransaction (SLB), whereas the shipownersells a vessel (a tanker for the purposes of thisarticle) at today's prevailing market rates andsimultaneously taking back the vessel onemployment for a certain period of the time.In such transactions, the shipowner frees upcapital which can deployed in any way theowner sees suitable, optimally by placingorders to renew and replace the fleet, while atthe same time retaining commercial andoperational control of the tanker for a periodof time in a robust freight market.In order for such a transaction to becomefeasible, several parameters are important andnegotiable between the shipowner and thelessee, terms such as the period (short termversus long term) and type of employment(bareboat versus timecharter employment),purchase options, if any, and of course thedaily rate that the shipowner will be paying tothe new owner and lessor. Several otherparameters indirectly affect the transactionsuch as the credit markets and cost of finance(for leveraged leases), type of asset class andassessment of residual risk of the vessel at endof lease, and finally the credit rating of theshipowner (an ex-owner and charterer of thevessel once the transaction has beenconsummated).What type of financial concerns would beinterested in acquiring vessels on such terms?Leasing companies and investment funds thatspecialise in leases due to tax reasons (theycan use depreciation for accounting purposesversus a tax-free shipowner in most cases), forresidual value reasons (in a market movinghigher vessels can have a market value abovebook value and thus offer to the financialowner an attractive return on investment),fixed income reasons (low risk, low rewardreturn) above cost of finance for a creditworthy lessor.From a financial and tax point of view inthe US, leases are categorised as either -a) Capital or finance leases - long-term leases covering more that 75% of the vessel's economic life, with the present value of the lease rental payments constituting 90% of the vessel's fair market value, and whereas the lessee automatically acquires the asset or has the option to acquire the asset at a bargain price. b) Operating leases - which are all non-capital leases (usually short-term leases where the lessee does not have an interest in the vessel after the termination of the lease).There is also the distinction of 'wet lease'versus 'dry lease' [in the former, the lessorprovides crewing (timecharter in shippingterms), in the latter the lessor provides thevessel alone (bareboat charter)]. A couplemore leasing terms to keep in mind are the'net lease' where all costs associated withinsurance, taxes, maintenance are paid by thelessee/charterer, and the 'leveraged lease'where the lessor arranges financing through along-term creditor.Commercial applicationsHaving covered the basic terminology, it'stime to turn to the commercial applications ofleasing in shipping.When negotiating the terms of a sale &Your answer toa low freightrateenvironment andstand downperiodsBP ShipcareThe Professional Lay-up OptionEmail: [email protected]: +44 1932 771571 Fax: +44 1932 771690Website: www.bpshipcare.comTel: +60 87 415277 Fax: +60 87 415330clean seas safe ships commercial successleaseback transaction, the purchase price and the daily rate are usuallythe most contested points. The higher the purchase price the happierthe owner/seller, and the higher the daily rate the happier the lessee.While most asset prices in shipping are quoted basis 'prompt, charter-free delivery', in a sale & leaseback transaction the purchase price issome sort of a function of the daily rate.Usually, the higher the purchase price, the higher the required dailyrate, all else being equal. In other words, the transaction can take place'at market levels', 'below market' or 'above market.'An 'at market levels' transaction is when the purchase price of theasset reflects the sale & purchase market on a 'prompt, charter-freedelivery' basis, and the daily rate is based on the purchase price. A'below market' transaction is when the shipowner sells the vessel atbelow market levels in exchange of a below market daily rate that willallow generation of higher operating profit during the period of thecharter. An 'above market' transaction is when the shipowner sells thevessel at above market levels while the daily rate will be higher thanotherwise (think of this type of transaction as the owner using thevessel as an ATM machine, whereas the sale allows a few milliondollars above market, which of course have to replenished during theperiod of the charter in the form of higher daily rate).An early generation double-hull Aframax built in 1993-1994 ofabout 95,000 dwt was contracted back then for about $40 mill. Intoday's market, 14 years later, such a vessel has a fair market value ona prompt, charter-free basis of about $43 mill. In a sale & leasebacktransaction for such vintage vessel based on such purchase price,originated in 2007, the daily rental rate (bareboat charter to thefinancial owner) was around $15,000 - $16,000 for a decent credit(lowest investment credit) for a five-year term. Assuming the technicalmanagement cost of $8,000 per day, the daily vessel operating expensewas around $23,000 - $24,000. In today's market, while the purchaseprice of such vessel is still within the same range, the required dailyrate is in the region of $18,000 per day to reflect the tighter creditcriteria and higher lending costs in the current financial markets. Thedaily vessel operating expense based on such a sale & leaseback netquote adds up to about $26,000 - $27,000.In Graph 2, we show the charter rates in the last eight years, onbareboat basis, for an Aframax of such vintage. The data was obtainedfrom Clarkson Research Services on a timecharter basis, and adjustedfor the daily operating expense and the utilisation rate to 100%. Wehave shown the one-year and the three-year firm contract daily rate andthe spot rate against the pre- and post-credit crunch average daily ratethat would have been secured for a typical transaction.It is no surprise that in the strong freight markets of this period, withthe exception of an overall anemic 2002 and a couple more short-livedINDUSTRY - MARKETSAugust/September 2008 zTANKEROperator 05www.krohne-skarpenord.comSave time on cargo operationsKROHNE Skarpenord a leadingprovider of advanced taylor mademarine equipment.The CARGOMASTERTank Level Gaugingcombined with our precision cargo tanradar OPTIWAVE 83offers unique beneftanker operators.Redundant level indicationThe OPTIWAVE makes all level calculationslocally. This is unique, as all other systemstransmit raw data for the main computer tomake a level. A potential computer problemwill therefore never cause a stop in cargooperations, as the cargo level is always shownon the integrated display on each unit on deck.Save time on cargo operationsSee us at SMM 23 - 26 sept. 2008Hall B7 - Stand no. 179Tanker Asset Prices (5yr-old Vessels)$0.00$20.00$40.00$60.00$80.00$100.00$120.00$140.00$160.00$180.0016-Sep-0316-Apr-0416-Nov-0416-Jun-0516-Jan-0616-Aug-0616-Mar-0716-Oct-0716-May-08Asset Price (USD mil)VLCC - 5yr oldAFRAMAX - 5yr oldMR PRODUCTS TANKER - 5yr oldGraph 1INDUSTRY - MARKETSTANKEROperator zAugust/September 2008 06soft freight market windows, theshipowner/lessee would had the opportunity totrade the vessel profitably on the spot marketand on one and three year firm contracts andwould had made an operating profit. Ofcourse, the shipowner/lessee would have beenexposed to the market risk of either renewingthe short-term firm employment contract untilfully covering the leaseback term, or risk thespot market. However, in such strong marketsconducive to leasing transactions, there wasthe case in early 2007 when an Aframaxtanker of such vintage could be sold to aleasing company, bareboated back for fiveyears and immediately 'flipped' to a third partyalso for five years (no market exposure) at asmall profit ($1,000 - $2,000 per day).For this article, we have primarily focusedon early vintage double hull Aframaxes, sincethey have been offering the best perspectivesfor such transactions. A post-2000 builtAframax with a purchase price materially inexcess of $60 mill would require a daily rentalrate of around $30,000 for five years, whichwould have made the project unfeasible froman economic/commercial point of view. Ofcourse, the period of the lease can be extendedto more than eight years, among other factors,in order to become workable.The term of the lease and the rest of theparameters will be covered in future articles inthis series, examining the variables and termsaffecting a sale & leaseback transaction.*Basil M Karatzas is managing directorfor projects & finance with CompassMaritime Services, based in New Jersey,US. He has executed projects in the sale& purchase (S&P) sector of the shippingbusiness and has acted extensively onbehalf of operating and financial ownersin originating shipping transactions(sale & leaseback transactions, raisingequity and debt, advisory services onshipping transactions and vesselarrests). He can be contacted [email protected], +201-585-9999, or www.CompassMar.com.Historical Aframax Rates (on bareboat basis)$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,0002000-012001-012002-012003-012004-012005-012006-012007-012008-01Daily Rate (Bareboat Basis, USD / d)Post-Credit Crunch 1YR BBC Equivalent DailyRate 3YR BBC Equivalent DailyRate BBC Equivalent DailyAverage Spot Rate Pre-Credit CrunchTOGraph 2August/September 2008 zTANKEROperator 07INDUSTRY - MARKETSThe old argument as to whether to opt for long term charters or play the spot markethas concentrated some of the finest minds in the shipping industry, usually to no avail.Spot or timecharteryour asset?Upon analysing many fleets'charter exposure it soonbecomes clear that differentmixes of spot and period chartersare used. The ideal fleet mix will gain the bestresults if the peaks of both spot and period aretaken advantage of. However, traditional market spikes arebecoming more uncertain and short termmarket hikes more common, making the jobof shipping planners more complicated andmaking it more difficult to predict marketbehaviour at any given time.US consultancy McQuilling Services hastried to analyse the period charter market. Byplacing a vessel on period charter an ownerwill be protected from the current high bunkercosts, while at the same time provide a steadyincome.On the other hand, period charters preventan owner from maximising potential earningsby taking advantage of a strong spot marketand triangulating opportunities. McQuilling said that its analysis showedthat the timecharter market is at timesdriven by the spot market, but is also has its own driving factors. For example,when the spot market is on the rise, theperiod market tends to follow and the spotmarket earnings stimulate an increase inperiod rates. When the spot market is falling, theperiod market will only fall to a certainbenchmark and it will not sink any further,regardless of what the spot market does.During this phenomenon, the period market rates will remain higher than theweak spot market earning for over a year at a time. McQuilling found that a VLCC fixed for 12months in December 2006 would havegenerated higher earnings than if left on theSome of the units we repair are:HERMetic UTImeter Gtex Standard & ChemicalHERMetic UTImeter Rtex Standard & ChemicalHERMetic Dip 2, UTI, UTI GT3 (GTIII) Standard & ChemicalFor all your UTI (Ullage - Temperature - Interface detector) repairs please contact or ship instruments to:Web site: www.pylonelectronics.comEmail: [email protected]: (902) 468-3344Fax: (902) 468-1203Pylon AtlanticA div. of Pylon Electronics Inc.31 Trider CrescentDartmouth,Nova ScotiaCanada, B3B 1V6Pylon Atlantic is an authorized service center for Tanksystem productsINDUSTRY - MARKETSTANKEROperator zAugust/September 2008 08spot market for the same period. Owners are attracted to the spotmarket by VLCC rates that could result in over $250,000 per day in TCE earnings. The consultant said that it had noticed spikes in a non-traditional timeof the year, which is making the spot market an even more attractiveoption. If owners are able to take advantage of these spikes, then thespot market would be a much more lucrative proposition than theperiod market. However, not all owners will have vessels in place atthe right time. The decision on whether to opt for the period or spot market isalso dependent on financing structure, company policy, marketlevels, among many other factors. In a simple observation ofhistorical market earnings, some conclusions may be drawn.McQuilling said. For example, in the Suezmax market, earnings have been clearlyhigher in the spot market compared with the one year timechartermarket since January 2005. Furthermore, if triangulated, thesevessels earned even more. In the smaller tanker sector, the immediate picture lookedsomewhat different. In the MR sector, the market had favoured 12months timecharters for the last two years. However, twoobservations should be noted - the Singapore/Japan 30,000 tonnelifting drags down the average spot earnings and triangulation wasnot taken into account, despite being an essential part of MRoperation. Notwithstanding this, the 12 months charter rate has beenabove $20,000 per day for the last two years and thereby providedhealthy earnings for most of that period. Turning to longer period, McQuilling said that placing a vessel ina three year or longer charter is becoming even more complex. Therewere simply too many future unknowns that are almost impossible topredict.For example, the operating costs were expected to increase withinthe general line of inflation including commodities, labour andadministrative costs. However, the cost of the shrinking number ofseafarers was forecast to increase at a much higher rate, thus drivingthe operating costs upward. Even if owners are increasingly trying to regulate escalation costsinto their calculations for period charter earnings, future operatingcosts remain an enigma and therefore diminish the attraction of longterm charters, McQuilling warned.The 12 month MRcharter rate has beenabove $20,000 per dayfor the past two yearsaccording toMcQuilling [email protected] [email protected] provides uncompromised quality asmanager for international investment consortiaof which Skagerack Invest is the largest.www.marinvest.seMarinvest specializes in largerproduct tankers and has designed,contracted and supervised thebuilding of the Marinvest classLR1, ICE class 1A, product tankers.Marinvest will take delivery of a further pair of ICE 1A, LR1 producttankers completing a series of six ICE classed environmentally friendlymodern product tankers with focus on flexibility.Marinvest manages seven existing vesselstransporting all types of refined petroleumproducts plus easy chemicals and vegetable oils.Marinvest has since 2004 a productive and mutually rewarding cooperation with SiriusRederi, a shipowning company from Dons with the same focus as Marinvest on quality.INDUSTRY - UKHO PROFILETANKEROperator zAugust/September 2008 10HOs confident of having official ENCs in placeFollowing the official launch of theAdmiralty Vector Chart Service(AVCS) earlier this year, the UKHO'schief executive Mike Robinson saidthat the organisation was verycomfortable with its progress."The sales have exceeded our expectations"Robinson said. The UKHO is continuing withits policy of offering three-month triallicensing periods and thus far about 30 vesselshad taken advantage of the offer. Feedbackhas been positive but like any new initiative,there have been some teething troublesrequiring some fine tuning of the service. Negotiations are still underway with Chinaand other countries with a view to having asmany electronic navigational charts (ENCs)available as possible by the end of this year ina bid to cover most of the world's largest ports(see TANKEROperator, May, page 36).While inconsistencies in chart informationare the same whether an ENC or a paper chartis being used, in the case of ENCs it becomesmuch more apparent to the mariner because onECDIS adjacent ENCs are displayed togetheron screen, whereas paper charts are normallyused one at a time. The problem is highlightedwhere ENCs overlap due to sensitive politicalboundary type issues, this affects ENCs in anumber of areas around the world, although itsimpact on the mariner depends to some extenton which ECDIS is fitted. Another difficulty in producing a trulyharmonised ENC dataset is that underlyinghydrographic data could have come fromsurveys of different eras resulting indiscontinuities at survey boundaries -especially where there is a mobile seabed.The UKHO said that it is determined toreduce the problems that inconsistency causesthe mariner by working closely with otherhydrographic offices (HOs) and by appropriateapplication of its compilation expertise.The organisation stated that the ENCs hadto be at least as good as the paper chartscurrently used, "Users have come to expectaccurate data from the UKHO", Robinsonsaid. The UKHO is working with other (HOs)to ensure that the information issued by theTaunton-based organisation meets rigorousstandards for accuracy and provides themariner with the most appropriatenavigational picture. Regarding the recent IMO NAV54recommendations; a consensus was reached ona mandatory carriage requirement for ECDISstarting in 2012; this will be put to the nextMaritime Safety Committee (MSC) meeting.The HOs believe they will have adequate ENCcoverage and consistency by 2010 and thatpricing levels will have reduced by then. Extratraining within STCWwill be needed to ensurethat all navigators have the necessary skills touse ECDIS safely and effectively.The NAV54 recommendations were basedaround papers submitted by Norway and theUK. After much debate it was agreed tankersof over 3,000 gt and passenger vessels of over500 gt would be the first ship types to befitted with ECDIS starting in 2012 for newhulls, with cargo vessels of over 3000 gtfollowing in 2013. If these recommendations,which include retrofitting of existing tonnageby 2018, are adopted by MSC then this wouldmean around 60% take up of ECDIS acrossthe board, Robinson thought. "ECDIS is thebest method of navigation going forward. Thestarting gun was fired at NAV54," he added. The onus is now on HOs to produce theENCs and ECDIS manufacturers to producethe systems. The UKHO is also looking toadd layers to the ENCs so that otherinformation that could be integrated into anECDIS to support activities, such as passageplanning and voyage execution. Digitisinginformation, rather than relying on the paperformat would provide greater flexibility in useof the data and was therefore the ultimategoal, the organisation said. Second phaseThe UKHO is in what it called a second phaseof discussions with OEMs regarding theimplementation of its plans. Given the leadtimes necessary it is hoped to be able todemonstrate 'front of bridge' operationsometime next year.Also under discussion at the IMO wasENavigation. This new concept could meanthe provision of totally integrated services,including digitised port information runningon the navigators' and masters' workstationsand aimed at 'front end navigation'.One thing is certain, that when the use ofECDIS becomes mandatory in 2012 or later,depending on its adoption and ratificationperiod, ENCs will have to be provided byGovernment approved HOs, so quite wherethis leaves the commercial vector dataproducers is not yet clear. However, the capacity to produce ENCscould be a problem in the near future for somenations, and so the UK, along with other statesinvolved in hydrographic work, is offeringassistance and training in producing ENCs,working through bi-lateral agreements andsharing technical experience.Nations that are signatories to the SOLASconvention are obliged to ensure provision ofhydrographic services and when ECDIS ismandatory this will include ENCs. TheInternational Hydrographic Organisation(IHO) encourages all states, which havenavigable waters to recognise thisresponsibility. Nations can meet theirobligations either by developing their owncapability, or through agreement with anotherstate to provide these services on their behalf.The IHO said recently that its goal was toimprove the level of hydrographic servicesthroughout the world by capacity building, atheme supported by the UKHO. The IHOdefined three phases in the development of anational hydrographic capability as the core tothis strategy. 1) Focus on the need to recognise their national responsibilities for the provision of hydrographic services and to initiate the collection and dissemination of marine safety information. The first stage is essential in order to maintain existing charts and publications to enable safe navigation. 2) The provision of advice and training assistance to support the creation of basic hydrographic surveying capability.3) Support further development of a national hydrographic service, including such capabilities as paper chart production, ENCs and nautical publications. Underpinning the IHO initiative is a four-stepprocess - awareness, assessment, analysis andaction. The organisation said that byproceeding in such a co-ordinated manner, thecapacity building strategy will over time helpHOs worldwide to develop appropriate levelsof hydrographic capability. UKHO ceo Mike Robinson.TOGermany's seemingly insatiableappetite for newbuildingscontinues, especially in the moretraditional German liner sector.Despite spiralling newbuilding costs, theinterest continues to be fuelled by the 'KG'fund schemes, whose liquidity shows no signof abating. However, the more traditional Germanfinance houses will no longer look atspeculative deals, but rather seek a shippingproject with a charter attached for cash flowreasons resulting in some of the KG fundinvestors finding finance harder to come by. During the past few years, the KG fundmanagers have looked at other projects awayfrom the traditional containerships and haverecently endorsed almost all types of tankers,including gas carriers; offshore support vesselsand even a drilling rig. This has attracted moreoversees players to Germany, either in jointventures with established German players, orby setting up shop on their own. To take advantage of KG type finance, acompany must have an operational base inGermany and more contentiously, if theGerman flag is being considered, then thevessel owner/operator must employ a masterwho is fluent in German marine law. A successful German tonnage tax regimewas introduced in 1999 and to keep it goingfor the foreseeable future, the authorities haveasked that German-based owners ensure that500 vessels will be under the German flag bythe end of this year. This means an extra 70-100 ships will need to register in the comingmonths, a fact not lost on the GermanShipowners Association (VDR), or itsmembers.The attraction of Germany and in particularHamburg, as well as other centres, such asLeer and Bremen, is that maritime clustershave been built up that clearly work. According to figures produced by theHamburg Metropolitan Region, in Germanythere are 440 shipping companies operatingaround 3,300 vessels totalling around 67 millgt. Of the owning companies, more than 200are based in the Hamburg area. There are alsomany overseas company subsidiaries locatedin the German coastal cities.Within the next three years, according tofigures produced by the VDR, there will beanother 1,300 vessels delivered into theGerman-controlled fleet, which will put astrain on crewing resources and training. At arecent German Maritime Conference adecision was made to support the nauticaltraining locations in the coastal states byexpanding their capacity.Greek interestsOne example of an overseas concern settingup shop in Hamburg is Hellespont. Theleading Greek-based tanker owner andmanager relocated part of its operations,including the shipmanagement to Hamburg ina joint venture to take advantage of the KGfinance system. As a result, Hellespont Hammonia GmbH& Co KG was formed, which is 50% ownedby Hellespont, 25% by shipowner PeterDoehle and 25% by KG emission house HCI Capital. Apart from full day-to-dayshipmanagement, the Hamburg office isresponsible for manning, insurance, repair &maintenance, purchasing, operations,husbandry, accounting and chartering. Since the German arm first commencedoperations out of Peter Doehle's offices,Focus on GermanyBanks pull the plug on KG fundingAugust/September 2008 zTANKEROperator 11INDUSTRY - FOCUS ON GERMANYFocus on GermanyTANKEROperator zAugust/September 2008 12INDUSTRY - FOCUS ON GERMANYHellespont has built up a considerablepresence, both in terms of ships and of people.Today, the company has six crude tankers(five Suezmaxes and one Aframax), six LR1coated product tankers and three recentlypurchased IMO II chemical tankers. Not stopping there, the company orderedanother eight IMO II chemical tankers and sixplatform supply vessels for delivery betweenthe end of this year and the middle of 2010.All have been ordered through KG financingschemes.The company's ceo Christian Freiherr vonOldershausen said that Hellespont hadearmarked its eight 17,000 dwt IMO II epoxycoated newbuilding chemical carriers for apool operation. "It (a pool) creates a certainstability of earnings and the KG fundinvestors now understand this concept," he said.Despite the 'credit crunch', vonOldershausen said that there was still anappetite among investors for shippingprojects, but the trick was to find the rightproject. "Investors appetite for shippingequity has not diminished. The problem isfinding a project that yields an acceptablereturn as newbuilding prices have gone uptremendously," von Oldershausen said. The escalating cost of newbuildings hassqueezed margins. In addition, the Germanfinance houses that lend to the KG investorshave become more discerning as have theinvestors themselves. From Hamburg, Hellespont technicallymanages all of the fleet under new managingdirector Captain Matthias Imrecke. CaptainAndrew Lidgard was also recently recruited tomanage the offshore fleet, also operating outof the Hamburg office. For crewing purposes,Hellespont has a small stake in ManilaShipmanagement & Manning Inc.Hellespont hopes to employ its first cadetsin August of this year as due to the number ofnewbuildings, the company needed to grow itsseafarer pool. The company is alreadyachieving 92-93% seafarer retention andclaimed to have a large officer pool. The company recently moved out of partnerPeter Doehle's offices on the Elbchaussee to amore central location as more space wasneeded. Another reason was to be near themajor banks, broking houses, laywers etc thatabound in the centre of Hamburg, vonOldershausen explained. To cope with the fleet expansion, four teamshave been set up in the office to look after thecrude, product, chemical and offshore sectors.Von Oldershausen admitted that the chemicalcarriers required more attention due to theirspecialist nature. A dedicated health and safetyofficer will be appointed soon. Around the same time that Imrecke wasrecruited to head up the technical managementteam, former head Spyros Vlassopoulos whohad spearheaded Hellespont's start in Germanywent back to Piraeus to take charge of thecompany's commercial activities, to strengthenthe relationship with charterers and sub-charterers.As for the current fleet, two of the three13,100 dwt chemical tankers in the fleet areworking the spot market, while the third islong term chartered to Vitol trading in Asia.Von Oldershausen described the chemicalcarrier market as "disappointing" in the firstquarter of this year. However, it picked upslightly in the 2Q08. He expected a "rough period" until the endof next year when, "..in line withexpectations of market participants thingsshould pick up again. In the meantime thereare a lot of newbuildings coming on stream,"he said.The six Panamax LR1s are timechartered toSanko for seven years and are operating in theproduct market sector. Four of the fiveSuezmaxes and the Aframax are also longterm chartered to the Japanese operator. The remaining Suezmax -Hellespont Trust -is chartered to Heidmar and is operating in itsSuezmax tanker pool. Sister HellespontTrader is also operating in Heidmar'sSuezmax pool having been sub-let fromSanko.Hellespont ceo ChristianFreiherr vonOldershausen receives acommemorative plaquefrom Father Apostolos onthe occasion of theblessing of Hellespontsnew Hamburg premises.Investors appetite for shipping equity hasnot diminished. The problem is finding a projectthat yields an acceptable return as newbuildingprices have gone up tremendously.Christian Freiherr von Oldershausen, CEO,Hellespont Hammonia GmbH & Co KGGas Combustion Units for LNG CarriersSince dual-fuel or two-stroke diesel engines drive LNG carriers, gas combustion units (GCU) have become the only capable backup solution for boiloff-gas combustion. SAACKE invented and patented the technique worldwide. Today almost every new LNG carrier features our innovation on board precisely optimised to the dimensions and the capacity of the vessel and positioned conveniently above main deck level.The success is based on high availability, intelligent design, low maintenance costs and operational safety at ultra-low emission rates. All that makes SAACKE GCU the benchmark for efciency and reliability. Judge for yourself!From Inventor to Market Leader.SAACKE GmbH Sdweststrasse 13 28237 Bremen GERMANY Phone: +49 - 421 - 64 95 0Fax: +49 - 421 - 64 95 363 E-Mail: [email protected] www.saacke-marine-systems.comAugust/September 2008 zTANKEROperator 13INDUSTRY - FOCUS ON GERMANYAlthough not ruling out the use of theGerman flag for some of the vessels in thenear future, von Oldershausen explained thatif the three 13,100 dwt chemical tankers wereput under the national flag, then the companywould need to employ around 15 Germanofficers, which in today's climate would beextremely difficult. Dutch interestsLast year, Amsterdam-based SeaarlandShipping Management expanded its growingglobal network into Germany by setting up ajoint venture with Hamburg-based TBMarine-Hamburg GmbH. The same year, Seaarland and TB andPartners' jointly ordered four IMO II shallowdraft 29,000 dwt product carriers, plus twocoated LR1s from China's Zhejiang HongguanShipbuilding for delivery in 2011 and thelatter from New Century Shipbuilding fordelivery August and September 2008. To manage the ships and to provide accessto the German equity market in July last year,Seaarland and TB Marine set up SeaarlandShipmanagement (Hamburg) GmbH & CoKG, which now operates under the watchfuleyes of managing directors Andreas Sand andClaus Bethke. The joint venture originally started with thedelivery of a secondhand handysize IMO IIIproduct tanker - 36,000 dwt Alia - on 19thDecember 2007 while three more handysizetankers were purchased from Teekay fordelivery this year, plus a newbuilding, whichis due for delivery next January. These werethe first vessel to be technically managed fromHamburg by Seaarland.At the time of the agreement, Seaarland'shead Antonio Zacchello said; "We now have astrong foothold in the Mediterranean, in NorthEurope in both Amsterdam and Hamburg, andin Asia, through our Singapore and Indiancompanies. This German initiative with strongpartners follows our strategic growth plan,always working with good partners tomaximise our mutual strengths and deliver toour charterers the powerful combination of aglobal shipping company with strong localknowledge."TB Marine-Hamburg GmbH was foundedon 1st July 2005 by Stephan Bracker andSteffen Thate to initiate, finance, own andmanage newbuildings and secondhand shipsfor both private and public investors in theGerman KG market. It has strong relations with Chineseshipyards and a Chinese investment group viaAquarius Marine Consulting (AMC),Hamburg. Thorsten Schablinski, sole partnerand managing director of AMC, providestechnical consultancy, plan approval andnewbuilding supervision for TB's projects. TB Marine and its partners now have 30tanker newbuildings on order. In a recentinvestor presentation, TB Marine said thatvessel Nos 1-24 will be employed under longterm charters and pool arrangements withleading European pool operators in the sizerange of up to 20,000 dwt. For example, eightof the Ice Class 1A chemical/productnewbuildings were fixed long term to MaerskTankers and another eight to the ClipperGroup. The final eight in the 16,500 dwt-19,000 dwt range are intended to go into theSwift Tankers pool.Four 29,000 dwt tankers will join theHandytankers pool while two LR1s are alsoon order and will join the Global Tanker Pool.Other vessels planned include three 92,500dwt bulk carriers and the latest ventureinvolving the financing of eight vehiclecarriers (PCTS), which are being built forLaeisz management.Amsterdam-based Seaarland ShippingManagement is a commercialshipmanagement company and part of theZacchello Group, which also includes Venice-based Motia Compagnia di Navigazione, asone of the shipowning arms and the technicalmanagement arm for the group's fleet.The group controls a fleet of 25 modernproduct and Aframax tankers with 15newbuildings to come, plus three Panamaxbulkers with another seven Panamaxes andminicapes to come. At the end of its newbuilding programme,the Zacchello Group will control about 85ships, including a fleet of 30 medium to long-term timechartered ships. In addition, thegroup has a 50% ownership of 10 Naples-based SynerGas Ethylene/LPG carriers andhas offices in Venice, Naples, Amsterdam,Singapore and Hamburg. TB Marine's Steffen Thate toldTANKEROperator that initially, the jointventure was set up to focus on newbuildingprojects. During the past three years, TBMarine has been responsible for 42newbuildings and four secondhand vessels andhas built up a pool of private investors withinthe KG scheme. The loan facilities have been arrangedthrough the world's largest ship financingbank HSH Nordbank and also with DeutscheBank, Hamburg and NorddeutscheLandesbank, based in Hannover."We are now benefiting from the Seaarlandhandysize, Aframax, LR1 and Suezmax tankerpools, which in turn benefit from the Germanmarket, including the KG funding schemes,"Thate said.TB Marine/Seaarland Shipmanagementgained its ISM certificate from ABS in October2007 and now employs around 25 persons inHamburg. Thate explained that Seaarland has aglobal network of crewing outlets.As for the future, "By about 2011, we willhave around 35 chemical/product tankersunder full management owned by Zacchelloand his partners," Thate said. It is Thate's intention to put around three tofive vessels under the German flag whileanother 10 are flying the Italian flag underMotia's control. Other major flag states havealso set up shop in Hamburg, including Liberiaand the Marshall Islands, which employGerman speaking auditors and surveyors.Oil majors are being focused on by thegroup as there is more external control beingexercised today through various schemes,most notably TMSA. Frequent safety, security and other meetingsare held between TB Marine, Seaarland andthe pool/charterers. Thate said that thecompany was also co-operating very closelywith ABS.INDUSTRY - FOCUS ON GERMANYTANKEROperator zAugust/September 2008 14Zacchello Group ProfileZacchello's shipping interestsoriginated in 1948 when AntonioZacchello and some partnerspurchased a 10,700 dwt 'Liberty'ship - Rialto.He subsequently bought his partners out andcontinued to build his shipping empire onhis own. Today, this consists of Seaarland ShippingManagement BV (Amsterdam), MotiaCompagnia di Navigazione SpA (Venice),Seaarland Shipmanagement (Hamburg)GmbH & Co KG, Seaarland ManagementServices (Singapore) Pte Ltd, SeaarlandManagement Services Pvt (India) andSeaarland Management Services (Geneva)SA.Basically, the companies' operations aresplit as follows: Seaarland Shipping Management (Amsterdam) acts as commercial manager of the ships owned by the group's Dutch companies and for the third party owned vessels. Seaarland Management Services (Singapore) is responsible for the day-to-day operations east of Suez. The office is growing as Zacchello puts more emphasis on the developing Persian Gulf/Asian markets. Motia carries out commercial and technical management for its owned vessels and is responsible for the technical management of the vessels owned by the Dutch-based companies, as well as third party owned vessels. Seaarland Management Services Pvt is responsible for the group's Indian seagoing crew requirements. Seaarland Shipmanagement (Hamburg) is jointly owned with TB Marine-Hamburg and manages the co-owned vessels with German investors and provides a gateway to the major German market. Seaarland Management Services (Geneva) is responsible for advisory and the execution of FFAs on behalf of the group and its clients. Seaarland Hamburg will handle anadditional 24 product/chemical tankers inthe range 16,500 dwt to 19,000 dwt, whichtogether with four out of eight car carriers,have been financed by German investors.Venice-based Motia has 12 vessels underfull management and expects to takedelivery of another four newbuildings.Motia also operates four ships ontimecharter. Technical management of the wholeZacchello group is handled by Motia andSeaarland Hamburg. As at June of this year, the total numberof vessels controlled by Seaarland andMotia was 116. These include 62 currentlyin operation, 37 newbuildings and 17timechartered vessels yet to be delivered. Zacchello has placed some of the vesselsin pools, such as Suezmax International,Aframax International, Handytankers andBaumarine. Other vessels are timecharteredto operators such as Trafigura, STX PanOcean, TotalFinaElf (Italia), ST Shipping,ENI, Cargill and Armada. The group alsooperates on the spot market.The group also holds a 50% stake inSynergas SrL through a Dutch concerncalled Julia Finance, which was set upspecifically for this purpose. The other 50%is owned by Ca.Fi.Ma, the holding companyof the Cafiero Mattioli Group.Synergas was formed in November 2005to purchase the fleet of 10 LPG carriers of4,000 cu m to 9,000 cu m capacity fromNavigazione Montanari, which was dulycompleted a month later. Antonio Zacchello.August/September 2008 zTANKEROperator 15INDUSTRY - FOCUS ON GERMANYSAM Electronics Your Partner for Automation, Navigation and CommunicationSAM Electronics GmbHBehringstrasse 12022763 Hamburg .GermanyPhone: +49 - (0)40 - 88 25 - 24 84Fax: +49 - (0)40 - 88 25 - 41 [email protected] success of our navigation and com-mand system NACOS is based on theunique concept to functionally integrateradar operation, ECDIS and autopilot. Our communication product scope comprises a wide range of systems forrapid and efficient aid to ships indistressas well as internal communication.With a few, highly flexible hard- andsoftware modules our 2200 series provides solutions for all automationrequirements onboard of your vessel.Please visit us at SMM 2008, 23 - 26 September, Hall B6, Stand 340.As for AMC, this concern offers thirdparty technical newbuilding supervision andonly puts its own people in the shipyards,rather than relying on third partynewbuilding surveyors. For example, ACMnewbuilding standby chief engineers willmove into the office as engineersuperintendents, once the newbuildingsupervision period has ended. Seaarland Shipmanagement only employsex seafarers and a cadet scheme is run in ajoint venture with ASP Ship ManagementScandinavia based in Mariehamn, Finland. KG expertiseThe German KG (Kommanditgesellschaft)equity syndicating system is perhaps notsuffering as badly as other forms of raisingfinance in today's economic gloom and doom. Whereas some would be investors inshipping equity will still rely on the debtfinancing to purchase shares in vessels, otherprivate shareholders do not. KGs were originally designed to help theGerman shipyards and shipping industry. Ageneral partner (GmbH) is usually required.Individuals participate with fixed equityportions on a non-recourse basis.To qualify for syndication, vessels must incompliance with international class societystandards, while both the commercial andtechnical management of the vessels must beundertaken in Germany and the vessels mustbe registered in Germany, although aninternationally accepted flag is also possible. Once the domain of smaller container andmultipurpose vessels, all types are now beingconsidered providing they have a long termtimecharter attached, but not a bareboat, ordemise charter contract. The change in the German tonnage tax of1st January 2007, bought no substantialdifference to equity finance deals. Basically,the tax is based on the gt of a vessel and notthe profit/loss performance (see page 18). However, Tobias Koenig founder of Koenig& Cie GmbH said that the syndicationmarket, which is most important in Germanyfor larger projects, is almost totally disruptedby the current financial crisis. "The KG fundsare not lenders. They are syndicating equityand combine it with debt financing to buyships, which they operate and charter out," he explained. Koenig said that despite this, the companyhad managed to realise new products. Hecriticised HSH Nordbank, the world's largestship financier, saying that the default rate inthe vessel mortgage loan sector is zero percent. "Their caution with the granting ofloans does not always seem reasonable tous," he said. Koenig was founded in 1999 and in 2006established Marenave Schiffahrts with HSHNordbank. It is claimed to be the first Germanshipping trust set up legally as a public listedcompany. The objective was to provideinstitutional investors with the possibility ofinvesting in the shipping market on a longterm basis, creating a new asset class forbetter investment portfolio diversification. He said the most KG investors wereexperienced and many of them invest 'anti-cyclically' and "...were in it for the long run."Due to their cyclical nature, the volatilemarkets have led to diversification beinghighly valued. For example, besides shipping,Koenig is now established in real estate,private equity, renewable energy, secondarymarket of UK life insurance policies andinfrastructure.TANKEROperator zAugust/September 2008 16INDUSTRY - FOCUS ON GERMANYA joint venture - Scorship - was alsoformed with Monaco-based Scorpio, which isinvolved in the running of two tanker pools, inwhich Koenig is participating. "To have ajoint venture, such as Scorship, seemed to belogical as Scorpio was seeking access to theGerman market and we had been looking for a partner to invest in Panamax tankers,"Koenig explained. "Therefore, our Panamax and handymaxproduct tankers had been managed by ScorpioShip Management, Monaco. Later on ScorshipTankers GmbH was formed by the twopartners, which has now taken up themanagement of these vessels," he said. "There is a lot of interest outside Germanyto find a local partner. And this is the reasonothers have formed partnerships and willprobably continue to do so in the future," headded.Last June, Scorship Tankers GmbHchristened two further double hull tankers atNew Times Shipbuilding, located on theYangtze River. The tankers were the last two in a series ofsix sister ships. They were christened KingDaniel and King Douglas. The latter washanded over to the charterer ST Shipping andTransport, Singapore and King Daniel will bedelivered in September. The six double hullcrude oil/product tankers were ordered in2005 for delivery in 2007 and 2008. Theywere Panamax class LR1 product tankers.The last two both make up the ProductTanker Fund IV, which had been open toKoenig & Cie investors since the end ofMarch 2008. The fund concept is acombination of fixed charter and poolearnings, with one vessel benefiting from thestability of the former and the other vesselfrom the variable earnings of the latter (thisvessel will be deployed in a leadingtanker pool). Koenig uses what it perceives as the bestpartners available to technically manage thevessels, for example, ColumbiaShipmanagement (CSM), Thien & Heyengaand V Ships. For example, all of the Marenavevessels are managed by CSM Hamburg. The issuing house invests in containerships,bulk carriers and product tankers. But thus farthe different ship types have not been includedin one fund. For tankers, Koenig thought that initially,this had proved more difficult. However,today Koenig & Cie is a successful tankercompany with."an unparalleled network inthe tanker markets. We offer investmentopportunities that are hard to match, which isgiving us a competitive advantage over otherGerman issuing houses," Koenig concluded. In another move, Jens Mahnke recentlyjoined Koenig & Cie GmbH as a managingpartner to take on responsibility for allshipping matters. Prior to this, Mahnke worked with theNordcapital Group, where he was managingpartner for shipping project development forthe last six years. From 1st June, the shareholder structure ofKoenig & Cie GmbH was Tobias Koenigholding 86%, Klaus Fickert and Jrn Meyereach holding 5% and Johannes Bitter-Suermann and Jens Mahnke each holding 2%. Since TANKEROperator's visit, ScorpioTankers GmbH & Co KG and ScorpioShipping Company, Monaco have said thatthey are set to broaden the business scope andas a result have been renamed ScorshipNavigation. As part of the expansion plan, thecompany will soon manage drybulk carriers aswell as tankers. Jens Mahnke was named ceoon 1st August.Essberger expandsJohn T Essberger is expanding its tankerfleet by ordering a series of newbuildingsfrom China and Turkey. The company has alsoextended its shipmanagement portfolio bywinning a management contract for a series ofSwedish product tankers newbuildings. The Chinese order involves two 8,500 dwtIce Class 1A chemical tankers fitted with 16stainless steel tanks, plus another two options.The first vessel will be delivered at the end of2010 and the second in February 2011. Essberger chose Dingheng (Jiangsu)Shipbuilding, which Captain Stefan Buelow,managing director John T. Essberger ShipManagement described to TANKEROperatoras a new yard specialising in LPG andchemical tankers. The vessels will be built inco-operation with the Dutch-based VolhardingShipyards and were designed by a Norwegianconcern. They will be powered by MANThe 5,771 dwt chemical tankerGeorg Essberger seen in the Kiel Canal.August/September 2008 zTANKEROperatorINDUSTRY - FOCUS ON GERMANY Driveline and Chassis Technology Fleet operators as well as ship owners want efcient vessels with high availability and reliability. This means installed equipment must be easy to maintain, have low through-life costs and perform around the clock in the most demanding conditions and meet Classication Society rules. ZF Marine provides complete systems comprising gearboxes, shafts, bearings, propellers and control systems to satisfy these require-ments and has a worldwide after-sales and service network on call at all times. We help you run a protable business!Please see our comprehensive product portfolio, dealers addresses and much more, at www.zf-marine.com www.zf.com ZF Technology the intelligent choice. Because you can relyon quality gearboxes,propellers and controls.See us at SMM,Hamburg!Hall A3 Stand A3.300medium speed common rail engines from the manufacturer'sAugsburg works. Earlier, Essberger had selected the new Turkish shipyard of Eregli toconstruct an 8,400 dwt and three 5,300 dwt vessels. The larger vesselis an IMO II type 124 m long, oil and chemical tanker fitted withMarineLine coated tanks. Construction began on 26th November lastyear under the supervision of Essberger and Bureau Veritas and thevessel is due to be delivered in January 2009. The three Ice Class 1A 5,300 dwt tankers will be fitted withstainless steel cargo tanks and all will feature MAN prime movers.They are due for delivery in September, December 2009 and April2010 respectively. As for the management contracts, these were for Svithoid Tankers'three 3,400 dwt and two 4,500 dwt tankers. Essberger inspectorstravelled to an Estonian shipyard in Tallinn to take over the first vesselfor Svithoid. One 3,400 dwt tanker - Vedrey Thor - was chartered toFisher Everard, while the larger units will operate for Herning under along term charter. Buelow explained that Essberger's philosophy was to continue tooperate specialist tankers of up to 10,000 dwt in partnership with theoil and chemical majors on a mixture of timecharter and spot businessbasis. The vessels normally operate in northern Europe, Baltic andMediterranean/Black Sea regions. In 2004, Essberger bought Dutch chemical tanker operator Broerefrom the Vopak group and formed the Broere/Essberger chemicaltanker pool. In April of this year, the operation was brought under thebanner of Essberger Tankers. The new vessels and all Essbergervessels will be gradually renamed taking the Essberger suffix. At the beginning of this year, Hugo Finlay was recruited to runEssberger Tankers as managing director. He has had more than 40years' experience in the tanker business having been employed atsenior level by Stolt Nielsen and Jo Tankers among others. At present, the fleet flies the Dutch flag (Broere vessels), Germanand Madeira flags - the latter as a European flag. As for seafarertraining, Essberger uses various establishments in Poland, China, thePhilippines and in-house seminars are regularly held. On boardtraining will be continued, Buelow said. The company employsEuropean masters on its tankers, mainly from Holland, Germany,Poland and the Baltic States. The seafarers are employed on a two month on, two month offrotation, which helps to ensure a good retention rate, Buelow believed.Being a family owned company, it was easier to bring the seafarersinto a family type working atmosphere, he thought. In Europe, Essberger has its own crewing agency in Gdynia, whilein Singapore, the company owns the crewing agency -Transocean ShipManagement and has a partnership in a Manila-based training centre,which is equipped with modern simulators, including bridges. Thesecan be attached to engine control rooms and a small engine. The Asianfacilities are mainly used for the bulk and cement carriers managed byEssberger, as well as for ratings on tankers (Filipinos). Essberger has set up a safety and vetting department in Hamburgand Buelow said that he was "quite happy" with the TMSA audits.Similar to the vessels, Essberger has bought the shipmanagementactivities closer to home by dispensing with the old shipmanagementcompany Transocean to better reflect the Essberger brand. Buelow explained that the shipmanagement arm will only look atthird party management business for special projects, such asnewbuildings. It was not Essberger's intention to become a fullyfledged third party shipmanagement concern.He is an active member of BIMCO, IPTA, the VDR and sits on theTANKEROperator zAugust/September 2008 18INDUSTRY - FOCUS ON GERMANYtechnical advisory board of GermanischerLloyd.Explaining this involvement, he said; "It isvital to be in the front line with all the rulescoming up. We have to join together topresent a good image and have to beproactive. We cannot just lean back and forgetabout what is happening. Everybody has toparticipate. If something comes up, don't fightit, but discuss it, otherwise we will loosecredibility," he added.To ensure adequate repair and maintenance iscarried out, Essberger has a repair shop inDordrecht, Holland, which came with the Broerebuyout. The company also uses the Hamburgshipyard Norderwerft among others for its tankerfleet. Buelow said that he did not believe inoutsourcing too many activities, but rather keepthem in-house to better monitor costs. GTS opts for Lindenau tankersAnother major German tanker player isBremen-based German Tanker Shipping(GTS), which now controls 12 producttankers averaging 3.5 years old with onenewbuilding still to come.Eight of the earlier product tankers are ofthe Kiel-based Lindenau 32,000 dwt class,while the newer four are of 40,600 dwt.Another vessel due for delivery in March ofnext year will be slightly larger at 43,000dwt, but still built to the Lindenau design. All the vessels were built by LindenauShipyard. Ten are in the KG system while theother two are wholly-financed by thecompany. All the activities connected withthe ships are handled in-house by just 18 people. The vessels fly the German flag and areclassed by GL. Managing partner FrankJungmann described the flag as "of verygood quality", but said the process ofregistration could do with improvement as at present several different authoritiesbecome involved."We need a central department in Germanyfor registration and a simple, efficientadministration," he said. Other Germancompanies spoken with by TANKEROperatorvoiced the same opinion.Being under the German flag, all GTS'officers are German, while the ratings arefrom the Philippines. Jungmann agreed with other German owners requiring German officers that for the future, the potwas empty. GTS' vessels normally trade in the spotmarket, however, there a few chartersOne of the Lindenau class32,000 dwt product tankers,managed by German TankerShipping.German tonnage tax explainedIntroduced in 1999, the Germantonnage tax scheme has beenby and large welcomed by theGerman shipping community.So much so, that moves are afoot to reachthe target of 500 vessels under the Germanflag by the end of this year, otherwise itcould be scrapped or amended, according tothe German authorities.If the target is reached then the tonnagetax stays in place for the foreseeablefuture, and all the signs are that this willhappen as the German shipownersinterviewed by TANKEROperator wereconsidering putting at least some of theirvessels under German flag. Basically, the scheme allows companiesto elect to have their taxable profits fromshipping activities determined at fixed rateswith reference to their ship sizes for 10years at a time, hence the call for moretonnage by the beginning of next year tostart the next decade of fixed rates.Graduated TariffUp to 1,000 nt = Eur0.92 per 100 nt per day1,000 - 10,000 nt = Eur0.69 per 100 nt per day10,000 - 25,000 nt = Eur0.46 per nt per dayMore than 25,000 nt = Eur0.23 per nt per dayAs an example given by the HamburgMetropolitan Region, a graduated tariff isimposed on the net tonnes, which is thenmultiplied by the number of days a vesselis in operation.In the case of a 40,000 nt vessel, thecalculation is based on an assumed profitof Eur174.80 per day. For 365 days ofoperation, this is calculated at Eur63,802,on the basis of which taxes will becharged independently of the actual annualprofit.Assuming the equity capital totalsEur21.6 mill, the calculated profit is 0.3%of the equity capital per annum, which isclaimed to be of minor relevance. Inaccordance with the current Income TaxAct, the amount - assuming that theeconomic development of the vesseloperations will be positive - indicates alargely tax free capital gain. German Tanker Shipping GmbH & Co. KGHans-Bckler-Str. 5028217 BremenPhone +49 421 387638Fax +49 421 3876390e-mail [email protected] TANKER SHIPPINGTANKEROperator zAugust/September 2008 20INDUSTRY - FOCUS ON GERMANYconcluded on coa terms. The company wasformed in 1998 by former Carl Buettnerexecutives. It originally owned seven vesselsup to about 23,000 dwt, but has sinceconcentrated on the larger size ranges,leaving Buettner to compete in the smallermarket sector. The six 24,000 dwt tankersbuilt in Croatia are today Buettner's largest vessels. Jungmann described the 40,000 dwt to43,000 dwt size as being in the middle of theSouth Korean designed 37,000 dwt and47,000 dwt types with good draughtcapabilities of about 11 m on maximum dwtcargo capacity (dwcc).The Lindenau-built vessels are fitted withMAN Diesel 4-stroke 8-cylinder mediumspeed diesel engines from the manufacturer'sAugsburg works connected to a CP propellerthrough a reduction gear. Becker rudders havealso been fitted on the larger vessels for extramanoeuvrability. Being fitted with the same engines results incontinuity of spares enabling the use of thesame maintenance and other systems usedacross the entire fleet.Classed with GL, the vessels are IceClass E3, or E2, equivalent toFinnish/Swedish Ice Class 1A, or 2A. Eight are 1A and the other four have the E2 (2A) notation. Today GTS operates with six partners andtwo managing partners. Jungmann explainedthat the company's policy is to operate thevessels in Europe or transatlantic and sellthem when they reach their second or thirdsurveys (10-15 years old). "They will stillbe in excellent condition," he said. When operating in Europe, the averagevoyage time is only around 4.5 days,including loading and discharge operations.The normal economic service speed is 13.5knots, although the vessels can steam at15.5 knots if needed. They each carry 18crew on board.As for the pumping systems, the smallervessels have been fitted with FramoDeepwell hydraulic pump systems, whilethe larger vessels have HamworthySvanehoj electro-pump systems fitted. Eachtank is coated and the vessels are fitted withcargo heating systems.Offen up and runningThe first four of CP Offen's eight HyundaiMipo 37,000 dwt MRs have recently joinedBrostrm's fleet.Ordered and technically managed byrecently formed Offen subsidiary CP OffenTankschiffreederei, the eight will becommercially managed by Brstrom followingthe signing of a long term partnershipagreement with the Hamburg-based companylast year. Before the first four were delivered,Brostrm was already operating eight 37,000dwt MRs in the Europeanmarket transporting refined petroleum oil products. All the new vessels were scheduled fordelivery by the end of this year from SouthKorea. The first four picked up a cargo ofvegetable oil from Asia to reposition toEurope. They will all fly the UK flag. *Since this update, it has been announcedthat Brostrm is to be taken over by Maersk.Where this leaves CP Offen Tankschiffreedereisjoint venture agreement is thus far unknown(see page 2). TOGL academies provesuccessfulLast year, Germanischer Lloyd (GL) held 276 seminars worldwide, attracting 4,086 participants, compared with 220 in 2006, which pulled in 3,950 people. August/September 2008 zTANKEROperator 21INDUSTRY - FOCUS ON GERMANYGL has developed what it calls a'Modular System for FurtherEducation in Shipping', which issplit into 11 distinct subjects.Both public and private seminars are held, andtailor-made in-house tutorials are also offered. GLAcademy's Susanne Schreeck toldTANKEROperator that it was not the intentionto compete with seafarer training schools oruniversities, but rather join forces if possible. Seminars and tutorials are held worldwidein English, although local languages can alsobe used, for example to train surveyors inoverseas locations. Most maritime subjects are covered, frombasic shipping knowledge to high technology,including a series aimed at 'training thetrainers'.The UAE and India are areas of obviouspotential, GL said. An academy will beopened in Dubai this October, which will beused by the other Gulf States and the classsociety is also in talks with Dubai MaritimeCity about a co-operative partnership. Anotherpartnership is also in place with the IndianInstitute of Marine Engineers based inMumbai.Other co-operative training ventures arebased in countries such as Vietnam and earlierthis year, GL recently opened GLAcademyHellas, which is run from Piraeus. The classsociety is also one of 12 partners in the soonto be opened MTC Maritime Training CenterHamburg (see page 23).GL has found that the more popularseminars are the ones that cover generaltopics, such as basic shipping and technology,for example for bank staff involved in themaritime sector. Some of the courses willinclude exercises involving individual andgroup work and interactive sessions. "We donot only show overheads," Schreeckexplained.One of the more specific training coursescovers the 'Certified Coating Inspector'. Thiscourse will be held between 16-22 Novemberand is already fully booked with 15participants. The seminar has been puttogether by GL in co-operation withMuehlhan, which specialises in marine surfaceprotection.As for GL's class portfolio, over 6,300vessels totalling 70 mill gt are now underregular technical supervision of GL. In the space of 12 months, GL's fleet hasgrown by 10 mill gt. "This is a milestone inthe history of the classification society," saidDr Hermann Klein, member of GL's executiveboard, at the classification society's Hellascommittee meeting in Piraeus at the beginningof June. "Based on the incoming orders we expect asustained growth rate again," he said. To cope with the extra tonnage, GL hasincreased its staff level particularly in EastAsia. In 2006 alone, a total of 312 employeeswere hired worldwide. Since the beginning ofthis year more than 300 international positionswere filled. Today the workforce totals over4,100 worldwide.In another move, GL has been authorised toparticipate in the US Coast Guard's (USCG)alternate compliance program (ACP). As a result, US shipowners can select GL astheir recognised organisation, acting on behalfof USCG. GL is one of only three non-USclassification societies to have a USCG ACPauthorisation.ACP is a voluntary alternate process for aUS registered vessel to obtain a USCGcertificate of inspection by complying with thestandards of a delegated classification society,including its ACP Supplement andInternational Conventions. In the space of 12 months, GLs fleet has grown by 10 mill gt. This is a milestone in the history of the classification society...based on the incoming orders we expect a sustained growth rate again - Dr Hermann Klein, member, Germanischer Lloyd Executive BoardTOTANKEROperator zAugust/September 2008 22INDUSTRY - FOCUS ON GERMANYOn 1st June, 2005, DNV moved itsEuropean headquarters fromLondon to Hamburg. The Germanoffices cover northern Europe andAfrica.At the time, DNV said that Hamburg was anincreasingly important international maritimecentre for shipowners, managementcompanies, financial institutions as well asshipyards, reflected by the steadily growingnumber of vessels managed or owned byGerman companies, in particularcontainerships."The decision to move the regional office toHamburg is underlining our strategy tobecome the number-one class alternative inGermany and shall give a clear signal to themarket that we see increasing potential forgrowth of DNV services. At the same time,we recognise the ongoing importance of theUK maritime market by continuing our goodwork in the London market," said DNVMaritime coo Tor Svensen, speaking at thetime of the move.Regional manager Joerg Beiler and countrymanager Joerg Langkabel said duringTANKEROperator's recent visit to Hamburgthat competition among class societies willincrease the focus on the service level and willtrigger the introduction of new services for themarket. However, competition would not leadto reduced focus on quality.Last year, DNV moved into larger premiseslocated in the centre of Hamburg, close to theflag administration. Langkabel explained thatthe German flag authorities have nowextended the scope to carry out statutorysurveys etc on German flag ships by otherclass societies.DNV now claims the No 2 spot in terms ofGerman-controlled tonnage entered behindGL. Although the high number ofcontainerships controlled by German interestsunder GL class is attracting much of the otherclass society interest, DNV claimed more than38% of the tankers in German management interms of gt. DNV also boasted 1.3 mill gt ofGerman newbuildings by the middle of thisyear, compared with 1.85 mill gt ofnewbuildings entered for the whole of 2007. The class society has appointed a localcustomer service manager whose job it is tovisit the owners and listen to their needs,Langkabel explained. Thus, the concept of aHamburg service centre had been expanded.For example, a tailor-made service is offeredon fuel savings - a very pertinent exampletoday when the cost of IFO 380 cSt had hitthe $700 per tonne mark recently. Anotherexample of the service concept is that advicecan be given on TMSA and SafetyManagement Systems. At the beginning of this year, DNVemployed 70 people in Hamburg and thesatellite offices around Germany. By the end of 2008, this number will have risen to90. An office has also been opened inBremen.DNV has a huge database containing whatit calls 'knowledge management'. Forexample, some German owners and managersneed to know about potential propellerdamage in routes through ice. The informationheld on propeller damage could help theowners and managers decide upon the need tocarry a spare propeller.Certification of marine equipment and sub-suppliers is another strong area withinGermany as many suppliers, such as MANand MTU among others, have full orderbooksdue to the massive vessel ordering spreeduring the past few years.Several vessel types, includingcontainerships, cruiseships and ro-ros arebeing built in German shipyards to DNVclass. Also included are four LPG carriers atMeyer Werft for Harpain Shipping. Germanports are among the busiest in Europe and therepair yards are experiencing better times oflate, creating more work for class surveyorsin general.Similar to GL, DNV has set up an academyin Hamburg, which takes up one floor of thesix-storey building. Three rooms are availablein an open type landscape, the largest ofwhich can accommodate up to 60 persons. Both seminars and courses are heldfocusing on operations and technical topics,including technical courses aimed at non-technical personnel, which are provingpopular. DNV has been holding seminars andcourses in Germany since 1995 and welcomedmore than 1,200 participants last year, whichencouraged the society to open its owndedicated facility. Seminars and courses are split intocategories, such as ship types, whichinclude containerships, oil and producttanker, chemical tanker and gas tankerupdates plus design, equipment and cargooperations.Another series covers maritime technologyin all its forms from hull inspection tomanaging complex electronic systemsintegration. Four courses are offered onmaritime rules and classification issues and alarger selection of courses cover managementsystems. General shipping business is alsocovered aimed at the office newcomer.All the listed seminars and courses are heldin English. DNV claims second spot in German vessels classedDNV has opened its own dedicated academy in Hamburg.TOAugust/September 2008 zTANKEROperator 23INDUSTRY - FOCUS ON GERMANYOne initiative underway in whichGL is a stakeholder is theMaritime Training Center (MTC)Hamburg, which is due to openits doors next February.Hamburg has been without a major trainingfacility since many nautical colleges closeddown during the shipping downturnexperienced during the 1980s, which left ahuge gap in training. Hamburg also lost the'SUSAN' simulator training facility to Leer,which is now home to a largeshipmanagement fraternity.MTC will be located at Harburg, a suburbof Hamburg, built in an old dock area.Illustrating Hamburg's maritime clustermentality, MTC is a joint venture betweenshipping companies Rickmers Reederei, OrionBulkers and Marlow Navigation who acts as acrew manager. Apart from GL, other stakeholders includeMAN Diesel, the River Elbe, Port of Hamburgand Kiel Canal Pilots' Associations, port andlogistics training concern ma-co maritimescompetenzcentrum (formerly known as FZH),and private investors. SAM Electronics isacting as a co-ordinating partner whileBremen-based Rheinmetall DefenceElectronics will supply the shiphandling,radar/ECDIS, GMDSS, liquid cargo handlingand ships engine simulators. Furthermore, hands on training will beprovided for the operation and maintenance ofmarine diesel engines and their componentsthrough a MAN Diesel workshop. PreviousFZH fire fighting and rescue boat courses willalso be included. MTC managing director Heinz Kuhlmannexplained that by integrating the pilot groups,ma-co specialists and the GLAcademy, MTCwill be able to offer quality and professionalknowhow at the highest level in mostdisciplines.Kuhlmann said that marketing the centrewould start in earnest this September whenbookings will be taken. He also claimed thathe already had verbal promises from someshipowners to use the facilities. All thetraining courses, seminars etc, plus thedocumentation will be in English to attractinternational clients. Once MTC is fully operational, it will havea training capacity of 14,300 man hours,making it one of the largest training centres inEurope.The equipment and operation alone is costingEur6.5 mill and the City of Hamburg isdonating Eur900,000 towards the project. Apartfrom Harburg, another simulator centre isplanned in Hamburg for a 2010 start up.Large training centre nears completionAn impression of the full mission bridgesimulator.www.mtc-simulation.comMTC will open its doors beginning of 2009 in Hamburg and provides a wide range of maritime training courses for navigation, technical operations, maintenance, GMDSS, safety and tanker operations. For more information and course catalogue 2009 contact: [email protected] Training Center - HamburgTOTANKEROperator zAugust/September 2008 24INDUSTRY - FOCUS ON GERMANYBy providing tankers with pre-determined breaking points intheir double hull, Lindenaubelieves it can enhance tankersafety. While mandatory double hulls offersignificantly better protection against thethreat from a collision than single hull vessels,pollution may still occur if both the outer andinner hulls are punctured. If the inner tank shell was designed topartially disconnect from the supportingstructure in a lateral collision, it would deformmore easily, bulging inwards to produce alarge dent at the point of impact, rather thanrupturing. This would require an inner hullmade from a highly ductile, extensiblematerial. These ideas inspired the concept of aso called 'crumple zone' for tankers. To turn this idea into an actual project,Lindenau got in touch with Hamburg-HarburgTechnical University (TUHH) andGermanischer Lloyd (GL) to arrange for abasic initial research programme. It was thought that an austenite with highductile yield might prove suitable materialfor the inner tank shell. Under tensileloading, these kind of austenites resistfailure for a much longer period thanstandard steel types. While shipbuildingsteel has a ductile yield of between 16% and22%, austenitic steel can be extended to 30%to 35% before failing. However, a tensile shell in itself will notsuffice. To bulge inward across a large enougharea, the shell must be allowed to separatefrom its supporting structure. To illustrate theproblem, Lindenau's project head in charge ofdeveloping the design - Ingo Tautz - used animage of a balloon inflated inside a wire cageand glued to the bars. "Pushing the balloon downwards will causeit to burst. But if you don't glue it to the bars,it will be free to move so you can push itinwards to quite an extent before it will burst,"Tautz explained. A hull with abreaking pointKiel-based Lindenau Shipyard is further enhancing tanker safety by designing vessels with a pre-determined breaking point.*SPOSwww.SPOS.euA MeteoGroup CompanyMeteoConsult T: +31 317 399 800MASTER THE WEATHER...We have found it extremely helpful in planning our voyage and more importantly staying out of bad weather areas......on this voyage we used 87,4 metric tonnes of HFO less...August/September 2008 zTANKEROperator 25INDUSTRY - FOCUS ON GERMANYOn any ship you will find the cage'sequivalent. It is formed by longitudinalstringers and vertical frames. Stringers andframes make up the skeleton that supports theouter and inner hulls of the ship and which arespaced about 2 m apart. The critical questionis how to enable the inner shell to separatefrom this supporting cage, thereby enlargingthis space.As far as the longitudinal stringers areconcerned, the solution is straightforwardenough- the stringers are welded only to theouter hull and have no contract with the innerhull. A more complicated matter is the case ofthe vertical frames. A series of holes, knownas perforated pre-determined breaking points,are made in the sections closest to the innershell. In a collision, the frames are intended torupture at these locations, thus releasing theinner shell. The larger number of breakingframes, the better. This design concept was first developed byLindenau partner and former managingdirector Guenter Stehn, who estimated thatframes may break over a length of 20 m alonga ship's body, allowing the austenitic innershell to bulge inwards by several metreswithout rupturing. To ensure that this works,tanks may not be fully loaded and must befitted with burst plates designed to break onimpact. The cargo then flows into aneighbouring tank or ballast tank. What made Stehn's approach appealing wasits simplicity. The vessel's inner shell deformswithout causing an oil spill. But how far canthis be taken before the ship's structurebecomes unstable? As it is, sailing in roughseas is a punishing experience for a tanker,exposing it to incessant assaults from differentload combinations, a constant interplay ofcompressive and tensile stresses. This relentless strain is particularlyaggressive around cut outs and holes wherecracks may form. Perforated pre-determinedbreaking points are not exempt from thisthreat. The critical question is, how should theperforations be designed so the frames onlyfail in a collision as intended whilesafeguarding the structural integrity of thevessel during normal operations?In his dissertation completed under thesupervision of TUHH's Professor EikeLehmann, Tautz analysed the hidden pitfallsof calculation methods that simulate theplanned failure of pre-determined breakingpoints. The ductile yield of austenitic steel,while known, does not help in determining thehighly important parameter of time of failurewhen calculating collision simulations.Knowing the time of failure is critical. If atank shell separation from the frames is toolate, the striking vessel might penetrate it.No matter how many calculations areperformed, there is no substitute for physicalmeasurements and practical tests. Toaccommodate this, Lindenau has requestedresearch funding from the German FederalMinistry of Economic Affairs. The researchproject aims at clarifying important aspects ofoperational and collision safety. Operational safety measurements havealready begun on a ship section builtaccording to the new design concept andinstalled on the 44,700 dwt product tankerSeychelles Patriot. Predetermined breaking point. In a collision, the malleable inner hull of the tanker will bulge inwards without causing an oil spill.(Graphics Lindenau)Seychelles Patriot. One sidesection was built with integratedpredetermined breaking points.(Photo Lindenau)TANKEROperator zAugust/September 2008INDUSTRY - FOCUS ON GERMANYThis 189 m long double hull tanker was delivered by the Kiel yardlast February. A three-frame side section of this vessel was builtaccording to Stehn's design, featuring perforated pre-determinedbreaking points. GL is conducting long term measurements on one ofthe frames to verify the results of the structural durability calculationsperformed thus far. These measurements were taken using strain gauges attached to theperforations. These strain gauges consist of plastic strips with etched-on copper leads. When the material expands, the copper's electricalresistance will change accordingly. The resistance readings are thenconverted into units of tensile force, providing a means to assess thestatic and dynamic stresses occurring around the measurement points. Three perforation holes have been fitted with six strain gauges each."Measurements will continue around the clock for an entire year," saidPeter Wania, GL's metrology engineer. "This should provide us withenough data to answer the question as to whether this design providesadequate structural durability."These measurements provide clarity regarding the operational safetyof the design under normal operating loads. "What we cannot do withthese measurements is verify what will happen in a case of collision,"Tautz conceded. Therefore, Lindenau will run a series of crash tests, some of whichwill involve a scale model of a ship's side, complete with pre-determined breaking points, which will be rammed by a bow-likeelement. "We will not be able to substantiate the precise functionalbehaviour of our design until we complete the entire research project,"said Tautz. A three-year window has been assigned for the project. All parties involved are aware that the new concept will fail in aworse-case collision scenario, a high speed, right angle impact. "Whena ship collides at a 90 deg angle at high speed, it will cut right throughto the centre of the struck vessel. There is no way to prevent that," saidStehn. But ships generally heave to when a collision is imminent, sothe impact occurs at an oblique angle. Five to six frames might breakin the process, Stehn estimated, producing an inner-shell dent two tothree metres deep. The concept of a crumpling zone for tankers may not be ready to beput into practice immediately. But conceivably, it will shape the wayoil and chemical tankers will be built at Lindenau during the comingdecades. Stehn himself was open to the idea that the patented designconcept of perforated pre-determined breaking points may become aninternational requirement at some point in the future.*This article first appeared in GLs magazine nonstopby whose kind permission this article was reproduced.Voyage Planning Regulatory Advisory Reports and LogsWe are pleased