TANKER OPERATOR MAGAZINES(March 2012)

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MARCH 2012 www.tankeroperator.comIncorporating the TANKEROperator Annual Shipping ReviewTANKEROperatorMarch 2012 TANKEROperator 01ContentsMarketsDemand heading for a slowdownNews ProfileShipboard fatigue - factUS Report Arntzen spells it outPipeline, or tanker?ShipmanagementInterManager gainsInmarsats service bundleAWT upgradesWallem goes for DNVChemical/Product TankersLow contracting a good signWhats in your tank?PiracyISS solutionCCTV protectionTechnology26 Latest LPGC deliveredFront 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 companys 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 warning32 Tank Services IMOs PSPC COT Scanjet expands14040610261924I Weve been here beforeIII How did it go wrong?X Top 30 ListingXVIII Noboru Ueda Profile XX Witherby changes tackANNUAL REVIEWTANKEROperator

March 2012 2COMMENTFishermen shot dead- an accident justwaiting to happenTANKEROperatorVol 11No 4Tanker Operator Magazine Ltd2nd Floor, 8 Baltic Street EastLondon EC1Y 0UP, UK www.tankeroperator.comPUBLISHER/EVENTS/SUBSCRIPTIONSKarl JefferyTel: +44 (0)20 8150 [email protected] CochranTel: +44 (0)20 8150 [email protected] SALESMelissa SkinnerOnly Media LtdTel: +44 (0)20 8950 [email protected] year (8 issues)195 / US$320 / 2202 years (16 issues)300 / US$493 / 336Subscription hotline:Tel: +44 (0)20 7017 3405Fax: +44 (0)20 7251 9179Email: [email protected] 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 DAmato 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 didnt 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 - orat least notes taken - to compare with the AIS. An Italian report issued in mid-February called for a ballisticscomparison. 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, thats bad enough - but for it to remainquiet, thats really much more condemnable. And self-regulation reallyis not the way to go - its a necessary but not sufficient condition, thesecurity companys 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. 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March 2012 04INDUSTRY MARKETSTanker 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 Researchhighlighted 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, BPs 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 thatsales 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 transportwould 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 ofthe 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. Europes 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. 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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 projects 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 thanShipboard fatigue now scientificallyrecognisedNEWS FOCUS - PROJECT HORIZONTANKEROperator

March 2012 06The participants were wired up to monitor fatigue levels.Ice Class Tankersa TANKEROperator reportResearched and written by Ian CochranArctic Tankers - a new Gold Rush?18,000 word report by Tanker Operators editor, Ian Cochran400 - March 2012Northern Sea Route voyagesCost comparison with SuezRegulatory requirementsExpected market growthRegulations - Polar CodeShore infrastructureAvailable to purchase online from our online store,alternatively to order please e-mail, Karl Jeffery, publisher, on [email protected] Tel +44 208 150 5292 INDUSTRY PROJECT HORIZONMarch 2012 TANKEROperator socio-economic grounds.The shipping industry and those who regulate it cannot afford toignore these findings, he said.He was speaking of Project Horizon, the findings of which haveprovided a first benchmark for understanding and predicting howdifferent watch systems influence the level of fatigue, or sleepiness ofships 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 vessels 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 fittedwith 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 adisturbed 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 adisturbed 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)closed gaugingThe HERMetic UTImeter Gtex is a portable electronic level gauge for closed gas tight operation.The unit is used for custody transfer, inventory control measurement and free water detection on marine vessels.Connected to a HERMetic vapour control valve, the UTImeter Gtex avoids any gasrelease during operation and enables 3 measurements in one single operation:ullage, temperature and oil-water interface level measurement. By increasing safety and efciency,Honeywell Tanksystem helps customers improve business performance.For more information visit our website www.tanksystem.com or call +41 26 919 15 00 2012 Honeywell International, Inc. All rights reservednternational trade fair Singapore14 -16 March 2012Stand P22Meet us @ Asia Pacifc MaritimeTANKEROperator

March 2012 08INDUSTRY 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 wereobserved 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 splitsleeping 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 tiredat 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 novelevents, 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 findingsThe two simulated voyages with the different watches.March 2012 TANKEROperator INDUSTRY PROJECT HORIZONEcoMATE System for monitoring offuel consumption and bunkeringEcoMATE is a reliable system formonitoring of fuel consumptionand bunkering operations.Together with the OPTIMASSseries of fowmelers, il offers accurate and maintenance freesolutions for all fuel systems.www.krohne-skarpenord.comCARGOMASTER The all-in-one tankmonitoring systemCARGOMASTER is the completesolution for tank monitoring andalarm. The system is well provenand is installed on all kinds ofvessels. Combined with the highprecision cargo tank level radar0PTWl\F 83OO 0 Morine, lhe syslem offers unique benefls for tanker operators.KROHNE Skarpenordoffers complete solutions for monitoring of liquids onboard all kinds of shipsWarsash 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 ShipownersAssociation.European Harbour Masters Committee.INTERTANKO.UK Marine Accident Investigation Branch.UK Maritime and Coastguard Agency.Project Horizon partnersafternoon 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. TANKEROperator

March 2012 10INDUSTRY - US REPORTUS tax- Arntzenspells it outOn 21st February this year, Morten Arntzen president and CEO of the OverseasShipholding Group (OSG) gave a testimony to the US House Ways and MeansCommittee 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 countrys 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 vesselsin 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 ofcapital, 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 vesselsoperation, 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 DefensesUS TransportationCommand as a vitalelement of our militarysstrategic 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-ownedinternational shipping fleet, which may becalled into service for our nations defence.American-owned companies internationalships are part of what is thus the EffectiveUS Controlled Fleet (EUSCF) that is, thefleet 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,OSGs 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 businessesOSGs Morten Arntzen.INDUSTRY - US REPORTMarch 2012

TANKEROperator11forChemical/Product TankersTHE tank coating system for carrying CPPs, PFADs, Methanol, and Bio-Fuels.+01 440-937-6218 Phone+01 440-937-5046 Faxwww.adv-polymer.comAdvanced Polymer CoatingsAvon, Ohio 44011 U.S.A.Rely on MarineLine 784 tank coating to handlea wide range of cargoes carried by chemical and product tankers. MarineLine 784 offers enhanced corrosion resistance compared to phenolic epoxies or zinc silicates, at a similar cost. It is faster and easier to clean, with higher cargo purity.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 OSGsbalance 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 yearsearlier, 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 theshipbuilding, 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.TOTANKEROperator

March 2012 12INDUSTRY - US REPORTThis article argued that given theObama administrations decisionnot to approve the Keystone XLpipeline (a politically andenvironmentally 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 executives 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 (unlikebuying oil from people who hate us). But, from a shipping executives 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.Its 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.Its 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 majorassumptions 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 forshippings invisiblehandOn 7th February, 2012, business journalist Joe Nocera published in the Op-Ed pages ofThe New York Times an opinion piece entitled Poisoned Politics of KeystoneXL*.INDUSTRY - US REPORTMarch 2012 TANKEROperator13Severn Trent De Nora has over 35 years ofleadership and expertise in electrolytic disinfection treatment solutions. Setting new standards with the Type-Approved BALPURE ballast water treatment system, we have created a simple, reliable and cost-effective solution for both new and existing vessels.-Easy to install-Easy to operate -Low capital cost -Low operating cost -Non-corrosive -Operator safe-Suitable for hazardous cargo area installations-Surpasses IMO D-2 standards by ten-foldWE UNDERSTANDBALLAST WATER TREATMENTVisit us at Asia Pacific Maritime, March 1416, Singaporeand at Sea Japan, April 1820, TokyoTo learn why BALPURE is the right ballast water treatment solution for you,contact [email protected] or visit www.balpure.comHigh probability events sustain thedirection of the market, but its usually lowprobability events that act as catalysts andgame changers. Its 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 theAcademys 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 smartclassroom, 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 simulatorTOTANKEROperator

March 2012 14INDUSTRY - SHIP MANAGEMENTIndustry associationgoes from strength tostrengthInterManager, 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 twoassociate 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 Dickinsons 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 andcargo, freight and logistics. Each of the marine teams works closelywith an international network of maritimelawyers, marine surveyors, investigators andloss adjusters to provide the complete marinelegal service 24/7. Hill Dickinsons 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 hisCertificate 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 thecouncils 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 KPIAssociationssystem 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. TOMarch 2012 TANKEROperator .15INDUSTRY SHIPMANAGEMENT - COMMUNICATIONSFrontline opts forInmarsats newservice bundleA major tanker company has claimed to have overcome the increasing complexity andcost of communications by opting for a complete switching system. Frontline, the worlds largest tankerowner in terms of tonnage, is toenhance its ship/shorecommunications network byinstalling Inmarsats 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 Inmarsats ability todeliver made up the additional element inmaking the choice, he said.With XpressLinks 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 thecrews 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 theXpressLink 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 cant 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 Inmarsats 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 Inmarsatscustomers go straight for an always onservice, 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 dancingcomplete 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 onFrontlines 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 gosolution, 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. TOTANKEROperator

March 2012 16INDUSTRY SHIPMANAGEMENT - MANAGEMENT SYSTEMSThis features port forecasts, tidedata, tools for easy customisationand direct access to bunkerpricing. According to ErikHjortland, 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 AWTs BVS on board system to monitor their entire fleet.AWT upgrades fleetmanagement systemStandfirst-Applied Weather Technology (AWT) has released GlobalView 2.0, a newversion of the companys fleet management system.Ve|||ag ea4 I!B 0e|e|eseCDISIREPort State ControlFlag State InspectionsClass InspectionsShip Visit ReportsInternal AuditsNavi AuditsMarine Injury ReportsVessel/Cargo damagesMachinery damagesEnvironmental incidentsNear MissesNon ConformitiesFleet ReportsNear Miss ReportsManagement ReportsOverdue Items ReportShip ReportsOil Major ReportsVetting Status ReportInternal vs. External DecienciesKey Performance Indicators [email protected] QuestionsMost frequent DecienciesMarine Injury Report TOMarch 2012 TANKEROperator .17INDUSTRY SHIPMANAGEMENT - DATA MANAGEMENTThe contract also includes the Workand Rest Hours module allowingfor compliance with internationallegislation on rest hours forseafarers.This is the largest contract signed for DNVNavigator 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 theCaptains 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 databaseof information about most of the worlds 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.Masters notesThe system is arranged for easy creation ofMasters 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,Wallems director of safety and quality. Thecompany tested the system thoroughly beforetaking this next strategic step. As part of the systems 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. TOPredictabilityWouldn't it be great to be able to see ahead? To be able to look into the future and predict the costs of keeping your vessels safe and in compliance for the next fve years? We at Wilhelmsen Ships Service believe that planning and predictability are vital for our customers. We know how crucial your operational effciency and risk management are to you. So, let us help you face the future by taking care of your liferafts. Anywhere in the world, at predictable prices, and always in compliance.Check out our website for more information: www.wilhelmsen.com/liferaftrental Liferaft Rental. No delays, no surprises.When tomorrow comesMaking every port your home portn e h W

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INDUSTRY CHEMICAL/PRODUCTS TANKERSMarch 2012 TANKEROperator19However, not all is rosyunderlined by a Gibson Researchreport issued in the middle ofFebruary, which said that theproduct 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 thefutureMost operators have more faith in the chemical and products tanker markets futurethan any other at present. In 2012, the expectations are for an evensmaller 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 Researchs 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 onthe 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. TOSource - Drewry Maritime Research.Source - Gibson Research.TANKEROperator

March 2012 20Whats in your tank? Last January, the MARPOL 73/78 Annex II and MEPC 2/ Circ. 15 Annex 10 tankcleaning regulations that came into force in August 2010 came into full effect, leaving many ship operators facing a new challenge. It's not a MIRACLE...MRACLE tank cleaning [email protected] | www.chemserve-marine.comIt 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 Services (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 ourglobal 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 yearsacquisition 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 Chemicalsfactory just outside Tnsberg 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 withNalfleets previous parent company Nalco,WSS has access to suitable technologydeveloped by the Nalco R&D team, inINDUSTRY CHEMICAL/PRODUCTS TANKERSCelebrating our 35 Year of Operations.thYour Preferred Ship Repair Yardin the Arabian GulfISO 18001ISO 28000 & 20858ISO 9001 & 14001ISO 27001 & ISPS CodeP.O. Box 50110, Hidd, Kingdom of Bahrain, Tel: +973 17 67 1111, Fax: +973 17 67 0236, E: [email protected], www.asry.netaddition to a skilled team of WilhelmsenChemicals scientists based at the R&Dlaboratory outside Tnsberg. 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. Its 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 2012 22INDUSTRY CHEMICAL/PRODUCTS TANKERSWSS marine chemicals director GrahamHunter.Produced in association withSupported bySponsors includeContactMary-Ellen KontogeorgouDelegates [email protected] SkinnerSponsorship [email protected] +44 777 252272Emmanuel VordonisTOMaking money in a tough tanker market:how to cut costs and increase operating standardsDimitris Lyras TANKEROperatorMartin ShawA conferenceSpeakers: 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 Srensen, 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 ShipmanagementMetropolitan Hotel, Athens, April 3 2012 TANKEROperator

March 2012 24INDUSTRY - PIRACYISS launches anti-piracy solutionCost effective armour protection will provide countermeasures to safeguard vessels and crew welfareInchcape Shipping Services (ISS) andVessel Protection Solutions (VPS) havelaunched an anti-piracy partnership. Thesolutions will provide customers withhighly 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 visibilityto 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 vessels 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 Lloyds 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 willprovide 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 theres nopoint in just going for the cheapest materialthat may tick a compliance box but doesntwork 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. TOOur VPS operation and our expertise in this area is testament toour commitment to helping our customers meet these challengesthat serve to impact the efficiency of their operations and the wellbeing of their crews,- Claus Hyldager, ISS group CEOINDUSTRY - PIRACYMarch 2012 TANKEROperator25Protecting your vesselby CCTVOn Page 36 item 8.9 ClosedCircuit Television (CCTV) states- Once an attack is underway andpirates are firing weaponry at thevessel, 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 externallymounted 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.TOTANKEROperator

March 2012 26TECHNOLOGY - SHIP DESCRIPTION - GAS HUSKYStealthgas completessmall gas carriernewbuilding planOn 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 theLiberian 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 ofmore 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/Mobils2006 criteria. In addition, the fore and aft mooringwinches 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 vessels 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 degLPG VCMOne tank 410 250Both tanks 730 450Loading rates (cu m/hour)Anchers and chaincabIesall sizes and diameters directly available from our large stock in Rotterdamwww.wortelboer.nlTECHNOLOGY - SHIP DESCRIPTION - GAS HUSKYMarch 2012 TANKEROperator27C respectively. It should be noted that these figures are based on amaximum 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 vessels 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 International4 Dunlop Square, Livingston, Edinburgh, EH54 8SB, Scotland, UK. Tel No: +44(0)1506 463 227Fax No: +44(0)1506 468 999 Email: [email protected]: www.seamanshiplibrary.comOUT NOW!5eomonship|brcry7he Cnboord DigiIolFublicoIions CuIiI

Witherby Seamanship International4 Dunlop Square, Livingston, Edinburgh, EH54 8SB, Scotland, UK.Tel No: +44(0)1506 463 227Fax No: +44(0)1506 468 999 Email: [email protected]: www.seamanshiplibrary.comAsk your local chart agent or see www.seamanshiplibrary.com Addmedu|ese|e8eeksbcsedenshpIypeAddsng|ee8eeksIe|urIhercusIemseyeur|brcry5ynchIhenew'5ecmcnshp|brcry'IereceveupdcIescndneI|ccIens8uybe|ere3Apr|Iereceveyecr'sFkEEsubscrpIenIe'5hppngkegu|cIenscndGudcnce'werIh5McrnendusIrysIcndcrde8eek|ermcIAccepIedpub|ccIensne|ecIrenc|ermcI

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Length, overallLength, bpBreadthDepthSummer draftSummer deadweightGRTCapacityMain engineAuxiliariesSpeedFuel consumption(HFO) (MDO) Tank Capacities(HFO)(MDO)Fresh waterCargo tanks (max) Principal particulars Gas Husky, Gas Esco119.5 m112 m19 m9 m6.8 m6,900 t5,860 t7,500 m33,510 kW @ 203 rev/min2 x 485 kW @ 1,200 rev/min13.5 knots (CSR)14.9 t/d 2.36 t/d610 m3 100 m3140 m32 x 3,750 m3 TANKEROperator

March 2012 28TECHNOLOGY - SHIP DESCRIPTION - GAS HUSKYGeneral arrangement drawings.March 2012 TANKEROperator29TECHNOLOGY - 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 SHIPYARDS BERGUM Member of the DAMEN SHIPYARDS GROUPP.O. Box 7 phone+31 (0)511 46 72 [email protected] AABergu fax +31 (0)511 46 42 59www.damen-bergum.nl mThe Netherlands STANDARD OF EXCELLENCE CUSTOM BUILT IN SERIES PRODUCTIONcompressors, each vessel can supply the gas. A float level type gauge is fitted at eachtank dome and the vessels are both fitted witha starboard and port manifold for cargooperations 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 aspeed 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.TOTANKEROperator

March 2012 30TECHNOLOGY SHIP - TO - SHIP TRANSFERSGAC opens up off Sri LankaGACs 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 GACs 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 arelogistical 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 groups 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 officiallycame to an end and in 2010 the London-basedjoint cargo committee of the Lloyds insurancemarket removed Sri Lanka from the War RiskRating. That opened the way for the expansion ofGACs 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.TOThe 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 LOIs 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 awareofthe 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, withSTS service providers, supporting theirrejection of signing the LOIs, 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 LOIsThe Port of Rotterdam has set up dedicated ship-to-ship transferareas within the Europoort complex.TO w l ae ho r au s in ku O o t e l b a l i a vva a s yys a wwap x eex l a c o l d n a p ld l r o wwo e h t d n u o3 n I . d e h c t a m n ue r d n a e g d e l w ov o r p o t y t i l i b a r u . s rrs e b m e m osi e s i t rr e pto p s - e h t - n ostts r o p 0 5 3es n o p s eela c o l e d i v TANKEROperator

March 2012 32TECHNOLOGY - TANK SERVICINGNO SMOKINGPitting and rust staining of the tank topSTEELPLATEDRAIN WATEROIL COATPitting(Anode)Sludge(Cathode)HS INERTGASINERTGASUnloaded - Corrosion potential from pitting in tank bottomThe main paint manufacturers havebeen undergoing laboratory tests inorder to gain certification for theirproducts under the watchful eyesof 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 experien