tomarch06.pdf - Tanker Operator

Tankers, Tankers and still more Tankers

TANKEROperatorMarch 2006

This surge in growth looksset to continue on the backof burgeoning refinery

activity and the fact that thelocals want to control their owndestiny. Other neighbouringcountries also see an opportunityfor investment and growth inDubai, which has a stable busi-ness regime and a good serviceindustry, including finance.

Fleet expansion can be seen inall tanker sectors, from VLCCs tobunker barges. Qatar also wantsto run its own LNG fleet, whichshould give a boost to the servicesectors in Doha and Ras Laffan,while Iran's National Iranian

Tanker Co (NITC) has hugeexpansion plans as has SaudiArabia's National Shipping Corpof Saudi Arabia (NSCSA).However, apart from gas richQatar, it is in Dubai where mostof the action is to be seen.

Examples of fleet expansionplans in the Dubai tanker own-ing and operating sector includethe two Saudi Arabian owned

tanker concerns - NSCSA togeth-er with its affiliate MideastShipmanagement, and SaudiAramco's shipping arm Velainternational, which have bothset up shop in Dubai as has GulfNavigation, which started off life

in Muscat, Oman. Secretive Vela International is

thought to be close to ordering upto seven VLCCs to go with thefour on order at Daewoo, plustwo 49,000 dwt products tankers.According to company informa-tion, Vela currently operates 23VLCCs and five products tankersoperating in the Red Sea andArabian Gulf.

Vela operates from split loca-tions with its corporate headquar-ters in Dhahran, Saudi Arabia,while the operations and mainte-nance of the VLCC fleet is han-dled from Dubai and the productstankers from Jeddah.

As for NSCSA and MideastShipmanagement, both companiesoperational headquarters are inDubai, which report to the Riyadhhead office. A profile of NSCSAappears on page 11, but briefly thecompany has announced a five-year $1.3 bill programme wherebythe tanker fleet will double in sizefrom the nine VLCCs and two onorder, plus the 14 chemical carriersand 10 more on order.

NSCSA also has a majoritystake in National ChemicalCarriers (NCC) with SABIC asthe minority shareholder. Thischemical carrier operator has afleet of 12 vessels, plus six build-ing at Hyundai Mipo. There arealso plans to increase this opera-tion in the future.

Omani investorsAs for Gulf Navigation, this con-cern was formed in 2001 by fiveSaudi, Omani and Kuwaiti inter-ests to service the needs of theinvestors in Oman and as anational partner to the Omanigovernment's new investmentsin tankers.

In 2003, the company movedto Dubai and was established asa local Emirate holding concernwith subsidiaries in SaudiArabia, Kuwait and Oman andalso with joint ventures in theUAE and Greece.

One of Gulf Navigation's jointventure companies is OdinGulf,which as the name suggests,involves Stamford, Connecticut-based Odin Marine. This concern

Investment in tankers of every conceivable type has led to Dubai and its fellowGulf Co-operation Council (GCC) states becoming a magnet for ship operations.

Industry NSCSA’s huge expansion plans - 11

Lack of qualifiedpeople a problem -12

P&I clubs face thecrossroads - 14

Focus on DubaiThe Maritime Centrefor the Middle East -1 - 8

www.tankeroperator.com

TechnicalLack of VOC legislation - 16

Deepwell pump alternatives - 17

Super ice classtanker arrives - 19

In this issue

Dubai-a tanker investor's paradise?

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In Dubai Emirate the local rulers havebeen quick to realise that the oil fromthe Emirates will run out in around 15

years time and so they have invested intourism and the service industries, such asshipping and finance.

The regime in Dubai is somewhat simi-lar to that of Singapore, ie regimented, butwell run. The legal and finance regime isgearing up to serve the many shipownersand other service companies moving intothe area, both local and international. Oneproblem is that any would be investor will need a local partner owning at least

is involved with local commercial andlogistics requirements in the Middle Eastregion and the Indian sub-continent.

Last November, Gulf Navigation wenton the record saying it was going to investin 26 to 30 crude oil, products and chemicaltankers. It said that among the acquisitionswould be around eight to 10 VLCCs, whichwould join the fleet by 2010. Four 46,000dwt chemical carriers are currently underconstruction at Hyundai Mipo for deliveryin 2008. The company also holds options onanother four 54,000 dwt chemical carriers,plus other options.

During the past few months, the compa-ny has been linked with several VLCC pur-chases and was recently reported to havecommitted $220 mill on two newbuildingresale VLCCs ordered by the Moller-Maersk group at Dalian New Shipyard fordelivery in 2008.

Elsewhere, Dubai-based newcomer GulfEnergy Maritime (GEM) recently orderedfour 47,000 dwt products/chemical carriersat Hyundai Mipo for delivery 2008 and2009. GEM has six panamax coated tankersand five products/chemical tankers eitherin service or due for delivery this year andnext and also manages two EmiratesNational Oil Co (ENOC) bunker tankersand has four newbuilding bunker tankersat Dubai Drydocks.

GEM was only formed in 2004 as a $430mill joint venture company involvingOman Oil Co (30%), ENOC (35%),International Petroleum Investment Co(30%) and another 5% by Thales under aUAE Offset Programme.

Giant finance and investment concernETA-Ascon also has a shipping and tradingdivision based in Dubai. Recently, this divi-sion announced that it will acquire 76 ves-sels to bring its total up to 100 by 2010, in abid to turn itself the largest shipowner inthe Middle East.

The orders will range from panamaxdrybulk carriers to VLCCs. It already hasone $110 mill VLCC on its order books.ETA-Ascon recently signed a joint ventureagreement with MOL to operate VLCCs.

Products tankersAnother newcomer, Abu Dhabi-basedEmirates Ship Investment (Eships) has eyes

on smaller MR type II/III coated prod-ucts/chemical tankers. Up to 20 could beordered during the next five years.

Eships already controls four productstankers of around 8,500 dwt. In addition, an8,100 dwt chemical tanker currently underconstruction at Anadolu in Turkey waspurchased from Furtrans at a price thoughtto be in the region of $17 mill.

The company said in a statement thatthere was a lot of elderly local tanker ton-nage in the region, which needed replac-ing. Eships is also looking at the LNG mar-ket and plans to own two to four LNGCs,but said that it was not interested in tech-nical management.

Eships was formed in January 2006 outof Combined Cargo UAE (CCU), a jointventure with Torvald Klaveness and localinvestors, which was largely an investment-based shipowner with just a handful ofbulk carriers. Klaveness is still involved tosome extent on the drybulk side.

Across the Gulf, Teheran-based NITChas at least 10 LNG and 10 chemical carriernewbuildings planned in $2 bill investmentprogramme. Its aim is to become the fourthlargest tanker operator by 2009 and hassaid it wants to increase its fleet to 59 shipsby 2008.

At present, NITC has three VLCCsordered at Daewoo, three with Hyundaiand three at Samsung, plus four 160,000dwt tankers contracted at Hyundai Samho.Three 100,000 dwt tankers and three 63,000dwt tankers are also to be built at Sadra.Another two 35,000 dwt tankers have beenordered at Fara Sahel, plus another three1,500 dwt tankers at Sadra. Some of thesmaller vessels are intended to trade in theCaspian Sea, where oil exploration and pro-duction is booming.

Qataris activeNot to be outdone, the Qataris also havemassive investment plans. One companywith growing ambitions is Qatar ShippingCo (Q Ship). As at the end of December, QShip operated six aframax tankers withanother two building. Two of these areoperated in a joint venture withExxonMobil. The company also has three37,000 dwt clean products tankers withanother two 105,000 dwt vessels due to be

delivered this year. Being based in Qatar, Q Ship is naturally

heavily involved in the gas sector, both LPGand LNG. The company currently ownstwo LPG carriers with another four VLGCs,due for delivery in 2008-09. As for the LNGsector, Q Ship owns shares in eight LNGCswith another under construction.

In June 2004, Q Ship was invited byQatar Petroleum to become a 15% stake-holder of Qatar Gas Transport Co (QGTC,or Naqilat/Nakilat). QGTC aims to have amajority stake in at least 50 LNGCs and upto 50.1% in another 16 carriers to be deliv-ered between 2007 and 2010 to primarilycater for LNG shipments between Qatarand the UK/US. This number could rise tobetween 70-100 vessels. By February ofthis year, QGTC had acquired stakes ofbetween 30% and 60% in around 30LNGCs.

Since then the two companies haveannounced a 50:50 joint venture concern,which will initially own four LNGCs. Toavoid damaging competition among itsLNG project companies, Qatar has formed acompany to handle the joint marketing andshipping of associated products, such asLPG sulphur and condensates. It is thoughtthat the Q-Ship/QGTC joint venture will berun on the same lines.

Various strategic alliances are beingformed with overseas oil majors, LNGCowners and managers and pre-qualifica-tion agreements set up to both bid andcompete with other owners for LNG trans-portation projects.

Another country currently expanding itsshipping empire is Oman. Oman Shippingwas formed in 2003 and has interests in fourLNG carriers, two of which were deliveredlast December. Two more are building fordelivery this year, while a seventh is due for2008 delivery.

The company also has a VLCC and aproducts tanker on order in joint ventures.Both are due for delivery in 2008. A contractwas recently signed with Oman Refinery tooperate a coastal 14,000 dwt chemicaltanker on a long term basis.

A ship management company - OmanShip Management - which is a subsidiary ofOman Shipping, has been formed to man-age the LNG carriers.

DUBAI

TANKEROperator

TankerOperator March 2006 page 2

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Vol 5 No 2Maritime Content Limited

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The investment currently underway in Dubai has to be seen to be believed. At one stage20% of the world's construction cranes and 80% of the world's dredging fleet were

operating in and around the Dubai/Jebel Ali/Sharjah areas of the UAE.

Dubai- a service centre for the Middle East

51% of the action to set up shop.

Artificial islandSeveral initiatives are being talked of towoo companies into a maritime cluster typeenvironment. The most ambitious is theDubai Maritime City project, which is anartificial island to be built between the hugeDubai Drydocks complex and Dubai's PortRashid.

At the time of TankerOperator's visit, theground was being laid using largedredgers to position the spoil and rockcarriers to lay the surrounding breakwa-

ters. The developers' plans include reposi-tioning the Al Jadaf repair complex to thesite, creating both office and leisureaccommodation. In total, the business areawill include a marina, offices hotels,restaurants, retail and a leisure complex,plus a flexible exhibition site. An academ-ic area will also be built consisting of mar-itime education, research and develop-ment complexes.

The repair and maintenance area willinclude a dockyard, ship lifts, state-of-the-art equipment, warehouses and workshopsto serve medium size commercial vessels

continued on page 3

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as well as the booming yacht and leisureboat sector. Al Jadaf is a large shiprepaircomplex located in Dubai Creek, whichslips more than 1,000 ships per year,mainly tugs, workboats, dhows and off-shore supply boats.

Companies visited by TankerOperator inDubai had reservations about joining thenew venture. However, most had adopteda 'wait and see' policy on what was onoffer to persuade them to move into thenew city.

Open registerOther initiatives being talked of include aDubai shipowners' association and anopen UAE registry, which local sourcesthought was still some way off. SeveralMiddle East and Asian companies havealready moved their technical and/orcommercial management teams into theDubai region. In addition, local companieshave sprung up investing in tankers of allshapes and sizes from VLCCs to bunkertankers.

It is still possible to see around 60 largetankers anchored off Fujairah on the otherside of the peninsular. These are mainlysupplied by agencies based in Dubai, due to the proximity of a modern interna-tional airport, which is claimed to be idealfor crew changes, supplies and spare partairlifts.

Tankers started the Middle East ship-ping revolution in the 1950s through to the1970s. The latter decade saw the start ofthe massive investments in ports, oil terminals, airports and other facilities aseach ruler tried to outdo the other. Thehuge shiprepair complexes in Bahrain and

Dubai were also built around this timeand have since been and are still beingupgraded.

Across the Strait of Hormuz and theGulf, the Iranians are building up theirshiprepair and shipbuilding empires,while Saudi Arabia and other Gulf statesare upgrading their refineries and/orabout to start building new ones in aneffort to cash in on future exports of prod-ucts. They see an opportunity to exportproducts and gas to China, India and theUS, as well as the more traditional crudeexports.

Of course, LNG often crops up in con-versation as Qatar is only a short hopaway from Dubai by plane. Such is thelure of LNG that American Bureau ofShipping (ABS) moved its Middle Eastregional headquarters from Dubai to Dohaa couple of years ago. The class society haskept a presence in Dubai, due to the hugeshiprepair facility and to tap into the newbreed of shipowner emerging in Dubai.

ABS' one regret is not being able to con-duct any business in Iran, or with Iraniancompanies, due to political pressure, asthe potential for new business was huge,partly due to the Iranian build up of theirtwo state-owned shipping fleets - IRISLand NITC- plus the investment in ship-building and repair yards.

Another problem could confront theMoller-Maersk empire unless the uproarcaused by the alleged blasphemous cartoons dies down. The Danish conglom-erate likes to set up its own office locally inareas of influence, rather than use theagency network and has several in theMiddle East region, including in Iran.

Satellite image of Dubai Maritime City squeezed in between Dubai Drydocks on the left and Port Rashid on the right.

TO

However, Dubai Drydocks is notthe only player in town. Anothershiprepair complex is based at Al

Jadaf located about two thirds of the wayup Dubai Creek. This repair facility han-dles around 1,000 vessels per year, albeitsmall, but nonetheless vital to the localeconomy. There are around four to fivemainstream companies based at Al Jadaf

with over 200 others offering various serv-ices. The whole complex employs around4,000-5,000 persons.

Backing the shiprepair facilities areengineering repair and maintenance con-cerns, such as rivals Goltens and NicoInternational. Goltens is based at the AlJadaf facility having recently moved out ofDubai Drydocks premises as did supply

company Unitor. Nico is based almost halfway between Dubai and Jebel Ali and haslarge warehouses and prefabricationsheds where machinery can be brought infor repair.

Goltens is perhaps in the unenviableposition of having to up sticks again in thenext two to four years as the Al Jadafrepair complex is due to move in its

entirety to the vast new Dubai MaritimeCity, currently under constructionbetween Port Rashid and Dubai Drydocks(see page 2).

The reason for the move out of the dry-docks' premises is that the giantshiprepairer is building a $70 mill ship-building facility, including a slipway,alongside the drydocks, called the Safina

When one thinks of maritime Dubai, shiprepair comes very high on the list. Since the 1970s, the giant Dubai Drydocks repair complex with its rigs and VLCCs/ULCCs has dominated the city’s skyline.

Shiprepair forms a major part of the service ethic

continued from page 2

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project. Although bunker tankers, work-boats and tugs have been and are stillbeing built at the drydock complex, this isthe first foray into major league shipbuild-ing, except for a panamax size floatingdock built about 10 years ago and a large2,000 tonne capacity floating crane fittedwith four 200 tonne capacity hooks.

By the middle of this year, the ship-building division will be enhanced by apanel line and steel assembly area, which was under construction duringTankerOperator's visit. A new Italian panelline cutter has been ordered for the steelassembly plant. The slipway will be 120 mlong and 60 m wide, meaning that largerships will have to be built in sections. Ahydrolift system will be used to launch theship sections into the water. The offices tobe used for the shipbuilding division arethe premises recently vacated by Goltensand Unitor.

Chief executive Geoff Taylor explainedthat the Safina project had been in theplanning stage for 18 months and will takeonly another 4.5 months to lay most of theground work allowing shipbuilding tostart.

A letter of intent has already beensigned to construct the hulls up to themain deck of two Aker designed semi-submersible rigs. The major sections of therigs' hulls, pontoon and legs will be builtas separate units and assembled in one ofthe huge drydocks. Once the hulls have

been built, outfitting will take place atAker Kvaerner's Stord facility onNorway's west coast. Steel cutting isscheduled for May of this year with thedelivery of the first unit in June 2007 to be

followed by the second some eight monthslater.

The original idea was for the shipbuild-ing division to market 47,000 dwt prod-ucts tankers. However, Dubai Drydocks'Taylor said that due to the rig contracts,this project had been put back. Despitehandling many FPSO and offshore rigconversions down the years, this is DubaiDrydocks largest contract thus far. Theyard is also building 6,000 dwt bunkertankers for Gulf East Maritime (GEM) toits own design.

Taylor explained that shiprepair andconversions would always remain the corebusiness and that shipbuilding wouldaccount for around 25% of the turnover.During TankerOperator's visit there were23 ships in the yard, including two VLCCsbeing converted to FPSOs. Negotiationsare currently underway to bring a thirdFPSO conversion project to the yard,Taylor confirmed. He said DubaiDrydocks had the capacity to handle twosuch conversions simultaneously.

During the past couple of years theaverage daily occupancy has been around25 ships and by the end of this financialyear, Taylor claimed that the yard wouldhave docked 380-400 vessels. On any oneday, around 60-70 superintendents orowners' representatives will be on site,while the yard employs close to 7,500workers, plus sub-contractors. Around1,000 more will be needed for the ship-building site.

A major source of revenue for the localshipyards and repair shops is the hugenumber of the world's dredgers that arecurrently working in the area on the largeoffshore reclamation schemes. They alsoneed servicing on a regular basis.

Taylor said that after a dire shiprepairmarket in and around 2001, the last coupleof years have been good. He still views theVLCC market as his core business withinshiprepair and there were at least twoalongside during TankerOperator's visit,apart for the two earmarked for FPSO con-versions. Large tankers currently account

for around 50% of the shiprepair turnover.Overall the number of VLCCs coming tothe yard has dropped as there are nowmany under five years of age. "Once theyreach 10 years old, they start to get inter-esting", Taylor said.

Dubai Drydocks is enhancing its facili-ties for the repair of LNGCs. Several wererepaired in a sort of job lot a couple ofyears ago. Once the Qatar LNG trains areup and running, Taylor sees a good oppor-tunity for LNGC repair and maintenance.

FPSO/FSO conversionsWorking with Dubai Drydocks amongothers in the world of heavy engineeringis Jebel Ali-based Lamprell. This concernfabricates process modules and mooringsystems for FPSO/FSO conversions andother heavy engineering projects, such asbarges and land rigs. Lamprell opened itsJebel Ali facility in 2002, but has no roomexpansion, a fact that the company nowregrets.

Lamprell's client base includes SingleBuoy Moorings, Saipem and ExxonMobil.Many of the FPSOs are for service in WestAfrican waters. The integration takesplace at nearby Dubai Drydocks orSingapore. However, Lamprell's futureplans include integrating the modules atJebel Ali's 1,000 m quayside located acrossthe road from the fabrication area. Thequayside has 11 m of water depth, thus theoperator can bring the tanker to the plantinstead of having the expense of barging amodule to Dubai, a distance of 25 km, orhiring a heavy lift vessel to ship it toSingapore, explained marketing managerStephen Smith.

The company has also built severalbuoys, bow mounted turrets and ancillarymooring equipment. Lamprell claims itcan fabricate all mooring systems forFPSOs, including calm buoys, mag andsuction anchors, plems and piles, buoyan-cy tanks and mid-water arches.

One of the latest contracts was for themanufacture of a 2,800 tonne discon-nectable bow mounted typhoon-classed

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turret for the Enfield FPSO project forWoodside Petroleum. The Enfield turret,which is claimed to be largest in the world,was shipped to Samsung for fabrication onboard a FPSO. The column alone is 75 m inlength. It was rolled onto the quay for ship-ment to South Korea. Single Buoy Mooringsacted as design consultants for the project.Part of the tests included the simulation ofthe FPSO and turret on site intyphoon conditions.

Bergesen's ULCC BergeEnterprise, currently inSingapore, is having her top-sides fabricated by Lamprellin Jebel Ali for a Pemex proj-ect. Upon completion, thetopsides will be shipped toSingapore. Modules forSaipem's FPSO conversionproject at Dubai for Petrobras'Golfinho field are also beingfabricated at Jebel Ali. Theyinclude lift gas compressionmodules, manifold moduleand a power generation module. Lamprell's previousdealing with Saipem came inthe construction of the top-sides for the Mystras FPSOproject, the conversion ofwhich was also undertakenby Dubai in 2003.

The numbers of FPSOs areexpected to increase fromaround 117 today to 146 by2010, a conversion rate ofnearly six per year. Projectsare being talked of, or are inproduction in Angola,Cabinda, Congo andMauretania, as well as thehuge market that is Nigeria.At present, the market is run-ning at between two to fourper year and has been play-ing catch up since 2003,Smith said.

Around 80,000 tonnes oftopsides are needed between2006 and 2008 as each top-side project will weigharound 22,000 tonnes andthere are four VLCC/ULCCconversions planned. Atpresent, FPSOs account foraround 25% of LamprellJebel Ali's workload.

Smith explained that theequipment was normallylaid out in the yard as itwould be on the ship for easeof testing and final installa-tion on board ship.

Gulf rivalsFor larger vessel repairs,Dubai's main rival is nearbyASRY at Bahrain and thelarge Singapore repair yardcomplexes. However, in afew years' time anotherrepair yard could open itsgates to VLCCs and LNGCsif plans come to a head asseems likely. To be built atRas Laffan at a cost estimat-ed to be in the region of $1bill, the yard will be operatedby Qatar Gas Transportation

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Co (Naqilat), the Qatari state-owned com-pany. At present there are plans to con-struct two VLCC capacity drydocks andtwo for LNGC repairs. It is thought thatthe complex could be ready for businessaround the middle of 2009.

Local sources suggest that Naqilatintends to invest a total of $3.5 bill onLNGCs, bulk carriers and the repair yard.

Naqilat went public in January and has amajority stake in 56 gas carriers and up to50.1% in another 16 LNGCs. Qatar has theworld's third largest gas reserves afterRussia and Iran.

Specialist repairersBoth repair specialists Goltens and NicoInternational have been investing in new

facilities and equipment recently as theyvie with each other for repairs and main-tenance both in their own facilities and onboard ship.

Goltens built its reputation as a special-ist repairer of marine slow and mediumspeed diesel engines and has sinceexpanded its portfolio into other sophisti-cated services and moved into the power

p1-8.qxd 22/03/2006 13:07 Page 5

Scandinavian Electric Systems andInfrafone.

In any one year, Goltens will performreconditioning work on 1,100 two strokepistons and 1,200 exhaust valves; overhaulmore than 500 four-stroke diesel engines;in situ bore 50 bedplates and grind ormachine more than 300 crankpins; over-haul more than 200 turbochargers; over-haul more than 8,000 fuel nozzles andmore than 10,000 Woodward governors;board more than 3,000 vessels and tradethousands of spare parts.

Nico goes publicLast year, rival Nico International's hold-ing company Topaz Energy and MarineSAOG (TEAM) merged with RenaissanceServices of Oman to create a $300 millmarket capitalisation public company,quoted on the Muscat, Oman stockexchange. The company also purchasedBUE Marine of Leith, managers of 60-65AHTS of which around 15 operate out ofnearby Jebel Ali.

In 2005, Nico boasted 547 uniqueclients, which created 11.6 jobs per day atan average of $6,200 per job, explainedgeneral manager Fazel A Fazelbhoy.

Due to the boom in oil and gas explo-ration and development in the CaspianSea, Nico is expanding its workshops inKazakhstan and Azerbaijan where BUEalready has operations. In 2004, another

workshop was opened at Fujairah.Nico has a co-operative agreement with

Mitsui Babcock for boiler repairs, forwhich LNG is a growing market. The com-pany already repairs around80% of LNGC boilers world-wide and is now enteringthe FPSO market. Nico alsoundertakes underwatercleaning, propeller polish-ing and maintenance in lieuof drydocking to IACS andnon-IACS class society stan-dards using brushkarts.Underwater servicesaccount for around 8-10% ofthe turnover, Fazelbhoysaid.

As an alternative toChockfast, Nico has anagreement with Dutch con-cern Machine Support forengine mountings. Like itsrival Goltens, Nico sees its future in thevalue added high specification end of themarket.

Another service offered is specialist rid-ing crews, which are put on board vesselsprior to drydocking in order to reduce off-hire time, which is a popular service whenfreight rates are high. Teams of two, four or

six technicians often attend vessels offshore. Fazelbhoy admitted that he was inter-

ested in getting into shiprepair and dry-docking smaller vessels in Nico's ownfacility in the future. He said he hadlooked at installing a floating dock atFujairah but was gazumped by DubaiPorts, which needed the land to expandthe container terminal. With many vesselsnow registered at Jebel Ali, this wasanother obvious choice for a repair facility,Fazelbhoy said. The company alreadyoperates ADYARD in Abu Dhabi, about160 km up the coast from its Dubai base.

In the wet bulk repair sector, crude oiltankers make up 30% of Nico's workmainly off Fujairah, while products/chemical tankers make up around 9% andLNG/LPG vessels were growing quickly.Around 55% of the work comes from GulfCo-operation Council (GCC) states, eitherby domicile of owner/ operator or by orig-ination of order.

Fazelbhoy explained that in generalterms, vessels coming from western desti-nations tended to look at the area forrepairs, but those emanating from the eastnormally prefer to repair in Singapore orChina where the cost of steel is cheaper.

Nico also sees growth in the role of ashipbuilder-nominated repair yard. Thisinvolves the inspection and possible over-haul of newbuildings, the so called "snaglist" when a vessel is delivered.

Fazelbhoy said that Nico needed tokeep at a very high job occupancy rate andwas looking at many areas in which toexpand, including the growing number of

containerships using thearea. Nico has alreadyopened a branch at Salalah,Oman, which is a growingcontainer transhipmentport.

The summer heat andhumidity causes problemsto almost everybody work-ing in the Gulf region.Working inside ships tankscan become unbearable inhumidity reaching 90% andoutside temperatures of 40-45 deg C. In the workshops,the temperature can reach60 deg C and so the work-force cannot endure thesetemperatures for more than

15 minutes at a time. As for the contentious issue of Dubai

Maritime City, Fazelbhoy said that Nicointends to move into the area in some formor another, but as with many companiesTankerOperator spoke with, the final deci-sion is still some way off as thus far,nobody quite knew what was on offer.


DUBAI

Nico’s Fazel A Fazelbhoy

generation and the oil and gas industry. At present, the family-owned company

employs 1,000 people in 16 locationsworldwide and is estimating 2005 netsales of $100 mill. In the Gulf, Goltens hasservice stations at Bahrain, Dubai, AbuDhabi and Fujairah and will open a repre-sentative office at Qatar this year, whichwill eventually be expanded to a fullworkshop.

As well as appointing a new presidentin the shape of Paul Friedberg, Goltensalso purchased engine licensee NylandsMaritime, a leading supplier of two-strokediesel engine spare parts. Friedbergexplained that Nylands was a parallelbusiness and was for many years a licencebuilder of MAN B&W diesel engines.

One of the Goltens' innovative servicesis machining crankshafts in-situ, insteadof the traditional grinding method ofrepair. According to Friedberg, bymachining on site, the task takes less timeand creates less mess as the vessel's sternsection does not have to be almost dis-mantled to pull the crankshaft.

A new service offered is the manufac-ture, repair and servicing of hose handlingcranes on bunker tankers and chemicalcarriers, plus the supply of new cranes ofbetween 1-20 tonnes lifting capacity.

Goltens operates a syncrolift within theAl Jadaf complex lifting up to 2,500tonnes, which can handle 20-25 small ves-sels in parallel. Charges are levied on a permetre length per day basis.

Friedberg said the challenges for thefuture included diesel engine after sales.He was keen to increase the company'sfocus in this sector. The shiprepair indus-try's ongoing consolidation was anotherchallenge to service providers as was theincreased sophistication on board today'svessels, such as electronically automatedcontrols, which will lead to further devel-opment of technical skills.

In the diesel engine repair sector, hedescribed Goltens as a "diesel doctor". Thecompany's engineers go on board a shipand conduct status reports using the diag-

nostic approach while the engine is inoperation. The company can then repairany faults, or recommend a course ofaction, taking on more of a consultancy

role. Friedberg asserted that Goltenswould continue to work with worldwidemanufacturers, including South Koreanand Chinese licensed engine builders andsend engineers on training courses at leastonce every 12 months.

Goltens recently invested $750,000 in anew electrical workshop at its Al Jadafsite, despite the threat of moving toDubai Maritime City in two or threeyears time. New workshops have alsobeen opened in Oslo and Shanghai, whileFujairah should have come on stream inFebruary of this year. An Indian work-shop will follow during the latter part of2006, probably in Mumbai and Chennaias will Rotterdam. A facility was alsoopened in Vietnam last year.

Another major activity at Al Jadaf isthe testing, repair, overhaul and fullreconditioning of governors. Goltens isfully authorised by leading governormanufacturer Woodward to act as a deal-er and an independent repair facility forits governors. Governors from mainengines and auxiliaries, cargo turbinesand auxiliary turbines are handled in therepair shop.

Apart from Woodward, agreementshave been signed with OEMs Bjorge,Fischcon, Philadelphia Resins,

Nico offers underwater repair and maintenance using brushkarts.

TO

Nico also sees growth in the role of a shipbuilder-nominated repair yard. This involves the inspection and possible overhaul of newbuildings,

the so called “snag list” when a vessel is delivered.

p1-8.qxd 22/03/2006 13:08 Page 6

However, the agency picture haschanged somewhat as acquisitionsand co-operative ventures have

changed the face of the traditional agent. Forexample, Wilhelmsen Maritime Services(WMS), the newly created service division ofthe Wilh Wilhelmsen group, aims at chang-ing the way vessel and ports communicatewith their maritime service providers.

The company moved its Middle Eastand Black sea operation into Dubai abouttwo years ago. Regional vicepresident for the areas - KnutBrathagen - explained that WMSlooked at the airline industry tosee how efficient it had becomein turning around planes at air-ports in an effort to speed upship turnaround times.

He claimed that by its size,WMS has the strategy, tools andthe organisation to provide acomplete service. The companyhas developed group supportsystems, which link all parties toa service following the shipbefore, during and after a port call.

Brathagen claimed that as one of the com-pany's key regional centres, the UAE willplay a vital role in these developments. Withthe recent addition of ship supply concernUnitor to its portfolio, the combined pack-ages on offer allows for a "one stop shop" forclients seeking integrated services.

WMS was formed on 1 January 2005and comprises of Barwil, Barber andUnitor. In January, Barwil announced thatit had won an agreement to representFrontline's tanker fleet in the UAE in 2006for the third consecutive year. Barwil spe-cialises in providing ships' agency andliner representation worldwide. In 2005,Frontline made nearly 600 calls in UAEports, terminals and offshore Fujairah.

The group offers other services, includ-ing ship management, crew management,bunkers, insurance, consultancy and nowspecialist ship supply through Unitor. Sincethe acquisition last year, an integrationmanager has been appointed. Brathagenconfirmed that Unitor should be fully inte-grated by the first quarter of this year andthat the brand name would be kept.

"An agent is changing into being allthings to all people, not just involved in hus-bandry, but also spares etc," he explained.

Gulf's largest agencyClaiming to be largest player in theMiddle East Gulf and Red Sea area isKanoo Shipping Agencies. The 75-year oldcompany handles around 7,000 ship callsper year and has expanded into Iraq,Yemen and Sudan in the past 12 months.

Kanoo is a member of S5, the London-based global agency network set up in2004, which allows for a single point ofentry to a global organisation of sevenlarge agency networks. These includeNorton Lilly in the US, Agunsa in SouthAmerica, Royal Burger/Euro Shipping innorthern Europe, Sturrock in southern

Africa, Jardine in the Far East, McArthurin Australia and Kanoo in the Middle East.

For its part, Kanoo invested some $2.5mill into the scheme. The owner can savemoney by making more ship calls with themember agencies for less fees. For example,regional commercial manager StephenHines said that an owner making 500 portcalls per year would benefit from loweragency fees. Qatargas is one companyrecently signing up to the scheme. There

are now around a dozenclients in the scheme andHines claimed that S5should be in profit by theend of this year.

The agency offers a fullservice off Fujairah, KhorFakkan and Mina Saqr fortankers using its own sup-ply/crew boats and claimedto offer proven contingencyplans in case of an incident,plus the usual agency serv-ices. In total, Kanoo man-aged around 7,700 launch

trips from the various bases in and aroundthe Gulf. Some 6,000 crew changes wereaccomplished by a dedicated team, whichonly looks after this side of the business,while around 100 bunker calls were beingattended off Fujairah per month.

A Kanoo Maritime Centre was openedin Fujairah in November 2001, whichoffers ship managers a complete range ofservices under one roof. On/off crewchanges can be carried out between MinaSaqr and Fujairah to avoid deviation anddelays. At Fujairah, the agency also has awarehouse, superintendents' offices andan ISO fuel testing facility.

Agreeing with WMS that shorteningship turnaround times is the name of thegame, Hines said: "If you can save half anhour or an hour at each port, you can savea lot of money over the course of a year."

The software is split into Agency Now,a regional software system and AgencyWorld, the global network. The next step,according to Hines, is to allow ownersdirectly into the system for instant access.Some ports insist on notices of arrivals andsailings from ships, while others willaccept notices from agents. By havingdirect access to the system, an owner cansee the disbursements and finalise his orher costs, as most are fixed.

In Dubai there are around 200 agents,ranging from one person with a suitcase toa large company, leading to a very com-petitive situation, Hines said. The decid-ing factor to a shipowner on which agentto appoint for his or her port calls was notso much based upon the fee, but rather theservice provided, Hines explained.

Some of the larger players includeKanoo, Wilhelmsen Maritime Services,GAC, Sharaf and Inchcape ShippingServices (ISS), which was recently pur-chased by Dubai government investmentcompany Istithmar for a reported £165 millfrom UK-based Electra Investment Trust.


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Host of agency concerns vying for business.

Traditional agents - a thing of the past?

p1-8.qxd 22/03/2006 13:08 Page 7

DNV has around 100 employees inthe region, including 23 surveyorsin Dubai. One of the main areas of

business is the tanker and LNGC markets,especially in Qatar, Iran and Oman.Newbuildings have been coming thickand fast with an estimated 4.7 mill gt ofshipping ordered by owners domicile inthe region last year.

DNV is confident thatthe growing LNG andproducts/chemical carriermarkets will engenderextra business for the classsociety. As new playersenter the market, regionalmanager Eivind Grostadsaid, the more they willneed support beyond thatoffered by traditional classsocieties. "If an owner has-n't got the technical compe-tence, we will go in andhelp," he said.

The Saudi, Kuwaiti andIranian oil refineries werelooking to upgrade theirrefineries and build newones with a view to export-ing value added productsand chemicals, as well asthe more traditional Gulfcrude oil and now gas.Grostad expected the sizeof products/chemicaltankers to grow and wehave already seen orders in the 110,000dwt plus size range for this type of vessel.

Drilling is also increasing in the region

with more sophisticated equipment, espe-cially off Abu Dhabi. DNV also classes theworld's largest vessel, the 564,650 dwtKnock Nevis, ex Jahre Viking, which is oper-ating as an FSO off Qatar on a long termcharter. DNV is involved with the conver-sion of the 245,000 dwt Knock Adoon intoan FPSO at Dubai Drydocks. This Fred

Olsen Production owned unit will replacethe 141,000 dwt FPSO Knock Taggart at theAntan Terminal later this year. DNV is

also classing the twoAker H6 semi-sub-mersibles to be builtat the drydocks (seepage 3).

At least 20 chemi-cal and productstankers have beenordered for localcompanies such asGulf Navigation andGulf EnergyMaritime underDNV class and thesociety claimed tohave scooped up 55%of orders in the lastthree years fromowners in the region,including India andIran. More than 50%of the Qatari LNGCsfor various ownerswill be classed by theNorwegian-basedclass society.

Grostad said thatIndia is building uptwo of its shipyardsto VLCC standards.One is located at

Cochin on the west coast while the other isat Visakhapatnam on India's east coast.

He said that politically, the US hadinfluence in Qatar and Bahrain and withNorway being a neutral country, therewas not a problem in conducting businessin Iran, which was booming. Six 63,000dwt shuttle tankers are being built in

Sadra Shipyard to transport oil in theCaspian Sea for Turkmenistan interests.The oil will be exported via Iranianpipeline to the Kharg Island terminal atthe head of the Gulf. They are being builtto a new shallow draft design, whichincludes having their accommodation fit-ted forward.

DNV has invested in a survey vessel tocater for tankers anchored offshoreFujairah. A 31 m long high speed craft hasbeen purchased from Kanoo. Currently,the class society has four surveyors basedin Fujairah who previously had to rely onagents boats to get to the vessels, whichcould take hours or even days.

Regional moveMeanwhile, rival ABS moved its regionalheadquarters from Dubai to Doha in Qatarin October 2004, mainly to take advantageof the growth in LNG and LPG carriers.However, a hard core of surveyors andother personnel still work out of Dubai,which is itself set to expand.

Technical backup is currently availablefrom London and Piraeus, but local tech-nical teams will be on the ground soon,ABS' Roger Shimmin, vice presidentMiddle Eastern region said.

During the next five and possibly 10years, the LNG market looked set grow ata phenomenal rate. FPSOs were alsobecoming more popular. To cope with this

demand, ABS had embarked on trainingprogrammes for clients both internallyand externally. Seminars have and arebeing held on problems with LNG carriersloshing, propulsion systems, new guidesand regulations and results and ongoingwork on vibration studies. ABS' MiddleEast Technical Advisory Committee held

its inaugural meetingin December lastyear.

ABS claimed to beparticularly strong inthe LNG trades,where much of itsgrowth will comefrom. LNG tradeswere set to triple andthe size of vesselsdouble in a veryshort space of time.New entrants werebeing seen and theshort term chartersand spot trades werenoticeably increas-ing, ABS said.

Between 1975 and2005, LNG carriersizes only increasedfrom around 125,000cu m to 147,000 cu m.In a very short periodof time, gas carriersof 210,000 cu m,215,000 cu m and

even 250,000 cu m giants were expected.One of the major problems was that a gascarrier is now designed for a 50 year lifes-pan, while the tanks are not a problem, thehull can be if not looked after properly.

The 129 newbuilding LNGCs are main-ly powered by medium speed diesel-elec-tric or slow speed diesel machinery. Thisin itself creates problems of vibration inthe membrane system and also the ques-tion of what to do with the boil-off gasfrom the cargo. As the slow speed enginesburn fuel oil, one of the answers was toput reliquefaction plants on board. Tofight fatigue, the ballast tanks coatingsneeded maintaining, but as reported thereare no foreseeable problems with the con-tainment tanks. Life extension pro-grammes for ABS class elderly LNGCswere already in place.

Of the vessels in service, ABS hasclassed 26%, or 32 out of the 121 vesselscurrently operating. As for newbuildingcontainment systems, some 85% haveopted for the membrane type for variousreasons. Here, ABS uses its SafeHull pro-gram as the membrane system is similar tothat of a standard tanker.

There are five major class societiesinvolved with LNGCs. For vessels in serv-ice as of December, 2005 LR has the lion'sshare at 31%, ABS comes second with 26%,DNV is third with 22% and BV fourth with12%. In fifth place is ClassNK with 9%.

As would be expected in a region of such maritime growth, the classification societies are well established in the area.TankerOperator spoke with Det Norske Veritas (DNV) and American Bureau of Shipping (ABS)

about their respective activities in the Middle East Gulf region.

Class societies have invested in the area to gain a piece of the action

DNV is overseeing the conversion of the Knock Adoon into an FPSO at Dubai.

DUBAI

TO


p1-8.qxd 22/03/2006 13:09 Page 8

Although the large tanker market -VLCC and over - is expected togrow by as much as 20% on the

back of 95 newbuildings joining the fleetby 2008-09, demand is expected to grow intandem on the back of world's seeminglyinsatiable appetite for oil.

The demand for oilis and will continue toincrease, especially inIndia, Asia and theUS. Despite refineriesbeing upgraded orplanned in theMiddle East and Asiaand the arrival of thehuge gas trains, thelong haul movementof crude oil is stillexpected to grow sig-nificantly.

Demand couldoutstrip supply if itincreases more thancurrently anticipatedand if the single hull phase out is strictlyadhered to on the back of charterers'unwillingness to accept such vessels afterthe cut-off dates.

In a 83-page report 'VLCC MarketOutlook to 2010 and Fleet Ownership andEmployment Analysis' published byLondon broking house Galbraith's, itshowed that the VLCC trading fleet hasgrown rapidly since the beginning of 1994to total 465 vessels as of 1 January 2006, ofwhich 306 are double hull. Seven are fittedwith double bottoms and the other 152 areof single hull construction. Thus around159 VLCCs could be withdrawn from themarket by 2010 under MARPOL, if noexemptions were granted by flag adminis-trations and port states.

What was certain was that there would

be no single hull VLCCs trading to US orEU states after 2010. Under OPA 90 somecould still trade to LOOP or to designatedlighterage zones some 60 miles off the UScoast. And a few could continue to trade toAsian ports under exemptions, but inthese instances, the loading and discharge

terminals plus the charterers might insiston double hulls.

Due to the number of single hull vesselsstill trading, Galbraith's noted that theirwithdrawal will lead to an increase in neworders for delivery around 2009-2010. Thereport said that the estimated VLCC build-ing capacity is expected to total no morethan 80-90 vessels for 2009 and 2010 com-bined as the berths will be taken up byLNGCs and large containerships.

However, some owners currentlyappeared reluctant to commit themselvesto ordering vessels at prices, which werealmost twice those of 2002. If this situationcontinued it could lead to a very tight mar-ket in 2010-2011, provided demand contin-ued to grow as forecast, Galbraith's said.

As at the beginning of this year, there

were only four VLCCs built in 1985 or ear-lier, which were still actively trading. Theothers are being used for long term stor-age or converted into FPSOs.

Interestingly, the report intimated thatthere was no interest in ULCCs. In fact,only four have been built in the last 20years and there are no more on the hori-zon. Today's VLCCs tend to be larger thantheir earlier counterparts, being aroundtwo million barrels carrying capacity andfitted with double hulls, which alsoincreases the amount of steel work neededand therefore the cost.

Due to the expected increase in refinerycapacity in Asia and the Middle East, themajor VLCC routes were forecast as:-

Long haul - Middle East to the US and West Africa to China, Asia and India. Medium haul - Middle East to China/Asia and West Africa to the US.Short haul - Middle East to India.

As for the spread of new orders, Japan istop of the league with 40, followed bySouth Korea with 35 and China with 20.China is expected to bring extra capacityto the table once the huge shipyard proj-ects come on stream towards the end ofthe decade.

Galbraith's listed the largest shipyardsin terms of VLCC orders. 1) Universal Shipbuilding is top with 18

ships at its two yards. 2) Daewoo has 17. 3) Sharing third place with 10 ships each

are Dalian New Shipyard and IHI. 4) Hyundai Samho comes next with nine.5) Hyundai Heavy Industries and

Nantong COSCO have six each. 6) Kawasaki has four. 7) Samsung, Imabari and Mitsui have

three each. 8) Bohai, Jiangnang Changxing and

Mitsubishi have two each.

In owner/operator terms, NITC leads theway with 13 VLCCs on order, followed byMaersk (AP Moller) and MOSK with nine,NYK with eight, COSCO with six and GulfMarine Management (Ghassan Ghandour),MISC and Nanjing with four each.

There is a danger that the newbuildingprice could escalate, analysts said. A fig-ure of $150 mill is being banded about,due to a lack of newbuilding berths, theappreciation of the South Korean Wonand the introduction of the common rules,which will put around 4%-5% on new-building costs, due to the increase in steel.

Recent orders and rumours includeJiangnan Chiangxing's contract for twooption two 297,000 dwt VLCCs placed byFrontline. The cost was said to be $104 milleach and the vessels are to be delivered in2009 through to 2010.

If correct, this is a relatively low price intoday's market where up to $130 mill pervessel is the norm. However, Nanjing OilTanker ordered two option two VLCCs atthe same shipyard last December for areported $100 mill each.

Other deals include BW's letter of intentfor two 320,000 dwt VLCCs with BohaiShipbuilding at slightly more than $110mill per ship. In contrast, Vela's order forsix 320,000 dwt VLCCs at Daewoo willcost the Saudi company around $129 millper ship, while Emirates Trading's 298,000dwt VLCC at Universal was said to havecost $120 mill and Kristen Navigation's320,000 dwt tanker at Daewoo will setthem back $125 mill.

The VLCC makes a come back

INDUSTRY NEWS TANKEROperator


On 24 March 2006 the 1996 Protocol tothe Convention on the Prevention of Marine Pollution by Dumping ofWastes and Other Matter, 1972, will enter force, following its ratification byMexico in February, the 26th country to do so.

The 1996 Protocol represents a majorchange of approach to the question ofhow to regulate the use of the sea as adepository for waste materials in that, inessence, dumping is prohibited, exceptfor materials on an approved list. Thiscontrasts with the 1972 Convention,which allowed dumping of wastes atsea, except for those materials on abanned list.

IMO secretary-general EfthimiosMitropoulos welcomed the ratification.

"Now that the requisite number ofratifications has been received, the 1996 Protocol will enter into force, thusachieving another major milestone for the marine environment. The applica-

tion of the Protocol's precautionaryapproach will have a significant impacton the protection of the marine environ-ment from dumping at sea," Mitropoulossaid.

The 1996 Protocol enters into force 30days after ratification by 26 countries, 15of whom must be contracting parties tothe original 1972 treaty. The 1996Protocol was adopted in November 1996and will supersede the 1972 Convention"as between contracting parties to thisprotocol which are also parties to theconvention". This means, in practice,that both instruments will be in force inparallel for some time, but the momen-tum will gradually shift to the protocolas more and more parties ratify it.

The 1996 protocol parties will beinvited to attend the first meeting from30th October to 3rd November this year,in conjunction with the 28th consultativemeeting of the parties to the LondonConvention, planned in the same week.

Strong growth forecast as both supply and demand strengthens but not necessarily at the same time.

More of these on the horizon.

TO

Dumping of wastes at sea rules strengthened Nigerian terrorists blasted oil and gaspipelines and sabotaged a key oil loadingterminal belonging to Royal Dutch Shell,forcing a halt to the flow of more than500,000 barrels a day recently.

A spokesman for the Movement for theEmancipation of the Niger Delta, wasreported in the local press as saying: "We'lluse our rockets on the ships to stop themfrom taking our oil."

The military said it would do whatevernecessary to ensure tankers remain safe inNigerian waters.

Commenting on the threat, Paul Singervice president, Securewest Internationalsaid: "This is where the definition of piracyand terrorism becomes somewhat blurred.When does piracy become terrorism? Butmore importantly, is anything achieved bytrying to discriminate between the two?The essential matter to focus on is, whetherpiracy, terrorism or stowaways, all shouldbe looked at as potential security breachesand threats to the safety and security of

vessels and crew."In this particular case, we have seen

events continue to escalate in the regionwith serious incidents and almost runningbattles. Although the IMB reported a dropin reported piracy in 2005 there is growingconcern about the increasing severity ofattacks. Piracy has largely 'moved on' fromopportunistic theft to hijacking, ransomsand armed boardings.

"The situation for static platforms andtankers operating in this region is not dis-similar to the Northern Persian Gulf, onlythere they have coalition vessels andenforced exclusion zones. In the absence ofsuch measures in the Niger Delta, othermeans will have to be adopted by individ-ual vessels and operators. Every situationwill vary so it's not possible to give allencompassing advice, but without doubtthe most important security aspect is toensure constant, effective and equippedvigilance is maintained day and night,"Singer concluded.

Tankers threatened with rocket attacks

Frontline = 35MOSK = 32BW Group = 21Vela = 19Kristen and Agelef = 18NYK = 16Euronav = 15NITC = 15Dr Peters = 14Tanker Pacific = 14

Table of the top 10 VLCC operators

p9-10.qxd 22/03/2006 13:15 Page 1

INDUSTRY NEWS


Intertanko's Singapore Tanker Event to be heldlater this month, has gathered momentum.

The event will be opened by YeoCheow Tong, Minister of Transport of theRepublic of Singapore. Other keynoteaddresses will be delivered by SimonYang, COSCO's deputy director research

& development and Martin Stopford,managing director, Clarkson Research.

Launched last year in Athens and nowforming an integral part of the event is thePoseidon Challenge, which has alsoacquired a list of distinguished speakersand participants in its own right.

Intertanko claims that the response fromheads of industry invited by chairmanStephen Van Dyck to join members andwork together in a sustained commitmentto continuous improvement, and to addressparticipants in the Poseidon Challenge ses-sions on Friday 31 March, has been impres-sive. A good number of links in the chain ofresponsibility have already confirmed that

their top executives will participate. Those who have accepted an invitation to

participate in the Poseidon Challenge include: President of Teekay Marine Services,

Graham Westgarth; Chairman of theInternational Association of ClassificationSocieties, Bob Somerville; Chief executive of Singapore's Maritime and Port Authority,BG Tay; Executive director of Thenamaris

and one of the inspirationsbehind the PoseidonChallenge, EmmanuelVordonis; Chairman of theInternational Group of P&IClubs, Alistair Groom;President of the InternationalSalvage Union (ISU), HansVan Rooij; President of theWorld Maritime University,Dr Karl Laubstein; Chairmanof the Institute of CharteredShipbrokers (ICS), BruceOgilvy; President of theInternational Association ofPorts & Harbors (IAPH), TomKornegay; President of theFederation of NationalAssociations of Shipbrokersand Agents (FONASBA),Philip Wood; President of theInternational Ship Managers'Association (InterManager),Rajaish Bajpaee; Secretary gen-eral of the InternationalBunker Industry Association,Ian Adams; President ofVideotel and former secretarygeneral of the IMO, Bill O'Neil.

The Poseidon Challenge isan initiative which bringstogether all the stakeholdersand participants in the energytransportation business in acommon effort to achievepractical and effective action.It examines the commitmentof every individual partici-pant, every link in the chain ofresponsibility, to take practicalsteps towards realising thevision of zero fatalities, zeropollution, zero detentions. Italso focuses on each link in thechain as well as on the rela-tionship between those links.

In addition, a new-styleinteractive market session willsee delegates encouraged torespond to presentations frompanelists, including Erik MAndersen, director, RS PlatouShipbrokers; Louisa Follis,director, SSY Consultancy &Research; Paul Horsnell, man-aging director, head of com-modities research, BarclaysCapital; Odd Anker Hassel,director, Cambridge EnergyResearch Associates (CERA).

On Thursday morningMarch 30, two special work-shops will be held. One willaddress Vessel PollutionEnforcement - Problems andSolutions while the other willaddress Maritime Security,looking at pirate attacks,fears of terrorism, and securi-ty in general, in the southeastAsia regions in particular.

Tanker people head for Singapore

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p9-10.qxd 22/03/2006 13:15 Page 2


INDUSTRY PROFILE NSCSA TANKEROperator

The National Shipping Corporation of Saudi Arabia (NSCSA) recently unveiled a five year strategic plan, which centres on the raising of around $1.3 bill this year to fund further developments.

Saudi tanker owner plans huge fleet expansion

Much of the money will be used todouble the size of its crude oiland chemical tanker fleet. HSBC

Saudi Arabia has been given the mandateto finalise the financial plan, whichincludes a capital increase due in Marchthis year. New York-based McQuillingServices prepared the plan. Vessel num-

bers are set to double between 2006 and2010 under the recently announced fiveyear plan.

Currently, NSCSA has nine double hullVLCCs, plus two newbuildings and 16chemical carriers, plus another eight47,000 dwt IMO II zinc coated chemicaltankers on order. Two of the newbuild-ings entered service at the end of last year.

Up to the end of the third quarter of

last year, the company's net profit reachedSR348 mill, a rise of 27% compared withthe same period in 2004. One of the mainreasons for this meteoric rise was SaudiArabia's increase in crude oil productionto try to meet the world's seemingly insa-tiable appetite for oil and also to offsetrecord price levels.

The country is also rapidly expandingits petrochemicals industry with a view toincreasing exports to India, China and tothe US. Refineries are being upgraded andnew ones planned as Saudi Arabia seeksto be a net exporter of refined products, aswell as crude oil.

NSCSA was founded in 1979 by Royaldecree purely as a liner and ro-ro operator.The company didn't diversify into tankersuntil 1985 when it started to operate chem-ical carriers. The following year, NSCSAjoined with United Arab Shipping Co(UASC) to form Arabian ChemicalCarriers (ACC). This operation was fur-ther expanded in 1990 when NationalChemical Carriers (NCC) was formed asan 80:20 partnership with Saudi BasicIndustries Corp (SABIC).

The chemical ships were by this timeemployed in a combination of long termcharters to SABIC and through NCC act-ing as a pool member with OdfjellTankers.

In 1993, NSCSA ordered five doublehull VLCCs from Mitsubishi. They weredelivered in 1996-1997 and immediatelyentered into long term charters with Vela,the Saudi Aramco offshoot. They were fol-lowed by another four double hull VLCCsdelivered in 2001 and 2002. They are eachfitted with 45,000 bhp Wartsila RT-Flexdiesel engines, giving the flexibility of ahigh service speed of 17 knots.

Not stopping there, in late 2004 NSCSAsigned a contract with Hyundai Samho forthe building of two more double hullVLCCs for delivery in March and

August/September 2007.Last year, the company acquired a 30.3%

stake in LPG carrier Petredec, which ownsor operates around 50 vessels of varyingcapacities from 5,000 to 80,000 cu m.

Saleh M Al Shamekh, corporate vicepresident oil & gas explained that since2002, NSCSA has increased its exposurecommercially by trading several VLCCson the spot market. More than 60% of thespot voyages had been performed oncharter to just five majors - Vela, Shell, BP,ChevronTexaco and ExxonMobil.However, the long term employment pat-tern was still high at 67%. Four of theVLCCs were still operated by Vela on longterm charter agreements at the time ofwriting.

Due to this increase in commercialactivity, the company decided to reacti-vate its Dubai office and relocated its oiland gas division to the Emirate.Experienced personnel were also draftedin to operate the commercial manage-ment, to undertake newbuilding manage-ment and technical supervision in closeliaison with subsidiary Mideast ShipManagement. Al Shamekh said that thisyear, the Dubai office would be furtherstrengthened by additional charteringpersonnel and business analysts.

Going into a bit more detail regardingthe five year plan, he said thatNSCSA would consideracquiring well-built modernVLCCs, either newbuildings,or on the secondhand market.He also revealed that the com-pany will review its exposureto the spot market, potentiallyreversing the current trend of60% spot and 40% long termdeployment as and when themarket dictates.

Money can also be raisedthrough Islamic finance hous-es, which are becoming moresophisticated in their deal-ings. "They have become very competitiveas liquidity has grown in the region," AlShamekh claimed.

Ship management armIn 1996, NSCSA formed Mideast ShipManagement to look after the technicaloperation of its fleet and opened an officein Jebel Ali the following year. Two yearslater, the division was moved to Dubai. Themanagement arm was originally set up as ajoint venture with Acomarit (UK) andbecame a 100% NSCSA subsidiary in 2005.

The ship management arm started offby managing eight ro-ros and a chemicaltanker. The following year this hadincreased by four VLCCs and anotherchemical tanker. Today Mideast manages22 ships, including the chemical carriers,VLCCs and ro-ros aided by 60 staff in theDubai office. The VLCC fleet flies theBahamas flag, while the chemical tankerfleet is registered in Norway (NIS) and the

Bahamas. According to president Adel M Al-

Dulaijan, Mideast recently adopted seam-less quality assurance systems both for theoffice and the fleet, including the ISMCode, ISO 9001:2000 and ISO 14001:2004.The audits were undertaken by DNV.

As for the tanker management self-assessment (TMSA) programme, he saidthat the audit had been submitted to theoil majors as both Mideast and NSCSA seethemselves as in "strategic partnerships"with the oil majors. He said, "We will notgo down the road of a third party man-agement concern."

Al-Dulaijan claimed that managementwas keen on a 'promote from within' poli-cy both in the office and on board ship toprovide a promising staff career path. Ahigh retention rate is claimed. A cadettraining programme is in operation forSaudi nationals as is a career developmentprogramme. The cadets are being trainedin the UK and will be placed on board theVLCCs and ro-ros. It is hoped to includeunits of the chemical tanker fleet in thecadet scheme at a later date.

Real time information is used in the shipmanagement office. An IT managementplanning system has been installed as is aplanned maintenance and spare parts man-agement system. The company uses

Purplefinder for fleet tracking purposes.The ships are equipped to switch fuels

if necessary due to low sulphur regula-tions although this throws up planningand capacity problems. Al-Dulaijanthought that the supply of low sulphurfuel would also be a problem in the future.At present the VLCCs tend to bunker inthe Middle East Gulf and/or inRotterdam.

Commenting on the Dubai location, hesaid the company can take advantage ofproven streamlined systems and highquality maritime infrastructure, plus thegood geographical location as the majorityof the fleet passes through the area. "Thisenables us to conduct effective shipinspections and improves communicationwith crew while the services and suppliesare being provided to the ships in a timelyand cost effective manner. Dubai and off-shore Fujairah are good areas for servicingthe ships," he stressed.

Mideast’s Adel M Al Dulaijan and NSCSA’s Saleh A Al-Shamekh...

TO

1979 - Incorporated as a Saudi joint stock concern

1985 - Diversified from being a pure ro-ro operator into chemical transportation.

1996 - Added crude oil transport to its portfolio with the delivery of its first VLCC.

1997 - Fully owned subsidiary Mideast Ship Management opens its doors in Dubai.

2003 - Placed orders for 10 chemical tankers with Hyundai Mipo under the NCC banner.

2004 - Placed orders for a further two VLCCs with Hyundai Samho.

2005 - Acquired 30.3% share in LPG shipping and trading concern Petredec. Announced five year plan aimed at doubling its tanker assets.

2006 - Announced it would float 30% of its 80% stake in NCC.

NSCSA at a glance ...are joined by Michael Hudson-Davies

p11.qxd 10/03/2006 11:00 Page 1

InterManager, the successor to ship-management organisation ISMA, is

still searching for a new general secre-tary. The task of selecting suitable candidates was placed with marinerecruitment specialists Spinnaker last year.

A Spinnaker spokesperson toldTankerOperator that there had been agood response with a high calibre of

people applying for the post. No inter-views had been arranged thus far, asInterManager was still in the processof forming a selection committee.

To lift its profile, InterManager isworking on a set of KPIs and a guideto best practice for shipmanagers. Theorganisation has enlisted the help ofTrondheim-based research organisa-tion Marintec in writing the guide.

InterManager search continues

INDUSTRY SHIP MANAGEMENT


The number of specialist tankers is growing faster than the number of qualified people needed to look after them.

Greater dependence on IT forecast

“We aim to be the perfectpartner to quality tankerowners, managing a

market share of 20% of the third partytanker management market by 2010, that is 120 vessels". So says the visionarystatement from International TankerManagement (ITM).

There are currently around 400-420tankers under third party ship manage-ment worldwide, according to ITMDubai's managing director Ole Wang. OfITM's total of 64 vessels either on fullmanagement or charterparty administra-tion (commercial management), 18 aretaken care of from the Dubai office. Theseinclude VLCCs, suezmaxes, aframaxes,obos, and products and chemical carriersowned by such luminaries as Frontline,Norse Management, Irano Hind, YusufBin Ahmed Kanoo, Simatech, EmiratesShipping Investment Co and Seatankers.

Alluding to the larger ship manage-ment concerns, Wang said "There is a cer-tain scale beyond which customers don'tlike." ITM's turnover is around $6-$7 milland it employs roughly 50 people.Although difficult to quantify, the fees pership work out at roughly $130,000 peryear, depending on the size and type ofvessel managed.

ITM was formed in June 1998 as aBermuda-based company by BarberInternational. In turn, Barber is now a100% owned by Wilhelmsen MaritimeServices (see page 8), itself part of theWilh Wilhelmsen group.

As well as Dubai, the company hasbranches in Singapore, Germany andIndia and hopes to open another shipmanagement office in the Far East soon aswell as building up a presence in the US.The Dubai office tends to manage tankersof 20,000 dwt and above. Such is theDubai offices' IT investment, this branchalso serves as a base for back office func-tions for other ITM offices worldwide.

"ITM's systems, based on advanced ITsolutions and a highly qualified staff onboard and shore provide the basic net-work for our performance" ThomasArakal, Dubai's vice president technicalmanagement said. "Our managementteam consists of ex mariners, technicalengineers, naval architects and electricalengineers with a total experience of more

than 200 years of sea service as well as 150years' in ship management."

ITM offers a comprehensive ship man-agement package covering technical shipmanagement, crewing, post fixture man-agement, newbuilding supervision, projectservices and insurance claims and handling.

In January 2003, the ITM group decidedto go ahead with a formal risk assessmentprogramme bringing in DNV and attainedISO 9001:2000. Wang claimed that ITMwas one of the first third party ship man-

agers to be accredited with ISO 9002 and14001, which occurred on 30 April 2000.

As for OCIMF's TMSA project, Wangsaid that ITM was firmly committed to thescheme. The company was awaiting itsfirst inspection by an oil major under thescheme at the time of TankerOperator'svisit. The scheme was meant to be up andrunning by 1 January 2005, but only 23management companies were ready bythat date, including ITM, Wang claimed.

However, the oil majors involved inTMSA's direction offered operators a one year grace period. Commenting on thescheme, Wang said; "Some oil companieshave already stated that TMSA will steertheir choice of operators. Others have saidthat if one vessel fails an audit, the wholefleet may be failed. Some tanker companiesmay risk being blacklisted by an oil compa-ny until they change operator. This is goingto separate quality tanker managers likeITM from less serious operators," Wang

thought. With TMSA came the ITM con-cept of 'marine asset management', whichwill be the core business of the future. Inessence it means taking care of all the needsof a shipowner.

The ISM Code created a minimum stan-dard and now those standards were beingramped up a notch, he said. Wang claimedthat 95% of ITM's fleet was up to TMSACategory 4 and that a few had reachedCategory 3. He also said that there was plen-ty of business to be had outside the OCIMFempire. ITM is a member of Intertanko andwill abide by its suggestions, Wang said.Port State Control (PSC) will ensure thatstandards are kept up, he thought.

Wang forecast that within a couple ofyears, the ship management industry willhave a greater dependence on IT, especial-ly in the engineering department. Everyship will be on line and diagnostics willtake on greater significance.

The company uses mixed nationalitycrew mainly coming from Barber ShipManagement (70%). The other 30% aretaken from owners' crewing agents.

Barber undertakes the selection processand ITM decides on their competency. Thecompany uses well developed trainingfacilities in India and more recently in thePhilippines, Romania and Russia. ITM'spolicy is not to have too many mixed raceson board its ships and no minority races.

Wang thought that working exactlywithin the parameters of 'minimum safemanning', the ships wouldn't get very far.To operate to the 'minimum safe manning'regulations a ship could only go from A to

B in an emergency. ITM has seven or eightseafarers above the minimum manninglevels with the owner's full approval,Wang explained.

ITM is looking at the growth of thechemical tanker market with interest, butWang thought that the number of new-buildings was growing faster than thenumber of qualified people around to lookafter them. The manager has two ice classtankers on its books and here again thefuture growth will be dictated by theavailability of properly qualified people tolook after them.

The German office established in 2001looks after 19 vessels with 12 staff, buthopes to lift the total to 28-30 by the end ofthis year. Owners of vessels placed withITM Germany include Frontline, Marlinkand Ideenkapital Marine Services.

This year, ITM's technical managementwill be swollen by two bulk carriers and in2007 a suezmax is due to join the fleet. Asfor the commercial department, it will takeon the responsibility for a further 10 chem-ical tankers and four LPG carriers.

ITM’s Ole Wang and Thomas Arakal outline the company’s philosophy.

TO

p12-13.qxd 10/03/2006 11:02 Page 1

Late last year, software house UlyssesSystems announced that TransoceanShipmanagement, OSG, NaftomarShipping & Trading, Arcadia ShipManagement, Aegean Bulk,Pioneer Tankers, New AsianShipping, Orient Marinehad signed up as clients.

Due to the generalincrease in the number of thenew vessels on one hand,and the current interest incompanies going public andbecoming larger throughmergers and acquisitions onthe other, the pressures ofaccountability have jointlycontributed to this increasein sales, Ulysses said.

Ulysses said that its TaskAssistant software softwarehelped clients to effectivelyachieve the needs of most ofOCIMF's TMSA internalmanagement requirements.The company explained thatthe idea behind TaskAssistant was to allow anoperator to save unneces-sary work in advising theirclients that through rigorousself-assessment their shipwas safe, well kept and in compliance with the rules and regulations.TMSA, plus other industrydynamics, were putting atremendous workload onthe already overstretchedhuman resources both onboard ship and ashore,Ulysses said.

"Task Assistant helpsaddress TMSA effectively,cost efficiently, and helpsmaximise the potential ofour mariners' work," saidStefan Polomsky, managingdirector TransoceanShipmanagement.

Ulysses' software isclaimed to be easy todeploy, easy to use and tomodify by the client. Most ofthe company's clientsreported that 80% of theirsoftware lifecycle is directlyrelated to these areas. Thetask of complying withTMSA was a major preoccu-pation for most companiesand added tremendousworkload unless it was sim-plified through appropriatedata management.

"TMSA is introducingseveral new layers of report-ing and co-ordinationrequirements. Our marinersshould be less preoccupiedwith administrative process-es and focus their attentionto what they do best, run-ning the vessel. “I believeTask Assistant, will enhance

performance and efficiency," saidGeorge-Paul Perantzakis of NaftomarShipping & Trading.

Ulysses developed Task orientated

software to help companies evolve and effectively comply with most kindsof managerial self-improvement targets, as well as any new external regu-

lations. The company was establishedin 1996 and is based in London, withoffices in Greece, India, Singapore andthe US.

TANKEROperator

TO

Now that we’ve got our high horsepower tugs work-ing in the Bay Area once again, Crowley’s come fullcircle. After all, we began our marine services busi-ness here in 1892 and it’s still home to us. So it’sonly natural that we’d come back to help keep theships that call here as well as the environment safeand sound.

But the big picture is this: Survey the entire WestCoast and you’ll find that Crowley owns and oper-ates one of the most advanced fleets of tugs in theworld. Equipped with the best technology available,we’ve got some tugs that can go as fast as 16 knots

with a direct bollard pull of 300,000 pounds andothers that can go from full power ahead to fullpower astern in just 15 seconds. Plus, all Crowleycaptains and first mates are seasoned profession-als, most having worked with us for an average of12 years. You can’t ask for a more prepared crew.

For your own picture-perfect ship assist or escort in San Diego, Los Angeles/Long Beach, Oakland,Tacoma, Seattle, North Puget Sound or PrinceWilliam Sound/Valdez, Alaska, call Crowley ShipAssist & Escort at 800-248-8632. Or visitwww.crowley.com.

Crowley tugs - an attraction at every West Coast port.

© Crowley Maritime Corporation, 2006 CROWLEY is a registered trademark of Crowley Maritime Corporation

Liner Shipping • Worldwide Logistics • Petroleum & Chemical Transportation • Alaska Fuel Sales & Distribution • Energy Support • Project Management • Ship Assist & Escort • Ship Management • Ocean Towing & Transportation • Salvage & Emergency Response www.crowley.com


TMSA helps Ulysses increase sales

p12-13.qxd 10/03/2006 11:03 Page 2

INDUSTRY P & I


Competition between the clubs has been likened to a very long game of base line tennis. Back and forth it goes, returnfollows return, rallies last for ages, until a small error is made, a slight misreading of the situation occurs and this

eventually leads to a shipowner changing clubs, reasons Sam Ignarski.

Premiums struggle to keep up with outgoings

P&I for most of the time is a part ofinternational insurance, whichappears to be unchanging. Or, as a

leading industry commentator once putit, it is an industry where it takes a greatdeal of time for nothing much to happen.The competitive struggle goes onbetween P&I providers, but under theunusual circumstances of a cartel agree-ment sanctioned by Brussels. And formost of the time, the competition seemsto be rather isometric in nature-there isplenty going on, but force meets more orless equal force and there is little evi-dence of movement. But beneath theinstitutional façade of P&I, pressures arebuilding, for all the usual reasons in mar-itime affairs, and some of the manifesta-tions are quite visible today.

Taken as a whole, P&I has struggled tocollect sufficient premium to keep goingcomfortably for the best part of 15 years.Mutual clubs, non-profit making as theyare, are nevertheless struggling to keep

enough money in the kitty to withstand anadverse run of years. Despite year on yearincreases being levied by most clubs, thereis still no end in sight of asking for more.This year the range of increases demandedranged from nil at the more solventBritannia Club to the 12.5 % tabled by theUK Club. The fixed premium market has

felt the absence of a comfortable incomefrom this stream most visibly in 2005.Among the first to announce a limited

withdrawal from the market was Markel,the successor owners of the much reducedTerra Nova business, which once hostedthe ambitions of Jonathan Jones.

Then late in 2005, the French compositeinsurers AXA announced that it was alsojoining the impressive list of fixed premi-um insurers who had entered the P&I

market only to leave with regrets. (Thelist includes such redolent names asOceanus and Ocean Marine, Sphere Drakeand HIH, to name but a few)

Back in the late 1990s, the men fromAXA went the rounds of the mutuals,measuring them up for a takeover, in themanner of the AGF/Allianz or Capital Z,helping thereby to cause great excitementin the hearts and minds of many clubmanagers. This was the time of notableasset inflation, pre-the bursting of theinternet bubble. AXA took the view that itcould do better, by acquiring a modestinsurance operation based in Belgium andseeking to build a business organically. Inthe end it seems the reinsurance costswere prohibitive, even for bulk purchas-ing AXA.

Now not far short of 1,000 shipsinsured with a decent loss ratio and sixyears into the intention, the company is toleave the field, for other more profitablelines. Does this mean that fixed premiumP&I has no real future? Not necessarily--looking at the figures behind the sale ofBMM to QBE, you could say the owners ofthe small ships specialists did very nicelyout of de-mutualisation. Contrariwisemight it be said that insurers are bestadvised to acquire something in the P&Imutual world to gain the cross sellingplatform they often desire? Not inevitablylooking at the rather inchoate unionbrought about by the Allianz and theBritannia Club's management operationwhere the reason why hangs heavy in theatmosphere.

The nature of the industry tends tofrugality if not downright meanness. It iseconomical, resistant to 21st centuryfinancial machinations, and purposedriven to an extent rare in the moderninsurance industry. This is not to say thatit is impervious to all reform and rein-vention, but only the really well con-ceived initiatives will survive over the

distance and the insurance cycle.

Competition Most years readers relying on a summaryof the P&I renewal might be forgiven forthinking that the market had grown by anadditional 10% in the run up to February20th. Fleets do leave clubs and clubs do

over the years wax and wane, but it is verydifficult to make much sense of the eventsof a single renewal. This year there wereas always notable switches by owners.

But few clubs are prepared to announcethey have become smaller as a result of therenewal. When a member goes it is usual-ly deemed to have become beyond theunderwriting pale. This year's standoutchanges seem to denote a sudden volatili-ty into the story. Instead of the usual oneor two percentage points, the Skuld Clubhas announced a very unincrementalgrowth in its owned tonnage of 11.5% andthe Standard Club has admitted it willemerge smaller as a result of losses duringrenewal. One of these, Grimaldi Lineswould have been more than usuallypainful for a club known for its close affin-ity with Italian shipping.

The North of England has crossed the60 mill entered gross tons mark and nodoubt hopes that it has well and truly lostits identity in the minds of others as thediminutive club in provincial North EastEngland. Some of the movements betweenthe clubs are merely the result of the wayshipping lines keep disappearing by wayof consolidation. Thus old links betweenlines like P&O Nedlloyd, or CP Ships andtheir clubs have been superceded by thepreferences of their new parents. A link toa different time was broken with the lossof the entire Latvian Shipping fleet, most-ly tankers, from the UK Club and GardClub to Skuld. It is also reported thatseven Capital Ship Management vesselsmoved to the Oslo based mutual, alongwith an increase in the numbers of tankersof AP Moller-Maersk.

New kids on the block There is not in 2006 a large contingent ofnew players thirsting for a part of the P&Imarket. The South of England P&I Club isstill very small-its founders haveantecedents in the old fixed premium P&I

Taken as a whole, P&I has struggled to collect sufficient premium to keep goingcomfortably for the best part of 15 years. Despite year on year increases

being levied by most clubs, there is still no end in sight of asking for more.

A team that wins is a team that trains. At Eurasiawe are constantly striving for excellence through teameffort and hard work.The result is some of the world’sbest managed ships.

Only the best individuals make up the best teams.Headquartered in Hong Kong with offices in 7 differenttime zones, Eurasia works in partnership with its customers to offer complete ship management solutions.

Better People. Better Ships.GLOBAL MARITIME SOLUTIONS

www.eurasiagroup.com

Overall Winner - HKMA Quality Awards 2003Best Ship Manager in Asia 2002 & 2003 - LLMA AwardsWinners of the Best Practice Awards 2004 - Supply Chain Management

We train for you to succeedWe train for you to succeed

SILVER JUBILEE YEAR

p14-15.qxd 10/03/2006 11:05 Page 1

tend to increase or decrease the figure.The price will then be upgraded to takeaccount of the excess reinsurance contract-this rate is different for tankers and gener-al cargo ships. On top of this calculationthere will possibly also be a US oil pollu-tion surcharge, payable as a per tonne rateup to a maximum of 20 voyages. The final

price will tend to reflect the underwritingconviction in P&I that this is a dangerousform of shipping, even if many operatorsnowadays do not really insure the lowerbands of risk in the way they once did 20years ago.

It will be noticed here that this method-ology relies on history and precedentmore than it does of actuarial insight orrisk management savvy. The system usedtends to start out with a one size fits all fig-ure, ameliorated or augmented by the his-tory and loss record of the members con-cerned. The rating is thus perhaps much ofa muchness, rather than a sensitive barom-eter of prospective risk.

Substandard ships - This goes to thenewly live question as to what the P&Isystem can do in its arrangements to tendto suppress substandard ships. The indus-

try at present claims it is on the wholeunable to recognise anything as clearly asa substandard ship, the importance ofwhich varies in the story of human error,which so often is the background to large,unexpected catastrophic claims. Often theship involved in a big casualty has the bestof provenance and maintenance, is certi-fied in keeping with all the rules and can-not be faulted as a piece of hardware.

Consolidation - As the shipping indus-try carries more and more of world tradein containers, and as the numbers of play-ers in the industry contracts by way ofconsolidation, the question often ariseswhether the shipping industry still needsto support 12 mutual clubs. The case for afurther consolidation of P&I growsstronger each year. It is difficult to achievedue to the vested interests in the variousindividual clubs and the partisanshipamong owners whose attachments to theirclubs is often at variance with their repu-tations for hard headed decision taking.

ConclusionP&I is under the same kinds of pressure asare other suppliers of insurance and serv-ices to shipping. It is a world where thehorizons and the profit margins have atendency to shrink. One further cause forlong term concern is how this industrywill prepare itself on a human level toproperly serve an industry whose centreof gravity is in the Pacific. The legions oflawyer-linguists and other area specialistswho are not beating a path to careers inP&I should be of greater concern to itscommittees than it appears to be at themoment. The industry should need noreminding how quickly shipbuilding leftthe Atlantic Ocean-will P&I describe thesame melancholy path waking up only torealise it is too much in the wrong place atthe wrong time? TO

companies in London. They haveachieved recent fame in Japan by supply-ing P&I cover to the fleets of North Korea.Also the phoenix like strategy of Rankinand Tiney, formerly of the Ocean MarineMutual is aimed at the smaller end of theAsian market.

One quasi P&I development has seen

the announcement in recent weeks of anew cover for inland waterway operatorsin drycargo trades on the Yangtse riverwho have traditionally been uninsured.These ships will for the first time be able tobuy insurance for risks such as wreckremoval and oil pollution under a newfacility set up by Asia Insurance BrokersShanghai Branch (AIB). The facility, whichis offered by China Pacific Property andCasualty Insurance Company (CPIC) isreinsured in the London market by lead-ing marine underwriters. This specialisedcover is one response to regulatory movesin China to introduce the habit of insur-ance on the country's rivers.

Until now, casualties and collisions onChinese rivers have tended to requireintervention by the river or maritime safe-ty authorities, who have often been theproviders of clean upresources, or the suppliers ofwreck removal services.Today, the last two contin-gents of uninsured shipown-ers ply the rivers of Russiaand China and the role ofriver tankers in those twocountries is increasinglycoming under the spotlightas the energy demands of theworld respond to economicdevelopments.

InternationalGroup of Clubs

It is the international groupof P&I Clubs, which carriesthe main weight of the inter-national shipping industry(90% of world's deepsea ton-nage). The group is heldtogether by an agreement oncompetition (which is in factan agreement to limit com-petition) and the reinsurancepool set up by the clubs toreinsure claims that run over$50 mill. The tendency of theclubs to retain more risksand to reinsure only thehigher echelons is for thesmaller and less solventclubs an issue of real con-cern. The more risk a club

retains (the level is currently $6 mill eachclaim) the more the reserves are exposedto erosion by runs of moderately largeclaims.

The diagrammatic scheme of reinsur-ance for the clubs can be viewed in allits complexity at the newly establishedwebsite of the international group

(http://www.igpandi.org). Each timethere is a major casualty, which is sharedaround the clubs by way of pooling thelayer between themselves and their owncaptive up to $50 mill, there is always atleast the prospect of a discussion on whythe ship was underwritten by any givenclub in the first place.

Current IssuesRating - Not much has changed over theyears in the way a tanker for example israted for renewal by a P&I underwriter.The price will begin with the existing ratecharged (unless the ship is straight out ofthe shipyard). The club will apply its gen-eral increase, which in the case of the UKClub was 12.5% this year. The underwriterwill then look at the operator's record tosee if there are any features, which will

TANKEROperator

Until now, casualties and collisions on Chinese rivers have tended to requireintervention by the river or maritime safety authorities.... Today, the last two

contingents of uninsured shipowners ply the rivers of Russia and China and the role of river tankers in those two countries is increasingly coming under the spotlight as

the energy demands of the world respond to economic developments.

For further information regarding this alternative P&I club please contact:

The South of England Management AGBranch OfficeZimex Business Aviation CenterBimenzältenstrasse 75, CH-8058 Zurich Airport, Switzerland

Tel +41 (0) 433 88 34 88Fax +41 (0) 433 88 34 89Email [email protected] www.sepia-pandi.com

The South of EnglandProtection and Indemnity Association(Bermuda) LimitedHamilton, Bermuda


p14-15.qxd 10/03/2006 11:05 Page 2

TECHNOLOGY VAPOUR CONTROL


Oil terminals gradually embrace VOC systems, despite lack of legislation, reports Brian Warshaw.

Vapour cloud explosion drives terminal project

In those heady days, some 10 or 12years ago, when the problem ofvolatile organic compound (VOC)

emissions from terminal oil loading firstclaimed the serious attention of the oilindustry, a small team at the Phillips ter-minal at Seal Sands at Teesside in the UK,was given the task ofreviewing and produc-ing a plan for the plant.

It was the time whenboth BP and NorskHydro were workingtowards building VOCrecovery systems atHound Point and Sturerespectively, and theNorwegian authoritieswere encouraging thedevelopment of ship-based recovery units.

At Seal Sands, a cyni-cal member of the studyteam confided that thePhillips way was toadopt the acronymCATNAP - "Cheapestavailable technologynarrowly avoidingprosecution". Thecheapest way was to donothing. There was no specific UK orEuropean legislation preventing orrestricting emissions, despite clear evi-dence of its harmful effect both on humanhealth and the environment.

There still remains no legislationspecifically restricting the emission ofVOCs; but a contract has been placed anda VOC recovery system will be operatingat Seal Sands oil terminal during the sec-ond half of 2007. A spokesperson atConocoPhillips government affairs andpublic relations department declined todiscuss either the technical aspects of theproject or the rationale behind the deci-sion to install it.

In a report into the explosion at theHumberside refinery, published late lastyear, the Health and Safety Executive

(HSE) said, 'The first incident happenedon 16 April 2001 when 170 tonnes of high-ly flammable LPG was released fromConocoPhillips (then Conoco Ltd)Saturate Gas Plant at its Humberside oilrefinery. The gas cloud ignited causing amassive explosion and fire. As the fire

burned it caused failures of otherpipework resulting in another explosionand fireball'. The HSE described the inci-dent as 'very serious and had the potentialto be catastrophic.'

VOC emissions include ethane andmethane, both highly inflammable andexplosive gases, and it is therefore notunreasonable to surmise that the decisionto install a vapour recovery system at SealSands related to the incident at theHumberside refinery.

The oil export terminal is owned bytwo British companies, Norsea Pipelineand Norpipe Petroleum UK. Oil isreceived through a 34-inch pipeline,which starts at the Ekofisk Centre, inNorwegian waters, where three pumpsensure that the liquid flows the 354 km

distance to the terminal. Fifty kilometresdownstream of the centre is a tie-in pointfor oil from UK fields. The pipeline andterminal became operational in 1975.

In March last year, it was announcedthat a contract worth £36 mill had beenplaced with Costain Oil, Gas and Process

of Manchester, for a vapour recovery proj-ect at the terminal. Subsequently an orderwas given to John Zink based in Tulsa, US,to design and supply the marine vapouremission recovery system. The pity is thatit has taken until 'peak oil' production

level has been reached, rather than havingbeen undertaken at an earlier period in theterminal's life, before the VOC recoveryfacility is to become operational.

The conceptual design studies that JohnZink undertook at the start of the contractindicated that the best solution was to usethe carbon bed adsorption principle.

Common configurationIn its common configuration, the adsorp-tion/absorption vapour recovery system isequipped with two identical adsorbers,each filled with activated carbon to attractthe VOC vapour. One adsorber vessel isalways on-stream in the operating mode,while the other is off-stream being regener-ated. Automatically operated valvesensure the swing between adsorption andregeneration mode with the facility alwaysbeing available to the vapour emissions.

The hydrocarbon vapour-air mixturethat comes from the tanker through thevapour return line on the jetty, enters theoperating adsorber where the activatedcarbon adsorbs and retains the hydrocar-bon element of the mixture, allowing theair to be vented to atmosphere.

During this process of adsorption, theoff-line adsorber vessel is being regenerat-ed. The carbon bed is subjected to a com-bination of vacuum and purge air strip-ping to remove the impinged hydrocarbonmolecules, restoring the carbon bed to astate where it can adsorb more hydrocar-bon vapour during the next cycle.Extraction of the concentrated hydrocar-

Surprisingly, the UK has no rules regarding VOC controls for its terminals

There still remains no legislation specifically restrictingthe emission of VOCs; but a contract has been placed and a VOC recovery system will be operating at Seal

Sands oil terminal during the second half of 2007

p16-19.qxd 10/03/2006 15:30 Page 1

Hans Høyer Jensen, Hamworthy'smarine cargo pump sales director said,"By using frequency converters the pumpscan operate at optimum performance dur-ing any unloading conditions. This resultsin a quicker port turnaround time, higher

total system efficiencyand hence, lower powerconsumption. Usingelectric motors directlyas the drive force alsoincreases system effi-ciency compared withalternative systems".The total installed powerfor the cargo/slop tankpumps is around 2,360kW. Total unloadingcapacity is limited to3,600 cu m per hour.

"Electric-drive deep-well cargo pumps are areliable, safe and energy-saving alternative tohydraulically drivenversions. The main fea-tures of all these pumpshave been designed toimprove safety and relia-bility, increase efficien-cy, and reduce systemcomplexity comparedwith other systems thatare available. This pump

system provides a solution to today'sdemand for a simplified distributed pumplayout using an electric motor on theweatherdeck connecting to the pump unitvia a long drive shaft," he continued.

Hamworthy developed its electrically-

bon vapour is achieved through the oper-ation of a liquid ring vacuum pump,which discharges it to a three-phase sepa-rator suitable for separating the vacuumpump seal fluid, hydrocarbon vapour,condensate, and non-hydrocarbonvapour. The seal fluid is pumped from theseparator, cooled, and returned to the vac-uum pump for reuse.

The hydrocarbon vapour with the con-densate, passes through an absorber col-umn where the final process of recoverytakes place. The vapour flows through thecolumn and co-mingles with a cold liquidhydrocarbon, which absorbs it and eitherreturns it to storage or permits it to bespiked into the crude oil, which is beingloaded to the tanker.

Pumps providedTo operate the column a lean absorbentsupply pump and a rich absorbent returnpump are provided to circulate therequired absorbent. A small stream of airand residual vapour exits the top of theabsorber column and is recycled to theoperating active carbon bed adsorber andthe cycle starts again.

Part of the system for transferring thevapour from the tanker to the recoverysystem is a blower unit. This unit over-comes a situation where pressure losses inthe piping system are too great to allowthe vapour to flow. The IMO's rules forvapour recovery systems make it manda-tory for a detonation arrestor to be fittedand used in the vapour recovery line as aprimary safety device. The inline detona-tion arrestor provides protection against asecondary flashback. It works by quench-ing any flame through absorbing its heatand preventing travel through thepipeline. An alternative design uses a liq-uid barrier for the same purpose.

As part of the Teesside project, JohnZink will provide two identi-cal systems each designed tohandle a crude oil flow rateof 8,000 cu m per hour or16,000 cu m per hour in com-bination. The recovered oiland condensate will beadded to the oil beingloaded.

Throughout the earlystages of the project, both theUK's Environmental Agency,and the Health and SafetyExecutive were activelyinvolved in reviewing theproposals for the selectedtechnology.

The Norwegian crude oilimported into Teessideemanates from the Ekofisk,Eldfisk, Embla and Tor fields,as well as from Valhall, Hod,Ula, Glyda and Tambar.There is additional oil comingfrom Fulmar, J Block, Gannet,Auk, Clyde, Janice, Orion,Jade and Halley fields locatedin the UK sector.

After the crude oil isreceived it goes through astabilisation process beforebeing ready for shipment.The terminal has 10 tanks,each with a capacity of750,000 barrels.

The 'Lindenau safety tanker class2010' is a 40,500 dwt tanker designclassed by Germanischer Lloyd

(GL). The first four were ordered byGerman Tanker Shipping. The vessels'47,000 cu m capacity tank arrangementcomprises 12 cargo or slops tanks, and aresidue tank. Each tank is approximately16 m in depth. For each of the vessels,Svanehøj will be supplying 10 CKL 200units, producing an output of 600 cu m perhour at 120 m liquid column (mlc) for themain cargo tanks, and the DL model yield-ing 250 cu m per hour at 120 mlc for instal-lation in the two slops tanks. The pumpwells in the tank are formed by pressingthe stainless steel into an optimum shape,designed to leave behind a very lowresidue of product.

Control of the pumps' variable speeddrive is through a frequency converter,and 14 of these have been provided oneach vessel. These additional two fre-quency converters are used to providevariable speed control on the two tankwash pumps. To meet GL's safety require-ments the converters are configured in'true' 12-pulse mode, fed via transformers.In utilising this design, the harmonic dis-tortion is kept at a low level, with a clearsafety margin to the rules, and the con-verters are designed to provide easy back-up for each other in the unlikely event of amalfunction.

TECHNOLOGY CARGO PUMPS TANKEROperator


It’s nice to start with an item of good news, and the bearers of it are Hamworthy Svanehøjof Svenstru, Denmark. Four of its electrically-driven deepwell cargo handling systems

have been selected for installation on a new design of ship being built by the Lindenau Shipyard at Kiel in Germany, writes Brian Warshaw.

Cargo pumps - first the goods news …

VAPOUR CONTROL

TO

Pres-Vac pump head showing magnetic drive and mode ofretaining cargo fluid within the unit (see page 19).

Seut Industrier as Mosssev. 63/65 -1615 Fredrikstad, Pb. 351, 1601 FredrikstadTlf: 69 36 87 70 - Fax: 69 36 87 71, E-mail; [email protected], - www.seut.no

Seut blind flange valves A product based on quality, efficiency, simplicity. Easy to operate and reliable in use.Suitable for:

Ships Rigs and platforms Refineries Terminals. Chemical and petrochemical industries

Approved by:DET NORSKE VERITAS - BUREAU VERITAS - LLOYD'S REGISTER OF SHIPPING - U.S. COAST GUARD - AMERICANBUREAU OF SHIPPING - RINA ITALY - GERMANISCHER LLOYD - USSR REGISTER OF SHIPPING

Wherever you require security when blinding:Liquids Oils Solvents Chemicals.

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p16-19.qxd 10/03/2006 15:31 Page 2

driven deepwell pump range to appeal toowners of larger tankers. The currentrange of Svanehøj models are the CKL 200,rated at 600 cu m per hour, the CKL 250ranging up to 800 cu m per hour, and thelarger CKL 300 unit which offers unloadingrates from 1,200 to 1,800 cu m per hour.

It might be the competitive nature ofthe deepwell pump industry; but news

that companies are talking more aboutcompetitor's perceived or false failings,than of their own equipment's merits, is'bad' news.

Bad newsJust before the end of 2005, Marflex of Oud-Beijerland of the Netherlands, issued a let-ter to potential clients and customers

extolling the benefits of its electrically-driv-en deepwell pumps. This was no ordinarymarketing exercise. The company wasresponding to innuendo and maliciousrumours against it, which it claimed a com-petitor selling the conventional hydrauli-cally operated pump was spreading.

The letter claimed the competitor wastalking to potential customers in a way

that directly implied the Marflex systemhad technical flaws. This, it said, wasunacceptable, unethical, and totallyuntrue. On the contrary, Marflex believedthat its research, advanced technology,market feedback, and continued innova-tion had given it a lead in providingpumping systems to meet the requirementof today's market.

Since the beginning of the1980s, Marflex has beenmanufacturing, servicing,and repairing pumps,including hydraulicallyoperated units. In 1986 itstarted development of anew concept in deepwellpumps and sold its first sys-tem two years later.

Using the principlesinherent in hydraulicaldrives, variable speed con-trol and non-overload char-acteristics, Marflex set aboutusing an electric motor. Atthat time, class-approvedexplosion proof motors hadbecome available, along withstatic frequency converters.

There followed the designof a non-cargo lubricateddrive shaft, a unit that itclaims has a service life of10,000 hours, the equivalentof the bearings in the electricdrive motor, and the 20 to 25year operating period for adeepsea vessel.

With cargo pumps capa-ble of delivering flow rates of80 to 1,500 cu m per hour,and ballast units from 150 to2,000 cu m per hour, Marflexstandardised a system thatemploys a one-speed electricmotor for small producttankers where the specificgravity of the load is fairlyconstant, a two-speed motorfor tank cleaning, and a vari-able speed motor, controlledwith a static frequency con-verter for its cargo pumps.The benefits claimed derivedfrom the variable speedmotor are high efficiency,energy consumption relatedto need, and soft-start toreduce generator demandduring start-up.

Drive shaftarrangement

Another contribution thatMarflex claimed to havegiven the industry is theenclosed intermediate driveshaft arrangement. By shield-ing the drive-shaft from theloaded cargo the choice ofmaterial is far greater and canbe selected for metallurgicalstrength properties ratherthan its non-corrosive fea-tures. Marflex uses42CrMo4V, a chrome molyb-denum steel which can beheat-treated, rather than 316Lstainless steel from which itmanufacturers the shaft.

TECHNOLOGY CARGO PUMPS


p16-19.qxd 10/03/2006 15:32 Page 3

and high level alarms fitted in the cargotanks. A vapour return system has alsobeen fitted. She is also fitted for singlepoint bow mooring operations.

Stena Arctica has been designed to sailwith a draft of 15.4 m on the full dead-weight, the maximum allowed to transitthe Gulf of Finland/Danish Belts regions.

Her bridge has been designed for a 360deg view for greater safety in narrowwaters. The main engine's output is 16,630kW, or 22,610 bhp and both the main engineand the auxiliaries run on heavy fuel oil.

Ice class tanker poolStena Arctica and Stena Antarctica repre-sent the first two units in theStenaBulk/Sovcomflot pool of vessel,which is expected to grow to 10-15 iceclass tankers soon. By 2008, Stena and sis-ter company Concordia will operatearound 12 large, ice strengthened tankersalone.

The objective is to ship 20-25 milltonnes of Russian oil per year from theBaltic region, primarily Primorsk, to theUK/Continent. This is currently theequivalent of around 33% of Primorsk'stotal exports. The volume of Russian oilexported through the Baltic region hasrocketed since 2001 when just 300,000tonnes were exported. Last year, the figurewas a massive 57 mill tonnes from theGulf of Finland.

Stena and Sovcomflot have also intro-duced the so called 'B-MAX' design, a fol-low up to the successful 'V-MAX' VLCCsnow in service from West Africa toPhiladelphia. The 'B-MAX' design is alsoof VLCC proportions being of 200,000-250,000 dwt, but has a shallow draft com-pensated by an extreme width, enabling itto navigate through the Gulf ofFinland/Baltic fully loaded. Its length ofjust under 300 m will also allow it to tran-sit the Bosporus.

For redundancy and ease of manoeuvra-bility, all the propulsion equipment will beduplicated. One B-MAX can lift 6-7 mill

tonnes annually, which equates to around10% of the annual throughput fromPrimorsk. Design work and tank tests areongoing and a final decision as to whetherto go ahead and build tankers to this designshould be forthcoming this year.

Elsewhere, Concordia has signed anagreement with TotalFinaElf, to charterthe last in the series of six P-MAX prod-ucts tankers for five years. The vessel willbe named Stena Perros when she is deliv-ered at the beginning of 2008. With thisagreement, all eight vessels in the SEK 2.2bill investment programme are now char-tered out.

Concordia claimed that the tankers'unique design enables them to load 30%more cargo than a conventional productstanker with the same draft - at very littleextra cost - and provide a very high levelof safety due to being fitted with doublemain engines, rudders and other criticalcomponents and systems.

The six vessels were ordered in 2003, tothe MAX concept at the Croatian shipyardof Brodosplit. These vessels, designated P-MAX, were product tankers of about49,900 dwt.

Concordia defines the MAX concept as'vessels designed for maximum loadingcapacity in shallow waters'. In addition tohaving mandatory double hulls, they weredesigned according to a new concept forsafer oil transportation with double mainengines in two completely separate enginerooms, double rudders and steering gear,two propellers and double control systems.

In 2004, two Panamax tankers of about75,000 dwt, in which Concordia has a 50%share, were ordered from the same yard.All of the six vessels on order will be deliv-ered over a two-year period starting fromthe end of 2005.

Concordia Maritime also has twoVLCCs, each 313,000 dwt, on time charterfor five years. These vessels, V-MAX,which entered service in 2001, were thefirst vessels built in accordance with theMAX concept.

TECHNOLOGY SHIP DESCRIPTION TANKEROperator


At the end of January, the first of StenaBulk’s aframax ice class tankers was shown off inGothenburg her port of registry having been delivered from Hyundai in November of last year.

The Ice Tanker Cometh

Stena Arctica can navigate through ice of up to 1 m thick under her own power.

Shaft and bearings are lubricated, thereforethere is little potential for failure duringstripping or tank cleaning operations.

Using a system that employs a maxi-mum shaft length of six metres before abearing and support are installed, Marflexhas shown that depth is unlimited. Axialthrust from the pump impeller is absorbedby the bearing immediately above theshaft, and is not transmitted to the shaftabove, or to the motor.

The Marflex letter concluded by askingits potential clients to find out the facts aboutits equipment from them and companiesthat are using its equipment, rather thanfrom a competitor with pumps to push.

A report prepared in 2002 byDeltamarin, on behalf of Hamworthy KSESvanehøj, is titled, 'Study of hydraulic andelectric driven deepwell cargo pumpoptions', and is available for download onthe Hamworthy website at www.ham-worthy.com/docGallery/127.PDF.

Five years serviceBack to some good news. Pres-VacEngineering based at Allerød, Denmark,has reported that its first magnet-drivendeepwell cargo pumps are fast approach-ing the point where they have been inservice for five years.

Pres-Vac installed its first units, one ofwhich was manufactured from duplexstainless steel, in two small chemical carri-ers owned by Herning Shipping. The4,000 dwt tankers were subjected to fre-quent unloading and tank washing, ensur-ing that the pumps have been exposed to aheavy workload, proving their capability.

A unique feature to the industry,although widely used in pharmaceuticals,is the magnetic drive, which eliminates theneed for a mechanical seal, and ensuresthat the pump remains leak-free through-out its operating life. In the event of foreignmaterial in the tank jamming the pump-head, the magnetic drive slips and protectsthe drive shaft, which continues to rotate.

The system created some challenges tothe designer, a major one being the need tolubricate the shaft bearings. Unlike the tra-ditional design, which would incorporatebearings in the pump drive unit, the Pres-Vac unit has the main bearing at the inlet,which in combination with a non-returnvalve ensures cargo fluid is trapped in thepump head housing, and is not lost duringthe stripping and purging operations.

Magnetic-drive pump heads are morecostly and complex to construct than thedirect drive model. Power consumption isrelatively high due to eddy current lossesin the pump's metallic shroud; but bymachining a smaller clearance betweenthe pump rotors and the shroud, this losscan be reduced, although this solution canincrease impeller wear due to solids con-tained in the cargo.

A review of advantages against disad-vantages would undoubtedly measurefavourably towards the magnetic-drivepump head. Leak-free operation, damageto the drive shaft eliminated, maintenanceof mechanical parts reduced, and thepump operation can be set on a pre-pro-grammed cycle.

It is the Pres-Vac's intention that in thenear future it will have a deepwell pumpunit that is suitable for 25,000 dwt chemi-cal tankers.

Stena Arctica is not only the Swedishflag's largest vessel, but is also thelargest vessel to have the highest

class notation. The 117,100 dwt tanker hasbeen built to Finnish/Swedish Ice Class1A Super, which means that she can nego-tiate ice of up to 1 m thick under her ownpower. The only other vessels trading thatcome up to this size and ice class areNeste's two double acting tankers Masteraand Tempera.

She and her still to be delivered 114,000dwt slightly smaller sister Stena Antarcticawill be the first vessels to join a large fleetof ice class tankers to be operated by a co-operative pooling agreement involvingStenaBulk and Sovcomflot. The vesselswill transport Russian oil from the Gulf ofFinland to northern Europe under a 10-year charter to Russian oil logistics con-cern Progetra.

Both tankers have been built with about10% more steel than more conventionalaframaxes. They also have a far higherengine output than their counterparts andthanks to an improved hull form they cancarry about 6,000 tonnes more cargothrough the Danish Belts with about thesame fuel consumption per cargo unit. Forexample, the Stena vessels will burnaround 50 tonnes of hvo per day at 14knots, compared with an average afra-maxes 47 tonnes at the same speed.

Some months ago, Northern MarineManagement, the technical managementarm of StenaBulk and Concordia, startedan ice condition cadet training programmeand increased its intake of cadets. BothStena and Sovcomflot have jointly sup-ported the creation of an ice training cen-tre together with training programmes atthe Admiral Makarov State MaritimeAcademy at St Petersburg. Sovcomflot is along term sponsor of the St Petersburgfacility, while Stena supports theChalmers Lindholmen maritime college inGothenburg. Both schools are now co-operating on ice class vessel training.

Stena Arctica has been classed by DNVwith the notation *1A1 ICE-1A* Tanker forOil, ESP EO NAUT-AW VCS-2 PLUS-1TMON NAUTICUS (Newbuilding). Theregistered owner is Stena Rederi ABTechnical Division and she is managedout of Glasgow by Northern MarineManagement.

The 250 m long and 44 m wide vessel isfitted with seven epoxy coated cargotanks, which have been fitted with a centreline bulkhead. The total capacity exclud-ing the slop tanks is 130,213 cu m, whilethe slop tanks capacity totals 2,299.4 cu m.She is also fitted with a segregated ballasttank arrangement and an inert gas system,which is supplied by a generator and acrude oil washing system. Her centrifugalcargo pump has a capacity of 3,000 cu mper hour. Three 500 mm cargo connectionshave been fitted on each side. For tankgauging, a radar system has been fittedTO TO

CARGO PUMPS

p16-19.qxd 10/03/2006 15:32 Page 4

TECHNOLOGY NEWS


The ECDIS combination unit allowsSNTG to reduce its present bridge net-work on some ships from four PCs to two.SNTG currently uses three units forECDIS and conning, and one for VDR.

SNTG opted for a larger hard drive toenable recordings well in excess of themandatory 12 hours. Engine, rudder andbow thruster movements will also berecorded in order to provide betterinsights into any incidents.

The playback software was found to besuperior and the record and playbackcapabilities far exceeded the requirementsof IMO. No special playback software isneeded. The DVD with the recorded datacan be played back on any multimedia PC.

The recorded data is claimed to beunique in that it also incorporates the com-plete ECDIS logbook and the actual elec-tronic charts used in the voyage, togetherwith their update status, etc.

Included in the package is the MarisFleet Management software for remotemonitoring of SNTG's vessels. This will be

used in conjunction withSNTG's Iridium SSAS unitsenabling the company tomonitor the position of itsfleet at any time.

SNTG has a long historywith VDRs. In 1996, thecompany installed VDRs ontheir D37 class of parceltankers built in Denmark, 10years ahead of the presentregulations.

This S-VDR is based oncommercially off-the-shelfhardware, which will ensurelow life cycle costs, claimedMaris. It is based on a flexi-ble modular design,enabling easy installation,especially on SNTG's coastalfleet where space is tight.

At the IMO's MaritimeSafety Committee 79th ses-sion in December 2004amendments were made toregulation 20 of SOLASChapter V (Safety ofNavigation) on a phased-incarriage requirement for ashipborne simplified voyagedata recorder (S-VDR). Theamendment enters into forceon 1 July 2006.

LR to class world’s first commonrules tankers

The world's first tankers to be specifiedwith the Common Structural Rules (CSR)for tankers of 150 m in length and abovehave been ordered to Lloyd's Register (LR)class at China's New Times ShipbuildingCo for a large unnamed Cyprus-basedowner. The order is for four aframaxtankers of 114,000 dwt. It is anticipatedthat the keel of the first ship will be laid inJuly 2007, with delivery in July 2008.

According to LR, the four tankersordered at New Times Shipbuilding willbe different from the previous generationof tankers in several significant aspects:

In compliance with the CSR, the ships will have been designed for a 25-year fatigue life based on the North Atlantic sea environment, resulting in vessels with enhanced strength, fatigue life performance and robustness. The loading applied to the tanker design is transparent to the designer, being related to actual loading, as well as correlated with data from direct cal-culations carried out specifically for the purposes of developing the new rules. This approach ensures a robust mini-mum standard while allowing owners to also specify tanker designs with additional operational flexibility if required. The adoption of the 'net thickness' approach allows clear definition of structural capability and corrosion margin. Permissible diminution levels will be transparent to all involved par-ties and the shipping industry at large.

The International Association ofClassification Societies' (IACS) CSR fortankers was published on 15th January,2006 and comes into force on 1st April thisyear. The new rules are the result of afour-year-long joint research and devel-

opment project between LR, ABS andDNV, with the rules having been unani-mously adopted by IACS Council on 14thDecember, 2005.

LR's marine director Alan Gavin said:"While there are some in the industry whoare attempting to complete newbuildingcontracts and fill slots before the Aprildeadline, this owner and New TimesShipbuilding have invested in the long-term view. They have sent a clear messageto the industry that they intend to supportthe CSR philosophy in the strongest wayby investing in CSR tonnage well beforethe deadline. Although the future remainsuncertain and through-life maintenancewill be all important, these vessels will bewell placed to avoid the commercial andregulatory pressure that may be exertedon pre-CSR tonnage with similar deliverydates in the same way that double-hulltankers are experiencing advantages oversingle-hull tonnage."

To date, LR has assessed and assisted inupdating standard tanker designs world-wide to take the new rules into account.LR is providing both owners and yardswith comprehensive training to preparethem for the implementation of the CSRand has also recorded a number of firsts inthe delivery of these courses.

Training courses have already beenheld in China, South Korea and Japan andwill continue over the coming year. LR hasalso released fully tested and updated ver-sions of its ShipRight SDA and RulesCalcsoftware throughout the developmentprogramme in step with the various draftsmade available and also to coincide withthe publication of the CSR. The softwareenables designers to easily assess the com-pliance of their designs with the CSR,claimed LR.

Stolt-Nielsen Transportation (SNTG) hasawarded Norwegian information systemsprovider Maris a contract to provide sim-plified voyage data recorders (S-VDR) forSNTG's parcel tanker fleet.

The Maris S-VDR is the world's firstapproved recorder with an optional elec-tronic chart display and information sys-tem (ECDIS).

This will put SNTG in a strong positionto meet any upcoming carriage require-ments for ECDIS, including the US Portand Waterways safety act, as well as IMOrequirements, Maris claimed.

The contract follows another awardedby Hoegh for the same equipment earlierthis year.

SNTG's decision followed a two-yearevaluation of S-VDR manufacturers by aproject team consisting of representativesfrom SNTG's technical, purchasing, safetyand vetting departments. The team wastasked with evaluating 12 bids received inresponse to a tender sent out to 18 poten-tial suppliers.

Stolt’s parcel tanker fleet will be fitted with Maris S-VDRs.

MARIS wins Stolt contract

p20-22.qxd 22/03/2006 13:18 Page 1

MAN B&W is bringing its worldwide aftersales service under one banner - MANB&W PrimeServ.

The company sees the after-sales mar-ket as a key part of its business, andplans to expand its service activities overthe next few years. Fivenew PrimeServ brancheswill be opening during2006 - in Houston, Dubai,Cuba, Guangzhou andMumbai.

One of the innovativefeatures of the PrimeServportfolio is online serviceusing satellite-based enginemonitoring. The broad net-work of service centres,

which are staffed by highly-trained spe-cialists is now being expanded furtherwith the five new branches.

MAN B&W Diesel recently introduceda new training course for "InternationalService Engineers", the purpose of which

is to equip talented young people withthe skills needed for the service businessin the future.

The first PrimeServ conference tookplace on 2nd March 2006 in the MANMuseum in Augsburg, which served asthe start of the new-look, optimised serv-ice network. The executive board

brought together managers of the world-wide service organisation to share theirthoughts and experiences. The aim of theconference was to make the participantsaware of the importance of presenting aconsistent and co-ordinated profileunder the new PrimeServ label, MANB&W said.

TANKEROperator


MAN B&W introduces PrimeServ

AVL’s TechDays4-5th May

About 100 experts aredue to discuss 'the posi-tive influence of electron-ics on large engines' inGraz.

The first AVLTechDays on largeengines, employed onships, power plants andlocomotives was held in2004.

This platform for the developers, manufac-turers and suppliers oflarge engines was estab-lished not only to offerthe decision makers inthis sector a forum fordiscussing important cur-rent issues, but also forusers such as shipownersand operators.

The focus will be notso much on the technicaldetails of the ever morenumerous electronic con-trols applied to largeengines, but more impor-tantly, the presentationswill highlight the hugeadvantages with regardto reduced emissions,improved efficiency andpower yield, and also the challenges that elec-tronics present forengines. Questions ofreliability, necessaryredundancy and similarconsiderations will alsobe covered.

It will be structured inthree different sessions.The opening speeches willset the scene by giving anoverview on the marketdrivers and the main man-agement issues.

Sessions two and threewill follow with presenta-tions on technical solu-tions and innovationsspecifically for large dieseland gas engines.

Maris

p20-22.qxd 22/03/2006 13:22 Page 2


TECHNOLOGY NEWS

Members of the International SalvageUnion (ISU) recovered over 875,000 tonnesof pollutants during salvage operationslast year.

During 2005, emergency assistance wasprovided worldwide for 247 vessels withcargoes and bunkers threatening pollu-tion, which was a marginal fall of some7.5% on the 266 casualties recorded in thesurvey for 2004.

The results of the ISU's latest annualPollution Prevention Survey show thatoils, chemicals, other pollutants andbunker fuel recovered last year totalled875,331 tonnes, as against 734,582 tonnesin 2004. This amounts to an increase of justover 19%.

ISU president Hans van Rooij said:"Once again, our members have demon-strated their effectiveness in defending themarine environment. In 2005, the recover-ies included over half a million tonnes ofcrude oil."

Forty-six of the ISU's 51 members con-tributed data for the latest annual survey.During 2005, ISU salvors responsible forthe 247 salvage assistances recovered thefollowing:

61%, crude oil (and diesel oil) - 533,281 tonnes (452,304 tonnes in 2004)7%, chemicals - 60,147 tonnes (34,752 tonnes)23%, other pollutants (eg gasoline, slops, dirty ballast, etc) - 201,960 tonnes (152,235 tonnes)

9% bunkers - 79,943 tonnes (95,291 tonnes)

Hans van Rooij added: "The volume ofcrude oil recovered saw an increase of justover 17% on the 2004 figure. The recoveryof chemicals, at 60,147 tonnes, was anincrease of over 73% on the 2004 figure.The volume of bunkers recovered has inthe past been remarkably consistent - inthe range of 60,000-70,000 tonnes. In 2004,however, the figure increased to 95,291tonnes. Last year it fell back to 79,943tonnes, a decrease of over 16% on 2004."

During 2005 there was an increase inthe number of tanker salvage operations -34 as against 24 in 2004. The largest tankerservice involved a crude carrier laden with133,500 tonnes of Arabian Crude.

Last year saw a significant decrease inthe number of casualties (tankers andother vessels) requiring the ship-to-shiptransfer of cargoes and/or bunkers. Thetotal fell from 36 cases in 2004 to 20 in2005. None of these transfers involved asignificant tonnage.

Last year the single most utilised formof contract was Lloyd's Form, which wasused in 81 services (over 30% of the totalnumber of assistances). There were also44 cases utilising other forms of salvageagreement, such as the Japan Form. Inaddition, there were 11 wreck removaloperations, 27 common law salvage claimsand 84 services carried out on a lumpsumor daily hire basis.

Half a million tonnes of oil recovered last year ISU: Recovery of pollutants by marine salvors - 2005Other pollutants

(201,960 tonnes/23%)

Bunkers (79,943 tonnes/9%)

Chemicals (60,147 tonnes/7%)

Crude Oil (533,281 tonnes/61%)

Exxon Valdez spill: 37,000 tonnes

Sea Empress spill: 70,000 tonnes

247 salvage operationsPollutants recovered: 875,331 tonnes

Annual Pollution Prevention Survey12,617,837 tonnes of oil, chemicals and

other pollutants recovered in the 1994-2005 period

Prestige spill: 77,000 tonnes

ABS Health, Safety, Quality and Environmental standards metConsolidated Marine Management ofGreece, operators of a fleet of productstankers and LPG carriers is the first com-pany to attain the recently expandedHealth, Safety, Quality and Environmental(HSQE) notation issued by ABS.

The HSQE notation indicates that CMMhas been audited and found in compliancewith the standards contained in the recentlyissued ABS Guide for Marine Health, Safety,Quality and Environmental Management.

These new standards expand upon theprevious safety, quality and environmen-tal standards by adding management sys-tem criteria specifically tailored to themarine industry based upon theSpecification for Occupational Health and

Safety management systems (OHSAS18001:1999.

These standards require the companyto establish, implement and maintain doc-umented occupational health and safetyobjectives at each relevant function andlevel within the organisation.

In doing so the company is required toestablish and maintain procedures for theongoing identification of hazards, theassessment of risks and the implementa-tion of necessary control measures for rou-tine and non-routine activities.

These apply to all the activities of allpersonnel having access to the workplace,including subcontractors and for theworkplace facilities themselves.

China’s largest tankers to be DNV classDNV has been contracted to class two newVLCCs for Bergesen World-Wide Shipping.The tankers will be the largest tankers everbuilt in China and the first built there to fol-low the Common Structural Rules.

The specifications for the ships werejointly developed between BW Tankers,Bohai Shipyard and DNV according toBjørn K Haugland, DNV Maritime's region-al manager for the Greater China area."These ships will have a groundbreakingnew vessel design and are the first set ofVLCCs in China with the new commonstructural rules for double hull oil tankersdue to be effective 1st April this year."

DNV has been helping China's ship-builders to make many groundbreakingfirsts - such as the first five VLCCs built inChina, which were to DNV class.

Since then DNV has been involved in

most VLCCs delivered from China,including and up to the 10th VLCC. Thesevessels were built for both internationaland local operators.

Expansion in ChinaDNV will accelerate expansion in Chinaby adding offices and training facilities asthe country assumes an increasinglyimportant role in the construction of high-spec vessels.

DNV plans to open an office in Ningbolater this month to tap the potential inZhejiang Province, where new shipyardsare planned around Ningbo andZhoushan Island, including what willbecome the world's biggest shiprepairbase. The class society recently opened anoffice in Nantong in Jiangsu Province. Lastyear, it opened an office in Beijing.

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CONFERENCE REPORT TANKEROperator

The attitude of Greek tanker opera-tors to the Tanker Management SelfAssessment (TMSA) scheme varies

from lukewarm to very warm, but alsohighly stressed and very confused, if theatmosphere at Tanker Operator's recentAthens conference about TMSA (31stJanuary) can be taken as a benchmark.

Many tanker operators still misunder-stand TMSA, it seems, seeing it the sameway as they saw all the other initiatives(ISM, ISPS, ISO), with more proceduresand forms to complete, more inspectionsand proving things have been done, whilethe ships are operated similarly to before.

The truth is that tanker operators donot have to reach any specific standard byany specific date, or do anything specific.They have to go through endless cycles oflooking for risks and working out how toreduce them. It seems that only a verysmall number of tanker operators areexpected to reach the higher stages(Levels 3 and 4).

No specific deadline has been set forproviding TMSA numbers, although dif-ferent oil majors have set deadlines of endof 2005 to mid 2006.

Apparently some oil majors are askingfor submissions although they havn't setdeadlines.

TMSA should create a market rewardfor tanker operators, which do more toaddress seafarer competence, vessel main-tenance and the shipboard working envi-ronment, something which is too oftenmissing in the current market dynamic ofregulation and vetting.

But it will ultimately be up to the mar-ket to decide how much investment inhigher TMSA scores lead to more chartersor better charter rates, and ultimately upto tanker operators to read the market andassess how much to spend on it.

Greek tanker operators are generallyconsidered the best in the world at read-ing the markets, and their general assess-ment already seems to be that it is worth-while putting a lot of effort into TMSA.Other tanker operators around the worldtake note.

"TMSA is a great tool - it gets us all outof a rut," said Alan Johnson of TsakosTrading and Shipping. "It's a wonderfulsystem for the industry to use. When itcomes to the charters, if they see you dowhat you say you do, you have morechance of getting the business."

Some tanker operators already say theyhave observed vetting inspections gettingtougher when the market is weak. Oilmajors are very likely to charter vesselswith higher credible TMSA scores if theyhave a choice.

There were warnings that the successof the scheme would depend on the spiritin which it was accepted by tanker opera-tors, with a risk that it could be reduced to

yet another paper exercise, like ISM was incertain companies.

But TMSA is very different to ISM,because it is something companies assessthemselves against, not something otherpeople assess the company against.

TankerOperator readers may be tired bynow of reading about problems with pub-lic perception of the industry but TMSAdoes appear to be the closest anyone hasfound yet to a solution.

The general public may not be interest-ed in ship maintenance, but the regulatorswho act on their behalf, and who areunder pressure to improve the industryaccident rate, will certainly be pleased tosee oil majors managing to improve thestandards in the vessels that they charter,and managing to avoid the bad operatorsmore accurately than they have done inthe past.

How far do you go?Alan Johnson revealed figures from oneoil major, that according to its assessmentsof 285 tanker operators in the 'white fleet'who seek to charter with OCIMF, 35% oftanker operators do not reach level 1 ofTMSA, and level 1 is higher than what iscommonly considered ISM, or regulatorylevel. Around 50% were at stage 1, 13%per cent at stage 2, 4% at stage 3, and only1% at stage 4. ISM level, or regulatorylevel, is commonly considered equivalentto TMSA level 0.5.

One oil major said that 50% of tanker

operators either did not reach an accept-able level, or embellished their responses.

Many tanker operators more familiarwith oil majors said they did not believethat the original intention was to force amajority of tanker operators into stage 4,

but to provide a means for stage 4 opera-tors to be differentiated.

"In 15 years time, I think the spreadbetween the levels will be the same," saidDimitris Lyras of Lyras Shipping (confer-ence chairman). "I don't think oil compa-nies want us to be distributed equally on aflat scale. Everybody will be round aboutthe bottom, with a few stars at the top."

Honesty and transparencySeveral speakers said they believed thatbeing open and transparent to both oilmajors and inspectors pays off in the longrun, improving trust. "Don't try to coveryourself. Do it right, simple, have yourships arrive in port on time and avoiddetention," said Seaworld Managementand Trading's HSE director MichaelReppas.

"You should be open with your cus-tomers and oil majors," he said. "Buildingtrust is vital. Definitely things should bereported, if something goes wrong withyour ship and also your cargo."

There are tricky questions. "Supposeyou have established a risk, for example alow flow alarm not working," Lyrasasked the panel. "Should you report theseproblems?"

For Kostas Polydakis, technical man-ager, Athenian Sea Carriers, the answerwas certainly yes. He gave an example ofa vessel approaching US waters with amalfunctioning oil content monitor on theoily water separator.

"We reported the problem to the flagadministration, the class society and theUS Coast Guard and a relevant entry wasmade in the oil record book, as soon as theproblem was discovered. We provided arisk assessment and a plan to solve it withan authorised service engineer attendingupon arrival. If you're open about yourproblems, the response from authoritiesand inspectors is always very positive asthey can see that there are proper process-es in place and you're not trying to hidesomething," he said. "Any piece of equip-ment may fail at some time. What distin-guishes a quality operator is the way thesedefects are handled."

Even the best tanker operators strugglewith being ruthlessly honest, it seems. "Inmany cases the inside perspective may bemisleading. Sometimes we think we arecomplying with certain requirements,"said Polydakis. "But if you have the oilmajors assessing you, and not just doing ityourselves, it may look very different."

Risk managementRisk management is one of the most com-plex areas of TMSA. While experiencedtanker operators have a very clear ideaabout what their risks are, there is confu-

Woolly, confusing, stressful, but ultimately a tool to get shipowners out of a rut and improve their businesses - some of the verdicts on TMSA reached at TankerOperator’s Athens conference.

TMSA warmly received in Athens

An attentive Athenian audience listens to the speakers

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CONFERENCE REPORT

and thoroughly or they lose credibility."Unless this process was carried

throughout the company, seafarers wouldnot feel confident enough and not feelcomfortable with newcomers, who theymight have to leave on the bridge," hesaid.

"This was not an easy process. This wasnot done overnight. It took us many years,many efforts, but it has started to payback."

Malandreniotis was asked by SteveBlair, head of management systems atABS, why OSG feels that it has to make itsown assessments of seafarers, rather thanrelying on the government certificationsystem, as most shipping companies do.

"The certification issue you raise isquite serious," he replied. "A certificate isonly good for the time it is issued."

"Say you go through records of a chiefmate and compare it with another chiefmate. They both have the same sea serviceand were employed on two sister ships.This does not tell you anything. If one ship

is at an anchorage - in the Persian Gulfdoing ship to ship transfers. A sister shipis in the Far East going through theMalacca Straits every 10 days. What doyou learn about the navigation compe-tence of seafarers doing ship to ship trans-fers in the Persian Gulf?"

Polydakis said that many oil majorauditors may not trust shipping companyin-house training, seeing it as "just print-ing certificates," suggesting that compa-nies should also use third party traininghouses.

"The time people spend in the officebefore they go on board is increasing," hesaid. "On board, they have a mixture ofcomputer based training and face to facetraining".

Polydakis suggested that providingtraining was one opportunity TMSA creat-ed for vendors to the tanker industry.

Captain Gabriel Andreou, director ofshipping company Enesel, warned thattanker operators should be wary aboutputting too much emphasis on training.

"Sitting on a simulator is very differentto actually sitting on the bridge. A lot ofpeople do very well in practise - theassessment should be made on the battle-field," he said.

"I have a heard a lot today about train-ing. But it doesn't solve all the problems,"he said.

This view was echoed by ABS' Blair."You can train and train people - but if theattitude is not there, it means nothing tothem," he said.

Seafarer retentionBlair suggested that a root cause of theproblem of lack of seafarer loyalty to theiremployers, and poor shipboard workingculture, was the fact that the vast majorityof shipping companies only employedseafarers by the voyage, rather than put-ting them on longer term contracts.

"Surely we should be looking at fullypartnering with seafarers and ensuringthey are competent by putting them on aservice contract?" he asked.

Conference chairman Lyras noted thatalthough many shipping companies

sion about how risk manage-ment should be made in anorganised process.

One company with amethodical approach to riskmanagement is OSGShipmanagement; CaptainPanos Hatzikyriakos, safetyand security manager,explained how his companyhas set up a senior risk man-agement team, operating out ofGreece, Newcastle and NewYork, with the role of assessingthe risk and distilling informa-tion for the company decisionmakers, so they can decide howmuch money should be spenton the different areas.

"Our main objective is tomitigate the risk and reduce itto reasonable levels," he said.

The biggest risks, equip-ment failure and seafarersdeviating from procedures, arevery hard to address methodi-cally; Hatzikyriakos said thatthe structured risk assessmentprocess at OSG makes the startingassumptions that all equipment is fit forintended purpose and procedures are fol-lowed.

Safety cultureA safe working culture is one where sea-farers follow procedures but feel comfort-able alerting colleagues and managementattention to areas where they feel proce-dures could be improved.

A safe working culture is one whereseafarers work and help each other, notone where they bark orders at each otherand expect them to be followed unques-tioningly.

The engineering minds in the shippingindustry often find it hard to addressissues of their shipboard working culture;but some shipping companies have suc-cessfully addressed it and improved it.

"It is evident that skilled and welltrained seafarers sometimes deviate fromthe procedures due to a lack of safety cul-ture. This is something we have toimprove," said Reppas, who is a directorof a company which has vessels out ontimecharter to reputable operators.

One place you can start, Reppas said,was on shore, because a shore based cul-ture of continuous improvement wouldsoon be reflected on the ship.

TMSA encourages management teamsto work together and build consensus, andwork out what the best practises are, asopposed to the autocratic workingschemes of the past.

Reppas said that based on experience,an effective approach is for the companyto set project teams, including people fromboth shipboard and shore based manage-ment. People should work together if youwant to achieve company wide under-standing and support.

When seafarers who worked as mem-bers of a team ashore go on board, it is cer-tain that they will be leaders in imple-menting company systems and enhancethe safety culture on board. It has beenverified that this way you gain commit-ment and improve performance, Reppasthought.

Training and attitudeOSG's training manager SpyrosMalandreniotis explained how OSG wentabout getting a better picture of its seafar-er competence. "We decided to enhanceour methods of getting to know the peoplewe employed better," he said.

"One should start by explaining howcompetence is defined. Competence is notknowledge. Attitude is difficult to meas-ure. You have to go through a process ofre-evaluating," he said.

"People are very much willing to buyinto any training product," he said. "Butyou just can't put someone in front of ascreen and make a test based on a com-puter evaluation. The computer will nevertell you how this person thinks and howhe will make use of the information."

"We developed a lengthy assessmentprocess. The request put for every deckofficer was to put together a passage planusing charts - assess how well the peoplecould make use of information available tohim. We could find out ifthe individual was prac-tising parallel indexing.We make a feedbackwhich was quite tellingabout the competence ofseafarers. The resultswere quite revealing.

"After we had thisextensive data, we had aclear pattern of theirstrengths and weaknesses.

"We have been dis-cussing people's reactionsto taking up changes andtaking up the concept ofchange. People did notreact so positively in thebeginning. Then theyrealised they would notbe thrown overboard. Therealised it was somethingthat they could do moreand more," he said.

M a l a n d r e n i o t i swarned that these kindsof processes need to becarried out consistently

OSG’s training manager, Spyros Malandreniotis shares the stage with chairman Dimitris Lyras

Transas Hellas’ Robert Hockham, left, enjoying a light hearted chat with Captain Kyriakos Kalandranis from European Product Carriers, middle, and Apostolas Belokas from IBS, right.

p23-26.qxd 10/03/2006 11:29 Page 2

employ staff on a voyage basis, that doesnot mean that their retention ratios arelow, quoting Antonios E Vrondissis,quality manager and DPA, AndriakiShipping, who claimed a 98% seafarerretention ratio at his company, despiteeveryone being on voyage contracts."Seafarers do want to work for the samecompany," he said. "It's natural."

Malandreniotis said that OSG tried notto employ anyone on a single voyagebasis. However he admitted that retentionis a complex issue for OSG. "The bettertraining we give them, the better the CVthey can take to another company," hesaid. "There is no answer. We just trainthem and train them."

"It comes down to the management toput together incentive schemes to attractseafarers and retain them," he said. "Thereis an understanding your manning is avery valuable asset to the company.

Lyras pointed out that it is not neces-sarily bad if seafarers move around fromdifferent companies, because they can eas-ily carry ideas about best practise fromone company to another. "We've had a lotof value from seafarers trying other com-panies and seeing what they do," he said.

Planned maintenancePolydakis picked up the requirements fora planned maintenance system (PMS) asone area where tanker operators may findthey are not as far ahead as they think.

"I'm sure a few managers after readingTMSA nodded to themselves and said"yes we have a PMS," he said.

"There must be a formal system in placefor reporting defects. There must be a wayto prioritise defects. Maintenance anddefect reporting automatically reports tothe staff.

"You can try and do all this without acomputer system - I'm sure it's not worthmentioning or discussing. The PMS sys-tem must cover all deck systems. It mustbe vessel specific. Even deep fat fryershave planned maintenance tasks."

"If we cover all of the above, we cansay, yes, we have a PMS," he said. "Weneed to invest time and money. We musttrain the users. Training is the most neg-lected part of a PMS. If people on board donot utilise their investment its potentialgoes down the drain."

"Developing a PMS system is a full timejob," he said. "I believe you should havededicated personnel, at least one person asa dedicated project manager."

Athenian's sophisticated maintenancemanagement system proved very helpfulduring vetting inspections, he said,because the inspectors could immediatelyhave a transparent, clear view of the statusof the ship's maintenance.

"They like to see it on one screen,because this is real," he said. "Having awealth of defects to show them, generatesconfidence that the system is really in use."

"Transparency is very important - it'snot just compliance. How it is verified onboard that these jobs have been done. Themore information you have here, the moretrusted you are."

"The main value is being able to provethe way you handle your defects is theway it should be. Start proving that youare correcting your problems," he said.

Polydakis was asked by George Hoyt

of Newslink Services how much seafarersget involved in developing the mainte-nance system, and if they are consideredpart of the technical team.

He replied that 70% of revisions comefrom proposals from chief engineers. "Themain driving force are to the seafarersthemselves - expecting after one or twoyears of using the system. The feedbackwe're getting is definitely very valuable."

Lloyds’ RegisterIoannis Iakovou, TMSA product managerand Piraeus client training manager,Lloyd's Register Piraeus, said that LRbelieves TMSA is quite a good thing.

"TMSA is a tool for shipping companies touse and a framework for improvement,"he said. "A tool for oil majors to choosewho to give business to."

"They are good practises," he said. "Itgives you a road to go along, it providesguidance. You can compare yourselveswith other companies."

"TMSA itself won't reduce risk," hesaid. "But the policies and practises itpreaches will reduce risk. Risk assessmentappears in numerous places. In the end,we should have benefits."

Iakovou stressed the importance of tak-ing on the spirit of TMSA. "Don't make it apaper exercise," he said. "ISM was not

intended as a paper exercise."He said that he believed shipowners

should make money out of TMSA, notspend it. "I've seen quotes that it costs$70,000 per year per ship," he said.

"There is an outlay now- but in the longterm it should save money."

LR's services include sitting down withshipowners and reviewing their systems,or providing external confirmation thattanker operators have reached the level inTMSA that they think they have. LR canalso provide guidance, training and sug-gest areas for improvement.

Iakovou stressed the risk of companiesjust developing lots of procedures, which

TANKEROperator


p23-26.qxd 10/03/2006 11:29 Page 3

CONFERENCE REPORT


superintendents visit the ship, but whatthey really want to know is how long hestays there and what he does when he ison board.

Change managementApostolos Belokas, managing director, ofTMSA consultancy IBS, said he believedthe two hardest areas of TMSA werechange management and risk assessment.

On the topic of change management, hesaid that the biggest contributor to changewas management support, and the biggestreason for resistance to change was lack ofemployee awareness. "Employees want tohear messages from the top," he said.

Many shipowners do not realise what alarge change TMSA is bringing about."People say - we will comply by updatingthe safety management system," he said."We see a lack of resource allocation tomany critical TMSA elements."

A mistake that some of the tanker oper-ators make is seeing TMSA as a project,rather than an ongoing thing. Some tankeroperators still mistakenly see it as some-thing to "comply" with. Many companiesbelieve they are already at stage 4.

IBS is undertaking a survey of industryopinion about TMSA; of the 180 resultsreceived so far, the main findings are thatTMSA is considered positive by the major-ity of tanker operators. Cultural change isvery important, and many tanker opera-tors overestimate their status, he said.

On the downside, many tanker opera-tors believe they could have received moreguidance from OCIMF, and see it as a costwith no benefits, and say it does not dif-ferentiate between small and large compa-nies, which operate their vessels in differ-ent ways. Many operators believe thatthere will shortly be a revised version.

Several operators believe that TMSAcould have been more comprehensive onhow to reduce crew fatigue; instead TMSAasks tanker operators to make risk assess-ments and reduce them, expecting them toreach the conclusion unprompted thatputting more staff on board so that seafar-ers are less fatigued will reduce risks.

"You have to mobilise a lot of resourcesat one time," he said. "Seafarers have to betaken into account."

no-one understands for things like "riskmanagement" and "change management",rather than actually improving things.

A lot of the TMSA requirements arequite complex, including being able toprove that you will improve, and measur-ing processes, doing incident and nearmiss investigation, comparing with othershipowners. Other difficult areas are riskassessment, change management, criticalequipment, data collection and bench-marking.

Iakovou stressed that shipownersshould not see this as something theyshould comply with (for example, provethat they can do) but use it as internal toolsto improve their effectiveness.

One of the trickiest areas is the shorepersonnel, because it is hard to get highscores without a company personneldepartment, which many shipping com-panies don't have, he said.

Many small companies are strugglingto find other companies to benchmarkagainst he said, and there are private com-panies offering benchmarking services.

Another tricky area is the one aboutrotating shipboard staff through officepositions, which shipping companies needa certain scale of operation to achieve.Providing company seminars is also ahard thing for small companies to do.

Other problems shipping companiesare facing is when there are people in thecompany, who do not believe in TMSA, ordisagree with specific aspects of it, such asthe part which suggests shipping compa-nies should use electronic charts."Companies say, this is not my policy, I'mnot going to do it," he said.

Iakovou stressed that tanker operatorsdo not have to follow all the requirementsto the letter, but should instead look at the

spirit of it, working out where their worstperforming areas are and improving them,and using the risk management process toprioritise which areas to address. "It takescommitment and time," he said.

InterManagerStephen Chapman, general secretary ofInterManager (International ShipManager's Association) was invited byTankerOperator to talk aboutInterManager's initiative to develop astandard set of KPIs (key performance

indicators), and talk about how this dove-tails with TMSA.

There are of course differencesbetween what a shipmanager wants todemonstrate to its client the shipowner,and what shipowners want to demon-strate to charterers.

Shipmanagers want to demonstrate toshipowners, among other things, theircompetence in managing costs, and thatthey can manage vessels more economical-ly than shipowners' in-house teams, some-thing that a charterer is not particularlyinterested in.

Chapman criticised TMSA for not stat-ing specifically enough what was required."Only two items are measurable in an ana-lytical sense," he said.

InterManager is aiming to develop alimited number of KPIs, which are "objec-tive and easily measured and accepted aslegitimate by the industry," he said.

The Society of Independent Gas Tankerand Terminal Operators (SIGTTO), theChemical Distribution Institute (CDI),Germanischer Lloyd (GL) and the UKHydrographic Office (UKHO) have agreedto collaborate with the project, heexplained.

The KPI initiative certainly fits in withthe aspects of TMSA, in that it helps com-panies to monitor their own safety andcrew competence, and compare it withother companies.

Ulysses SystemsPanteleimon Pantelis, services director ofsoftware company Ulysses Systems, talkedabout the software angle of TMSA, in par-ticular the various sections which askshipowners to collect and evaluate data,and improve transparency.

Shipping companies can use software tomonitor all of their risks and be able todemonstrate this.

They can use software to get informa-tion to seafarers and shore staff at the spe-cific time when they need it.

With the number of manuals that sea-farers are expected to be familiar withincreasing enormously, charterers willshortly start asking shipowners questionsabout how they know seafarers are awareof the contents of the manuals.

This information is easier to answer ifthe software puts the relevant informationin front of the seafarer when they are doingthe task.

Pantelis warned that KPIs can create afalse picture. For example, a shipownermight publish a KPI about how often TO

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