Tanker operator-magazines-march-2012

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MARCH 2012 www.tankeroperator.com Incorporating the TANKEROperator Annual Shipping Review TANKEROperator

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Transcript of Tanker operator-magazines-march-2012

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MARCH 2012 www.tankeroperator.com

Incorporating the TANKEROperator Annual Shipping Review

TANKEROperator

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March 2012 � TANKEROperator 01

ContentsMarketsDemand heading for a slowdown

News ProfileShipboard fatigue - fact

US Report �Arntzen spells it out� Pipeline, or tanker?

Shipmanagement� InterManager gains� Inmarsat’s service bundle�AWT upgrades�Wallem goes for DNV

Chemical/Product Tankers� Low contracting a good sign�What’s in your tank?

Piracy� ISS’ solution�CCTV protection

Technology26 Latest LPGC delivered

Front cover Thomas Gunn is to supply an additional 43 Unicom-managed vessels with its outfit management service, bringing the total upto 78 vessels, the bulk of the company’s fleet. The vessels will be supplied with both customised Russian Hydrographic Officeand UK Hydrographic Office charts and publications, in both digital and paper format.

30 STS Transfer� GAC enters Sri Lanka� LOI warning

32 Tank Services� IMO’s PSPC COT� Scanjet expands

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24I We’ve been here beforeIII How did it go wrong?X Top 30 ListingXVIII Noboru Ueda Profile XX Witherby changes tack

ANNUAL REVIEW

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TANKEROperator � March 20122

COMMENT

Fishermen shot dead- an accident justwaiting to happen

TANKEROperatorVol 11 No 4Tanker Operator Magazine Ltd2nd Floor, 8 Baltic Street EastLondon EC1Y 0UP, UK www.tankeroperator.com

PUBLISHER/EVENTS/SUBSCRIPTIONSKarl JefferyTel: +44 (0)20 8150 [email protected]

EDITORIan CochranTel: +44 (0)20 8150 [email protected]

ADVERTISING SALESMelissa SkinnerOnly Media LtdTel: +44 (0)20 8950 [email protected]

SUBSCRIPTION1 year (8 issues)£195 / US$320 / €220

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PRODUCTIONWai CheungTel: +44 (0)20 8150 [email protected] by PRINTIMUSUl.Bernardynska 141-902 BytomPoland

The alleged shooting dead of two Indian fishermenoff the Indian coast last month has thrown up aplethora of theories and counter theories as to whatdid actually happen. The upshot was that the D’Amato managed Aframax Enrica Lexie wastaken to Kochi where the armed guards on board were arrested andcould be charged with murder.

Although at the time of writing, it was early days following thisincident, the facts as stated by both the Italians and Indians do not addup, according to one US-based security concern.

At the beginning, the Italians insisted that they were approached by aboat that didn’t answer to warnings, including flares and radio calls (Ithas since been established that both were attempted, quoting a reportfrom Washington, DC-based C-Level Maritime Risks).

Conflicting reports of the incident have been received from bothsides. For example, the Italians insisted that the event occurred 30 milesoff the Kerala coast - at 12.30 hours Rome time - or 14,30 hours localIndian time. And the Italian Navy reported the encounter first - beforeanyone else, including the Indians.

For their part, the Indians insisted that the attack occurred at only 14miles off the Kerala coast - which they insisted was inside territorialwaters. However, even if the distance was correct, the conclusion waswrong. Territorial waters extend only 12 miles, while 14 miles is ininternational waters.

What was really confusing, said C-Level, was that the Indians claimthat the attack occurred at 17.00 hours locally - a full 2.5 hours laterthan when the Italians said it occurred.

Another anomaly was, if the Italian marine infantry are to bebelieved, the description of the fishing boat from the Indians did notmatch the description of the boat they encountered. There were alsoconflicting reports on the number of fishermen seen on board the vesseland the number of bullets actually fired.

The official Indian story was that there are no pirates in the watersoff Kerala, which the security company said is ‘simply not true’.

Fishermen often approach a large vessel underway, as its wash churnsup the surrounding sea and with it the fish.

Following the reported incident, someone should have accessed theAIS tracks of the Enrica Lexie and the other ships in the vicinity andcompared them with the time and location of the Indian fishing boat.

The coastal radar of the Kerala Coast Guard should be recorded - or

at least notes taken - to compare with the AIS. An Italian report issued in mid-February called for a ballistics

comparison. Unfortunately, the Indians who were shot and killed arenot to be given autopsies, as the Indian authorities refused.

To help create a level playing field, C-Level Maritime Risks calledfor armed guard regulations to have teeth. ‘If it is found that an armedguard team has fired in error, that’s bad enough - but for it to remainquiet, that’s really much more condemnable. And self-regulation reallyis not the way to go - it’s a necessary but not sufficient condition’, thesecurity company’s report said.

In conclusion, the report said that the IMO has to step in and startadopting regulations with teeth - this is the wake-up call that has to benoticed - otherwise more will die - and countries will again findthemselves shoved into confrontations that no one wants, while piratesprofit from the confusion and the new reticence of guards to use theirweapons.

Another US-based security concern told Tanker Operator a couple ofmonths before this incident occurred that there were many fishingvessels in the Gulf of Aden/Red Sea areas. The fishermen are mostlyarmed for their own protection, as they live by the gun in almostlawless states. However, they pose virtually no threat to passingshipping.

UK-based marine safety concern, BCB International has called onworld leaders to rethink the self-protection measures used bycommercial ships to ward off pirate attacks. The company said that ithad been warning for some time about the dangers linked with the usedof armed guards on commercial vessels.

While accepting that the vast majority of armed guards protectingcommercial vessels are extremely well trained and highly professional;the company said that there can be no room for human error whenlethal force is used.

We have also seen reports of naval units attacking innocent fishingcraft with fatal results. After all, in the Indian Ocean, pirate motherships are often captured dhows, or large fishing vessels. How do youtell the difference when put in a position where a decision has to betaken almost in a split second?

Was this particular incident caused by trigger happy marines, a shearpanic reaction, or a calculated attempt to ward off an attack? Both sidesdiffer on this.

The P&I clubs must be tearing their hair out. TO

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TANKEROperator � March 201204

INDUSTRY – MARKETS

Tanker demandheading for aslowdown?

During the middle of January, BP released its long term view of energy markets to 2030.

Although the outlook covers allenergy sources, for tankermarkets the emphasis obviouslyis on oil. Gibson Research

highlighted several points from the BPforecast that are closely related to the tankersector.

Most importantly, BP expects growth inglobal liquids demand of 16 mill barrels perday (oil, biofuels and other liquids) over thenext two decades, rising to 103 mill barrelsper day by 2030. This compares with growthof 19 mill barrels per day over the past 20years, resulting in a slowing down, from anaverage of around 1.2% per annum to 0.8%per annum.

However, a critical part of the outlook isthat only 9 mill barrels per day is expected tocome from crude oil, with the rest comingfrom biofuels, NGLs and other fuels(including processing gains), Gibson said.China and India would account for more than70% of demand growth, with consumptionrising by 8 mill barrels per day and 3.5 millbarrels per day, respectively. Demand inOECD countries is likely to fall by 6 millbarrels per day.

Faced with a difficult task of projecting sofar ahead, BP’s outlook is based on theassumption of accelerating current trends inthe energy sector, such as a drive for cleanerenergy and greater fuel efficiency.

For example, in the transport sector,“…..efficiency of the internal combustionengine is likely to double over the next 20years,” BP said. This incorporates that“…sales of conventional passenger vehicles,accounting for nearly 100% today…” willdecline to a third of total car sales by 2030and that sales of hybrid cars will dominate.

However, BP cautions that if there are nochanges to fuel efficiency, car usage and useof alternatives, “oil demand in road transport

would increase by a massive 23 mill barrelsper day.”

This huge difference illustrates theimportance of technology combined withgovernment/consumer policies and the bearingit will have on the tanker business, Gibsonsaid.

On the supply side, growth in global liquidsdemand is expected to be met primarily byincreasing OPEC production, which wouldrise by 12 mill barrels per day, with the largestgains in NGLs and crude output from Iraq andSaudi Arabia.

Perhaps worryingly for the tanker market,BP anticipates that the Americas will largelybecome energy self-sufficient by 2030, due tostrong growth in Canadian oil sands, Braziliandeepwater projects and US shale oil, as wellas US and Brazilian biofuels.

Overall, these trends will have majorimplications for the tanker markets. Althoughat present the immediate threat for theindustry is tonnage oversupply, in the long runfactors such as slowing demand,environmental concerns, fuel efficiency andtechnological advances will be among themain drivers that will shape the future of theoil markets and with it, demand for tankertransportation, Gibson concluded.

Iranian exportsTurning to Iran, the recently announcedEuropean ban on imports of Iranian crude oildue to come into force on 1st July could meana significant shift in crude oil movements.

Exports of Iranian crude into Europeincreased during second and third quarters of2011, partly as a direct result of the loss of 1.3mill barrels per day of Libyan crude duringthe civil war.

Gibson calculated that Iran currentlyexports around 0.7 mill barrels per day intothe European refinery system, almost half of

the Libyan pre-crisis total. Spain and Italyhave been the biggest European importersfrom Iran in recent times.

It was also notable that France has gonefrom zero imports in the fourth quarter of2010 to average 76,000 barrels per day duringthe second and third quarters of 2011.

With Libyan crude exports now nearing pre-crisis levels, by the time the ban isimplemented, Europe will be well placed toswitch supplies away from Iran.

Europe’s economic growth (or lack of it) isalso a major factor as demand is unlikely torise significantly during 2012, Gibson said.

Should Europe require to source alternativecrude supply, Saudi Arabia is the obviouscandidate to make up any shortfall. SaudiArabia could supply any shortfall through theSumed pipeline taking up the capacity vacatedby the loss of Iranian crude.

Currently, Iranian exports to the Far Eastcurrently represent about 60% of its crudeexports. Tougher sanctions on Europe willsimply mean more crude will go east. Indiaand China will cite economic reasons for theirreliance on a continuous supply, as theireconomies continue to grow. As a furtherinducement, Iran may offer crude atdiscounted prices in order to ensure thatexports continue to their largest customers inAsia.

After 1st July, the political focus will turneast as the US and Europe attempt to ramp upmore pressure on India, Japan and SouthKorea to join the ban. Turkey will also comeunder pressure as it is the fifth largestimporter of Iranian crude. In the US, tougherfinancial sanctions are already on the agenda,Gibson said.

Several tanker operators have already statedtheir intention of not loading at Iranianterminals, including Tankers Internationaland Frontline. TO

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The results of a 32-month, partEU funded, 11 - partner researchproject into fatigue at sea havebeen published.The project clearlydemonstrated that certain ship watch patternscarry an increased risk of sleepiness, whichshould serve as a wake-up call to the industry,a leading maritime union official said at therecent launch of its findings.

One of the project’s partners, Anglo-Dutchmaritime union Nautilus’ senior nationalsecretary Allan Graveson said the unionwelcomed the results and urged the shippingindustry and those who regulate it to act onthe findings.

”Nautilus welcomes this research, whichprovides detailed scientific support todemonstrate the validity of our concerns aboutfatigue at sea. No other safety-critical industrywould allow key personnel to regularly workup to 91 hours a week and this study offersthe opportunity to move to methods ofworking that are based on science rather than

Shipboard fatigue now scientificallyrecognised

NEWS FOCUS - PROJECT HORIZON

TANKEROperator � March 201206

The participants were wired up to monitor fatigue levels.

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INDUSTRY – PROJECT HORIZON

March 2012 � TANKEROperator

socio-economic grounds.“The shipping industry and those who regulate it cannot afford to

ignore these findings,” he said.He was speaking of ‘Project Horizon’, the findings of which have

provided a first benchmark for understanding and predicting howdifferent watch systems influence the level of fatigue, or sleepiness ofship’s officers.

The research project brought together academic institutions andshipping industry organisations (see table), with specialist input fromsome world-leading transport and stress research experts.

It made pioneering use of bridge, engine room and cargo simulatorssimultaneously to assess scientifically the impact of fatigue in realisticseagoing scenarios that would be encountered on board a 40,000 dwtproducts tanker undertaken two return voyages between Fawley in theUK and Rotterdam - a total trip of seven days.

During the simulated vessel’s laden leg, two grades of cargo werecarried in order to test the shipboard personnel in the simulated cargoloading and discharge operations room. The cargo tanks were ‘fitted’with an inert gas system.

In total, 90 experienced deck and engineer officer volunteersparticipated in rigorous tests at Chalmers University of Technology inGothenburg (50 persons) and Warsash Maritime Academy atSouthampton Solent University (40 persons) to measure their levels ofsleepiness and performance during the most common watch keepingpatterns – four hours on/eight hours off (4/8) and six hours on/six hoursoff (6/6).

Some of the Gothenburg-based volunteers were also exposed to a‘disturbed’ off-watch period, reflecting the way in which seafarers mayexperience additional workloads, as a result of port visits, bad weather,or emergencies.

Basically, Chalmers simulated the standard three bridgewatchkeeping scenario of four hours on and eight hours off and a‘disturbed’ 6/6 watch whereby deck officers were in a state of 18 hourscontinuous wakefulness.

Professor Mike Barnett, associate director (research) at WarsashMaritime Academy, Southampton Solent University, explained thatWarsash simulated both deck and engine room undisturbed 6/6 routinelinking the simulators. The cargo control room simulator was usedwhile the ‘vessel’ was in port. Both voyages between Fawley andRotterdam were simulated to be as realistic as possible, including apilot coming on board. The intake of caffeine was regulated by onlyallowing four cups of coffee per day and no alcohol was allowedduring the experiment. The two round trips were then compared.

Participants came from many countries and were taken from all agegroups and both male and female junior officers were used, all actingas 2nd or 3rd Mates, as solo watchkeepers, or 2nd or 3rd Engineers forengine room duties. Those in the cargo control room simulator hadsome tanker experience and from which communications traffic wassimulated, such as when undertaking bunkering operations in port.

In addition, there was a Chief Officer and an AB on call, but theywere not present on the bridge during the watches. The deck officerswere not allowed to use an ECDIS and had no alarm systems to helpthem. A chair was placed on the bridge to see if the watchkeeperswould use it with mixed results.

Key findings showed the most marked sleepiness detected was in the6/6 team where at least one occurrence of falling asleep on watch wasdetected among 45% of officers on the midnight to 6 am watch andthere was also one occurrence for about 40% of those on the midnightto 4 am watch in the 4/8 group.

Watchkeepers were found to be most tired both at night and the (continued on p9)

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TANKEROperator � March 201208

INDUSTRY – PROJECT HORIZON

� At least one occurrence of sleep wasdetected among 45% of officers in the 6/6team working the 0000-0600 hrs watch atChalmers and one occurrence for about 40%of those on the 0000-0400 watch in the 4/8pattern. � At Warsash, where the watchkeepersremained undisturbed in their off-watch restperiods, the number of occurrences ofsleeping on watch for officers on the 6/6pattern varied and was up to more than 20%on the 1800-0000 watch. � Such incidents of sleeping on watch werefound within both watchkeeping patterns, andthey mainly occurred during night and earlymorning watches. � Participants in all the groups reportedrelatively high levels of subjective sleepinesson the KSS scale, which got higher towardsthe end of a watch and the end of the week. � Varying degrees of sleep loss were

observed between the watch systems anddepending on whether off-watch periods weredisturbed or not. Overall sleep duration forthose on the 4/8 pattern was found to berelatively normal, with around 7.5 hours perday for those in Team 1 at Chalmers andabout 6 hours for Team 2 at Warsash.� Participants working 6/6 watches werefound to get markedly less sleep than thoseon 4/8, and data showed a clear ‘split’sleeping pattern in which daily sleep on the6/6 pattern was divided into two periods —one of between three to four hours and theother averaging between two to three hours. � Reaction time tests, carried out at the startand end of each watch, showed clearevidence of performance deterioration – andthe slowest reaction times were found at theend of night watches and among those on the6/6 patterns. � Watchkeepers were found to be most tired

at night and in the afternoon and sleepinesslevels were found to peak towards the end ofnight watches. � The 6/6 regime was found to be moretiring than the 4/8 rotas and ‘disturbed’ off-watch periods were found to producesignificantly high levels of tiredness. In both watch systems, the disturbed off-watch period was found to have a profoundeffect upon levels of sleepiness.

There was evidence that routine andprocedural tasks could be carried out withlittle or no degradation, while participantsappeared to find it harder to deal with novel‘events’, such as collision avoidance or faultdiagnosis, as the ‘voyages’ progressed.

Researchers also noted a decline in thequality of the information being given byparticipants at watch handovers as the weekprogressed. �

Project ‘Horizon’ Key findings

The two simulated voyages with the different watches.

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March 2012 � TANKEROperator

INDUSTRY – PROJECT HORIZON

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Warsash Maritime Academy, SouthamptonSolent University – co-ordinator.

Bureau Veritas, Marine Division ResearchDepartment.

Chalmers Tekniska Hoegskola, Department of Shipping & Marine Technology.

European Transport Workers’ Federation,Nautilus International.

Stockholms Universitet, stress researchinstitute.

Charles Taylor – The Standard P&I Club.

European Community Shipowners’Association.

European Harbour Masters’ Committee.

INTERTANKO.

UK Marine Accident Investigation Branch.

UK Maritime and Coastguard Agency.

Project Horizon partners

afternoon while sleepiness levels were found to peak towards the endof night watches.

Participants were performance tested using a hand held computer(PVT) when they came on watch and then again when they went offwatch.

Performance deteriorationReaction tests carried out at the start and end of each watch alsoshowed clear evidence of performance deterioration – the slowestreactions were found at the end of night watches and among those onthe 6/6 patterns. Routine and procedural tasks were able to be carriedout with little or no degradation, but participants appeared to find itharder to deal with novel ‘events’, such as collision avoidance, or faultdiagnosis, as the ‘voyages’ progressed.

It was found, however, that the deck and engineering teamsdeveloped a good working relationship. Social interaction wasencouraged as was deemed very significant. It was thought that fatiguewould reduce peoples’ interaction with each other.

Researchers have used the data to develop a new fatiguemanagement toolkit – Fatigue Risk Management Systems - for use byshipowners and managers, seafarers, regulators and others, to helparrange working schedules to mitigate risks to ships and their cargoes,seafarers, passengers and the marine environment. It is hoped thatthese can be used as part of the Safety Management System (SMS)within the ISM, Professor Barnett said.

It is hoped to develop a crisis management project, which will lookat how to manage fatigue in difficult circumstances. For this project,senior officers, such as Masters, Chief Officers and Chief Engineers,will take part. �

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TANKEROperator � March 201210

INDUSTRY - US REPORT

US tax- Arntzenspells it out

On 21st February this year, Morten Arntzen president and CEO of the OverseasShipholding Group (OSG) gave a testimony to the US House Ways and Means

Committee Subcommittee on Oversight and the House Ways and Means CommitteeSubcommittee on Select Revenue Measures Hearing on Maritime Tax Issues.

In a speech championing the ‘AmericanShipping Reinvestment Act of 2011’, hesaid that the US maritime industry wascritical to the country’s economic well-

being its homeland and national security. A recent PricewaterhouseCoopers (PwC)

study for the Transportation Institute about theUS domestic maritime industry found that theindustry overall contributed more than $100bill in economic output to the domesticeconomy and employed nearly 500,000workers.

Today, there are more than 40,000 vessels

in the domestic maritime fleet, comprised ofsome of the most technologically advancedvessels and other assets in the world.

The technological advances, which haveresulted from that massive commitment of

capital, have greatly improved the flow ofcargo, resulting in virtually seamlessmovement of goods from origin to destinationanywhere in the world.

The US-flag industry also continues toinvest in the expansion and modernisation ofthe fleet. For example, during the past yearOSG took delivery of the last of 12 Jones Actships constructed by Aker PhiladelphiaShipyard, a huge investment that createdthousands of US shipbuilding jobs and willcreate thousands more relating to the vessels’operation, maintenance, and commercial use.

These newbuildingsrepresented the largestcommercial shipbuildingorder since World War II.

OSG also has madesubstantial investments inits US-flag internationalfleet, which has beendescribed by theDepartment of Defense’sUS TransportationCommand as “a vitalelement of our military’sstrategic sealift and globalresponse capability.”These investments help tosustain a US shipbuildingindustrial base, a pool ofAmerican seafarers and afleet of US-flag vesselsfor time of war, ornational emergency.

OSG and the USmaritime sector also playa key role in maintaining avibrant US-owned

international shipping fleet, which may becalled into service for our nation’s defence.

American-owned companies’ internationalships are part of what is thus the ‘EffectiveUS Controlled Fleet (EUSCF)’ that is, the

fleet of merchant vessels, registered in certainforeign nations, that are available forrequisition, use or charter by the USGovernment in the event of war or nationalemergency.

US fleet depletionHowever, a 2002 study commissioned by theDepartment of Defense and performed byprofessors at the Massachusetts Institute ofTechnology found that the EUSC fleetdropped by 38% in terms of numbers of shipsand nearly 55% in terms of deadweighttonnage between 1986 and 2000. Today,OSG’s ships constitute a critical component ofthe EUSC fleet.

Despite the successes of the US maritimeindustry and notwithstanding the critical roleUS shipping companies play in the USeconomy and national defence, they facesevere competition and challenging marketconditions. Moreover, as a highly capital-intensive industry, the companies have verysubstantial funding needs.

“US shipping companies simply cannotthrive if we are burdened with tax codeprovisions, which do not apply to other UScorporations, or if access to capital,particularly our own earnings, is impeded,” he warned.

A recent Lexington Institute study on thecontributions of the domestic maritimeindustry to US security found that ‘thegreatest danger to the role and function of theUS as a seafaring nation is the decline of itsmaritime industry and merchant marine.’

Antiquated provisionHe explained that his testimony focused HR1031, the ‘American Shipping ReinvestmentAct of 2011’, which would correct anantiquated provision in current law thatsingles out US shipping companies for lessfavourable treatment than other US businesses

OSG’s Morten Arntzen.

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INDUSTRY - US REPORT

March 2012 � TANKEROperator 11

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and impedes access to their own earnings. Asa result, that flaw in the tax code has impededshipping companies like OSG from havingaccess to their own capital, funds thatotherwise could be used in the US.

By way of background, as a general rule,US corporations are allowed to defer UStaxation on their foreign subsidiaries’ income.Over 30 years’ ago, in 1975, Section 955 wasadded to the Internal Revenue Code. Thisprovided that US shipping companies coulddefer immediate taxation on their foreignsubsidiaries’ earnings from shippingoperations only if those earnings werereinvested abroad in qualified foreign shippingassets.

The Tax Reform Act of 1986 made matterseven worse by ending deferral altogether forshipping income earned by foreignsubsidiaries of US shipping companies, evenif reinvested in foreign shipping assets. Thisloss devastated US shipping over the next twodecades.

Over time, Congress recognised the extentof that damage. To help revive US shipping,the American Jobs Creation Act of 2004(JOBS Act) restored deferral for shippingincome. This change strengthened OSG’sbalance sheet and allowed the company toembark on the largest US shipbuilding effortsince World War II.

That 2004 law also lowered the tax barriersthat prevented US companies, which didbusiness internationally from bringing foreignearnings earned prior to 2004 back forinvestment in the US. However, because theJOBS Act failed to address the problemscreated by enactment of Section 955 30 years’earlier, shipping companies could not benefitfrom those lowered tax barriers.

As a result, US shipping companies weredenied an opportunity that the JOBS Actafforded all other US corporations and theforeign earnings reinvested in foreign shippingassets before 1987 remained stranded abroad.

Because Section 955 remains law, USshipping companies still must maintaininvestments in foreign shipping assets madedecades ago, pre-1987. Any net decrease inthose investments results in an immediate tax.

This vestigial quirk in the tax law hascaused capital of US shipping companies to beleft offshore, effectively preventing thosecompanies from investing their earnings backinto the US economy.

Legislation is needed to fix this problem forUS shipping companies and allow thosecompanies to redeploy their pre-1987 earningsin the US.

The American Shipping Reinvestment Act

(ASRA) would repeal Section 955 and allowUS shipping companies to bring home pre-1987 earnings that are stranded overseas byaffording US shipping companies the same taxtreatment on those earnings as the 2004 Actalready extended to all other US corporationswith foreign subsidiaries.

Enactment of ASRA will allow US shippingcompanies to be treated the same as all othercompanies were treated in the JOBS Act,giving them the ability to redeploy fundscurrently stranded abroad for use here athome.

ASRA will help US shipping companiesmake investments in the US-flag fleet, as wellas vessels that support homeland security andthe military. ASRA also will help create andsustain thousands of American jobs in the

shipbuilding, seagoing and related trades. More generally, by freeing up needed capitalfor the maritime sector, the legislation willprovide an immediate economic boost in theshort-term, while creating lasting benefits forthe economy in the long-term.

For all those reasons, ASRA has earnedbroad, bipartisan support in the House and theSenate.

It is also supported by US maritime labour,US shipyards, state maritime academies andUS shipping companies.

“We in the maritime sector look forward toworking closely with the chairmen andmembers of the Oversight and Select RevenueMeasures Subcommittees to ensure promptpassage of this important legislation,” Arntzenconcluded. TO

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TANKEROperator � March 201212

INDUSTRY - US REPORT

This article argued that given theObama administration’s decisionnot to approve the Keystone XLpipeline (a politically and

environmentally charged decision in anelection year), the Canadian government hasactively been seeking alternative buyers forthe oil extracted from their tar sands; namely,they have been cultivating buyers in Chinathrough a recent trade mission headed by theCanadian Prime Minister.

The Keystone XL pipeline was supposed topour oil from Alberta, Canada, to the US Gulfrefineries where it could be processed andconsumed in the US. The pipeline project wasrejected partially on concerns about its impactper se on the environment and partially on anorchestrated effort by environmental groupsthat perceive oil production from tar sands tobe highly energy-demanding andenvironmentally dirty as to deserve a boycottat any point of the chain from investment intar sand projects to production, transportationand consumption.

Of course, the counter-argument will beabout the overall carbon footprint if theChinese end up buying Canadian oil and theUS sources oil from countries more remotethan Canada (like Venezuela, West Africa, orMiddle East).

The economic benefit and the potentialenvironmental impact of the pipeline aside, ashipping executive’s mind has to focus on theeconomic benefit from the disproving decisionof the pipeline on the maritime industry alone.Canada is an extremely stable country and astaunch US ally, and traditionally, most of theCanadian oil and mineral commodities find abig market in the US. No doubt, it makesgreat economic sense: a bankable andinsatiable consumer market located close tothe producer country along a peaceful bordersharing same institutional principles (unlike‘buying oil from people who hate us’). But, from a shipping executive’s perspective,

with international flag market interest, anyprospects over this border trade were untilnow fully indifferent: oil from Alberta couldbe transported via continental pipeline, veryeconomically once the pipeline was installed,to the Gulf of Mexico without ever touching atanker; it will never pop the cork off of achampagne bottle! (for owners active in theGreat Lakes shipping, of course, thecommodity trade between Canada and the USis still a viable market).

If Chinese prove to be substantial buyers forthe oil from the Canadian tar sands, logicallytankers will be involved in transporting oilfrom the west coast of the North Americancontinent to China. Obviously, this isinspiring news for shipping, and the tankerowners in particular. Almost like a deus exmachina intervention, a new trading routeeffortlessly appears on the globe map and thetonne/mile demand automatically perks up.

It’s still premature to figure out what type oftankers will benefit most from such trade, butan educated guess may be that oil will betransported from Middle East to west coastUS/Far East in VLCCs or Suezmaxes, whichthen would proceed in ballast condition toCanada to load tar sands oil for Chinadischarge and then proceed in ballast toMiddle East to load again.

TriangulationClearly such triangulating schedule reducesthe ‘ballast leg’ of the overall trip, as tankerscrossing westbound the Pacific Ocean are inladen condition. It’s still very premature todetermine that the above scenario willeventually play out as such, or if it will serveas a catalyst for a market recovery from thecurrent slump in the tanker freight rates. Forinstance, the pipeline may still be approvednext year once presidential elections in the USare out of the picture after November 2012. Economic efficiencies and rational decisionmaking in the market place are the major

assumptions for building economic modelsand market projects. Selling (andtransporting) Canadian oil across the ocean toChina instead of to the US, and having the USimport oil from countries located further apartthan next door Canada clearly is not the mostefficient trade. As it turns out, in the marketplace there might be considerations thatsupersede economic efficiencies; in thisinstance, environmental and political concerns,whether for good or bad reasons, guide themarket place toward a certain direction andtoward the benefit of shipping.

There is little doubt that shipping is anindustry driven by a multitude of variables andinputs, including financial, fiscal, monetary,geo-political, sovereign, social, environmental,regulatory and technological factors. In turn,each of these factors is the product of severaladditional sub-variables and minor nuisances;and, some of these variables may be correlatedto some extent or possibly be fullyindependent. Any decent economic model ofthe industry about future projections has todeal with most, if not all, of such inputs.

The $60,000 question becomes, however,how one treats the ‘long tail’ of all thesevariables? There is a small probability thateach of these variables can vary widely.Whether some of the approximately 120VLCCs still on order will be delivered laterthan scheduled, or cancelled altogether may bea small aberration that an economic model cantolerate.

On the other hand, if Canada finds in Chinabuyers for all the oil supposed to betransported to the US by the Keystone XLpipeline (830,000 barrels per day), thenpotentially a VLCC will be required to loadalmost every two days; the impact on themarket, the low likelihood of such scenarionotwithstanding, can be much moremeaningful, as 25 VLCCs (about 4% of theentire world VLCC fleet) will be required toservice such trade.

A long arm forshipping’s ‘invisible

hand’On 7th February, 2012, business journalist Joe Nocera published in the Op-Ed pages of

The New York Times an opinion piece entitled ‘Poisoned Politics of KeystoneXL’*.

Page 15: Tanker operator-magazines-march-2012

INDUSTRY - US REPORT

March 2012 � TANKEROperator 13

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High probability events sustain thedirection of the market, but it’s usually lowprobability events that act as catalysts and‘game changers’. It’s the events that seeminitially infinitesimally improbable thatchange the markets and can be a blessing, or aboon to market participants. As the CEO ofGoldman Sachs mentioned once, ‘I spent 98%of my time worrying about 2% probabilities’.

Shipping, an industry well known for itsvolatility has, time and again, shown that lowprobability factors outside the industry canvery well create or destroy value in shipping.It seems that the cancellation of the KeystoneXL pipeline may be poised to create suchvalue for the shipping industry.

* This article was written by Basil MKaratzas, chief executive of KaratzasMarine Advisors & Co, a shippingfinance advisory, vessel appraisal andvessel brokerage firm based inManhattan. Karatzas may be contactedat [email protected], or at +1 713545 5990.

Massachusetts MaritimeAcademy (MMA) recently hostedan opening ceremony for theAmerican Bureau of ShippingInformation commons building.The 42,000 sq ft building houses theAcademy’s new full mission ship simulator,supplied by Transas USA.

It combines maritime tradition with thelatest technology in maritime training,including the campus library, museum,archives, model ship collection, plus hi-techsimulation facilities, multimedia ‘smart’classroom, and resource centres.

The new simulator and its support areasinclude a full mission, 360 deg bridgesimulator, debriefing room, instructorscontrol room and an ante room.

Modern navigation systems installed onthe bridge, include an integrated navigationsystem (INS), dynamic positioning systems(DP2), ARPA/Radar multifunction displays,and ECDIS, all meeting the latestinternational maritime regulations.

The full mission simulator is in additionto the Transas Navi-Trainer Professional5000 simulator systems already installed atMMA. It can operate either independently,or in joint exercises across campus formulti-vessel scenarios, with the existing tugbridge and electronic navigation laboratory.

As one of the US’ six state maritimeacademies, Cape Cod located MMA claimedto balance a unique regimental lifestyle witha typical four-year college academic studycourse. �

Transas supplies MMA witha full mission simulator

TO

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TANKEROperator � March 201214

INDUSTRY - SHIP MANAGEMENT

Industry associationgoes from strength to

strengthInterManager, the international trade association for the shipmanagement

industry, has started 2012 with a bang.

In the first month of this year,InterManager welcomed two fullmembers – shipmanagement companiesHistria and Green Wave – and two

associate members – international law firmHill Dickinson and crew communicationsprovider SMART Link.

Histria Shipmanagement manages a fleetcomprising nine modern fuel efficient 41,000dwt oil/chemical tankers, including twonewbuildings under construction at ConstantaShipyard. Future plans include the building oftwo 50,000 dwt shallow draft, high cubic, fuelefficient eco-design oil/chemical tankersscheduled for delivery in 2013.

Formed in 1992, the shipmanagementconcern is part of the Histria Group, whichencompasses a network of companies engagedin shipmanagement, chartering, operation,crewing, repairs and upgrading, technicalmaintenance and safety at sea for a growingfleet of tankers, bulk carriers and generalcargo vessels ranging from 3,000 dwt to164,000 dwt and totalling an aggregate ofmore than 650,000 dwt.

The Romanian-based concern was amongthe first European shipping companiesawarded the International Safety ManagementCertificate IMO A 741(18) by GermanischerLloyd in October 1997. The company hasrecently updated and restructured its integratedmanagement system to give added value to itscapabilities to manage a modern fleet.

Green Wave Shipping is a Singapore-registered company managing a small fleet ofmodern stainless steel chemical tankers. Thecompany is a subsidiary of Koyo Kaiun Co.

Hill Dickinson’s international marine, tradeand energy practice comprises more than 100dedicated marine legal experts based inLondon, Piraeus, Singapore, Liverpool andManchester. The practice comprises fourteams – yacht, shipping, commodities and

cargo, freight and logistics. Each of the marine teams works closely

with an international network of maritimelawyers, marine surveyors, investigators andloss adjusters to provide the complete marinelegal service 24/7.

Hill Dickinson’s enrolment enablesInterManager to reacquaint itself with formermember Ian Maclean who has now moved toHill Dickinson having previously been withInce & Co.

Philippines-based SMART Link providessatellite communication for the maritimeindustry with an estimated 120,000 activesubscribers. Backed by telecommunicationcompany SMART Communications Inc,SMART Link serves seafarers in theAsia/Pacific region, Indian Ocean, MiddleEast and parts of Europe and America and isinstalled on some 7,500 vessels.

IMO representativeBuilding on this momentum, InterManager hasappointed Capt Paddy McKnight to the role ofits IMO permanent representative.

The organisation was previously representedat the IMO by Svein Sorlie of WilhWilhelmsen Holding, who has now retiredfrom shipping.

On leaving the RN, he spent 15 years as theUK representative at The JapaneseShipowners’ Association (JSA), which entailedinteraction with all the leading shipping tradeorganizations, as well as the IMO.

In particular, he was a member of theshipowners’ delegation throughout the genesisand development of the Maritime LabourConvention at the ILO in Geneva.

In another move this year, InterManagerpresident Alastair Evitt, has been made aFellow of The Nautical Institute (FNI).

Evitt, managing director of Meridian MarineManagement, was formally presented with his

Certificate of Fellowship at the annual generalmeeting of the North West England & NorthWales Branch of The Nautical Institute inLiverpool on 16th February.

Rear Admiral JS Lang FNI, chairman of thecouncil’s fellowship committee, said:“Fellowship of The Nautical Institute is only awarded to those who have made asignificant contribution to nautical science, the nautical profession and/or the objectives of the Institute.”

KPI seminarsA series of workshops is being held topromote the InterManager-led KPIAssociation’s system of measurable standardsfor the shipping industry.

InterManager is using the workshops as ameans of communicating a betterunderstanding of how the measurement systemworks, including explanations of theperformance indicators being used and theprocess of collecting data.

For example last month in Singapore,InterManager secretary general KubaSzymanski, together with vice presidentGeorge Hoyt and Markus Schmitz, managingdirector of SoftImpact, led the first full dayworkshop which was held at the offices of VShips - courtesy of V Ships Singaporemanaging director, Capt Satnam Kumar.

Szymanski said: “This is a good opportunityfor us to talk to current and potential users ofthe KPI system and explain the benefits firsthand as well as addressing commonmisconceptions. It is also good to hear actualusers of the system explaining how they arebenefiting from it and have them share theirexperiences with the wider industry.”

In addition, InterManager has established anAsia-based KPI support network to enableusers to share best practice and otherinformation. TO

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March 2012 � TANKEROperator . 15

INDUSTRY – SHIPMANAGEMENT - COMMUNICATIONS

Frontline opts forInmarsat’s newservice bundle

A major tanker company has claimed to have overcome the increasing complexity andcost of communications by opting for a complete switching system.

Frontline, the world’s largest tankerowner in terms of tonnage, is toenhance its ship/shorecommunications network by

installing Inmarsat’s new offering XpressLinkon more than 100 vessels in its fleet, includingthe newbuildings.

“We evaluated the providers and made apurely commercial decision about XpressLinkfrom Inmarsat,” said Kjell Langva of FrontlineManagement in Norway. “The choice wasmade after a year of positive experience withVSAT from Ship Equip”.

“The cost-benefit profile and the unmatchedfailover capability, which offers unlimitedusage on Inmarsat FleetBroadband, were keyto the decision. Also Inmarsat’s ability todeliver made up the additional element inmaking the choice,” he said.

“With XpressLink’s internet and voiceservices, communications on board the vesselwill be greatly enhanced, supportingoperations and improving overall efficiency. Italso allows the crew to stay in touch withfamily and friends and handle their personalaffairs, at a very low cost, which has been animportant issue for Frontline,” said Langva.

Driving forceLangva explained to Tanker Operator thatFrontline uses the ‘always on’ option as thecrew’s recreation was the main driver of thewhole project. “The crew is the mostimportant element of success when competingwith other shipowners,” he explained.

Frank Coles, president, Inmarsat Maritime,said. “The contract with Frontline is alandmark agreement for XpressLink. This is asignificant endorsement by the world leader incrude oil shipping. It confirms that we have ahighly-competitive product, offering excellentvalue for money and with the right focus ondelivering reliable high-speed broadbandthrough a combination of L-band and VSATservices.”

Switching is an integral part to the

XpressLink system. VSAT is used when insidethe coverage, however, when outside thecoverage area, or the VSAT signal is lost,communication is automatically switched toFleetBroadband and back again when theVSAT returns online.

Coles said that shipowners wereincreasingly looking for redundancy andcommunications reliability. “In the past theyhave been happy with one service, but todaythey can’t take the risk,” he said. “We(Inmarsat) are in charge of the servicereliability to deliver a cost-effective service.”

For a fixed low cost, XpressLink providesvessels worldwide with access to both Ku-band VSAT and L-band FleetBroadbandservices in a bundled package – with aguaranteed free upgrade to the 50 Mbpscapability of Inmarsat’s Ka-band GlobalXpress when the service becomes operationalin 2013.

“Ka-band is a game changer from a speedperspective, introducing truly high speedbroadband over satellite. It is a VSAT serviceand will replace slower KU services currentlybeing offered,” Coles explained.

Service choiceTurning to FleetBroadband as a standaloneproduct, Coles said that Inmarsat continued tosee high take up of FleetBroadband from newcustomers, as well as those migrating fromolder generation technology and competitorproducts that are not as reliable.

He also explained that some of Inmarsat’scustomers go straight for an ‘always on’service, while others opt for a choice ofservices. “The need for ‘always on’ is notalways there from a (shipowner) businessperspective,” he said.

Coles said that there was some cost synergyfor larger fleets, but it was also true to saycosts depend on the type of service required.“If a customer wants fast internet broadbandof course it will be more expensive thansimple email.

“Most shipowners are not at the point wherethey are taking ‘all singing all dancing’complete solutions. Like in all markets, thereare the leading edge adopters, as well as themore standard shipowner who is content withthe basic product,” Coles said.

Langva said that with fixed annual costs, hesaw the possibility of savings with a largefleet, especially with the increased need forcommunications. He explained that FrontlineManagement also looks after vessels in theKnightsbridge, Golden Ocean, Ship Financeand Sea Tankers’ fleets, among others.

The installation of XpressLink onFrontline’s vessels will commenceimmediately and continue throughout 2012.

Langva explained that most of theinstallations/upgrades will take place while thevessels were in port, such as Singapore, whichis a favoured destination. “Satcoms installationis not a big job, as the crew can prepare thevessel before an Inmarsat technician comes onboard for a few hours,” he said.

In a recent presentation, Coles said that inthe future, companies will be able to use thecommunications available to transfer moredata for much the same cost.

For a tanker using anywhere between 10 GBand 40 GB per month, a bundled solution wasmore cost effective that a ‘pay as you go’solution, he said.

With the new Global Xpress ka-bandservice due to be launched in 2013, tieredpricing will be offered for the amount ofbandwidth used per month allowing operatorsa choice. Coles said; “It will depend on howmuch data needs to be transmitted and howmuch the vessel operator is willing to pay.There will be a certainty of costs at eachlevel.”

The average plans will be between 10 MBup to 5 GB, but an operator can negotiatemore if he or she needs it, he explained.Global Xpress will offer downlink speeds ofup to 50 Mbps, and up to 5 Mbps over theuplink, from compact user terminals. TO

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TANKEROperator � March 201216

INDUSTRY – SHIPMANAGEMENT - MANAGEMENT SYSTEMS

This features port forecasts, tidedata, tools for easy customisationand direct access to bunkerpricing. According to Erik

Hjortland, advisor, ship performance andbunker management, Odfjell Tankers, “Withthe addition of port forecasts, spot forecastsand bunker pricing, GlobalView is an evenmore valuable fleet management platform.Ultimately, it helps us to be more efficient inmanaging our fleet.”

The new features of GlobalView 2.0 includethe following:� Port forecasts: Fleet managers can plan andschedule the best time for loading/unloading toavoid periods of precipitation, or strong winds.Port forecasts are available for more than2,500 locations with hourly updates three daysout and three and six hourly updates five

days out.� Tide data: High and low tide data for over

7,500 locations help plan arrivals or departures based on high tides.

� Global ice concentrations: Global ice concentration imagery is available to help ships make the safest voyage possible. Colour-coded global ice concentration imagery, based on satellite data, shows dangerous ice concentrations.

� Spot forecasts: GlobalView 2.0 provides detailed weather data for specific ocean areas. Spot forecasts are available with hourly updates three days out and three andsix hourly updates five days out.

� Fuel pricing: Real-time bunker pricing is available for more than 70 locations globally. Information is updated throughoutthe day and includes barging rates, offered

on a subscription basis. This is provided in partnership with LQM Petroleum Services.

� Easy customisation: GlobalView 2.0 allowsfleet managers to send a message to multiple ships at once. Adding customised links to additional websites and data ensures that essential information is easily accessible, all in one place.

� Eco-Speed calculator: Using this tool, fleet managers can calculate the estimated cost of voyages at different speeds. Fleet managers’ plug in parameters and the eco-speed calculator will show a comparison.

� Monitor vessels with BVS on board: Fleet managers can now see voyage tracks from AWT’s BVS on board system to monitor their entire fleet.

AWT upgrades fleetmanagement system

Standfirst—-Applied Weather Technology (AWT) has released GlobalView 2.0, a newversion of the company’s fleet management system.

CDISIRE

Port State ControlFlag State InspectionsClass Inspections

Ship Visit ReportsInternal AuditsNavi Audits

Marine Injury ReportsVessel/Cargo damagesMachinery damagesEnvironmental incidentsNear MissesNon Conformities

Fleet ReportsNear Miss Reports

Management Reports

Overdue Items ReportShip Reports

Oil Major Reports

Vetting Status ReportInternal vs. External Deficiencies

Key Performance Indicators

info chemserve-marine.comwww.chemserve-marine.com

Repetitive QuestionsMost frequent Deficiencies

Marine Injury Report

TO

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March 2012 � TANKEROperator . 17

INDUSTRY – SHIPMANAGEMENT - DATA MANAGEMENT

The contract also includes the Workand Rest Hours module allowingfor compliance with internationallegislation on rest hours for

seafarers.This is the largest contract signed for DNV

Navigator thus far. Basically, it is a dedicateddecisions support tool for assisting the Masterin handling the administrative and regulatorycomplexity of port operations, the classsociety explained.

DNV Navigator facilitates compliance withrequirements from charterers and portauthorities and is often referred to as the‘Captain’s best friend’.

More than 1,200 port clearance forms areautomatically filled in with ship data so thatthe required paper work can be prepared in afew minutes. The system includes a database

of information about most of the world’s portsand terminals including publications and datafrom UKHO, IHS Fairplay and other sources.Arrival and departure procedures for all themajor ports are available as well as acomprehensive nautical library providing up-todate maritime-specific information.

Master’s notesThe system is arranged for easy creation ofMaster’s Notes, which are used for sharingport specific knowledge within the fleet andinformation can be shared with other systemssuch as gangway control systems and ECDIS.

“Wallem is striving continuously to managetheir fleet in safer and more cost effectiveways”, said Captain Deepak Honawar,Wallem’s director of safety and quality. Thecompany tested the system thoroughly before

taking this next strategic step. As part of the system’s implementation,

Wallem will make use of the Work and RestHours module. This module demonstratescompliance with the Maritime LabourConvention 2006 (MLC) and the Standard ofTraining, Certification and Watchkeeping forSeafarers (STCW).

Any violation of regulations is clearlyidentified and the system allows user-definedreports to be generated. Crew timesheets canbe generated in MS Excel and the power ofthe system can be increased by addingcompany-specific forms and by sharing datawith other company-specific or third partysystems.

DNV Navigator was introduced in 2002 andis already in use on over 2,000 shipsworldwide.

Wallem opts for DNVNavigator

Hong Kong-based Wallem Ship Management has ordered DNV Navigator for itsmanaged fleet of more than 190 ships.

TO

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INDUSTRY – CHEMICAL/PRODUCTS TANKERS

March 2012 � TANKEROperator 19

However, not all is rosyunderlined by a Gibson Researchreport issued in the middle ofFebruary, which said that the

product tanker market in the East has beenseverely depressed over the past few months.

TCEs for LR2s trading on the benchmarkroute from the Middle East Gulf to Japan(TC1) have averaged only $6,000 per day (ona round voyage basis at design speed) sinceNovember.

TCE returns dropped to even lower levels inearly February, to around $2,000-$3,000 perday at design speed. The conditions forsmaller product carriers in the East weresimilar, with LR1 and MR TCE earnings alsosinking well below fixed operating costs inrecent months.

This weakness in the region across all sizeranges has been primarily due to anabundance of available spot tonnage, withslow steaming becoming a common feature ofthis particular market sector.

Since 2005, the product tanker fleet hasincreased by 1,005 vessels (+65%). This isequivalent to close to an 8% per annumincrease. However, the pace of growth hasslowed over the past 12 months and, as aresult, the total gain in supply was only 3.5%last year.

Low contractingbodes well for the

futureMost operators have more faith in the chemical and products tanker markets’ future

than any other at present. In 2012, the expectations are for an even

smaller increase in fleet numbers, not leastdue to anticipated delays and cancellations, aswell as strong interest in scrapping amid thecurrent weak returns.

The biggest gain is likely to be in the LR2fleet, with net increase of 6% this year.Importantly, LR1 supply is forecast to rise byonly 2% and MRs by just 1.5%. This will leadto an overall growth of only 2%. Beyond2012, even slower expansion is projected inthe product tanker fleet.

Thus, the current market is still feeling theeffects of rapid fleet expansion over the pastfew years, but the more limited growth insupply in the future will alleviate theoversupply of product tankers.

At the same time, on the demand side, theprospects are for robust growth. More than 2.8mill barrels per day of new refining capacityin the Middle East and India is expected tocome on stream by 2016. This will offerstrong support both to long haul and shorthaul products trade out of the region.

Combined, these improvements in thesupply and demand conditions could provide asolid base for a substantial gain in producttanker rates in the East in the medium term,but for now product tankers will have a fewmore ‘rough waves’ ahead of them, Gibsonconcluded.

MRs positiveDrewry Maritime Research’s latest TankerForecaster tends to agree, saying that whilecrude oil tankers will continue to suffer,product tankers, especially MRs, are expectedto perform better in the coming years.

Freight rates for MRs improved in the lastquarter of 2011 owing to an increase inchartering activity across major trade routes inthis segment. Overall, reported spot charteringactivity increased by 18% in 4Q11.

Considerable improvement was observed on

the Mediterranean region where the activityincreased by 49% over the quarter followedby the Northwest Europe (26%) andSingapore (17%).

Of the product fleet, Drewry said that MRsstand out as having the greatest earningspotential in the long term. The consultancysaid that it expected that the fleet growth islikely to be restricted on account of lowordering in this sector.

Short termIn the short term, a marginal improvement inthe Atlantic trade is anticipated, althoughdownside risks include the closure of severalrefineries in the US Gulf, due to a lack of cashflow and the Eurozone debt crisis. However,the demand for MRs is likely to grow steadilyin Asia and Middle East regions withupcoming refinery capacity additions.

But the key for this potential rise in rates isthe demand/supply gap, which will work infavour of owners to a considerable extent. Thesupply of MRs declined marginally by the endof 2011 to 23.5 mill dwt.

Further, with the MR orderbook equating to8.5% of the fleet, Drewry forecasted a supplydemand balance of 2.3 mill dwt (or 9.8% ofsupply) for 2012. However, it is the reductionof this balance to 0.5 mill dwt (or 2.1% ofsupply) come 2016 that will push rates up. TO

Source - Drewry Maritime Research.

Source - Gibson Research.

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TANKEROperator � March 201220

What’s in your tank? Last January, the MARPOL 73/78 Annex II and MEPC 2/ Circ. 15 Annex 10 tank

cleaning regulations that came into force in August 2010 came into full effect, leaving many ship operators facing a new challenge.

It is now up to vessel owners andoperators to not only meet theseregulations fully, but also to continue toimprove shipmanagement efficiency,

reduce operational costs and promote safety atsea.

Wilhelmsen Ships Service’s (WSS) directormarine chemicals, Graham Hunter, believedthat although these new regulations couldcause headaches for some, they are entirelynecessary.

Hunter said: “Tank cleaning is a vital factorin governing the success of ship operationsand the majority of shipowners and tradersrecognise the importance of efficient tankcleaning products and adequate procedures.We know that the basis of successful tankcleaning operations is a fundamentalknowledge of all aspects and at WSS our

global network and service centres areconfronted with a huge range of situations ona daily basis.”

So how can marine chemical providers helpowners and operators to meet regulatorydemands while remaining efficient? Huntersaid that experience is key: “We have decadesof experience and can provide acomprehensive range of products designedspecifically to meet regulations through oureight global tank cleaning centres in Houston,Rotterdam, Singapore, Fujairah, Durban,Busan, Santos and Algeciras.”

Hunter went on to explain that last year’sacquisition of Nalfleet has positioned WSS asa world-leader in the provision ofenvironmentally-friendly marine chemicals.

All chemicals are now being produced at thesame location, the Wilhelmsen Chemicals

factory just outside Tønsberg in Norway withmanufacturing regulated by ISO 9001 and ISO14001.

Hunter explained that production andquality control is standardised for both productlines to ensure consistency and high qualityproducts: “Throughout the production processwe are committed to reducing waste, transportvolumes, hazardous substances and recyclingmaterials. Our aim is to keep increasing theeffectiveness of our chemical portfolio while,at the same time, improving safety andreducing environmental impact.”

New technologyAs part of the acquisition agreement withNalfleet’s previous parent company Nalco,WSS has access to suitable technologydeveloped by the Nalco R&D team, in

INDUSTRY – CHEMICAL/PRODUCTS TANKERS

Page 23: Tanker operator-magazines-march-2012

Celebrating our 35 Year of Operations.th

Your Preferred Ship Repair Yardin the Arabian Gulf

ISO 18001ISO 28000 & 20858ISO 9001 & 14001ISO 27001 & ISPS Code

P.O. Box 50110, Hidd, Kingdom of Bahrain, Tel: +973 17 67 1111, Fax: +973 17 67 0236, E: [email protected], www.asry.net

Page 24: Tanker operator-magazines-march-2012

addition to a skilled team of WilhelmsenChemicals scientists based at the R&Dlaboratory outside Tønsberg. Both teams meeton a regular basis to review the latesttechnologies.

And although WSS is the largest producerof marine chemicals in the world, innovationis still the prime goal. “It’s not only aboutsize,” says Hunter. “We realise that customershave a choice. We need to keep innovating tolead the market.”

WSS guidelines on tank cleaningchemicals:

� MARPOL Annex II regulations for the discharge of noxious liquid substances include restrictions on the types of cleaningadditives allowed to be used in tank washing operations.

� WSS offered to market 20 separate IMO-approved tank cleaning products under the old MEPC/Circ.363.

� Of these 20 approved chemicals, five were pure tank cleaning products. The remaindergeneral and multipurpose cleaners.

� Changes in IMO legislation MEPC/Circ 380: � New rules superseded MEPC/Circ

380 from 1st August, 2010. � Future products must not contain

any perfume or colouring agents. � Components (chemicals) with

Pollution Category X shall not exceed 10% of the total weight of the cleaning additive.

� If a component (chemical) falls within Pollution Category X, it shall be readily biodegradable.

� All chemical tank cleaning suppliers need to adopt their existing product range to these changes to comply with the new circular.

Products approved and evaluated throughMEPC/Circ.363 ceased to be valid on 1stAugust, 2010. To maintain a listing beyondthis date, a re-evaluation of the cleaningadditives concerned, in accordance with therevised guidelines given in MEPC.1/Circ.590,and regulation 13.5.2.of Annex10 ofMARPOL 73/78 is required.� The new circular of Annex10 of MARPOL73/78, (MEPC.2 / Circ.15, Annex 10) cameinto force on 1st August 2010. � WSS has 10 products approved accordingto this circular.� All products previously holding an IMOapproval can still be used for general cleaningpurposes around the vessels.� Products used for spot cleaning in tankscan be used as previously.

WSS chemicals solution: All WSS tank cleaning chemicals are;� Free from nonyl phenol ethoxylates or

other estrogenic compounds.� Non-flammables. � High concentrates.� Economical in use.� Tested and passed paragraph 13.5.2 of

Annex II of MARPOL 73/78. � IMO approved to MEPC 2/Circ. 15 annex

10.

TANKEROperator � March 201222

INDUSTRY – CHEMICAL/PRODUCTS TANKERS

WSS marine chemicals director GrahamHunter.

Produced in association with

Supported by

Sponsors include

ContactMary-Ellen KontogeorgouDelegates [email protected]

Mel SkinnerSponsorship [email protected] +44 777 252272

Emmanuel Vordonis

TO

Making money in a tough tanker market:how to cut costs and increase operating standards

Dimitris Lyras

TANKEROperator

Martin Shaw

A conference

Speakers:

Martin Shaw, managing director, Marine Operations and Assurance Management Solutions Ltd,ex-VP technical, fleet manager and vetting service manager, BP ShippingDimitris Lyras, director, Lyras Shipping and founder, Ulysses Systems (chair)Emmanuel Vordonis, ex executive director, Thenamaris Ships ManagementMads Friis Sørensen, branch manager, FURUNO European Branch OfficeTakis Koutris, managing director, Roxana Shipping and chairman, Marine Technical ManagersAssociation (MARTECMA)Captain Andreas Xapolytos, CEO, Tsakos Columbia ShipmanagementGeorge Vassiliades, commercial manager, Tsakos Columbia Shipmanagement

Metropolitan Hotel, Athens, April 3 2012

Page 25: Tanker operator-magazines-march-2012
Page 26: Tanker operator-magazines-march-2012

TANKEROperator � March 201224

INDUSTRY - PIRACY

ISS launches anti-piracy solution

Cost effective armour protection will provide countermeasures to safeguard vessels and crew welfare

Inchcape Shipping Services (ISS) andVessel Protection Solutions (VPS) havelaunched an anti-piracy partnership. Thesolutions will provide customers with

highly effective fully certified systems that aredesigned to combat RPGs and small arms fire,ISS said.

“Time and again we see bullet proof vestsissued to crews without hard armour plates,and vessels using 8 mm mild steel to protectthe bridge, internal doors and citadels, whichwill do nothing against a round from anAK47,” said Edward Unwin, VPS’ salesdirector.

“Similarly, using double layers of standardmesh fencing to counter the threat of an RPGattack will actually increase the chance of alethal detonation,” he continued.

Following extensive research and live firetesting, as well as years of consultation withthe defence industry and associated partnersand suppliers, ISS and VPS will providecustomers with a comprehensive range ofadvanced, high-tech protectivecountermeasures, ISS said.

Light armour system against shapedordnance (LASSO). A high tensile steel meshthat short circuits an RPG projectile renderingits explosive shape charge inert. LASSO isdeployed around the bridge offering protectionto the crew while still allowing full visibility

to the Master. The system can then be easilystowed when the vessel is not transiting highrisk areas. It comprises -

Ramor 500Specially designed light-weight, armouredsteel that offers comprehensive protection tothe bridge and vessel’s access points. Thearmour is able to withstand multiple hits fromhigh velocity rifle rounds including AK47making it ideal for Citadel construction. Thesystem does not require class recertification asit is lightweight and easily removable.

Composite armourA range of ultimate lightweight armourprotection that has been designed specificallyfor the maritime industry. Products includefully certified Lloyd’s Register approvedballistic doors, weapon cabinets andremovable ballistic panels. These STANAGcertified products are ideal for offeringenhanced protection to the bridge and internalaccess areas.

Anti-ballistic personal protectiveequipment (PPE).

Certified body armour, helmets, hard armourplates and soft armour panels, which havebeen specifically designed for maritimeapplications. These protective systems will

provide significant increased survivability ifthe crew comes under small arms fire. Theselightweight vests and helmets will also offeradditional protection against fragmentationand blunt trauma.

Graham Fee, project manager, VPS hub, ISS commented: “While Best ManagementPractices provides useful guidelines andrecommendations to combat pirate attacks,when it comes to ballistic protection,shipowners need real counsel on the kind ofsolutions to adopt. Budgets are tight given thecurrent economic climate, however there’s nopoint in just going for the cheapest materialthat may tick a compliance box but doesn’twork during an attack and invalidatesinsurance; ultimately costing more in the long-term.

Claus Hyldager, ISS group CEO, said:“Piracy is one of the greatest challenges theindustry faces.”

“While the legislative debate continues onhow to best tackle the issue in relation toarmed guards, is it vital that shipowners haveaccess to the best equipment and on boardvessel and crew armour that providesappropriate protection, right now.”

“Our focus is to provide solutions that savelives, are cost efficient and are proven by bothmilitary and civil agencies.” TO

“Our VPS operation and our expertise in this area is testament toour commitment to helping our customers meet these challenges

that serve to impact the efficiency of their operations and the wellbeing of their crews,”

- Claus Hyldager, ISS group CEO

Page 27: Tanker operator-magazines-march-2012

INDUSTRY - PIRACY

March 2012 � TANKEROperator 25

Protecting your vesselby CCTV

On Page 36 item 8.9 ClosedCircuit Television (CCTV) states- Once an attack is underway andpirates are firing weaponry at the

vessel, it is difficult and dangerous to observewhether the pirates have managed to gainaccess.

The use of CCTV coverage allows a degreeof monitoring of the progress of the attackfrom a less exposed position: � Consider the use of CCTV cameras to

ensure coverage of vulnerable areas, particularly the poop deck.

� Consider positioning CCTV monitors at therear of the bridge in a protected position.

� Further CCTV monitors could be located atthe Safe Muster Point/Citadel (see BMP4,

section 8.13).� Recorded CCTV footage may provideuseful evidence after an attack.

Singapore-based Gentay has installed theabove described CCTV installation integratedwith the low cost iPoP-network solutions forvessels to facilitate a rapid low costinstallation of a comprehensive system.

A unnamed but claimed to be a well knownoil major has completed initial trials of thissystem, which will now be deployed on theirvessels to deliver real time CCTV imagesfrom strategic positions situated on board,directly to the monitoring and recordingcomputer in the Citadel.

The installation includes six CCTVcameras, four internal and 2 IP67 externally

mounted CCTV cameras, providing live realtime images to a computer monitoring stationin the Citadel (ECR). It also included themonitoring equipment, recording devices forup to 14 days recordings, as well as allrequired networking utilising the integratediPoP-network solution for vessels.

The cost for this integrated solution,including installation, commissioning andtraining is about $23,000 per vessel, Gentaysaid.

This solution does not rely on WiFitechnology, which has proven to be sporadicon board vessels and does not requireinstallation of cabling, instead it utilises theexisting vessel power network to transmit theCCTV signal.

In the latest BMP4 - Best Practise for Protection against Somali Pirates, the installationof CCTV cameras was recommended.

TO

Page 28: Tanker operator-magazines-march-2012

TANKEROperator � March 201226

TECHNOLOGY - SHIP DESCRIPTION - GAS HUSKY

Stealthgas completessmall gas carriernewbuilding plan

On the 12th January 2012 the Vafias Group named two more gas carriers in Japan, thelast in a series of a long series of newbuildings for the Vafias Group.

The two purpose built highspecification, fuel efficientLPG/VCM carriers are of 7,500 cum capacity each. They fly the

Liberian flag and are classed by BureauVeritas.

The first vessel- Gas Husky - was deliveredon the 18th January, while the second vessel,due to be delivered in May 2012, was namedGas Esco.

Gas Husky is on long term charter to aMiddle East state-owned company while at thetime of writing, the Gas Esco is still unfixed.

Following these deliveries Vafias concernStealthgas will maintain its position as thelargest manager by number of owned ships inthe 3,000-8,000 cu m gas segment.

These two ships represent the final pair in aseries of 10 gas carriers that the Vafias groupordered for a total cost of around $250 mill atthe Japanese shipyard of Kanrei Shipbuilding.

Once the final vessel is delivered, the VafiasGroup fleet will grow to 62 ships, comprising38 gas carriers, 22 product and crude tankersand two Capesize bulk carriers, making it thethird largest group in terms of the number ofvessels in Greece.

Moreover, despite the huge growth seenbetween 2008 and 2012 with the deliveries of

more than 26 newbuildings at a cost of morethan $1.5 bill, the total debt of the group isclaimed to be below the $1 bill mark!

Stealthgas president and CEO Harry Vafiassaid; “We are waiting the last gas ship to bedelivered in May and we are finished after afrenetic pace of taking delivery of 10 lpgcarriers, nine MRs, five Aframaxes and twoCapesize bulkers in the last 3.5 years.

“We want to buy a few more gas ships. asthe market is quite firm and in addition, duringthe past three years, we sold eight older unitsand we need more younger vessels to keep ourlead in this segment,” he explained.

All the Aframaxes and MRs are on longterm bareboat charters, Vafias told TankerOperator.

The gas fleet is 50% managed by Stealthgasin Kifisia, Athens and the rest is split betweenMumbai-headquartered Selandia ShipManagement and Manila-based SwanShipping Corp.

EnhancementsThe Gas Husky and Gas Esco have beenupgraded compared with their near sisters. Forexample, they comply with Exxon/Mobil’s2006 criteria.

In addition, the fore and aft mooring

winches have been fitted with two drums eachfor extra safety, level alarms have been fittedin the bunker tanks; cylinder oil tanks havebeen added for low sulphur fuel operation,which have a capacity of about 15 days; twobilge alarm sensors have been fitted in theengine rooms; Hamworthy Svanehoj anti-rotating cargo pumps were chosen, as well asAnderson Greenwood cargo tank safetyvalves. Each vessel’s hull has also been coatedwith five years’ antifouling protection.

They have been built to US Coast Guardapproval for operating in US waters and alsoto Japanese trading regulations.

They are fitted with two IGC Type Cindependent cargo tanks with a capacity of3,750 cu m at 100% load, or 3,675 cu m at98% load factor in each tank. They have adesign pressure of 17.65 bar g (18 kg/cm2)and the valve settings have been setaccordingly. The maximum vacuum obtainableper tank is atmospheric.

The maximum and minimum temperaturesacceptable in the tanks are 45 deg C and 0 deg

LPG VCMOne tank 410 250Both tanks 730 450

Loading rates (cu m/hour)

Page 29: Tanker operator-magazines-march-2012

TECHNOLOGY - SHIP DESCRIPTION - GAS HUSKY

March 2012 � TANKEROperator 27

C respectively. It should be noted that these figures are based on a

maximum velocity of 6.5 m per sec for LPG and 4 m per secfor VCM in the liquid piping. If the cargo temperature is lessthan 0 deg C, a shore heater is to be used. If the vessel’s heateris used then the maximum rate of loading is limited to 250 cum per hour.

The loading is accomplished only by the terminal pumpingsystem and a proper size gas return line is to be connected.These figures are also subject to the operation beingundertaken in favourable conditions both on board and ashore.

Each tank is fitted with a Hamworthy Svanehoj removabledeepwell vertical centrifugal multi-stage cargo pumping systemcapable of 400 cu m per 120 m at SG 0.601, or 220 cu m perhour at 160 m at SG 0.948. A full liquid cargo can bedischarged in about 19 hours at 1 bar pressure, or around 53hours at 5 bar pressure.

Following discharge and before stripping, about 1.5 cu m ofliquid will be left in each tank and about 40 tonnes of vapourwhen discharging LPG. This takes around two hours toremove. Each tank is also fitted with a Tanabe Pneumatic Machinerycargo compressor and an inert gas system. The vessels canproduce their own inert gas and use nitrogen plants and fansfor tank inerting. Cargo heaters have been fitted of the shelland tube type. In case vapour gas is needed to feed the

Witherby Seamanship International

4 Dunlop Square, Livingston, Edinburgh, EH54 8SB, Scotland, UK .

Tel No: +44(0)1506 463 227 Fax No: +44(0)1506 468 999 Email: [email protected] Web: www.seamanshiplibrary.com

OUT NOW!

Witherby Seamanship International4 Dunlop Square, Livingston, Edinburgh, EH54 8SB, Scotland, UK.

Tel No: +44(0)1506 463 227 Fax No: +44(0)1506 468 999 Email: [email protected] Web: www.seamanshiplibrary.com

Ask your local chart agent or see www.seamanshiplibrary.com

OUT NO

W!OUT NO

@

yp

Length, overallLength, bpBreadthDepthSummer draftSummer deadweightGRTCapacityMain engineAuxiliariesSpeedFuel consumption(HFO) (MDO) Tank Capacities (HFO)(MDO)Fresh waterCargo tanks (max)

Principal particulars – Gas Husky, Gas Esco

119.5 m112 m19 m9 m

6.8 m6,900 t5,860 t

7,500 m33,510 kW @ 203 rev/min

2 x 485 kW @ 1,200 rev/min13.5 knots (CSR)

14.9 t/d 2.36 t/d

610 m3 100 m3140 m3

2 x 3,750 m3

Page 30: Tanker operator-magazines-march-2012

TANKEROperator � March 201228

TECHNOLOGY - SHIP DESCRIPTION - GAS HUSKY

General arrangement drawings.

Page 31: Tanker operator-magazines-march-2012

March 2012 � TANKEROperator 29

TECHNOLOGY - SHIP DESCRIPTION - GAS HUSKY

Custom built and series product Technically reliable Well proven designs Continuous technical development Dependable partner Customer oriented approach

DAMEN DOUBLE HULL OIL TANKER MTS ‘SHANNON FISHER’

DAMEN SSHIPYARDS BBERGUM Member oof tthe DDAMEN SSHIPYARDS GGROUP

P.O. Box 7 phone +31 (0)511 46 72 22 [email protected] AA Bergu fax +31 (0)511 46 42 59 www.damen-bergum.nlmThe Netherlands

STANDARD OF EXCELLENCE

CUSTOM BUILT IN SERIES PRODUCTION

compressors, each vessel can supply the gas. A float level type gauge is fitted at each

tank dome and the vessels are both fitted witha starboard and port manifold for cargo

operations and a 4 tonnelifting capacity hosehandling crane locatedamidships.

Main machineryThe Gas Husky and GasEsco are powered by aMakita B&W type 6L35MCMark 6 diesel engine,developing 3,510 kW at 203rev/min (90% MCR)burning heavy fuel oil. Twoauxiliaries have been fittedper vessel of Yanmarmanufacture type 6N165L-

SN burning marine diesel oil. These are 4-stroke engines developing 485 kW at

1,200 rev/min.The main propulsion unit gives the vessel a

speed of around 13.5 knots (at CSR) with a15% sea margin. The fuel consumption figureswork out at around 14.9 tonnes per day ofHFO and 2.36 tonnes per day of MDO.

A Deutz emergency generator has also beenfitted as has a Miura boiler and gaseconomiser, plus two Matsubara aircompressors and a Sanwa emergency aircompressor.

The two fuel and one luboil purifiers weresupplied by Mitsubishi. A Miura Protecevaporator for waste heat recovery with acapacity of 10 tonnes per day was alsoinstalled. The same manufacturer supplied thewaste oil incinerator.

The oily water separator was of Taiko KikaiIndustries make, as was the sewage treatmentplant.

Gas Husky is chartered to a Middle East state-owned concern.

CEO Harry Vafias pictured at the shipyardduring the naming ceremony.

TO

Page 32: Tanker operator-magazines-march-2012

TANKEROperator � March 201230

TECHNOLOGY – SHIP - TO - SHIP TRANSFERS

GAC opens up off Sri LankaGAC’s in-house ship-to-ship (STS)transfer concern GAC TransferServices (GTS) has opened a newfully-equipped base in Sri Lanka.The company said that this move was inresponse to the growing demand for LPGimports and exports of clean products in theIndian Subcontinent.

STS equipment, such as fenders and hoses,in accordance with industry standards, isstored at GAC’s base in Galle, which isstrategically located at the southern tip of theisland and is ready to be transported by tug todifferent locations, according to demand andconditions.

Experienced GTS operators work inconjunction with their GAC Sri Lankacounterparts to take care of all localarrangements, such as government permits,clearances, storage and transportation.

Lars Bergstrom, GAC Group vice president– Indian Subcontinent, said the choice of SriLanka as the regional base for STS operationsoffered a logical solution for principalswithout incurring high costs, or getting caughtup in red tape.

“India is a very important market withgrowing demand for STS, but there are

logistical issues due to bureaucracy and highcosts of locating there.

“Thanks to its proximity to that market andits key geographical position close to majoreast-west shipping lanes, Sri Lanka was anatural choice for the expansion of STSservices to the region,” he explained.

Safety complianceThe main commodities handled include LPG(-50 deg C), crude oil, fuel oil and gas oils, allin line with OCIMF and InternationalChamber of Shipping (ICS) guidelines and instrict compliance with the GAC group’s HSSEpolicy, quality management system and alllocal and international safety, security andenvironmental regulations.

Most operations will be carried out off portlimits (OPL) without any port authorityintervention. During the southwest monsoonseason between June and October, STSoperations will be concentrated in the moresheltered areas OPL Trincomalee and at OPLGalle and Colombo during the December toApril northeast monsoon season.

All operations are supported by boats owned and operated by GAC Sri Lankaaccording to the highest safety standards,

the company claimed.In 2009, three decades of civil war officially

came to an end and in 2010 the London-basedjoint cargo committee of the Lloyd’s insurancemarket removed Sri Lanka from the War RiskRating.

That opened the way for the expansion ofGAC’s STS operations to complement existingservices such as ship agency, bunker suppliesand the ship supply service (SSS), which usesa fleet of 10 modern high speed service craftto deliver supplies and personnel to vessels ininternational shipping lanes without themhaving to deviate from their course.

Agency, STS, SSS, bunker supplies andother services can be provided as part of anintegrated package of shipping, logistics andmarine solutions that GAC provides from theports of Colombo, Galle, Trincomalee and,most recently added - Hambantota.

GAC currently offers STS transferoperations from over 10 bases, includingRotterdam, Amsterdam and Flushing in theNetherlands, Gibraltar in Spain, Frederikshavnand Kalundborg in Denmark, Gothenburg inSweden, Malta, Cyprus, Malaysia, Vietnam,the Arabian Gulf and Indian Ocean.

TO

The OnlineSTS team has issuedthe following warning about theissuing of LOIs.Before conducting an STS operation, someservice providers issue letters of indemnities(LOIs) to the Masters of the vessels andrequest that they should be signed on behalf ofthe owner and prior to the commencement ofan STS operation.

Following several contacts, as well asdiscussions with P&I clubs, the followingprocedure is recommended to be adopted bythe shipowners as a standard policy.1) Masters/managers should avoid signing

LOI’s given by STS service providers.2) If the STS service provider insists, then the

P&I club should be immediately informed and consulted. It is of utmost importance

that the P&I clubshould be made awareof the LOI,otherwise, the ownermay not be covered in case of anincident.3)Masters/ managersshould only sign theLOI, incorporating anysuggestions from theirP&I club.

Managers should beable to provideevidence, such as emailcommunication, with

STS service providers, supporting theirrejection of signing the LOI’s, according toStep 1 above, as this evidence is highlyessential for the P&I clubs.

Indeed, the signing of LOIs without priorconsultation with their P&I club might resultin conflict with managers’ coverage.

Furthermore, in some LOIs, contractualduties with reference to the third partyindemnity are included, which appear to beout of the scope of the P&I coverage, asagreed with the shipowner.

STS service providers may accept partialliability on condition that the shipownerprovides evidence that the incident occurreddue to gross negligence by the provider/POAC (person in overall advisory control) etc.In this case the owner bears the burden ofproof.

It should be noted that P&I clubs understandthe commercial implications and timeconstraints in STS operations and endeavourto support their clients provided that they havebeen fully informed in advance, OnlineSTSconcluded.

Beware of LOIs

The Port of Rotterdam has set up dedicated ship-to-ship transferareas within the Europoort complex. TO

Page 33: Tanker operator-magazines-march-2012

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Page 34: Tanker operator-magazines-march-2012

TANKEROperator � March 201232

TECHNOLOGY - TANK SERVICING

NO SMOKING

Pitting and rust staining of the tank top

STEEL PLATE

DRAIN WATEROIL COAT

Pitting (Anode)

Sludge (Cathode)

H²SINERTGAS

INERTGAS

Unloaded - Corrosion potential from ‘pitting’ in tank bottom

The main paint manufacturers havebeen undergoing laboratory tests inorder to gain certification for theirproducts under the watchful eyes

of the class societies to ensure that they aresuitable for application in cargo tanks.

The background to the new performancestandards, according to International Paint(IP), was that the move from single hull todouble hull crude oil tankers resulted in anumber of vessels experiencing acceleratedcorrosion in cargo oil tanks, principally due tothe double hull promoting a more aggressivecorrosive environment.

While it had become common practice toapply protective coatings in the upper andlower areas of cargo oil tanks, the IMO PSPCCOT regulations mean that certain areas of thetanks must be coated on crude oil tankersgreater than 5,000 dwt at newbuilding, where:� The building contract is placed on or after

1st January 2013 or, in the absence of a building contract,

� The keels of which are laid, or which are ata similar stage of construction on or after 1st July 2013,

� Or the delivery of which is on or after 1st January 2016.

� The minimum areas of the cargo oil tanks that must be protected in accordance with the regulations are:

� Deckhead and structure, including brackets

connecting to longitudinal and transverse bulkheads.

� Longitudinal and transverse bulkheads to the uppermost means of access level.

� For cargo tank bulkheads without an uppermost means of access, the coating must extend to 10% of the tanks height at the centreline, but need not extend more than 3 m down from the deckhead.

� Flat inner bottom and structure to height of 0.3 m above inner bottom.

IP has announced that its principal anti-corrosive primers and shop primers havesuccessfully passed what the company calls“….these very demanding IMO PSPC COTlaboratory tests in accordance with the IMOMSC.288 (87) SOLAS regulations for cargooil tankers.”

Similar to the requirements of the IMOPSPC for sea water ballast tanks, theseregulations are designed to ensure thelongevity of cargo oil tanks and stipulate thatapplied coatings must remain in ‘good’condition for a minimum of 15 years, asdefined by IACS.

For a cargo oil tank coating to comply, allcoatings must be tested by class societyapproved testing facilities and have a classsociety Type Approval Certificate (TAC). Theaward of a TAC means the product hasdemonstrated the expected in serviceperformance, the quality of the supplied

material is assured and the product supplylocation has met regulatory requirements.

The successful IP products passinglaboratory tests included key products fromthe Interbond, Intergard, Interplate andIntershield product ranges.

Approved laboratories carrying out thetesting include COT bv based in theNetherlands. COT was the first laboratory inthe world with specific Lloyd’s Registerapproval to carry out testing in accordancewith the IMO MSC.288 (87) regulations forcargo oil tankers.

TACs for the successful IP products will beformally issued in due course, the companysaid.

Another coatings manufacturer tosuccessfully complete the tests was Jotun.

These tests were also carried out by COT bvin the Netherlands on several of theNorwegian company’s tank coatings systems.

Two test methods were utilised. The firsttest simulated the composition of the vapourphase in crude oil tanks, both in ballast and infully loaded condition. The second testsimulated immersion in a crude oil tank with amodel liquid developed to replicate some ofthe most corrosive crude oils.

According to Jorunn Holdhus Skovly,Jotun’s product manager for tank coatings, thecoating systems performed well in theserigorous tests.

NO SMOKING

Aggressive components in crude oil (sludge)

Corrosionof deck head plating

CO² H²O SOX

H²S

60ºC

THERMALCYCLING

25ºC

Condensation

InertGasInertGas

InertGasInertGas

InertGasInertGas

Loaded - Corrosion potential from ‘thermal cycling’

Gearing up for IMOPSPC COT

Approved at MSC 87 in May 2010, the IMO’s Performance Standard for ProtectiveCoatings of Cargo Oil Tanks (IMO PSPC COT) becomes effective on

1st January 2013 for new tankers.

TO

Source - International Paint

Page 35: Tanker operator-magazines-march-2012

The merged company has beenrenamed Scanjet Ariston.“Joiningthe group means the ScanjetAriston multipurpose monitoring

& control system, already installed on over550 projects worldwide, is now available toScanjet’s customer base of 3,500installations,” said Stavrin Bosnov, ScanjetAriston sales director.

Magnus Wallin, group CEO and architect ofScanjet’s rapid growth in recent years, said:“The Ariston team, products and expertise

complete the Scanjet ability to offer customersturnkey solutions from our global network ofoffices and service partners. When combinedwith our Scanjet Macron products alreadyused on over 400 installations, the Scanjetrange gives our group the class leading globalcapability for cargo and ballast monitoringcombined with integrated tank cleaning.”

The Scanjet Group product portfolio to themarine and industrial market now comprises:� Fixed and portable tank cleaning machines

(turbine, air or hydraulic-driven).

� Cargo tank level monitoring (radar or electric pressure sensors) with VRC & pump control.

� Ballast tank monitoring (air purge type or electric pressure sensors).

� Overfill alarms (floats or acoustic).� Water ingress monitoring systems.� Automatic oil-water interface detection

system for oil/product tanks.� Vapour emission control systems.� MPS anti-piracy systems (passive

non-lethal).

TECHNOLOGY – TANK SERVICING

March 2012 � TANKEROperator 33

Ariston merges withScanjet to offer

turnkey solutionsSwedish tank cleaning equipment supplier has acquired Ariston, manufacturer of

cargo and ballast control systems.

The Latest News is now available onTANKEROperator’s website atwww.tankeroperator.com and isupdated weekly. For access to the News just register byentering your e-mail address in thebox provided. You can also request toreceive free e-mail copies ofTANKEROperator by filling in theform displayed on the website. Freetrial copies of the printed version arealso available from the website.These are limited to tanker companyexecutives and are distributed at thepublisher’s discretion.

TANKEROperatorTO

Page 36: Tanker operator-magazines-march-2012

TANKEROperator � March 201234

TECHNOLOGY - TANK SERVICING

Mitsui OSK Lines (MOL) andMusashino have jointly developedwhat is claimed to be the world’s first portableliquid-level gauge for vessel fueltanks.This reduces the workload needed to measurea ship’s fuel level during bunkering andenables more accurate measurement. This willreduce the crew’s workload, and help preventincidents such as fuel spills from overfilling.

Its features include - � Compact main unit (24 cm wide x 37 cm

high x 31 cm deep), lightweight (about 4.5 kg).

� Power source of the main unit is 9V dry cells.

� Digital readouts and superior operability.� Wireless function enables simultaneous

monitoring of liquid levels in several tanks.� Bubbles sometimes occur on surface of fuel

oil during bunkering. This is called the ‘cappuccino phenomena’ and may cause

misleading readouts with conventional equipment. The new liquid-level gauge does not register misleading readouts.

� Sounding tape and gauge can be used simultaneously.

MOL said that even on vessels equipped withfixed liquid-level gauges, crews measure theliquid level manually by hanging soundingtapes into sounding pipes located on the deck,to help prevent overflow and to checkbunkering volume during refueling.

This operation must be done by a skilledcrew member, which creates additional burdenon the crew as he, or she must measure severaltanks simultaneously.

With the new liquid-level gauge, thepressure sensor, which is suspended into thefuel tank, senses changes in liquid-levelpressure and detects the fuel level in the tankquickly and accurately.

In addition, because of the function ofwireless transmission, several tanks can bemonitored on the ship’s computer at the same

time. This improves the efficiency of fuel levelmeasuring operations, reduces workload, andhelps prevent overflows, thus reducing the riskof fuel spills and environmental damage fromfuel tank overfill.

In December 2011, MOL invited severalshipowners and shipmanagement companies toa demonstration of the system on a vesselunder construction. Overflow problems duringbunkering and the ‘cappuccino phenomena’are common issues in the deepsea shippingindustry.

Portable liquid-level gauge for fuel tanks

Portable liquid-level gaugewith wirelessfunction.

TO

Fixing minor corrosion spotsbefore they lead to major drydockrepair work and at same timemeeting IMO’s ‘GOOD’ ballast tankcoating condition are bigadvantages for shipowners. Hempel’s new moisture tolerant and fast-curing Hempadur EM 35740 is the idealsolution for this task, the Danish coatingsmanufacturer claimed.

Ballast tank corrosion is a major worry forshipowners, as it can lead to structural failure.But corrosion repair usually means taking aship out of service for drydocking. WithHempadur EM (Easy Maintenance) 35740corrosion spots can easily be fixed - even atsea, the company said.

Hempadur EM 35740 is a new ultra highsolids (96% VS) and damp surface tolerantepoxy coating primarily for on boardmaintenance and repair of ballast tanks. Theproduct, available in 2.5 litre cans, is intendedfor brush application and it is particularlywell-suited for spot or smaller areamaintenance, or repair in hard-to-reach areaswhere climate control and surface preparationare difficult.

Another plus is the short drying time thatleaves the painted areas immersion-ready ineight hours, at 20 deg C, thus ensuring a quickreturn to service.

With its very low VOCs and ease of use, thecoating is ideal for on board maintenancework to keep the ballast tank coating in‘GOOD’ condition (according to new IMOguidelines for maintenance and repair ofballast tank coatings, MSC.1/Circ. 1330).

Ultimately, the product can help shipownersto avoid costly annual inspections schemesand reduces the need for repair work at thenext drydocking - all without disturbing vesseloperation, Hempel said.

While Hempadur EM 35740 has beenspecifically developed for on board ballasttank maintenance, it is also suitable as ageneral on board maintenance primer for mostother areas of the vessel.Major advantages -� The easiest way to keep corrosion down

while at sea.� Helps keep your ballast tank coating

in ‘GOOD’ condition (according to IMO guidelines).

� Reduced need for repair work at next

drydocking.� Short drying/curing time (immersion-ready

in eight hours, at 20 deg C).� Easy handling and less waste, thanks to

handy 2.5 litre cans.� Easy application reaching sufficient film

thickness by brush.� Surface-tolerant for reduced preparation

time.� Moisture-tolerant for application on damp

surfaces.� Extremely low VOC for maximum

convenience and care for crew and environment.

� Minimal PPE (personal protection equipment) required.

Hempel also supplies ballast tank coatings thatcomply with IMO-PSPC type approvedproducts, to ensure optimum ballast tankperformance and optimised efficiency duringapplication in the shipyard.

For optimal performance and service life,the coating should be reviewed duringmaintenance checks in drydock, as well asduring on board maintenance carried out bythe crew.

Ultra high solids epoxy for on boardmaintenance and corrosion control

TO

Page 37: Tanker operator-magazines-march-2012

reviewMarch 2012

A

Tanker shippingTANKEROperator supplement

ContentsA touch of déjà vu? I Markets - where it all went wrong IIITop 30 listing XProfile - ClassNK’s Noboru Ueda XVIIIWitherby adopts self-selection XX

One of Teekay’s North Sea Shuttle tankers Photo credit - Seagull.

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Déjà vu - are we re-living the 80’s?

A leading industry commentator recently said that this decade would be a ‘decade of costmanagement’. The question is, if this is the case then what will the industry look like at

the end of it?*

Those of us who have some greyhair will remember the last timethings looked like this. The 1970swas a decade that started with high

rates and large shipbuilding programmes onlyto progress to low rates by the mid-70s. In the1980s, low rates continued, which resulted ina change to the structure and standards withinthe industry. This was reflected in some of theincidents occurring in the 1980’s and 1990’s.

Could we see that again boom in the earlyyears of the new century, followed by lowfreight rates in the teens and incidents in thelate teens and twenties?

History seldom repeats itself exactly, butthere are lessons to be learned from the past.So what is the same as last time and what isdifferent.

Today, we have low freight rates andoversupply of tonnage. We are facing slowgrowth in large parts of the world, so overalldemand for shipping services is down.Energy costs are high and energy demand isnot growing as quickly as previously forecast.

The things that are different from the 1980sare the most interesting:-� Interest rates are low while they increased

over the 80’s. This suggest that depending on finance arrangements and build cost, thedrain from finance costs may be less of a problem that the 1980s.

� The industry structure is more complex leading to more complex regulation and requirements.

� New requirements related to air quality, security, ballast exchange and greenhouse gases are being introduced without reference to the ability to fund.

� We already have a shortage of quality officers worldwide, which combined with the complexity of modern vessels suggests a hunt for new cheaper sources will have limited benefit without affecting quality.

Most importantly though is the tankerindustry’s concern for quality safe ships. This

is a concern that is shared by owners,charterers and by port state organisations.When combined with the increasingsophistication of the way information isgathered and disseminated, a decline inquality will soon be noticed.

With the many new requirements mentionedabove it is easy to be distracted from what hasbeen the industry’s main aim – reducing oilpollution.

The annual Intertanko casualty statistics(see below), which also includes data fromITOPF, is a useful indicator.

The graph shows the improvement from the1990s to the mid 2000s. It is difficult to thinkof another industry that has enjoyed such animprovement. We should all be proud of that.

The increase in casualties since the mid2000s is a worry even though it has notresulted in an increase in pollution.Presumably double hull has done what issupposed to in reducing pollution from lowenergy collisions and groundings.

The catch is that as the industry hasimproved the tolerance for spills has reduced

at the same time as the visibility hasincreased. The increase in incidents isworrying as they are a leading indicator of thedanger of a bigger spill. The wrong set ofcircumstances, even with double hull, couldproduce a large visible spill, which would setthe industry back years.

There are a variety of reasons why there hasbeen this increase. I claim no detailed analysisbut here are some thoughts:- � Larger fleet although other analysis

corrected for size of fleet shows there is still an increase when that is taken into account.

� Predictable teething problems in the large number of new ships increasing hull and machinery incidents.

� Linked to the above, a lack of familiarity with new equipment in the new vessels.

� Competence and experience gap particularly in senior ranks carried forward from reduced training and recruitment in the last recession.

Could there also be the ‘laws of diminishingreturns? I believe the development of safety

Source: Intertanko.

March 2012 � TANKEROperator Annual Review I

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management systems with their focus oncontinuing improvement was a majorcontributor to the improvement shown above.In the early days of the system it was easy togenerate ‘quick wins’ - improvements thatwould have a wide and deep benefit while notgenerating excessive effort and cost toimplement.

As time passed, the need to react toincidents and continuously improve may resultin more onerous, less effective solutions.These solutions may have the opposite effectto that desired because they absorb more ofthe limited on board capacity. In some casesthat capacity may already be exceeded withthe result that corners are being cut just to getthrough the day.

Where does this leave the shipowner? Iwould say in the eye of a perfect storm:-� Rates are low, so limiting funds available.� New requirements mentioned above that

will cost money to implement and absorb shipboard workload.

� The need to focus on maintaining and indeed improving the operating standards created to avoid pollution.

� The possibility that just ‘pedalling faster’ will generate more expense and less improvement in the safety management system. Tomorrow isn’t just yesterday squared!!

The shipowner is subject to the same advicethat Charles Dickens’ character Mr Micawbergave David Copperfield: “Annual income £20,annual expenditure £19, result happiness:Annual income £20, annual expenditure £21,result misery.”

To avoid ‘misery’, the shipowner has tomake changes to deal with the current market.It is fair to say that after a period of boomthen there will be some potential to cut costs,but at what cost?

In simplistic terms the shipowner operatesin the space between bankruptcy andcatastrophe. If you spend too much you willgo bankrupt. If you spend too little on safeoperations you will face a catastrophe, whichmay well lead to bankruptcy as well. In a highmarket, bankruptcy is a long way away andyou can afford to spend to avoid thecatastrophe. Indeed you will spend more tokeep the ships running and trading. In a lowmarket the space between bankruptcy andcatastrophe is a much narrower space andtakes more skill to operate within.

In the real world there are early warnings ofbankruptcy and catasptrophe. Clearly you willrecognise the cash flow problems on the wayto bankruptcy. More importantly in the ‘globalvillage’ and especially with listed companies,

so will the outside world and this may reducecustomer’s confidence in using you.

Vetting, port state, USCG etc will notice ifyour operating standards have starteddropping off even if you don’t notice yourself.The nature of these organisations are such thatwhen a warning comes up that fleet standardsare falling then it triggers further attentionresulting in more inspections, etc. This will hitthe revenue side of things as ships becomemore difficult to trade, get arrested etc.

So the decisions on which costs are goodcosts and which are bad ones is important.

Cost cutting is a spiral, which if uncheckedleads to catastrophe. Quite often most debatewill take place on the first turn of the spiral.

At this point the cuts are least likely to causecatastrophe, as there will be multiple layers ofprotection. At the next turn the debate will beless because ‘look at last time nothinghappened’. As the spiral progresses morebarriers are peeled away increasing the riskbut the spiral continues because ’nothing hashappened’.

In fact there may be some small signs, butthey may be overlooked. This is an applicationof the corollary to ‘Murphy’s Law’. Murphy’sLaw is ‘what can go wrong will go wrong’.The corollary is ‘What should go wrongdoesn’t and we draw the wrong conclusions’.

So the focus is cost management not costcutting and relies on an understanding of thevalue as well as the cost of what you aretaking away.

It’s a bit like playing the block game‘Jenga’ with a blindfold on. In the early stagesof the game you can take away blocks by feelwithout causing the block tower to collapse.

At the later stages without seeing the bigpicture the tower will collapse.

A warning from history - the good officerson board your ships prevent more things goingwrong than you ever hear about irrespective ofnear miss and incident reporting. As you makechanges they will be the last barrier that willprevent something that is merely ill advisedturning into a disaster. So take care to retaintheir resilience in the difficult times.

To me then the big question over the nextfew years will be:-

How do we reduce operating costs whileimproving our operating standards? This is thetitle of the forthcoming Tanker Operatorconference in Athens on 3rd April at which

the Author is speaking on the subject of –How to undertake shipmanagement better (seewww.tankeroperator.com for details).

*This article was written by Martin Shaw, whois the managing director and founder ofMarine Operations and AssuranceManagement Solutions (MOAMS), aconsultancy set up in 2010 dedicated to theapplication of modern operationalmanagement techniques to drive efficiencyand safety in the marine sector.

Previously, Shaw was vice presidenttechnical in BP Shipping, the shipping arm ofthe BP Group. He has a background in marineengineering having served at sea up to therank of second engineer before taking theExtra First Class engineers’ examination andcoming ashore into BP Shipping’s office asFleet Safety Officer.

TO

Based on James Reason.

TANKEROperator Annual Review � March 2012II

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US-based consultancy McQuillingServices said at the time ofwriting in its 2012-2016 TankerMarket Outlook, global GDP

growth was forecast at 4% with the IMFexpecting that emerging economies wouldexpand by 6.1% and advanced countries by1.9%.

However, against a backdrop of sovereigncredit risks in Europe, a polarised politicalclimate in the US and inflationary concerns inthe developing economies, these figures wererecently revised downward.

The tanker market has not been immune tothe economic situation. Looking back at 2011,McQuilling calculated that total tankerdemand contracted by 0.5% from 2010 levels.This decline was influenced by severalunexpected events such as the Libyan civilwar, which slashed North African exportvolumes for the majority of the year.

As a result IEA members released suppliesfrom Strategic Petroleum Reserves, whichfurther eroded tonne/mile demand. Weakeconomic activity, reduced refinery utilisationin Europe and lower purchases of WestAfrican crude from Asian customers also hadan effect.

The VLCC sector continued to be the mostconsolidated class for the transportation ofcrude and residual products. A total of eighttrades comprise almost 80% of VLCCdemand.

In clean petroleum products, evolving traderoutes increased LR1 tonne/mile demand byover 10%, but the MR2 types remained theworkhorses of the sector.

McQuilling anticipated that excess tonnagesupply will remain the primary theme duringthe consultancy’s forecast period. Thedownside risk to the global economy will addan additional element of uncertainty to tankerdemand.

As a result, the consultancy forecast thatdemand should rise by an average of 1.5% peryear for crude and residual products and by

Where did it all gowrong?

The new year has started with the global economy in a precarious state, as emergingeconomies expand, while advanced economies struggle to keep pace.

almost 2% per year for clean petroleumproducts.

In an effort to improve the company’sforecasting, in this year’s cycle McQuillingsaid that it attempted to capture trade betweennon-OECD countries. This decision was madedue to the rising energy demand in developingcountries, new refining infrastructure andchanges in oil production trends. As a result,the consultancy claimed to have been betterable to analyse recent changes in the tankermarket.

In 2011, McQuilling expected 276 vesselswould be delivered into the tanker fleet, butonly 228 actually did so. Although this helpedlimit tonnage capacity growth in 2011, it willlikely pressure fleet expansion, particularly in2012 and 2013 as delayed deliveries enter thetrading fleet.

The exit profile was estimated at 75 vesselsbut 69 actually exited the trading fleet. Themost noteworthy difference occurred in theVLCC fleet, whose total fell by 18 vessels.This was partially influenced by demand forFPSO/FSO conversions. The continuedexpansion of offshore reserves will help keep

this demand for older tankers needed forconversions.

As a result, McQuilling said that at least 15VLCCs will be removed from the fleet eachyear in the forecast period.

In order to reflect current industry practicesin response to rising bunker prices, theconsultancy lowered its net-fleet sailing speedby one knot to 13.5 knots at the start of 2012.

The assessment of historical bunker pricescompared to Brent crude oil showed that thetraditional correlations no longer yielded anaccurate basis for forecast. This resulted inplacing an additional supply-premium onbunker prices to $650 per tonne.

Asset prices declined throughout 2011.Overall, prices contracted by almost 9%across all class sizes and ages. The only sectorto post a rise in secondhand asset prices wasMRs. The comparatively higher freight ratesrecorded by the MR class during 2011supported this development.

Syndicated loans to the shipping industrywill remain limited in the current economicenvironment. Ironically, this factor shouldhelp the market gradually return to a balanced

Sport rate TCE Revenue Forecast Forecast (2012 WS) (US$ 000/Day)

2011 (Act)* 2012 2011 (Act)* 2012

Crude & DPPVLCC 260 MMT (AG / East) TD 3 45 46 10.2 23.5Suezmax 130 MMT (Wafr / USAC) TD 5 66 68 13.6 13.2 Aframax 70 MMT (Carib / USG) TD 9 93 105 4.8 14.0Panamax 50 MMT (Carib /USAC) TD 10 114 115 9.1 11.9Clean ProductsAframax 75 MMT CPP (AG / Japan) TC 1 95 90 9.1 12.8MR 38 MMT CPP (Carib/USAC) TC 3 134 132 11.4 12.1MR 37 MMT CPP (Cont / USAC) TC 2 141 139 10.4 10.3

*Actual 2011 average spot rates based on 2012 Worldscale flat rates Source: McQuilling Services

Spot Rate Forecast by Trade (2012 WS) / TCE Revenue Forecast by Trade (US$ 000/Day).

March 2012 � TANKEROperator Annual Review III

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situation, as it should limit orders for newtankers, McQuilling said.

As the lending capacity is constrained,some companies may not be able to meetloan-to-value covenants, which shouldencourage industry consolidation. This couldopen the door for companies from outside theshipping industry to acquire assets.

Finally, McQuilling expected spot freightrates to hover at or near 2011 levels (adjustedto 2012 WS flat rates) this year.

DemandTurning to demand, McQuilling said that inaddition to oversupply stemming from robustcontracting in 2006, the tanker market hasbeen negatively impacted by several events.

The Arab Spring acted as a double edgedsword as it slashed Libyan crude oilproduction for the majority of the year andprompted IEA members to release 60 millbarrels of oil from the Strategic PetroleumReserves in June 2011. This reduced demandfor loadings and discharge from the globaltanker fleet.

Oil demand was further pressuredthroughout the year as a solution to theEuropean financial crisis remained elusive andsigns of an improving US economy wereclouded by political wrangling. As the yearcame to an end, rising concerns over inflationin emerging economies further lowered oildemand and economic forecasts.

As mentioned earlier, for the transportationof crude and residual products, VLCCs remainthe most consolidated of all sectors with eighttrades making up 77% of demand. On aregional basis, the Far East made up thelargest portion of demand as its expandingeconomy and downstream sector continuouslyrequire new sources of hydrocarbons. Theopposite has been occurring in OECD North

America and Europe, as weak petroleumproduct demand reduced refinery utilisationrates and crude-oil imports via pipeline havealtered supply sources.

This trend can be observed as tonne/miledemand from the Middle East to the US Gulfdeclined by 4% throughout the year.

In recent editions of its Tanker MarketOutlook, McQuilling noted the trend ofincreased trade between loading regions in theWest with cargoes destined to the East. Theload regions are defined as the Americas, WestAfrica and Europe and discharge regionsinclude the Far East, Southeast Asia and India.

It is expected that this trend will continue inthe future, despite demand being slightlylower in 2011 compared to previous years.This contraction was largely influenced byreduced Libyan production, which had asignificant influence in widening the pricedifferential between light and heavy crudes.

This raised the price of West African crudesin comparison to oil supplies from the MiddleEast, lowering tonne/mile demand fromwestern loading zones. The West-to-Easttrades are also largely influenced by fuel oilarbitrage into the Asian market, as Singaporeis the world’s largest bunkering hub.

In 2011, data showed that bunker sales hitanother record high of 43 mill tonnes, withsales averaging 3.5 mill tonnes per month.This strong demand helped limit the fall inWest-to-East fixtures last year.

Tonne/mile demand for Aframaxes fell by18% throughout the year. Despite its greaterflexibility compared to VLCCs andSuezmaxes, regional factors negativelyinfluenced demand.

For example, in the Western Hemispherereduced throughput rates at refiners located onthe US East Coast lowered importrequirements from load ports in the Caribbean

and northern South America.Data published by the EIA put refinery

utilisation on the East Coast at 70% ofcapacity in 2011 compared to a nationalaverage of 85%. Tonne/mile demand wasfurther pressured from the reduction in Libyansupplies, the economic situation in SouthernEurope and, to a lesser extent, recent events inSyria and Iran.

During the next five years, McQuillingexpects tonne/mile demand for crude andresidual products to rise by an average of1.5% per year. Tonne/mile demand forSuezmaxes is forecast to rise by 9% duringthe period but its overall share will remainstable at about 18% of demand.

With only one exception, trade volumes onthe top 15 CPP trade routes increased byaround 13% from 2010 to 2011 even thoughthe total sector only expanded by 1.5%. Tradein CPP saw a noticeable shift towards largertankers on trades between the Far East and theCaribbean, EC Mexico, Venezuela andColombia. Overall, LR1’s share of tonne/miledemand rose by almost 15% throughout theyear as the downstream industry beganundergoing structural changes.

A steady rise in trade from Northern Europeto South/East Africa has been observed overrecent years. These cargoes are mainlygasoline and gas oil. The boost in trade can beattributed to the region’s healthy economicoutlook with GDP growth forecast at 5% thisyear.

Over the next five years, McQuillingServices forecast that CPP tonne/mile demandwill rise by an average of about 2% per year.It is expected that MR2s will remain the workhorses of the CPP trade but will slowly cedesome tonnage to larger vessels.

Trade in petroleum products will continueevolving as weak margins are consolidating

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TANKEROperator Annual Review � March 2012IV

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the refining industry in OECD countries.These closures have totaled just over 1 millbpd in the US Atlantic Basin since the secondhalf of 2011.

Supply On the back of the continued weakness in theglobal economy, oil market disruptions andover capacity, tanker contracting fell to 109last year, its lowest level since peaking in2006.

Given the current size of the fleet, whichstands at 3,498 tankers above 27,500 dwt,contracting is expected to remain low in theshort-term. The availability of loans to theshipping industry will also remain limited inthe current economic environment. Thisshould help the market gradually return to abalance, as it should continue to limit newtanker orders, McQuilling said.

Prior to making adjustments to representdelays and cancellations, McQuilling recorded562 vessels of 27,500 dwt and above currentlyon order through 2014. This accounts forvessels that have a hull and an IMO numberbut omits deals listed as ‘reported’.

The consultancy said that its process of

ANNUAL REVIEW - MARKETS

forecasting slippageconsiders manyfactors. Afterdetermining whatvessels will bedelivered as IMO 1or 2, the orderbook isadjusted for delaysand cancellationsbased on an internalassessment of thefinancial health ofshipyards andowners.

The final step inestimating fleetexpansion comparesthe current orders in agiven year to a fractionof the average placed between 2001 and 2011.The greater of the two is used to determine thenumber of deliveries that could materialiseduring the forecast period. Over the next five years, McQuilling expected767 tankers to be delivered into the market,which includes vessels delayed from previousyears. Some 228 tankers are expected to be

delivered this year.This represents aslippage of 35% basedon the original-unadjusted orderbook.

In the larger tankerclasses, theconsultancy forecasteddeliveries of 62VLCCs andSuezmaxes.

With the exceptionof the MR2 class, withan estimated 44deliveries this year,supply increasesshould be lesspronounced in thesmaller tanker sectors.

Relatively healthyfreight rates havefueled MR2 marketoptimism in recentyears. The leastpronounced supplygrowth should occur inthe Panamax and MR1classes with arespective three andnine deliveriesexpected this year.This small orderbookis due to the increasing

specialisation of trades for which these tankersare used.

Figure 1 illustrates additions, deletions andtrading fleet inventory for all tanker classes.Note that through 2014 the tanker fleet willcontinue absorbing a high number of tankersbefore beginning to slow towards the end ofthe forecast period.

Starting in 2014, McQuilling said that itexpected the delivery programme to slow toroughly 125 vessels with this numbercontinuing to shrink.

As bunker prices rise in an environment oftanker oversupply, upward spot ratemovements are limited and owners havereduced sailing speeds to reduce fuelconsumption. McQuilling responded to thismove by lowering the average fleet sailingspeed by one knot to 13.5, realising that someowners may be operating at speeds closer to8-9 knots.

As the sailing speed is reduced, the deliveryof a cargo takes more time, reducing both theglobal and route specific availability ofvessels. Table 1 provides the impact to thetanker fleet when operators reduce sailingspeed by one knot. Other factors that will contribute to a reduction in tanker supply areport delays and demand for floating storage.

In recent years, demand to convert VLCCsinto FPSO/FSO units has increased. This hasbeen influenced by robust demand from theexpanding offshore industries in SouthAmerica, West Africa, the Gulf of Mexico,Southeast Asia and Australia/New Zealand.Going forward, the consultancy estimated thatthe offshore sector will absorb 15 VLCCs peryear for conversion to FPSOs/FSOs.

Historically, these have been single hullvessels but at the end of last year the Chios(301,824 dwt, 1993 built) and the Arosa

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Figure 1- Total Fleet Inventory Changes*.Source: McQuilling Services.

*These figures do not account for switching between clean and dirtytrades on Aframax / LR2 and Panamax / LR1. They also do not accountfor other factors that reduce supply, such as slow steaming, floatingstorage and port delays.

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March 2012 � TANKEROperator Annual Review V

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(291,391 dwt, 1993 built) double hull vesselswere sold for conversions into floating storageunits. This trend should continue and furtherhelp reduce fleet capacity.

Capturing the relationship of the factors that influence tonnage supply and their impact ondemand in a specific period requiresevaluating the effect of the fundamentalsdriving the market. In its 2012-2016 TankerMarket Outlook, McQuilling calculated thesurplus, or deficit, of vessels by subtractingestimated demand from the average annualtanker inventory that is available for eachvessel class.

By normalising this result, a capacity indexwas produced to gauge the surplus, or deficit,of a specific tanker sector. In addition to thefore mentioned factors that absorb tankercapacity, the capacity index accounts fortanker supply reductions stemming from

ANNUAL REVIEW - MARKETS

weather, maintenance, delays, dislocation,capacity reductions and availabilityreductions. Figure 2 provides the capacityindex for the entire trading fleet. In the coming years, thecapacity index for the totalfleet will continue to rise,as deliveries will outpacedeletions. In the short-term, a rising capacityindex in the LR1 sectorwill be seen, as a relativelystrong delivery profile could pressurefundamentals.

The capacity index isalso pressured, as theforecast is for demandgrowth to be lesspronounced during the out

years. This factor could be adjusted upwards ifthe global economy regains its balance andreturns to a growth trajectory.

It is important to remember when looking atthe capacity index that it is a tool to gauge theinteraction of supply and demand and not an absolute indicator of expected marketperformance.

Looking forward, the tanker market will continue to be pressured by thecombination of high tonnage availabilitycombined with demand side pressure.

500

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Figure 2: Capacity index - total fleet.Source: McQuilling Services.

TO

VLCC SUEZ AFRA PANA MR Number of Vessels * 15-28 3-15 8-15 2-5 9-20

Source: McQuilling ServicesTable 1 - Number of Vessels for each 1 knot of speed

* Assuming speed reduction across fleet sector. Specific number depends on deploymentassumptions

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TANKEROperator Annual Review � March 2012VI

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This is primarily due to the direfreight rates available to VLCCowners chartering their vessels forvoyages from the Middle East to

both east and west destinations.Braemar Seascope took a look back to 2005

to see how the VLCC spot market haschanged in just a few years.

Since 2005, there has been a 25% reductionin reported AG/West spot VLCC voyagesfrom 291 in 2005 to 216 in 2011. Just 11AG/West fixtures were recorded in January2012; if annualised, the total would be 180,only 62% of the number recorded just sevenyears earlier.

The US, the world’s largest oil consumerand traditionally the major customer forMiddle Eastern oil, has diversified its suppliesof energy with important knock-on effects forthe VLCC market. The reasons for thisdiversification are complex and reflect notonly market evolution, but changes to USeconomic, fiscal, environment and foreignpolicy.

According to a recent US EnergyInformation Agency (EIA) report, domesticcrude oil production reversed a long-termdecline to grow from 5.18 mill barrels per day(bpd) in 2005 to 5.47 mill bpd in 2010.Meanwhile, oil imports from Canada rosefrom 1.6 mill bpd in 2005 to 1.97 mill bpd in2010.

More locally-produced oil will replace long-haul oil in a shrinking marketplace: the EIA2012 Early Release Overview forecasts a0.5% annual reduction in energy consumptionper capita in the US between 2010 and 2035.

Meanwhile, high gasoline prices in the UShave led to a reduction in domestic gasoline

and diesel demand, with the US becoming anet petroleum products exporter for the firsttime last year since the late 1940s.

Despite overseas demand for petroleumproducts refined in the US, a number of EastCoast refineries have closed. They relied onimported crude, but couldn’t compete with USGulf refiners with access to cheaper WestTexas Intermediate crude oil.

China, meanwhile, has become the world’ssecond largest consumer of oil and, with an

extensive refinery building programmeunderway, is in line to match US oilconsumption within the current decade.

As a result, the VLCC spot market hasswung eastwards; in 2005, 20% of VLCC spot

The changing VLCCspot market

VLCCs seem to the most talked about sector of the tanker industry at present.

fixtures discharged in China; in January 2012,that had increased to 40%. Chinese oil refinershave swept into leading positions in theVLCC charter market.

Indeed, discharges east of Suez nowaccount for 85% of VLCC voyages out of theAG compared to 71% in 2005.

Mark Williams, Braemar Seascope researchdirector, believed that this swing to the East isnow firmly entrenched.

He said, “As Chinese refiners will probably

add over 6 mill bpd of domestic refinerycapacity in the next five years, their presencein the VLCC spot market is likely to increasefurther as China makes efforts to secure itsenergy supplies.”

How the VLCC market has changed since 2005. Source - Braemar Seascope.

TO

As Chinese refiners will probably add over 6 mill bpd of domesticrefinery capacity...the VLCC spot market is likely to increase further

as China makes efforts to secure its energy supplies- Mark Williams, Braemar Seascope Research ”

March 2012 � TANKEROperator Annual Review VII

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TANKEROperator Annual Review � March 2012VIII

ANNUAL REVIEW - MARKETS

Could steel traders be in for a bumper 2012 dueto the extra supply of vessels for recycling thisyear? Bets are now being taken about how many vessels will be forced bythe weak freight markets into the arms of recyclers, BraemarSeascope said.

Globally, ship scrapping capacity is almost unlimited in certainareas, as it is a simple business of driving ships onto beaches andcutting them up with oxyacetylene torches.

Theoretically, great numbers of ships could be sold for scrap andheld as inventory by the scrap dealers, to be pushed up the beach asand when required. Scrap prices for ships of around $500 per lightdisplacement tonne (LDT) remain, suggesting that demand for thesteel content in ships remains strong, the broker said.

Indeed, ship recycling capacity could grow further in comingyears. The China State Shipbuilding Corporation president saidrecently that half of China’s shipyards could go bust in the next twoto three years. Many of these yards could switch to recycling as, intheory, could European shipyards, though the economics ofrecycling in Europe are currently not encouraging.

Last year was not a record-breaking one for tanker recycling, despitethe poor freight markets. For four years from 1982 to 1985 over 20mill dwt of tankers were recycled while 14 mill dwt was sold fordemolition in 2010. Some 8.4 mill dwt of tankers were recycled in2011, with the figure for January 2012 maintaining that trend.

By comparison, Braemar Seascope estimated that, in 2011, 24.2mill dwt of bulk carriers were sold for scrap, surpassing the 12 milldwt scrapped in 2009 during the credit crunch, and the 11.5 mill dwtscrapped in 1998 after the Asian financial crisis, as well as the 15mill dwt scrapped in 1986, the year the BIFFEX bottomed out at554 points on 31st July of that year.

Scrapping of all types reached 41 mill dwt in 2011, making it thethird largest year for demolition ever. The second biggest was in1986 when 43 mill dwt was scrapped, while the record was 1985when 44 mill dwt of vessels were sent to the beaches.

Mark Williams, Braemar Seascope’s research director, said: “Ifmacro-economic conditions in 2012 continue to underwhelm and ifscrap prices stay at their recent high levels, this year could easilysurpass 1985 as a peak year for demolition.” �

Demolition set to break records

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Page 47: Tanker operator-magazines-march-2012

ANNUAL REVIEW - OIL SPILLS

According to International TankerOwners Pollution Federation’s(ITOPF) annual review, onlyone large spill from a tanker

occurred in 2011; the same as for 2008 and2009.

With only four medium sized spillsrecorded for the second year in a row, thismeans that 2011 saw just five spills ofgreater than 7 tonnes (50 barrels) fromtankers, the lowest on record.

In addition, the total volume of oil spiltlast year was also the lowest on record and,at around 1,000 tonnes, represents a minutepercentage of the volume of oil moved bysea. This combination of record lows isespecially encouraging given the everincreasing quantities of oil transported bysea, ITOPF said.

The Federation maintains a database of oilspills from tankers, combined carriers andbarges. This contains information onaccidental spillages since 1970, except thoseresulting from acts of war.

The data held includes the type of oilspilt, the spill amount, the cause andlocation of the incident and the vesselinvolved.

For historical reasons, spills are generallycategorised by size, small (<7 tonnes, or<50 barrels), medium (7-700 tonnes, or50-5,000 barrels) and large (>700 tonnes,or >5,000 barrels), although the actualamount spilt is also recorded. Informationis now held on nearly 10,000 incidents, thevast majority of which (81%) fall into thesmallest category, ie <7 tonnes.

This year, analysis of the causes of largespills since 1970 has allowed a moredetailed breakdown of vessel operationstaking place at the time of the incident.

The analysis has revealed that 50% oflarge spills occurred while the vessel wasunderway in open water with allisions,collisions and groundings accounting forjust over half of these. These same causesaccounted for some 95% of incidents whenthe vessel was underway in inland, orrestricted waters.

Last year’s oil spillslowest on record

The recent trend towards fewer spills from tankers and less oil spilt is being maintained. Year 7 700 Tonnes >700 Tonnes1970 7 281971 18 141972 48 271973 28 311974 90 271975 96 201976 67 271977 69 161978 59 231979 60 32

1970s Total 542 245Average for decade 54.2 24.5

Year 7 700 Tonnes >700 Tonnes1980 52 131981 54 71982 46 41983 52 131984 26 81985 33 81986 27 71987 27 101988 11 101989 33 13

1980s Total 361 93Average for decade 36.1 9.3

Year 7 700 Tonnes >700 Tonnes1990 51 141991 30 71992 31 101993 31 111994 26 91995 20 31996 20 31997 28 101998 26 51999 20 6

1990s Total 283 78Average for decade 28.3 7.8

Year 7 700 Tonnes >700 Tonnes2000 21 42001 17 32002 13 32003 17 42004 17 52005 22 32006 13 52007 13 42008 8 12009 7 1

2000s Total 149 33Average for decade 14.9 3.3

Year 7 700 Tonnes >700 Tonnes2010 4 42011 4 1

2010s Total 8 5Average 4 2.5

Position Shipname Year Location Spill Size (tonnes)1 ATLANTIC EMPRESS 1979 Off Tobago, West Indies 287,0002 ABT SUMMER 1991 700 nautical miles off Angola 260,0003 CASTILLO DE BELLVER 1983 Off Saldanha Bay, South Africa 252,0004 AMOCO CADIZ 1978 Off Brittany, France 223,0005 HAVEN 1991 Genoa, Italy 144,0006 ODYSSEY 1988 700 nautical miles off Nova Scotia, Canada 132,0007 TORREY CANYON 1967 Scilly Isles, UK 119,0008 SEA STAR 1972 Gulf of Oman 115,0009 IRENES SERENADE 1980 Navarino Bay, Greece 100,00010 URQUIOLA 1976 La Coruna, Spain 100,00011 HAWAIIAN PATRIOT 1977 300 nautical miles off Honolulu 95,00012 INDEPENDENTA 1979 Bosphorus, Turkey 95,00013 JAKOB MAERSK 1975 Oporto, Portugal 88,00014 BRAER 1993 Shetland Islands, UK 85,00015 KHARK 5 1989 120 nautical miles off Atlantic coast of Morocco 80,00016 AEGEAN SEA 1992 La Coruna, Spain 74,00017 SEA EMPRESS 1996 Milford Haven, UK 72,00018 NOVA 1985 Off Kharg Island, Gulf of Iran 70,00019 KATINA P. 1992 Off Maputo, Mozambique 66,70020 PRESTIGE 2002 Off Spanish coast 63,00035 EXXON VALDEZ 1989 Prince William Sound, Alaska, USA 37,000

Table 1: Annual number of oil spills (>7 tonnes).

Source: ITOPF.

Table 2: Major oil spills since 1967. Source - ITOPF.TO

March 2012 � TANKEROperator Annual Review IX

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TANKEROperator Annual Review � March 2012X

to the sale of assets to Frontline 2012, whichwill be registered on Oslo’s NOTC listing.

As for the assets, Frontline 2012 willpurchase five VLCC newbuilding contracts,six modern VLCCs and four modernSuezmaxes from Frontline, valued at $1,121mill in total.

Currently, the Frontline group operates, or commercially manages 43 VLCCs, 18Suezmaxes, including two newbuildings andfive Obos. It has a further five newbuildingVLCCs on order, which, as mentioned, havebeen switched to Frontline 2012.

The totals include vessels chartered in,owned by subsidiaries and those commerciallymanaged, according to the website as of

January, 2012. In addition, it was recentlyreported that the company had ordered sixMRs from STX Jinhae for $32.5 mill each.According to brokers, the vessels will bedelivered during 2013-2014. This order marksthe company’s first foray into the producttanker sector.

Recently, the company has been selling1990s- built tonnage mainly for recycling, orconversion work, which looks set to continuethrough 2012.

In addition, Frontline has formed aSuezmax pool – Orion Tankers – with NordicAmerican Tankers (which see). The joint50:50 joint venture will kick off with 29Suezmaxes. �

Due to the parlous state ofthe market, which has adverselyaffected companies with vessels having

a high level of finance attached to their bookvalues, at the time of publication, Frontlinehad just finalised the restructuring of itsempire.

In a nutshell, this resulted in Frontline 2012being formed on the back of a large privateplacement of shares, raising $283 mill, ofwhich John Fredriksen’s investment vehicleHemen Holdings had taken around half.Frontline will retain about 8.8% of the newshares.

Once the shareholdings are in place,Frontline will receive $1,121 mill with respect

FRONTLINE Group(24.96 mill dwt, plus 2.1 mill dwt newbuildings)

TANKEROperator’sTop 30 owners and operators

Taking the usual format, this list has been compiled in descending order of totaltanker deadweight tonnage per company. The figures have been extracted fromcompany websites, the Equasis database, other sources and the companies themselves.We have purposely not included FPSOs, LPG and LNG carriers in the totals.

As with last year’s listing, due the plethora of newbuildings delivered in 2011 and theamount of tonnage yet to come, plus a possible increase in the numbers recycled, therehas been and still will be changes in the fleet compositions during the next year or so,which will continue to result in changes to the rankings.

For example, in this listing the SCF Group has moved up the charts, while OmanShipping and Nordic American Tankers have been included for the first time, due totheir high number of recent deliveries.

TOP 30 TANKER COMPANIES

1

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Teekay’s empire has beensplit up into what is now known as

Teekay Parent and three daughter companies -Teekay Offshore Partners, Teekay LNGPartners and Teekay Tankers.

All four are public listed companies andover time Teekay Parent has sold (andcontinues to sell) tonnage to the daughtercompanies.

For ease of vessel compilation, TankerOperator has grouped all of Teekay’s ownedand chartered-in tanker tonnage under onebanner.

The figures listed do not include FPSOs,LPG and LNG carriers, but includes FSOs andthe various shuttle tankers.

According to the latest figures from thecompany, Teekay Parent and its daughtercompanies operate a total of 48 Suezmaxes,

57 Aframaxes, one Panamax and five productcarriers. In addition, there are fournewbuilding Suezmax shuttle tankers, plus aVLCC to come. The latter is jointly owned ona 50:50 basis.

This puts Teekay into second place in termsof deadweight tonnage, despite having thelargest tanker fleet by vessel numbers.

Included in these figures is joint venturepart-owned tanker tonnage and long termchartered-in tankers, as well as five ownedFSOs. As mentioned, not included are sevenFPSOs, plus another two under conversion, 21LNG carriers and five LPG/Multigas vesselson 15 year charters to IM Skaugen. They areoperating in the Norgas pool.

In a boost to its FPSO sector, last yearTeekay agreed to purchase certain assets fromSevan and will take a 40% stake in therestructured company. In addition, TeekayLNG agreed to purchase six LNGCs fromMaersk LNG in a joint venture withMarubeni.

In the tanker sector, last June, TeekayOffshore signed an agreement with BG tobuild four shuttle tankers for operation inBrazil. The four Suezmax DP2 shuttle tankerswill be constructed by Samsung HeavyIndustries in South Korea. Upon delivery in mid-to-late 2013, the vessels willcommence operations under 10-yeartimecharters to BG. �

Teekay Corp (13.19 mill dwt, plus 940,000 dwt newbuildings)

2

TOP 30 TANKER COMPANIES

NYK Group(12.8 mill dwt)

Three of Teekay’s new shuttle tankers seen at a handling over ceremony at Stavanger.

NYK manages 40 VLCCs, four LR2s, 24 MRs and 11 chemical

tankers, according to the company’s websitedated March 2011.

In addition, the Japanese major manages 29LNGCs and 10 LPG carriers, plus oneammonia carrier, which are not included in thefigures.

One of NYK’s major joint ventures -Knutsen NYK Offshore Tankers (KNOT) - inwhich NYK has a 50%, has entered into atimecharter contracts with several companieslast year for newbuilding shuttle tankers.

These include a charter with StandardMarine Tønsberg, owned by ExxonMobilExploration and Production Norway, for 10years, plus an option, for a newbuildingdynamic positioning 112,000 dwt shuttle

tanker to service SMT’s North Sea offshorefields.

The vessel will be built at Hyundai HeavyIndustries and equipped with bow-loadingequipment. The tanker will also be built toDP2 notation to satisfy the stringent North Seashuttle tanker requirements. She will bedelivered in 2014.

Another timecharter was signed with EnteNazionale Idrocarburi (ENI) for two shuttletankers for a maximum 10-year period startingfrom summer 2013.

Two new 123,000 dwt shuttle tankers arebeing built at Hyundai Heavy Industries andwill each be equipped with a DP system. Theywill be used to transport North Sea crude oilashore.

In addition, KNOT has signed a timecharter

agreement with Repsol. This contract is for afive-year period starting from the fourth quarterof 2012 and was the first timecharter contractsigned by the joint venture after NYK enteredthe offshore shuttle tanker business inDecember 2010.

A newbuilding DP 157,000 dwt Suezmax,which is also being built at Hyundai HeavyIndustries will be used to ship crude oil fromvarious locations, such as offshore Brazil.

In the VLCC sector, in February 2011, NYKand Thai Oil Public (Thai Oil) establishedTOP-NYK MarineOne, a joint venturecompany based in Singapore.

The new company then purchased the VLCCTenyo from NYK, which was subsequentlychartered to Thai Oil under a 10-yeartimecharter at the end of March last year. �

3

March 2012 � TANKEROperator Annual Review XI

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TANKEROperator Annual Review � March 2012XII

TOP 30 TANKER COMPANIES

Overseas Shipholding Group (OSG) (11.4 mill dwt, plus 1.1 mill dwt newbuildings)

Today, the SCF Group operates 156 tankers of all shapes and

sizes, including six chartered in, resulting inthe company rising to fourth place in thelisting.

They range from small asphalt/bitumencarriers and chemical tankers owned bysubsidiary Marpretrol to Suezmaxes. Theywill soon be joined by two VLCCs and afurther four Aframaxes, all of which arecurrently under construction.

Broken down into types, SCF Groupoperates eight gas carriers with further fourLNG carriers on order, 24 ice-class shuttletankers, 60 oil tankers and 62 product tankers.

The company also operates a drybulk andspecialised vessel fleet, such as tugs, seismicresearch vessels and icebreaking supplyvessels. The latter mainly operate in areas ofharsh conditions, such as the Arctic andRussian Far East, as do the shuttle tankers,which have been purpose built to operate insevere ice conditions. �

Sovcomflot Group (SCF)(11.6 mill dwt, plus 1.6 mill dwt newbuildings)

4

SCF/Novoship’s Aframax NS Clipper seen passing through the Dardanelles.

OSG still manages three outof the four last remaining ULCCs in a

joint venture, two of which have beenconverted to FSOs.

In total, OSG operates 111 tankers, ofwhich 65 are owned and another 46 charteredin. In addition, the US-based concern has onecar carrier, a series of articulated tug/bargecombinations (ATB) and four LNGCs on its

5 books, which have not been included in thefigures.

Included are the three ULCCs, 14 VLCCs(four chartered in), plus one newbuilding; twochartered in Suezmaxes; nine Aframaxes(three chartered in), plus two newbuildings;six lightering Aframaxes (four chartered in);six LR1s (two chartered in); 37Handysize/MR product tankers (21 chartered

in), plus onenewbuilding and 12 USflag product tankers(10 chartered in).

Similar to other largeplayers in the market,OSG has been slowlyshedding tonnage byrecycling andredelivering charteredtonnage in the light ofplunging returns.

OSG is a championof the pooling systemand participates in fourpools: TankersInternational, Aframax

International, Panamax International, andSuezmax International.

While each operates in generally the sameway, the characteristics of different marketsegments, geographic focus and establishedcargo contracts differ, the company said.

For example, one of OSG’s ULCCs and allthe VLCCs participate in the TankersInternational (TI) pool and trade worldwide onlong-haul voyages primarily in the spotmarket. TI was founded in 2000.

All of the company’s Suezmax tankers arein the Suezmax International pool and tradepredominantly in the spot market in theAtlantic Basin. OSG entered this marketsegment in 2008 when the pool wasestablished.

Thirteen of OSG’s Aframaxes are in theAframax International pool, co-founded by OSG and PDV Marina in 1996.The latter has recently pulled out, but OSGsaid it will continue to commercially managethis pool.

Finally, eight crude oil Panamaxes are in thePanamax International pool, established inpartnership with SONAP in 2004. �

One of OSG’s Jones Act US flag tankers built at Aker Philadelphia.

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TOP 30 TANKER COMPANIES

AET Tankers (10.7 mill dwt, plus 2.12 mill dwt newbuildings)

Part of the MISC group,Singapore-based AET Tankers is now one ofthe world’s largest Aframax operators with 58.

In addition, the company has 12 VLCCs,one Panamax and 13 chemical and productstankers of various size ranges on its books.

These figures, up to 1st January 2012,include several long term chartered vesselsand three Aframaxes owned in a joint venture.

The newbuildings include four VLCCs, four Suezmaxes, plus two Aframax DP shuttle tankers.

Last year, AET awarded a contract to

6

Maran Tankers Management (9.84 mill dwt, plus 1.28 mill dwt newbuildings)

MTM is part of theAngelicoussis Group and is represented

by London-based Agelef as agents.This shipmanagement concern has 23

VLCCs, 12 Suezmaxes and eight Aframaxeson its books, including vessels bareboatchartered.

In addition, MTM has another four

newbuilding VLCCs to come. Affiliate Maran Gas manages five LNGCs

and two LPG carriers, which have not beenincluded in the figures.

In January of this year, MTM was awardedan ISO 50001 accreditation by Lloyd’sRegister.

This is a voluntary international standard

that specifies the requirements forestablishing, implementing, maintaining andimproving an energy-management system.

It offers companies a systematic approach to continually improve energy performance,including energy efficiency, use andconsumption, LR said. �

Maersk Tankers(9.29 mill dwt, plus abt 1.59 mill dwt newbuildings)

We have included all the unitswithin the LR2, Handytankers and

Brostrom managed pools, plus the 17 VLCCsowned by the AP Moller-Maersk subsidiary.

Another five VLCCs are under construction.All of the VLCCs will enter the Nova Tankerspool, which was recently set up with the aimof managing some 50 VLCCs by the end ofthis year.

The pool partners are Maersk Tankers,Mitsui OSK/Phoenix Tankers, SamcoShipholding and Ocean Tankers.

Morten Pilnov of Maersk Tankers, will beNova Tankers’ managing director. A poolmanagement company, Nova Tankers A/S, hasbeen incorporated with Kazunori Nakai aschairman.

In January of this year, Ms Hanne Sørensenwas appointed new CEO of Maersk Tankerswith effect from 13th February 2012. Shereplaces Søren Skou, who recently assumedthe position as Maersk Line CEO.

In addition, the group has a number of LPGcarriers, FPSOs and FSOs under varioussubsidiaries, which have not been included in

the figures. Last year, Maersk agreed to sell itsentire LNGC fleet (eight) to a joint venturebetween Teekay and Marubeni. �

7

8

Drydocks World Dubai to convert two of itslatest Aframaxes into Marine Capture Vessels(MCV).

Eagle Texas and Eagle Louisiana, both107,000 dwt Aframax tankers delivered in2011 from Tsuneishi Shipbuilding, willundergo extensive conversion andmodification allowing them to perform dutiesfor Marine Well Containment Company(MWCC) in the US Gulf of Mexico.

This project was on the back of a 20-yearcontract awarded to AET by MWCC to supplytwo MCVs to provide containment services in

Maersk’s 35,000 dwt Handysize Richard Maersk seen at Europoort.

the event of a potential deepwater wellcontrol incident in the US Gulf of Mexico.

Both vessels will be fitted with DPtechnology, structural modifications requiredfor installation of modular processingequipment, additional accommodation andother facilities.

Once converted, the two tankers willcontinue to trade as standard Aframax tankersuntil required for containment duties. AET’sship-to-ship transfer lightering operation isbased at Galveston, Texas and operates STS inthe US Gulf. �

March 2012 � TANKEROperator Annual Review XIII

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TANKEROperator Annual Review � March 2012XIV

All of Euronav’s 13 VLCCsand one ULCC operate in the Tankers

International Pool. Another newbuildingVLCC is to be delivered this year.

These are a mix of wholly-owned andtimechartered in tonnage.

The Belgian concern also operates 22Suezmaxes and has another newbuilding tocome. Last year, the company cancelled afurther Suezmax newbuilding.

In addition, Euronav manages two ULCCFSOs, which are both under long termcontracts to Maersk Oil. Fleet management isconducted by three wholly owned subsidiaries- Euronav Ship Management and Euronav,Euronav Ship Management (Hellas). �

NITC (8.97 mill dwt, plus 5.58mill dwt newbuildings)

TOP 30 TANKER COMPANIES

MOL Group (9.16 mill dwt)

This year, we have taken thefigures for vessels managed by MitsuiOSK Lines only, as shown by the

Equasis database. We have not included 20 LNGCs and

another four LPG carriers. This leaves us with 18 VLCCs, one

Suezmax, 10 Aframaxes, 10 LR1s and 28chemical/product carriers.

There are others owned by subsidiaries andchartered in, but these are too difficult toquantify, as they change almost daily.

During the past year MOL has beenrecycling 1990s-built tanker tonnage andrecently announced that another five would begoing breakers.

These included the 1995-built VLCCs

9Atlantic Liberty, Atlantic Prosperity, the 1996-built Minesa and the 1998-built Rion, one ofthe youngest VLCCs to go to the scrapyardsince the 1980s.

Also on the scrap list was the 1992-builtSuezmax Glen Maye.

Last year, two of MOL’s shipmanagementcompanies merged. International MarineTransport and MOL Tankship Managementjoined together on 1st April, 2011 to formMOL Ocean Expert.

The merger integrated shipboard officers forthe drybulk, tankers and LPG carrier sectorsbelonging to both companies under the MOLumbrella to ensure more flexibility in seafarerallocation and streamline management, thecompany said at the time. �

MOL has recycled the Suezmax Glen Maye seen here in the Solent heading for Hamble.

Due to political reasons,NITC’s total could be subject to

change, although Tanker Operator has tried tounravel the vessels owned.

. For example, late last year, OmanShipping took back the six VLCCs that thecompany bareboat chartered to NITC, citingthe threat of sanctions. These have beendeleted from the total deadweight tonnage inoperation.

There must also be question markssurrounding some of the newbuildings, as totheir final destination regarding ownership.

At the beginning of this year, the companywas dealt yet another blow when the mancredited with building up the company intowhat it is today, before the threat of sanctionsmoved the goal posts – Mohammad Souri –confirmed that he had left the company.

The move appears political, as he wasreplaced by Hamid Behbahani, the formerMinister of Roads and Transportation and aformer professor at Iran's University ofScience and Technology, where he claimed tohave taught current Iranian PresidentMahmoud Ahmadinejad. �

10

Euronav (8.73 mill dwt, plus480,000 mill dwtnewbuildings)11

ChinaShippingDevelopment (8.5 mill dwt, plus 1.9mill dwt newbuildings)

Again China ShippingDevelopment has risen in the listing

due to further deliveries of newbuildingVLCCs, taking the total to 15.

More are thought to be still to come- atleast six tankers of varying sizes, plus anothereight 48,000 dwt crude/products tankers fromGuangzhou Shipyard, whose contracting wasannounced in December 2010.

In addition, according to the Equasisdatabase, the Shanghai-based companymanages five Aframaxes, 16 LR1s, 13Panamax crude carriers, 28 MRs and Handies,plus several smaller coastal tankers. �

12

TORM (7.65 mill dwt, plus150,000 dwt newbuildings)

Despite losing a few of itspool partners, TORM still has a

considerable number of product carriers and isa partner in the LR2 and LR1 pools.

In total, TORM manages 29 LR2s, 22LR1s, 51 MRs and 11 Handysize product

carriers. Inaddition, theDanish companyhas another threenewbuilding MRsto come.

To help ease itsfinancial burden,last year thecompany soldseveral productstankers, a coupleof which were on

leaseback deals and cancelled onenewbuilding products carrier contract. �

13

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NSCSA currentlymanages 17 VLCCs, 19

chemical carriers and four conros. In addition, another six 46,000

dwt chemical carriers are due forimminent delivery, plus a 75,000dwt chemical carrier.

These will enter the NationalChemical Carriers (NCC) fleet,which is an 80:30 joint venturewith SABIC and operates all thechemical carriers.

In 2009, NCC entered into a50:50 joint agreement with Odfjelland established an operatingconcern in Dubai. The companyalso has a 30.3% stake in LPGcarrier operator Petredec.

All of the vessels are managedin-house by Mideast ShipManagement. �

Singapore-based Ocean Tankers hasrisen in ranking thanks to its VLCCnewbuilding programme, of which thecompany still has four more to come.

Today, the company boasts 10 VLCCs,three Suezmaxes, 14 Aframaxes, sixPanamaxes, 22 MRs, four IMO2 Chemicaltankers and 21 of what is calls ‘general

During the last decade, DTM hastaken significant steps to renew its fleet.

For example, during the years 2000 - 2011,a total of 54 older tankers were sold, while thecompany simultaneously embarked on anewbuilding programme with the signing ofseveral contracts for VLCCs, Suezmax,Aframax, coated and crude oil Panamaxtankers.

Today, the Equasis database is showing 12VLCCs, 21 Suezmaxes, one Aframax and 14Panamaxes, both LR1s and crude carriers asmanaged by DTM.

With the exception of four tankers, all thevessels were delivered to the company in2004, or after.

Dynacom said that Ice Class vessels willbenefit from increased crude oil exports fromthe Baltic; there will be longer haul productshipments due to refinery capacity restrictions;companies with a modern fleet will have anadvantage; heating coils in VLCCs will aidthe carriage of fuel oil cargoes. �

TOP 30 TANKER COMPANIES

15

DynacomTankersManagement

(7.13 mill dwt)

Ocean Tankers (6.84 mill dwt, plus 1.27 mill dwt newbuildings)

purpose’ tankers. In addition, Ocean Tankers manages several

bunker tankers, supply craft and tugs in andaround the Singapore area.

Ocean Tankers is to put its VLCCs into theNova Tankers pool, together with partnersMaersk, Samco and Mitsui OSK.

The 2008-built VLCC Hua San.

National Shipping Co of Saudi Arabia(NSCSA) (6.1 mill dwt, plus 280,000 of newbuildings)

NSCSA’s 2001-built VLCC Harad.

16

March 2012 � TANKEROperator Annual Review XV

14

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The Aramco subsidiary has continuedits policy of selling older VLCCs,

hence Vela’s dropping down the order. The company currently owns 15 VLCCs,

one LR2 and five MRs. According to its website, Vela also has up to

40 tankers ranging from VLCCs downward oncharter at any one time. �

The COSCO Group has 12VLCCs, two Suezmaxes, three

Aframaxes, 10 Panamaxes and three MRs inservice under the management of DalianOcean Shipping (COSCO Dalian).

There are no doubt more to come due toChina’s effort to ramp up its energy imports inits own hulls and due the fact that the groupowns many shipyards in China.

In addition, the tanker sector of the grouplooks after four small LPG carriers. �

BW Maritime operates 14VLCCs, 16 products carriers and two

chemical tankers from its Singapore base. All the vessels, including the LNG/LPG

fleet of BW Gas is technically managed by BW Fleet Management, whose Singapore arm

looks after the tanker sector.The offshore side of the business has a fleet

of FPSOs, FSOs and FDFSOs, including the360,000 dwt Belokamenka used as an FSO inKola bay, near Murmansk. These have notbeen included in the figures. �

TOP 30 TANKER COMPANIES

Vela International Marine (4.86 mill dwt)

BW Maritime (5.45 mill dwt)

1817

COSCOGroup (5.07 mill dwt)

19

BW Maritimes’s 2008-built VLCC BW Edelweiss.

Tsakos Energy Navigation(TEN) (4.77 mill dwt, plus 314,000 dwt newbuildings)

AssociatedMaritimeCorp (AMC) (4.72 mill dwt)

Part of the Hong Kong MingWah Group, itself owned by China

Merchants, AMC manages 13 VLCCs, oneSuezmax and seven Aframaxes.

It is thought that the newbuildingprogramme came to an end with the deliveriesof two VLCCs last year, lifting the companyup the rankings. �

21

TEN’s fleet consists of three VLCCs, 10 Suezmaxes, nine

Aframaxes, three LR2s, nine LR1s, six MRsand eight Handies.

In addition, TEN has two DP2 Suezmaxes

on order on the back of a long term charterwith Petrobras. They are to be delivered in2012 and 2013 respectively.

TEN also manages one LNGC. �

20

ShippingCorporationof India(SCI) (4.65 mill dwt, plus630,000 dwtnewbuildings)

At the beginning of this year, SCI had four VLCCs, 20 other crudecarriers, 15 product carriers and two chemicaltankers.

In 2011, the company took delivery of eightLR1s and four Aframxes, while selling twoproduct cariers and four Panamax crudecarriers.

Another two VLCCs are under constructionat Rongsheng. �

TEN’s Aframax Sapporo Princess seen in the Bosporus approaching the Black sea.

22

TANKEROperator Annual Review � March 2012XVI

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Again there is no change toBP’s fleet total. The oil major

manages four VLCCs, 20 Aframaxes, 17 MRsand the shuttle tanker Loch Rannoch.

In addition, BP Shipping manages fourVLGCs, seven LNGCs, plus another for theNorthwest Shelf project. �

OSC has 14 VLCCs, plusfour more on order; two LR2s; two

methanol carriers; two chemical tankers andtwo product tankers in operation.

In addition, OSC has seven LNGCs, twoLPG carriers and several drybulk carriers,including VLOCs.

Around 12 of the VLCCs are in the VL8pool, a joint commercial venture betweenOSC, NAVIG8 and VTN, which was formedin 2010. More are due to follow this year.

At least six of the VLCCs were thought tohave been redelivered from bareboat charter toNITC recently, due to the sanctions threat. �

TOP 30 TANKER COMPANIES

MinervaMarine (4.62 mill dwt)

Tanker Pacific Management(4.21 mill dwt, plus 1.08 mill dwt newbuildings)

March 2012 � TANKEROperator Annual Review XVII

Minerva Marine currentlymanages three VLCCs, five

Suezmaxes, 22 Aframaxes and 10 MRs.Last year, the company took delivery of

three secondhand Aframaxes and a bulkcarrier. �

23

OmanShipping Co(OSC)(4.53 mill dwt, plus 1.75mill dwt newbuildings)24

BP Shipping(4.3 mill dwt)

25

BP’s AframaxBritish Kestrelseen stCoryton, itselfthe subject ofongoing debateover its future.

Tanker Pacific has continued to shed some of its older

tonnage and at the same time has a large order book.

At the beginning of this year, the Singapore-

based company had six VLCCs, 17 Aframaxesand 12 MRs under management.

In addition, its orderbook stood at fourSuezmaxes, four LR1s and four MRs. �

26

SK Shipping (3.78 mill dwt, plus 1.28 mill dwt newbuildings)

The South Korean shippinggroup has 11 VLCCs, two Aframaxes,

three MRs and four small chemical tankersunder management, according to the Equasisdatabase.

In addition, the company ordered fourVLCCs from Hyundai in 2009, which are notthought to have been delivered thus far.

In addition, the company manages fiveLNGCs and four LPG carriers. �

This company has twoVLCCs, six Suezmaxes, 16 Aframaxes and 10MR/Handies under management.

In addition, another VLCC, two Suezmaxesand four MRs are on order.

The company also has interests in drybulkcarriers and a containership. �

27

ThenamarisShipsManagement(3.37 mill dwt)

ChevronShipping (3.18 mill dwt)

NordicAmericanTankers (3.12 mill dwt)

28Chevron Shipping’s fleetincludes eight VLCCs, three

Suezmaxes, six Aframaxes and five MRs.In addition, the oil major operates one

LNGC for the Northwest Shelf project andtwo LPG carriers. �

29

At the end of last year,NAT took delivery of its 20th

Suezmax, bringing the company into TankerOperator’s Top 30 at No 30.

The company has grown rapidly since itsigned a bareboat agreement with BPShipping for three vessels in the 1990s. Thiscontract ended in 2004 allowing the companyto expand from the three vessels to 20 in justseven years.

All of the Suezmaxes are operating on thespot market and at the end of last year, NATestablished the Orion Tankers pool togetherwith Frontline on a 50:50 basis.

This specialist Suezmax pool started with29 vessels. As a result, during the fourthquarter of 2011, NAT left the Gemini pool. �

30

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TANKEROperator Annual Review � March 2012XVIII

For his tenure at the helm of IACS,Ueda set three important goals - tocomplete the transition to a moretransparent and robust IACS

structure and restate IACS commitment to theEuropean Commission; to make proactivetechnical contributions to the maritimeindustry and the IMO.

An immediate result of the transition to amore transparent and open structure was theadmission of the Croatian Register ofShipping and the Polish Register of Shippingas new members on May 3rd and June 3rd lastyear, respectively.

During the year, ClassNK hosted andchaired chairman’s office meetings in Tokyo,London, Oslo and Kyoto, the 69th and 70thgeneral policy group meetings in Tokyo andSeoul and the 62nd and 63rd IACS councilmeetings in London and Kyoto.

At the same time, Ueda took everyopportunity to visit and maintain dialoguewith the IMO and leading industryorganisations, including The InternationalChamber of Shipping (ICS) and the AsianShipbuilding Experts Forum.

The immediate legacy of his term aschairman of IACS was demonstrated recentlywhen a number of Asian industry groupsparticipated in IACS Winter Council Meetingin London where, at Ueda’s specific request,they joined regular European-based shipownerand shipbuilders’ association participants.

The outcome was a more active andbalanced exchange of opinion, with all partiesmaking important contributions to discussionsfocusing on the key issues of Goal BasedStandards (GBS), Common Structural Rules(CSR) and the Energy Efficiency DesignIndex (EEDI).

Commenting on the outcome of the meetingand whether Asian groups would continue toparticipate in IACS winter meetings, Uedasaid: “I think the most important outcome ofthe meeting was that beyond merelyexpressing our opinions, shipowners,

A year in the life ofNoboru Ueda

ClassNK chairman and president, Noboru Ueda, served as IACS chairman from July2010 until June 2011. He became the fourth ClassNK chairman to complete a term as the

head of IACS since the association was founded in 1968.shipbuilders and IACS were able to come tosolid understanding and agreement about thechallenges we face as an industry.

“I think the contributions of the Asianshipbuilders associations, who produce themajority of the world’s vessels, played anextremely important part in the meetingreaching a successful conclusion. As a resultof this success we anticipate that Asianshipbuilders will be able to play a more activerole in future meetings of IACS and in theindustry as a whole.”

Harmonised CSRUeda’s term of office was characterisedparticularly by the determination of IACS todevelop the Harmonised CSR for tankers andbulk carriers. Demand for such rules hadincreased following the sinkings of the Erikaoff France in 1999 and the Prestige off Spainin late 2002, prompting the IMO to developGBS.

IACS began discussions on developing CSRand, in June 2003, agreed to create one set fortankers and another for bulk carriers. Theobjectives included developing commonminimum structural requirements for thedesign and construction of robust ships, rulesbased on transparent methods and rulessupported by published technical backgrounddocuments. IACS also determined to providea rational link between the requirements fornewbuildings and ships in service and includethe IMO’s GBS’ concept.

In his presentation on the main CSRconcepts and application of the to the ChinaGreen Ship Technology conference inShanghai in July 2011, Ueda said the conceptsunderlying the development of the IACS’ CSRwere to apply a design and fatigue life off notless than 25 years in North Atlanticenvironmental conditions; to introduce highlevel strength assessment for factors, such asultimate hull girder strength and to introducethe net scantling concept. The current CSRwas adopted by the IACS Council in

December 2005 and had been applied totankers and bulk carriers contracted forconstruction on or after 1st April, 2006.

Ueda said it was important to realise thatthere were two different sets of CSR, one fortankers and one for bulk carriers. While thesetwo sets of rules were developed at the sametime, they were developed independently bythe joint tanker team and joint bulker teamand, as a result, were based on differenttechnical approaches for such key technicalelements as wave load, fatigue, finite elementmethod analysis and so on.

“Before IACS completed the current CSR,it sought feedback from industry, whichstrongly requested that common technicalapproaches be incorporated in both sets ofrules,” Ueda told delegates. Even thoughIACS managed to partially harmonise theCSR prior to completion, in order to meet thedemands of industry, IACS committed itself tocompletely harmonising the two sets of CSRsbased on a consistent methodology in thefuture.

“Over this same time period, the IMOcontinued to develop the GBS following thecompletion of the CSR. The GBS and relatedamendments to the SOLAS convention were

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ANNUAL REVIEW-PROFILE

March 2012 � TANKEROperator Annual Review XIX

finally adopted in May 2010. With thecompletion of the GBS, IACS decided tomake the Harmonised CSR comply with theIMO GBS. Unlike the current CSR, whichconsist of two separate sets of rules for bothtankers and bulkers, the new rules will coverboth types of ships.

“In its final form, the Harmonised CSR willultimately consist of three parts - a commonpart for the requirements of both tankers andbulk carriers and then two dedicated parts forthe specific requirements of tankers and bulkcarriers,” he explained.

GBS catalystUeda pointed out that the development of theGBS at the IMO had been the catalyst forIACS’ decision to include compliance with theGBS as part of the harmonisation process. TheIMO GBS comprised a hierarchy of five tiers- goals, functional requirements, verificationof conformity, rules and regulations for shipdesign and construction and industry practicesand standards. IMO provided Tiers I to IIIwhile the Harmonised CSR came under TierIV.

In accordance with the IMO GBSframework, each class society’s rulesincorporating the Harmonised CSR wouldneed to be compliant with both Tier I and TierII of the GBS. This compliance would then beverified by the IMO as part of Tier IIIverification of conformity.

With regard to one of the key elements ofthe IMO GBS, Ueda made clear that thefunctional requirements consisted of 15 itemsthat were further categorised into four fields -design, construction, in service condition andrecycling consideration. The main functionalrequirements for design and fatigue life wereto be not less than 25 years under NorthAtlantic environmental conditions, with whichthe current CSR had already complied.

Although the GBS requirements had notbeen finalised during the development of theCSR, the current CSR were developed with aview to complying with the recently adoptedIMO GBS requirements. As such, the current

CSR already complied with most of the GBSrequirements.

However, because the CSR were completedin 2006 and the IMO adopted the GBS in May2010, the current CSR do not complycompletely with some GBS requirements. Thefunctional requirements not covered by thecurrent CSR included structural redundancy,residual strength after damage, hull dynamiceffects on fatigue life, design transparency andso on.

“In order to meet these requirements, IACSwill develop new requirements, revise thecurrent requirements or prepare transparenttechnical backgrounds and consequenceassessments as part of the CSR harmonisationproject,” Ueda said.

“As some requirements under developmentfor compliance with the IMO GBS are quitenew, it is possible that scantling requirementsmay be affected. On the other hand, I expectthat scantling impacts and consequentialimpacts on ship operation cost from theHarmonised CSR will be limited because oneof the main objectives of the Harmonised CSRis to integrate the two existing approaches forkey technical elements.

“I must convey that it is premature topredict any scantling impacts from theHarmonised CSR. I can advise that IACS hasstarted to conduct consequence assessmentsand will provide the industry with theoutcome next year (2012),” Ueda said.

Under the auspices of the IACS structurefor the CSR harmonisation project, 10 teamsworking under the direction of the IACS HullPanel were charged with carrying out theactual harmonisation work concerning waveload, buckling, finite element method analysis,etc.

External reviewWith regard to the Harmonised CSR underdevelopment, IACS’ schedule providessufficient time for external review prior tofinalisation. However, in order to receivefeedback from the industry before this reviewperiod, IACS has organised a special external

advisory group and to date, four meetingshave taken place.

It is understood the first draft of the rulesfor review by industry will be released in themiddle of 2012, following a consequenceassessment and that the external review willbegin after this.

“In order to ensure that the externaladvisory group is balanced between all thedifferent sectors of the industry, as IACSchairman, I endeavoured to include not onlyshipowners’ associations but also shipbuilders’associations in China, Japan and (South)Korea in the membership,” Ueda said.

“At some point of time, tankers and bulkcarriers will be designed according to theHarmonised CSR instead of the current CSR.Although some new requirements will beadded to comply with IMO GBS, shipscomplying with the current CSR remain

among the best designed ships in the historyof the industry, because the core of the ruleswill remain similar. Therefore, shipscomplying with the current CSR should not beconsidered as sub-standard,” he concluded.

In its final form, the Harmonised CSR will ultimately consist of three parts - a common part for the requirements of both tankers

and bulk carriers and then two dedicated parts for the specific requirements of tankers and bulk carriers

Noboru Ueda, ClassNK Chairman and president

“”

Noboru Ueda, ClassNK chairman andpresident.

TO

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ANNUAL REVIEW - PROFILE

Witherby changeswith the times

Part of any shipboard, or onshore function is the collection and dissemination ofregulatory, information and training manuals.

TANKEROperator Annual Review � March 2012XX

These used to come in the shape ofvoluminous books, only tothankfully change into somethingmore readable with the digital

revolution. One of the leading providers of both hard

back books and digital eBooks is WitherbySeamanship, a specialist publisher oftechnical, operational and regulatory materialsto the shipping industry.

As the shipping industry has diversifiedmore fully into distinct sectors, iecontainerships, drybulk carrier, tankers, gascarriers and others, each with their ownspecific needs, so Witherby has moved onwith the times with its various offerings.

For example, from 15th February 2012, thepublisher changed its ‘Seamanship Library2012’ catalogue subscription to purchase to amore self-selection module system. Thedifference is that each module contains aselection of regulatory and technical titles thatbest fits the user’s ship type.

Core module‘Seamanship Library 2012’ now consists of a‘core module’ that contains 10 IMO titles thatapply to all ship types. Once purchased,additional modules, or books, as required, or

appropriate, can be added. Over 600 eBooksand 26 ‘ship type’ modules are currentlyavailable for addition to the library and thesewill be added to over the coming months andyears, Witherby explained.

Today, the library is recognisedby the UK Maritime andCoastguard Agency (MCA) asbeing an electronic equivalent forthe on board carriage of IMOinstruments, such as the SOLAS,MARPOL, LL, COLREG andSTCW conventions and UKRegulations, meaning that thesepublications are required to becarried on board by the ship’sSafety Management System(SMS).

An addition this year, Witherby hasintroduced the option - ‘Seamanship LibraryOnline’. This is a web based version of thesystem suitable for all networks, operatingsystems and devices.

‘Seamanship Library 2012’ is now alsoavailable through two of the industry’snavigational data management systems,Chartco and Voyager.

Users of these systems can have instantaccess to the library and are able to purchase

and unlock required modules/titles through thenormal mechanisms.

‘Seamanship Library’ also allows usersaccess to marine technical eBooks from theirPC, laptop, or online via PC, Mac or Tablet

device. The huge quantity of referencematerial is fully searchable, saving hours ofmanual browsing allowing the user to findwhat they want in seconds, the publisherclaimed.

Users can be kept up to date withinformation on the latest publications with oneeasy synch! If users require a new edition –when they receive an updated version of‘Seamanship Library’, they can immediatelyupgrade to the latest edition.

A potted historyWitherby Seamanship has beeninvolved in producing, protectingand publishing eBooks for morethan 10 years and it is thoughtthat there are over 250,000Witherby Seamanship eBooks inuse today. Books and eBooks are published for OCIMF,SIGTTO, Skuld, IACS and ITOPF plusothers.

Witherby can trace its history back to 1740in London, around the time that ‘Lloyd’sList’, one of the world’s oldest runningjournals, was first published at EdwardLloyd’s Coffee House.

The company’s early business included thepreparation of contracts between merchantsand shipowners, plus the insurance clausesassociated with them. Some 272 years later,the company still supplies insurance clausesto the commercial marine market.

In 2005, Witherbys entered into a jointventure with Seamanship International, aScottish based company that had found aniche in delivering high quality content.While Seamanship provided content through arange of differing delivery mechanisms andmedia, it had the expertise in electronicpublishing. Witherby Publishing Group is based in

Livingston (Scotland) and run by partners Iain Macneil and Kat Heathcote. Macneil is an ex-seafarer who set up SeamanshipInternational to design and develop trainingand reference materials for the shippingindustry. Kat, who has a background in theenergy business, including with BP and Wood McKenzie, joined the company in2004.

The company has customers in over 180different countries and has won a variety ofawards. Witherby said that it is lookingforward to celebrating its 275th birthdayin 2015. �

One of Witherby Seamanship’s best sellers.

TO

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