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EXPECTS STRICTER REGULATIONSANDREAS SOHMEN-PAO, CEO OF THE BW GROUP
+
forumA magazine from DNV no 02 2010
Wallem’s Joe Corcoran: MASTERS OF CALM
Focus: ASIA A SPECIAL REPORT
Hyundai’s Kwon Tae Kim: CHASING THE WIND
AFTER THE GULF OF MEXICO BLOWOUT:
22 Kwon Tae Kim of Hyundai: CHASING THE WIND
16 Andreas Sohmen-Pao of BW Group: “TOUGHER REGULATIONS AHEAD”
16 – no 02 2010
+ Focus: Asia
“THE OIL SPILL IN THE GULF OF MEXICO IS WIDELY EXPECTED TO LEAD TO TOUGHER REGULATIONS WITH CONSEQUENCES FOR THE WHOLE OFFSHORE INDUSTRY,” SAYS ANDREAS SOHMEN-PAO, CEO OF THE BW GROUP. HE ADDS THAT NEW
REQUIREMENTS, IF BASED ON THOUGHTFUL REGULATION, CAN BRING THE INDUSTRY FORWARD AND GENERATE BUSINESS OPPORTUNITIES FOR PROGRESSIVE COMPANIES.
TEXT: TORE HØIFØDT PHOTO: NINA E. RANGØY
Andreas Sohmen-Pao is the Group CEO of BW, one of the world’s leading
maritime groups in the tanker, gas and off-shore segments, operating a fleet of more than 110 vessels from centres in Singapore and Oslo. The group has seven business areas. These include crude tankers, product tankers, chemical tankers, LNG and LPG carriers, FPSOs, and an offshore technol-ogy division delivering turret and moor-ing systems for FPSOs and offshore LNG terminals.
Being deeply involved in the offshore industry,
what do you expect will change after Deepwater
Horizon?
“We are watching carefully to see what the outcome of the oil spill will be. It is hard to predict specifically how the regulations will change, as some of the changes will be politically driven. However, there is no doubt that requirements will be tougher. One concern is that decisions will be made on emotional rather than practical grounds.
“A general trend towards higher environ-mental expectations from society and politicians is also leading to stricter envi-ronmental legislation for both the offshore
and shipping industries,” says Andreas Sohmen-Pao. “One benefit is that the changes will help prepare us for a world with much higher energy costs. As such, we should embrace fuel management and energy efficiency as opportunities to be ready for the future, not just from an envi-ronmental point of view but also from an economic one.”
How do you balance innovation and daily
operations in BW?
“At BW, we are pursuing a series of envi-ronmental measures. Clearly, we need to respond to changing conditions imposed by regulators, but we also need to be pro-active in finding ways to do things better.”
Mr Sohmen-Pao points out several envi-ronmental initiatives and developments made by his company in the areas of fuel management, coatings, new propulsion sys-tems, ballast water management and other operational practices.
“We are pursuing a large number of initia-tives, also from the perspective of potential investments: we are incubating new tech-nologies and have started to fund ventures
that address current environmental challenges,” he says. “It is not easy to strike the right balance between future innovation and current operations. One needs the innovators to have enough space to dream but not to lose touch with reality. So we have a sepa-rate team looking at more futuristic oppor-tunities, but they communicate closely with the individuals running our ships on a day-to-day basis.”
As a highly technical organisation, how do you
think classification societies can assist you?
“Classification societies have a special position in that they combine in-depth technical expertise with breadth in terms of what they see across the industry. This combination can be a great support and valuable input to companies. Obviously, classification societies need to manage how they work with multiple companies without spreading confidential information from one to another, as well as their role as independent verifiers of statutory require-ments while acting as consultants. I think these issues can be managed, but they need to be handled carefully.”
“TOUGHER REGULATIONS AHEAD”
ANDREAS SOHMEN-PAO OF BW:
no 02 2010 – 17
I “We are watching carefully to see what the outcome of the oil spill will be. It is hard to predict specifically how the regulations will change, as some of the changes will be politically driven. However, there is no doubt that requirements will be tougher,” says Andreas Sohmen-Pao, CEO of the BW Group.
22 – no 02 2010
+ Focus: Asia
HYUNDAI HEAVY INDUSTRIES:
CHASING THE WINDAFTER ESTABLISHING ITSELF IN THE KOREAN RENEWABLE
ENERGY MARKET, HYUNDAI HEAVY INDUSTRIES WENT ABROAD, ENTERING THE CHINESE WIND TURBINE MARKET.
FURTHER EXPANSION PLANS ARE IN PLACE.
TEXT: SUN YOUNG PARK
PHOTO: NINA E. RANGØY
no 02 2010 – 23
Content02 2010
02 Editorial: Managing uncertainty and risk in corporate leadership
03 News
FOCUS: ASIA
10 Marcus Hand: Asia drive shipping and energy demand
12 DNV COO Remi Eriksen: Where the action is
15 DNV at World Expo 2010 in Shanghai
16 Andreas Sohmen-Pao of BW Group: “Tougher regulations ahead”
20 NYK: The front-runner of the eco revolution
22 Kwon Tae Kim of Hyundai: Chasing the wind
26 CNPC: Growth in the pipeline
28 Zhou Shouwei of CNOOC: Staying on the right track
30 Advising Vietnam on LNG
32 Shravan Rewari of ARI: Shaping tomorrow’s seafarers
36 Joe Corcoran of Wallem:
Masters of calm
40 John Angelicoussis of Angelicoussis Group: Crisis not over yet
43 Maran Tankers: Actions to further reduce the environmental footprint
44 Taking maritime research one step further
46 Professor Hailaos N. Psaraftis: Making maritime transport more effective
48 Professor Apostolos D. Papanikolaou: Improving ships’ design
50 Alexis Dugas de Baudan of AXA: Tackling vulnerability
52 Clean energy director Ross Tyler: 825 wind mills to solve the climate challenge
54 Summer students: “We have faith in LNG”
56 Last word: Risk management after Deepwater Horizon
FORUM 02.2010PUBLISHED BYDNV Corporate CommunicationsNO-1322 Høvik, NorwayTel: +47 67 57 99 00Fax: +47 67 57 91 60
EDITOREva HalvorsenTel: +47 67 57 97 [email protected]
DESIGN AND LAYOUTCoor [email protected]
PRINTINGGrøset
COVER PHOTO© Nina E. Rangøy
© Det Norske Veritas 2010
36Joe Corcoran in Wallem: MASTERS OF CALM
44 TAKING MARITIME RESEARCH ONE STEP FURTHER
50 Alexis Dugas de Baudan in AXA: TACKLING VULNERABILITY
36 – no 02 2010
+ Maritime industry
ON 9 June 2009, the HS Elektra was on its way to Quintero, Chile from
Brazil loaded to 90% capacity with 88,000 tonnes of light crude, with a specific grav-ity of 0.880 t/m2. This last fact would play a critical role in the ensuing drama.
After clearing the Straits of Magellan, Captain Sunil Augustine encountered heavy seas. He took advice to head toward sheltered waters closer to the Chilean coast, a route used frequently by even the largest ships.
When the HS Elektra started shaking and vibrating, Captain Augustine shut down the engines to determine what was happening. The ship started listing heav-ily to port and then going head down in three-metre swells. It soon became clear that they had struck an uncharted under-water rock.
All ballast tanks had been breached and seawater was seeping into the pump room and engine room. Things went from bad to worse when the auxiliary engines tripped and the crew had to work in total darkness until power was restored. With Force Six winds nudging the ship to shore in tough conditions, the unfolding crisis and the impending disaster required action. It was a calm June afternoon in Hamburg when Captain Corcoran’s phone rang.
DON’T PANIC
Captain Corcoran immediately connected Captain Augustine’s call to the Wallem emergency team in Hong Kong. Then he quickly gathered his emergency team in Hamburg, including DNV’s Emergency Response Service team (ERS). Once assembled, his command centre in Hamburg was receiving hourly updates from Captain Augustine.
The emergency process requires notifi-cation of many parties – the ship owner, charterer, cargo owner, underwriters, lawyers, and the Chilean authorities. This brought a lot of people together. Captain Corcoran continues: “On the other side you have a crew working in impossible conditions, blackouts, filthy weather, waves coming over the bow, the ship listing – it’s easy to panic. But helping everyone stay calm was one of the most important things we did to ensure that the right decisions were made.”
DNV’s ERS team was in place within an hour, supplying technical information to Captain Corcoran’s team and to Captain Augustine on the performance expectations of the ship based on what was known. “The early hours of this crisis were the most dif-ficult. We didn’t know the extent of the damage, so making decisions was difficult.
Every hour we’d get updates that made the situation sound worse. But the ERS team was very supportive and helped us make some good decisions.”
Due to the remote location, it took days to get the personnel needed onto the ship – from technical superintendents and naval architects to salvage experts and lawyers – and for the anti-pollution equip-ment to be brought up from Punta Arenas, 30 hours away. Captain Corcoran and his team ramped up for a worst-case scenario.
With the support of his Hamburg and Hong Kong emergency teams, the Chilean Navy (for whom he has only high praise) and DNV, Captain Corcoran was able to get a clearer picture and make decisions that would pull the situation back from nightmare territory.
NOT A SINGLE DROP
With the vessel stable, it was possible to prepare for offloading the crude from the HS Elektra. Due to cabotage, a Chilean ves-sel was required, but none of sufficient size could be located. On 22 June, 13 days after the accident, a vessel capable of taking half the cargo arrived.
DNV determined that even if the ship were totally flooded, it would not sink if it was in calm water and balanced due to
MASTERS OF CALMAFTER 45 YEARS IN THE INDUSTRY, CAPTAIN JOE CORCORAN, WALLEM’S MANAGING DIRECTOR IN HAMBURG, HAS SEEN HIS FAIR SHARE OF SCARY MOMENTS. BUT AS HE RECOUNTS, WHEN A FULLY LOADED TANKER HITS AN UNCHARTED ROCK IN A REMOTE SPOT, AND ONE NOTED FOR ITS OUTSTANDING BEAUTY, THE TERM ‘SCARY’ TAKES ON A WHOLE NEW MEANING.
TEXT: KENNETH R WINDSOR PHOTO: NINA E. RANGØY
How Wallem’s Joe Corcoran and team prevented another Exxon Valdez
no 02 2010 – 37
I Captain Corcoran is proud of the entire team. “I was especially proud of the ship’s crew, how professionally they acted and how they gave us timely information in such difficult circumstances. It’s because we had such experienced people involved that we were able to keep things calm and avoid another Exxon Valdez.”
44 – no 01 2010
+ Research & development
TAKING MARITIME RESEARCH ONE STEP FURTHER
no 02 2010 – 45
TEXT: MAGNE A. RØE
FOUNDED IN 1836, THE NATIONAL TECHNICAL UNIVERSITY OF ATHENS IS THE OLDEST AND MOST PRESTIGIOUS TECHNOLOGICAL EDUCATIONAL INSTITUTION IN GREECE. ONE OF ITS NINE FACULTIES IS THE SCHOOL OF NAVAL ARCHITECTURE AND MARINE ENGINEERING, WHICH WAS ESTABLISHED IN 1969. DNV HAS A STRATEGIC RESEARCH COLLABORATION AGREEMENT WITH THIS UNIVERSITY FOCUSING ON THE MARITIME INDUSTRY. EFFECTIVE MARITIME TRANSPORTATION AND SHIP DESIGN OPTIMISATION ARE THE TWO MAIN TOPICS. >>
© iS
tock
50 – no 02 2010
+ IT risk management
The AXA Group is a giant in the world of insurance and financial services,
with a client base comprising some 96 mil-lion individuals and businesses. The Group focuses on protecting the physical and financial assets of people and businesses. AXA France Services was established in 2003 to develop and implement solutions tailored to meet the company’s needs in terms of processes and information systems. The purpose was to ensure that AXA information systems were flexible enough to cope with any developments within the profession itself, and to become the pre-ferred supplier of advice and services to the company’s internal clients.
In order to reach its objectives, AXA France Services has over the past few years gone to great lengths to restructure its organisation and widen the skills and exper-tise of its staff. The results have been very positive. Today AXA has one of the most comprehensive change management centres in France, with 50 persons employed full time. And the quality of its change man-agement has been praised by publications such as the well known CIO Magazine.
During this journey, an important mile-stone has been working with DNV IT Global Services to standardise several best practices used for overseeing and
implementing projects, using the CMMI (capability maturity model integration) process improvement standard as a term of reference.
But how did AXA France Services arrive at its current position?
NEW BUSINESS REQUIREMENTS
Alexis Dugas de Baudan, head of the pro-fessionalisation programme at AXA France Services until 2010, saw a shift in the way the organisation regarded itself starting around six years ago.
“In 2004, we started looking at things in a new, more scrutinising way. Change management became an embedded con-cept, and we were suddenly looking at how to answer questions such as ‘how am I sure that my IT solutions are correctly used by the end-user’ and ‘how sure are we that my solution is a good solution for the end-user in an actual work situation’. This way of thinking emerged in consulting competen-cies around 2000 and became prevalent in AXA France Services in 2002.”
The shift in thinking in 2004 conse-quently triggered the professionalisation programme, which has been at the very core of the transformation of AXA France Services ever since. “In its initial phases, the professionalisation programme
focused on defining competencies and mapping functions, whether they related to the supervision, project management or quality of services. We focused on capi-talising on and describing internal best practices in maintenance, project man-agement, HR, and so on,” says Mr Dugas de Baudan.
In 2006, however, the focus shifted. Mr Dugas de Baudan explains: “Prior to 2006, the organisation was very traditional. For instance, our IT needs were still defined by using business analysis. And our focus was very much project-aligned, with for instance one IT support team allocated on a needs basis to the business areas. In 2006, we saw it becoming clearly neces-sary to have one dedicated organisation for each business area. And as a result of this we allocated dedicated teams, instruct-ing them to look at the business areas in a holistic manner: covering fields such as change management, IT and product management with one dedicated project manager.”
COLLABORATING WITH DNV
According to Mr Dugas de Baudan, through starting to collaborate with DNV IT Global Services in 2006, AXA France Services was able to identify and define the objectives
TACKLING VULNERABILITYTHE AXA GROUP REALISES THAT STAYING AHEAD OF THE GAME IN A TURBULENT AND UNPREDICTABLE GLOBAL ECONOMY
REQUIRES AN ABILITY TO CONSTANTLY ADAPT TO CUSTOMERS’ NEW EXPECTATIONS AND REQUIREMENTS.
TEXT: JANNICKE WITSØ PHOTO: AXA
no 02 2010 – 51
and targets that correspond to level two of the CMMI certification.
Mr Dugas de Baudan emphasises that DNV IT Global Services was the only company able to deliver both expertise in CMMI and the certification itself as well as guidance and coaching on the new project management practices.
“The good thing about DNV IT Global Services is that here we have a company that can deliver services for the entire CMMI process. After the initial phases, in which DNV IT Global Services explained what was possible with regard to level two of the CMMI and helped us to define specific measures, we sat down with its experts and created a plan to reach our goals. The last step of the process was
the dissemination of the practices devel-oped throughout the organisation. This was done by mixed teams consisting of experts from both DNV IT Global Services and AXA France Services – through aware-ness workshops and training.”
GAINING PREDICTABILITY
According to Mr Dugas de Baudan, the most important net gain from the CMMI process has been the increased level of predictability. “To me, one of the most important values added is that project management has become a predictable activity. With management quality services, we can now predict the future of projects. We can conduct risk analysis based on facts and see which projects won’t make it. Prior
to the professionalisation programme, we often thought there was something lacking, but we didn’t have the analysis to support backing out. Our new tools help us spend time more wisely while also enabling us to stop and redefine projects.”
I Alexis Dugas de Baudan.
2 – no 02 2010
MANAGING UNCERTAINTY AND RISK IN CORPORATE LEADERSHIP
Making decisions based on uncertainty is one of the most compelling challenges in corporate leader-ship, particularly for global players that are exposed to uncertainty and risks in many dimensions.
These challenges are here to stay, and business performance and success will increasingly depend on how we manage risks related to strategy, finance, the market and technology as well as those related to society’s expectations and requirements. Corporate responses in these areas will have both short-term and long-term impact on the individual company’s business performance.
“Increased understanding of all aspects of uncertainty and risk will support corporate leadership.”
In DNV, we have developed the concept of the ‘new risk reality’ that represents the context in which we work and help worldwide industries to manage risk. The concept of risk is often associated with threats, focusing on the downside aspects of business issues. However, it is equally important for corporate leadership to focus on opportunities and competitive advantage in an uncertain world, and this is embedded in DNV’s new risk reality.
I believe that increased understanding of all aspects of uncertainty and risk will support corporate leadership. An effective response will require analytical capabilities, governance and systems, as well as diverse expertise and efficient processes and tools. Risk management is a means to explore oppor-tunities and mitigate threats within the broader context of uncertainty. Uncertainty and risk should be addressed and discussed at board level, while being prepared for and managed by the corporate leadership.
Focusing on uncertainty in strategic and decision-making processes will make strategy implementation and responses more effective and efficient. Reliable and robust decision-making based on scenarios and an understanding of uncertainty will in the long run make corporations more successful as business enterprises.
In DNV, we are increasingly concerned about many political dialogues and decision-making processes being dominantly reactive and worst-case based, with limited understanding of the concepts of uncer-tainty and risk. This is particularly relevant when it comes to safety and the environment. Improving the level of trust and confidence between political stakeholders and global businesses should be an imper-ative for all parties involved. This can more easily be achieved if we have a common and transparent understanding of the new risk reality.
HENRIK O. MADSEN Chief Executive Officer
+ Editorial
no 02 2010 – 3
+ News
EXTENDED DRYDOCKING SERVICE
DNV now offers an extended drydocking service, developed to enable shipowners to extend periods between drydockings.
Developed in coopera-tion with shipowners and flag states, DNV’s project team evaluated in-service experience and improve-ments to hull coating per-formance, and assessed the quality of in-water repair and survey tech-nology.
“A combination of these approaches can extend periods between bottom surveys in dry dock for eligible ships to 7.5 years, provided that the consec-utive in-water bottom sur-veys are conducted with satisfactory results during the intervening period,” says DNV’s technical director Geir Dugstad.
TAKING A LEAD ON SHIP CARBON CAPTURE
Working with local partners, DNV’s Research & Innovation centre in Piraeus, Greece is developing maritime carbon capture technology.
Established in 2008 together with the School of Naval Architecture and Marine Engineering of the National Technical University of Athens, DNV R&I Greece works to provide solutions to give Greek shipowners access to innovative green technologies and quality decision support tools. In 2009, DNV partnered with Process Systems Enterprise Ltd, one of the world’s foremost providers of process modelling technology, to initiate the Maritime CCS (Carbon Capture and Storage) project, which has received funding from the EU, the UK’s Technology Strategy Board, and the Norwegian Research Council.
+ MAERSK TO DESIGN CO2 SHIPS WITH HYUNDAI AND DNV
Maersk has joined forces with Hyundai Heavy Industries and DNV to design ships for transporting CO2 from power plants to off-shore storage sites. The objective of the cooperation between the three companies is to produce a design for CO2 vessels so they are ready to be built once Carbon Capture and Storage (CCS) projects commence.
Maersk Tankers is already in a partnership with Maersk Oil and the Finnish utility companies Fortum and TVO; their aim is to develop a joint carbon emissions abatement project in the area of CCS.
“As part of this project, we will transport CO2 from the Finnish power plants to the North Sea, where Maersk Oil will use the CO2 to extract more oil from the maturing fields,” saysAnders B. Schulze of Maersk Tankers.
4 – no 02 2010
HUGE SAVINGS THROUGH BETTER RISK MANAGEMENT
“As much as 50% of cost overruns and delays in offshore projects can be mitigated through better use of early risk reviews, technology qualification programmes and classification schemes,” said Remi Eriksen, executive vice president of DNV at an energy summit in Shanghai recently.
The average cost overrun of new rig projects is some 35%, while the average delay of rig projects is seven months. Most FPSO projects have cost overruns of 20–30% and more than six months of delays.
SURVEYING IN CYBERSPACE The very first 3D survey simulator specially designed to improve safety in the shipping industry is now in use.
By this virtual ships are brought into the class rooms. Class surveyors and port state inspectors are able to take major steps forward. Later on, ship officers and superintendents will be able to start using the new tool too. The 3D simulator was developed by DNV. Based on the same principles as those used in computer games, trainees are able to navigate around all parts of a vessel or a drilling rig.
+ News
“These overruns and delays represent uncertainties. We believe that the challenge for the industry is to understand the complex risk picture better, price the risks more specific, and manage the risks appropriately,” said Remi Eriksen.
“For DNV, it’s important to develop technology to improve maritime safety,” says Olav Nortun, DNV’s COO responsible for Global Development.
“The position paper is meant as input to the ongoing discussion on how to improve safety and environmental protection during offshore oil and gas exploration, devel-opment and production,” says Elisabeth Tørstad, COO of DNV’s Division Americas and Sub-Saharan Africa.
+ AN EFFECTIVE US OFFSHORE SAFETY REGIME As a consequence of the Deepwater Horizon accident in the Gulf of Mexico, DNV has prepared a position paper highlighting the key aspects of an effective US offshore safety regime.
Major accidents tend to lead to a review and revision of current practices and regulations with the objec-tive of avoiding similar accidents in the future. This appears to be the case also this time. DNV’s views on key aspects of an effective offshore safety regime are presented in the position paper.
COOPERATION BETWEEN NEMKO AND DNV
Nemko, a Norwegian foundation offering testing, inspection and certification services worldwide, and DNV Business Assurance have agreed to explore opportunities for developing closer cooperation. In their deliberations the parties are looking into selected areas of product certification where they have complementary strength, such as certification of equipment for explosive atmospheres and medical devices in addition to certain geographical areas.
“This is in line with our ambitious growth strategy,” says Jahn Henry Løvaas, Director DNV Business Assurance.
no 02 2010 – 5
CLEAN TECH AGREEMENT
The Maritime and Port Authority of Singapore and DNV’s Clean Technology Centre have signed a partnership agreement to promote research, development and test-bedding projects for clean technologies.
The Clean Technology Centre has previously signed cooperation agreements with established research insti-tutions such as the Energy Research Institute at Nanyang Technological University in China and the National University of Singapore.
+ News
NYK, A.P. Moller-Maersk and DNV is to cooperate on greener shipping.
“Being involved in this project proves to our charterers, investors and the public that we are being proactive about protecting the environ-ment,” says Peter Curtis, Vice President of Seaspan Ship Management Ltd.
+ WARM WELCOME FOR DNV TRIPLE-E
One year of pilot projects with DNV’s Triple-E envi-ronmental rating scheme has turned out to be a success.
DNV Triple-E is used to set targets, monitor improvements and docu-ment success across a range of performance benchmarks. It is based upon sound environmen-tal management practices, fuel-efficient operations, energy-efficient ship design and verifiable monitoring systems and documentation.
+ CDM HAS PROVED ITS RELEVANCE
“CDM should play an important part in future emis-sion trading schemes because it leads to both emission reductions and technology transfer,” said senior vice president Bjørn K. Haugland of DNV at a Chinese-Norwegian round-table in Shanghai.
“The future of carbon trading and CDM is very much dependent on what happens to the European emission trading scheme, the EU ETS and whether the USA will allow for offset projects. If the EU ETS sets limits that increase the demand side and USA gets an energy law in place that also allows for international offset projects, then a mechanism such as CDM is probably the best tool available for producing carbon credits and transfer-ring technology,” said Mr Haugland.
“China counts for 50% of all CDM projects in the world, and DNV has validated 30% of these,” says senior vice president Bjørn K. Haugland of DNV.
THREE-WAY TEAMING TO EXPLORE GREENER SHIPPING
Shipowners NYK and A.P. Moller-Maersk have agreed with DNV to share ideas on emission reduction tech-nologies and initiatives.
Exchanging knowledge aims to enable more cost-effective solutions and more efficient implementation of measures required to reduce CO2, NOx and SOx emissions. The three companies will continue to take initiatives to safeguard the environment by developing environmentally friendly vessels and ensuring energy-efficient operations.
Captain Khong Shen Ping, Assistant Chief Executive of The Maritime and Port Authority of Singapore, and Remi Eriksen, COO of DNV’s Division Asia, Pacific and the Middle East, signed the Memorandum of Understanding at a ceremony in Singapore in June.
+ News
6 – no 02 2010
IT’ERS BELIEVE THAT DNV IS THE WINNER
DNV Academy has been awarded ‘Best IT trainer in The Netherlands’ by the leading IT magazine Computable.
The result is based on research by independent 3rd party Research VNU Media of 1,633 IT professionals, who based their judgment on their experience with IT training institutions in the past five years. Criteria for good performance were based on admin support, contents of the training, knowledge and skills of the trainer, price of the training, and alignment between training contents and practice. In total 116 training institutions were evaluated.
+ ECA SURVIVAL KIT
DNV has launched a new service called ECA Survival kit, helping shipowners find the optimal solution for operation in Emission Control Areas (ECAs).
ECAs have already been established in the Baltic Sea and the North Sea, and will be enforced along the North American coastlines. Other areas, such as the Mediterranean Sea, are expected to follow in the near future.
“Many operators will face tough times when the new emission reduction requirements come into force in the ECAs. I advise operators to start preparing now to get on the front foot when the upcoming legislation become a reality,” says DNV’s principal con-sultant Henning Mohn.
“Compared to heavy residual fuels, marine distillates are ‘cleaner’,” says DNVPS managing director Tore Morten Wetterhus.
MARINE DISTILLATE QUALITY DATA SERVICE
DNV Petroleum Services unveils the maritime industry’s most comprehensive data service on marine distillate quality.
Available online, the DNVPS Marine Distillate Quality Statistics provide fuel buyers with a variety of search options, ranging from supplier-specific data to wider quality trends and patterns in worldwide bunkering locations. The new product comes at a time when shipping operations are increasingly driven by fuel regulations to use more marine distillates.
“Distillates are much more expensive; one of the most important considerations for buyers is to determine if their ships have received the right type, quality and quantity of distillate fuel,” says DNVPS managing director Tore Morten Wetterhus.
DNV’s principal consultant Henning Mohn.
no 02 2010 – 7
ICE NAVIGATION CERTIFICATION
The Ship Manoeuvring Simulator Centre of Trondheim, Norway is the first training centre to have its navigation course certified to DNV’s ice navigation standard.
Certification by DNV means that the SMS course is developed, structured and deliv-ered to a high pedagogical standard, and that the contents meet or exceed the DNV standard of competence for ice navigation. This is the world’s only competence stand-ard available to the maritime industry.
“There will be more ship traffic in the Arctic regions. Navigating safely in these ice-infected waters requires skilled operators,” says Jon Rysst, DNV’s regional manager of Norway, Finland and the Baltics.
The new accredited service supplements the accredited wind turbine power performance and mechanical loads testing already being conducted by DNV.
ACOUSTIC NOISE EMISSIONS TESTING
DNV’s Seattle, Washington, office has been approved for accreditation by the American Association for Laboratory Accreditation (A2LA) for acoustic noise emissions testing on wind turbines.
Only a handful of organisations worldwide have achieved accreditation in this area (ISO/IEC 17025:2005), and DNV is the only private company in the USA to have successfully completed this evaluation process.
“LNG represents no technical obstacles. Economically, it is better than the alter-natives and it is an environmental winner, so why wait?” asks Tor E. Svensen, the President of DNV.
DNV’S BALTIC REPORT PUBLISHED
The environmental situation in the Baltic Sea has grown drastically worse in the past few years. DNV’s Baltic report suggests how shipowners can contribute to turn the situation around.
Emission Control Areas (ECAs) have already been established in the Baltic Sea and the North Sea, and will be enforced along the North American coastlines. Other areas, such as the Mediterranean Sea, are expected to follow soon. “There are at least three ways of solving these challenges,” says Tor E. Svensen. “Low sulphur fuel can be used. Scrubbers can be installed to remove the sulphur. Or the operator can switch to LNG.”
+ News
CLASS NOTATION FOR INTEGRATED SOFTWARE-DEPENDENT SYSTEMS
DNV has released a new class notation for integrated software-dependent systems, mainly for the offshore industry.
Equipment and systems have over the past few years become more complex, more automated and more integrated. This trend is accelerating. The new class notation represents the applicable best practices for work processes and quality assurance related to the full life cycle of integrated systems. It will make it easier to control, monitor and ensure the safety and reliability of systems that serve several functions and are integrated or connected via communication software networks.
8 – no 02 2010
+ Focus: Asia
no 02 2010 – 9
ASIA NOWASIA HAS BEEN AT THE FOREFRONT OF THE GLOBAL ECONOMIC RECOVERY.
DNV FORUM TAKES A CLOSER LOOK AT THE ASIAN MARKET.
+ Focus: Asia
© S
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10 – no 02 2010
DRY bulk shipping has become almost completely dominated
by Asia with an estimated 80% of all dry bulk cargo shipments related to the region. Although highly volatile the dry bulk mar-ket overall has enjoyed a reasonably good year in 2010, punctuated by the distinct peaks and troughs. The key driving force in the dry bulk trades has been China driven by a huge appetite for iron ore, to produce steel. In the first half of this year China imported 309m tonnes of iron ore, which would equate to 618m tonnes for the year as a whole. This accounts for roughly two-thirds of global seabourne iron ore trade. China’s annual steel consumption is low compared to many developed countries, still leaving room for further growth in volumes in the coming years.
China has also turned from a net export-er of coal to a net importer. The country has increasingly sourced its raw materials from across the globe altering traditional dry bulk trading patterns and increasing the per tonne mile. However, the dry bulk
markets are faced with significant overcapacity of newbuildings, with close to the entire existing capesize fleet due to be delivered in just three years. There has though been
significant slippage in delivery dates and cancellations, in the region of 35% so far this year. It remains to be seen if this will be enough to stop a serious imbalance of supply and demand and a resulting crash in the market.
After staring into the abyss in 2009 con-tainer shipping has bounced back sharply this year. There are two dynamics at play when it comes to container shipping growth in Asia. First there are the long haul trades to Europe and the USA driven by exports. While demand has greatly firmed up on these trades it is dependent on the health of western economies. Fastest growing and most resilient through the economic crisis have been the intra-Asian trades. Growth this year has surged; Neptune Orient Lines, for example, reported 47% volume growth on the intra-Asian and Middle East trades in the first half of this year, compared to the same period a year earlier.
Concerns do remain about overcapacity with slow steaming continuing to soak up a large amount of excess tonnage and a large number of newbuildings still to be delivered, including many of the largest boxships ever built. These vessels of up to 13,100 teu in capacity built by yards in South Korea are destined solely for the Asia–Europe trade as it is the only route with the port infrastructure to handle such huge vessels. However, this results in a cas-cading effect of smaller into other trades, including intra-Asia. The intra-Asia trades
have already seen vessel sizes rise signifi-cantly in recent years. Now lines are even going as far as to deploy 6,000 teu capacity vessels on certain longer regional trades.
In the near term the tanker trades are facing significant overcapacity brought about by a surge of newbuilding orders during the economic boom. However, the long term fundamentals for the tanker trades look good as the demand for energy continues to grow. Again China has been a major driving force, accounting for 40% of the increase in global oil consumption. The country’s demand for imported oil is expected to quadruple from less than two million barrels per day in 2004 to around eight million in 2020. Many Chinese ship-ping companies are moving to build up fleets of very large crude carriers.
China is also moving to dominate the shipbuilding industry. While South Korea still has the world’s largest shipbuilders China is rapidly catching up. A large number of new yards have sprung up rais-ing concerns both about overcapacity and quality. This year has seen an unexpected resurgence in orders which has helped to ease fears of rampant overcapacity caus-ing a collapse in prices. However, in the longer term the sheer amount of ship-building capacity does remain a concern for the industry, with shipyard closures difficult to manage at a local political level due to the large numbers of jobs they provide.
+ Focus: Asia
AT THE FOREFRONT OF THE GLOBAL ECONOMIC RECOVERY HAS BEEN ASIA AND THE SAME VERY MUCH GOES FOR SHIPPING MARKETS. ASIA, AND IN PARTICULAR CHINA, HAS BEEN DRIVING DEMAND FOR ENERGY AND COMMODITIES. THE REGION IS
ALSO HOME TO THE VAST MAJORITY OF THE WORLD’S SHIPBUILDING CAPACITY.
TEXT: MARCUS HAND editor, Seatrade Asia Week
ASIA DRIVE SHIPPING AND ENERGY DEMAND
I Marcus Hand
no 02 2010 – 11
© N
ina
E. R
angø
y
12 – no 02 2010
+ Focus: Asia
ASIA, THE PACIFIC AND THE MIDDLE EAST:
WHERE THE ACTION IS“THE GROWTH IN ASIA IS IMPRESSIVE, AND DNV IS EAGER TO MAKE ITS CONTRIBUTION TO COMPANIES AND GOVERNMENTS
IN ENSURING THAT THE GROWTH IS SUSTAINABLE,” SAYS REMI ERIKSEN, NEWLY APPOINTED COO AND HEAD OF DIVISION ASIA, PACIFIC & MIDDLE EAST IN DNV. “I AM CONVINCED THAT OUR SERVICES TO HELP CUSTOMERS IDENTIFYING, ASSESSING
AND MANAGING RISK WILL BE VALUED – AND NEEDED – IN THE RAPID GROWTH OF ASIAN ECONOMIES.”
TEXT: TORE HØIFØDT PHOTO: NINA E. RANGØY
DNV recently established a divi-sional structure to better
serve its customers by bringing senior management and certain key competen-cies closer to the market. The divisional head office for Asia, Pacific & Middle East is based in Singapore, and represents a distributed headquarters function – or an extended arm of Corporate. Remi Eriksen, who now is in charge of the Division, came from the position as global responsible for all DNV’s services towards the oil, gas and energy sector, with a seat in the Executive Committee. He still serves on the Executive Committee, but is now responsible for all DNV’s activities in Asia.
Could you briefly describe what distinguishes
DNV from other companies?
“Our purpose is to safeguard life, property and the environment. What we bring to the table is an exciting cross-disciplinary competence and an independence based on being a foundation. Deeply rooted in technology, with broad and deep industry expertise, DNV has developed its risk-based approach, leading to services that encompass safety as well as environment
and business aspects. In short, we help our customers see and grasp new opportunities and at the same time manage downside risks. We have developed a methodology that enables us to put a price tag on risk. I have already seen many examples of great savings from using this risk management approach at the very early stages of com-plex projects,” says Remi Eriksen.
“My clear impression is that there is a trend in the Asian markets towards a more risk-based approach. This trend can contribute to safer, more cost-effec-tive, and more environmentally friendly solutions.”
Why these extra efforts in Asia?
“There are many good reasons for further building up our presence in this part of the world, from the 2,000 we are today,” says Remi Eriksen. “Continued strong growth in most economies is one with investments, in both the maritime and energy sectors where we have our core competencies. Energy demand is increas-ing fast; developing sustainable energy supply solutions will be high on govern-ments’ agenda. Also, there are a lot of new-
building programmes ongoing, both within shipping, offshore and in the energy sector at large. DNV’s involvement with these newbuilding programmes represents more than 80% of our total activity in Asia.
“As a leading classification society, we are involved in all phases of the develop-ment of new ships and mobile offshore units. Most of the world’s leading nations on ship and offshore construction are here: Korea, China, Japan, Singapore, and runners-up like the United Arab Emirates and Vietnam. All are important markets for DNV.
“Through our class rules and standards, we present to our customers the aggre-gated experience and learning from the whole shipping and offshore industry. Our surveyors, be it on a newbuilding at a yard or onboard a 20-year-old rig, represent a safety net to the industry by verifying that safety, quality and competencies are according to required standards.
“But we contribute way beyond verifying accordance to rules. We work with oil and gas operators, yards and shipowners in the fields of enterprise risk management, asset risk, technology qualification and energy efficiency, to mention some. What
no 02 2010 – 13
I “As a leading ship classification society, we are involved in all phases of the development of new ships. Most of the world’s leading shipbuilding nations are here: Korea, China, Japan, Singapore, and runners-up like the United Arab Emirates and Vietnam. All are important markets for DNV,” says Remi Eriksen, newly appointed COO and Head of Division Asia, Pacific & Middle East in DNV.
14 – no 02 2010
+ Focus: Asia
they have in common is that they enable such companies to manage their total risk exposure. Better decision support means better decisions, ensuring safer and more economically sound operations.”
How is the demand for cleaner energies?
“The demand for cleaner and more envi-ronmentally friendly technologies and solutions is huge,” says Remi Eriksen. “China has set very ambitious goals when it comes to gas and LNG. In its energy mix for the next five years, gas will make up 10–12% compared to less than 5%.
“This gives DNV a unique opportunity to contribute with services within LNG along the whole value chain from upstream development and liquefaction to LNG carriers, terminal re-gasification and pipe-line distribution. But these opportunities are not limited to China. They also include South East Asia, the Middle East and Australia.
“Gas still represents a great untapped potential for replacing coal and oil in energy production. It also represents a much cleaner fuel for vessels than the present heavy fuel oil.”
What about renewable energies?
“No doubt, wind is the most important. Again, China has taken a bold step in defining a strong growth in offshore wind. With our long experience and strong posi-tion in the wind sector in Europe – where more than 70% of all wind farms are certi-fied by us – we are confident that wind will represent an important part of our future activities in Asia. To develop offshore wind farms, we can draw upon competencies from offshore oil and gas developments. This has given us a clear number one posi-tion in this market,” says Remi Eriksen.
“We want to help our customers enter new and exciting areas with a best possible understanding of their risk exposure.”
You have served in Houston and at the head
office in Oslo. Now, Singapore and Asia repre-
sent a different challenge. Do you have any man-
agement philosophy to ensure that you succeed?
“DNV’s most important asset is the com-petence of our people. And DNV has very competent people. I therefore think it is vital to have as a starting point that every-body has something to bring to the table. So I want all people to ask themselves – how can I best use my strengths? It is up to me as a leader to make sure that everybody gets the opportunity to contribute to DNV’s development, and to develop and grow as individuals.
“The one thing I do not want to see is that people bring forward problems – and problems alone. I want any problem to be accompanied by at least one suggestion for a solution. So, let’s find solutions – not only problems,” says Remi Eriksen.
I “We want to help our customers enter new and exciting areas with a best possible understanding of their risk exposure,” says Remi Eriksen, here in Mumbai, India.
no 02 2010 – 15
+ Focus: Asia
DNV has taken a leading role in the Norwegian Pavilion, by
signing on as a main sponsor and having CEO Henrik O. Madsen as the Chairman of the Pavilion.
“World Expo 2010 has already given us numerous opportunities to meet with key Chinese officials and business leaders,” says Henrik O. Madsen. “This is valuable to us, and I have a feeling it is valuable to
our Chinese friends. I believe World Expo 2010 is important for China as a whole. It is impressive to see close to 500,000 visitors at the exhibition site each day.”
DNV AT WORLD EXPO 2010
IN SHANGHAIWORLD EXPO 2010 IN SHANGHAI IS A BREATHTAKING EVENT, DISPLAYING CHINA AND ALL ITS PROVINCES AMIDST PAVILIONS OF COUNTRIES FROM ALL OVER THE WORLD.
WORLD EXPO IS A PLACE WHERE SOCIETY AND BUSINESS MEET.
TEXT: TORE HØIFØDT PHOTO: PATRICK WACK
I His Royal Highness, Crown Prince Haakon of Norway visited the Norwegian Pavilion, guided by its Chairman, DNV CEO Henrik O. Madsen.
16 – no 02 2010
+ Focus: Asia
“THE OIL SPILL IN THE GULF OF MEXICO IS WIDELY EXPECTED TO LEAD TO TOUGHER REGULATIONS WITH CONSEQUENCES FOR THE WHOLE OFFSHORE INDUSTRY,” SAYS ANDREAS SOHMEN-PAO, CEO OF THE BW GROUP. HE ADDS THAT NEW
REQUIREMENTS, IF BASED ON THOUGHTFUL REGULATION, CAN BRING THE INDUSTRY FORWARD AND GENERATE BUSINESS OPPORTUNITIES FOR PROGRESSIVE COMPANIES.
TEXT: TORE HØIFØDT PHOTO: NINA E. RANGØY
Andreas Sohmen-Pao is the Group CEO of BW, one of the world’s leading
maritime groups in the tanker, gas and off-shore segments, operating a fleet of more than 110 vessels from centres in Singapore and Oslo. The group has seven business areas. These include crude tankers, product tankers, chemical tankers, LNG and LPG carriers, FPSOs, and an offshore technol-ogy division delivering turret and moor-ing systems for FPSOs and offshore LNG terminals.
Being deeply involved in the offshore industry,
what do you expect will change after Deepwater
Horizon?
“We are watching carefully to see what the outcome of the oil spill will be. It is hard to predict specifically how the regulations will change, as some of the changes will be politically driven. However, there is no doubt that requirements will be tougher. One concern is that decisions will be made on emotional rather than practical grounds.
“A general trend towards higher environ-mental expectations from society and politicians is also leading to stricter envi-ronmental legislation for both the offshore
and shipping industries,” says Andreas Sohmen-Pao. “One benefit is that the changes will help prepare us for a world with much higher energy costs. As such, we should embrace fuel management and energy efficiency as opportunities to be ready for the future, not just from an envi-ronmental point of view but also from an economic one.”
How do you balance innovation and daily
operations in BW?
“At BW, we are pursuing a series of envi-ronmental measures. Clearly, we need to respond to changing conditions imposed by regulators, but we also need to be pro-active in finding ways to do things better.”
Mr Sohmen-Pao points out several envi-ronmental initiatives and developments made by his company in the areas of fuel management, coatings, new propulsion sys-tems, ballast water management and other operational practices.
“We are pursuing a large number of initia-tives, also from the perspective of potential investments: we are incubating new tech-nologies and have started to fund ventures
that address current environmental challenges,” he says. “It is not easy to strike the right balance between future innovation and current operations. One needs the innovators to have enough space to dream but not to lose touch with reality. So we have a sepa-rate team looking at more futuristic oppor-tunities, but they communicate closely with the individuals running our ships on a day-to-day basis.”
As a highly technical organisation, how do you
think classification societies can assist you?
“Classification societies have a special position in that they combine in-depth technical expertise with breadth in terms of what they see across the industry. This combination can be a great support and valuable input to companies. Obviously, classification societies need to manage how they work with multiple companies without spreading confidential information from one to another, as well as their role as independent verifiers of statutory require-ments while acting as consultants. I think these issues can be managed, but they need to be handled carefully.”
“TOUGHER REGULATIONS AHEAD”
ANDREAS SOHMEN-PAO OF BW:
no 02 2010 – 17
I “We are watching carefully to see what the outcome of the oil spill will be. It is hard to predict specifically how the regulations will change, as some of the changes will be politically driven. However, there is no doubt that requirements will be tougher,” says Andreas Sohmen-Pao, CEO of the BW Group.
18 – no 02 2010
+ Focus: Asia
In light of the difficulties in the global economy,
do you foresee that shipping has been through
the worst?
“I don’t have a crystal ball, but I think there is still the potential for new setbacks. It’s very unlikely that we will see the declines of 2009, but we still have some unresolved issues: huge yard capacity, a continued high level of ordering in some segments, companies with very different levels of readiness to cope with reversals. On the positive side, we see tremendous demand in emerging economies which could prove enough to pull us through.
“At BW, we have tried to strike a balance between being cautious and moving for-
ward with opportunities as they arise. In hard times, it is possible to become too careful. Recently we launched a bid for a company with an enterprise value of USD 1.7 billion and we are making other investments as well, so we are not sitting still.”
Of the BW Group, only BW Offshore is listed,
while the rest is privately owned. Is there a big
difference between listed and private companies
when it comes to growth ambitions?
“There need not be any difference in the growth ambitions of private and listed companies. One sees cautious public com-panies and aggressive private ones as well as the reverse. I suppose that private com-
I “At BW, we are pursuing a series of environmental measures … I … Clearly, we need to respond to changing conditions imposed by regulators, but we also need to be proactive in finding ways to do things better …
“It is not easy to strike the right balance between future innovation and
current operations. One needs the innovators
to have enough space to dream but not to lose
touch with reality.”
Andreas Sohmen-Pao, Group CEO of BW
no 02 2010 – 19
panies can more easily choose to do noth-ing without the risk of upsetting public shareholders, but ultimately it depends on the management and philosophy of each company. In BW, we are as committed to growth in the privately owned companies as in the listed one. In all areas of the Group, we aim for strong growth but without taking undue risks.”
One of your largest acquisitions was the takeover
of Bergesen in Oslo. That demonstrated good
timing?
“It’s true that we acquired Bergesen when the market was relatively low, but we have had our fair share of challenges and hard work. The two biggest disappointments
have been the very weak gas markets and the back-tax case in Norway. Having said that, we have been pleased with the excellent team and competence base in Norway.”
You have significant operations in Singapore.
How would you say that Singapore compares
to other shipping hubs?
“Singapore is a good location for several reasons. Its government sees that the maritime industry is of strategic value to Singapore and therefore focuses on creat-ing a positive environment for these activi-ties. The quality of decision-making and execution at government level in Singapore is exceptional.”
However, Mr Sohmen-Pao underlines that a business location is only as attractive as the decisions made in the last month or day. “Business needs a stable environment and, when one is investing with a 25-year horizon, a lack of predictability makes it very difficult to operate. In this sense, locating a key part of BW’s operations in Singapore has been a very positive experi-ence,” he concludes.
I … We are incubating new technologies and have started to fund ventures that address current environmental challenges.”
20 – no 02 2010
+ Focus: Asia
THE FRONT-RUNNER OF THE ECO REVOLUTION
IN THE LOBBY OF TOKYO’S NYK BUILDING, VISITORS CAN STUDY A MODEL OF THE SUPER ECO SHIP 2030, THE CONTAINER SHIP DESIGN OF THE FUTURE. WITH EIGHT RETRACTABLE FOIL SAILS AND 31,000 M2 OF
SOLAR CELLS AND SOLAR PANELS ON THE SIDE, THE SUPER ECO SHIP 2030 IS DESIGNED TO ACHIEVE THE TARGET OF A 69% REDUCTION IN CO2 EMISSIONS BY 2030.
TEXT: SUN YOUNG PARK PHOTO: NYK
no 02 2010 – 21
I The Super Eco Ship 2030 is one of the environmental initiatives NYK has taken with other maritime industry players.
Since the Meiji Restoration swept the country in the 1860s, Japan has been on the fast track to moderni-
sation. During the historical revolution that lasted for 125 years, NYK was one of the engines that led and grew with Japan. Now a global mega logistics company with a worldwide workforce of 55,000, NYK is taking steps to contribute to a sustainable future.
The Super Eco Ship 2030 is one of the environmental initiatives NYK has taken together with other maritime industry players. Mr Yasuo Tanaka, Corporate Officer and General Manager of NYK’s Technical Group, and Mr Masahiro Samitsu, Corporate Officer and General Manager of NYK’s Environment Group, elaborate that – including the efforts invested in the Super Eco Ship 2030 – NYK is committed to achieving a cleaner and better future for everyone.
AIMING FOR A COOL EARTH
The financial crisis that started in 2008 affected almost every part of the world economy; NYK also had to implement some tough measures. However, NYK has taken the rather daring step of not cutting back on any investments it has planned in the Cool Earth envi-ronment project. Mr Samitsu, who is in charge of this project, states that NYK is trying to go beyond traditions in its environmental thinking.
“NYK started the Cool Earth project two years ago. Around one tenth of NYK’s employees across all the divisions in Tokyo are assigned to this project; our primary goals are to halve our greenhouse gas emissions by 2050, to create a next-generation concept, and to draw a clear roadmap to achieve these goals. Assuming that the volume of seaborne transportation will likely grow by 3% annually, halving the total greenhouse gas emissions within the next 40 years seems quite a chal-lenge since it would mean an almost 85% reduction in CO2 emissions per tonne-mile. We still have a long way to go to realise this, but it definitely is an inspiring vision,” says Mr Samitsu.
“The Super Eco Ship 2030 is a good example of our efforts to go beyond traditional thinking. Container ships appeared during the 1950s, over half a century ago; today they have become slightly more efficient, but we needed more innovative and futuristic ideas to lead the revolution.”
TECHNOLOGY INSTITUTE FOR QUALITY TRANSPORT
In 2004, NYK established the Monohakobi Technology
Institute (MTI) to serve as a think tank for technology development. Mr Tanaka, currently the director of MTI, states that the institute has developed some envi-ronmental and energy-saving technologies.
“An air lubrication system, and a system for monitor-ing actual ship operations, are two of our environmen-tal projects. MTI has also developed some energy-effi-cient fuels and is continuously working to introduce energy-efficient devices. We believe that reducing the environmental footprint will soon determine competi-tiveness in marine transport,” says Mr Tanaka.
MOVING TOGETHER
Today, as a comprehensive global-logistics group, NYK is navigating its way forward to meet the needs of the globalisation era and to cope with some of the world’s imminent issues. In their steady navigation forward, both managers stress that collaboration and co-devel-opment is important for progress.
“Experience is very important in the shipping industry. Intensive involvement in knowledge-sharing processes is the most effective way to improve tech-nologies. Most of our research at MTI is partnered with various players in the industry. NYK’s recent technological collaboration with AP Moller-Maersk and DNV is a good example, showing our efforts to create a next-generation technology,” says Mr Tanaka.
“Joint developments can be the shortest way to reach our vision,” concludes Mr Samitsu.
I Mr Yasuo Tanaka, Corporate Officer and General Manager of NYK’s Technical Group (left) and Mr Masahiro Samitsu, Corporate Officer and General Manager of NYK’s Environment Group.
22 – no 02 2010
+ Focus: Asia
HYUNDAI HEAVY INDUSTRIES:
CHASING THE WINDAFTER ESTABLISHING ITSELF IN THE KOREAN RENEWABLE
ENERGY MARKET, HYUNDAI HEAVY INDUSTRIES WENT ABROAD, ENTERING THE CHINESE WIND TURBINE MARKET.
FURTHER EXPANSION PLANS ARE IN PLACE.
TEXT: SUN YOUNG PARK
PHOTO: NINA E. RANGØY
no 02 2010 – 23
24 – no 02 2010
+ Focus: Asia
I “In 50 to 100 years, renewable energy will be our only source. We are talking about a great potential market that can grow indefinitely,” says Kwon Tae Kim, Executive Vice President & COO of Hyundai Heavy Industries Co. Ltd.
T he transition to renewable energy is inevitable, according to Mr Kwon Tae
Kim. “It is the only reasonable answer to the climate change scenario,” he says. “Take electricity as an example; according to a US Department of Energy report, the whole world used around 18,000 TWh in 2008. Consumption is increasing at a rate of about 2.5% annually and will be around 30,000 TWh in 2030. This means it will almost double in two decades. The fast growth of non-OECD countries like BRICs will possibly create energy shortage problems and lead to the rapid expansion of the renewable energy business,” he predicts.
Mr Kim has been with Hyundai Heavy Industries (HHI) for over 30 years and is currently the head of Electro Electric Systems, a renewable energy division.
As a world leading shipbuilder, HHI also faced tough times during the recent recession. “When the market becomes saturated, the players start searching for new opportunities where they can gener-ate new business using their experience and knowledge,” says Mr Kim.
A NEW GROWTH ENGINE
HHI had been looking for a new growth engine for some time. “Electrification is a mega trend, and more electricity will eventually be generated from renewable energy. Wind and solar energy, currently the major sources, still cost more than energy from fossil fuels. Government sup-port continues to be essential for further development. However, with time, costs will decrease and other sources of renew-able energy will enter the market. In 50 to 100 years, renewable energy will be our only source. We are talking about a great potential market that can grow indefinitely,” he says.
Although HHI is a relative newcomer to this market, Mr Kim is confident that it has the capacity and strength to be one of the world’s leading players. “HHI has been part of many energy development and off-shore oil drilling projects. Understanding the market is one of our core competencies; it has been of great benefit to us when setting up our strategy.
“The most important issue is making the right investment with the most efficient
HYUNDAI HEAVY INDUSTRIES:
SPREADING ITS WINGS KWON TAE KIM, EXECUTIVE VICE PRESIDENT AND COO OF HYUNDAI HEAVY INDUSTRIES CO. LTD., IS A FIRM BELIEVER IN THE RENEWABLE ENERGY MARKET. A TRANSITION TO THE RENEWABLE ENERGY ERA SEEMS ALMOST INEVITABLE;
HE PREDICTS THAT SUCH A FUTURE WILL COME ABOUT SOONER THAN EXPECTED.
TEXT: SUN YOUNG PARK PHOTO: HHI
strategy. Design, production and sales are our major assets and this is reflected in our strategy. We have the ability to design and produce high-quality systems and products, and we can meet our customers globally through our worldwide sales network. Our strong maritime industry brand is important leverage when advancing into this new market,” he says.
THE HYUNDAI SPIRIT
Since Mr Chung Ju-Yung, the founder of the Hyundai Group, decided to start shipbuilding in the early 1970s, HHI has enjoyed over 30 years of success. According to Mr Kim, the key to its success lies in the “Hyundai Spirit” which was created by Mr Chung; this is the company’s main basis for facing challenges and ensuring growth.
After some time in the local renewable energy market, HHI went abroad. It entered the Chinese wind turbine market by sign-ing an MOU to construct a wind turbine manufacturing plant together with Datang Shandong Power Generation Co., Ltd. and Weihai City Government. The plant will have an annual production capacity of 600
MW (300 units, each with a 2MW wind turbine). The plant will be completed by year-end and start manufacturing in January 2011.
“China is one of the biggest energy-con-suming and -generating markets. This year, it has taken over as leader of the wind ener-gy market and represents a great potential. China is close to Korea geographically, and we already have our business infra-structure there. Our business in China is quite successful and, considering the envi-ronmental features for wind energy and the Chinese government’s support, there’s no reason for us to hesitate to advance into this market,” he says.
CHINA IS JUST THE START
HHI is constantly looking for opportuni-ties in the global market. “China is just the start. We are also moving into the North American market; once our renewable
energy business is on track there, we might consider expanding our production facilities in countries such as Pakistan
and India. Our goal is to be among the world’s top three
companies in this market by 2020.
“We’re happy that DNV has a global pres-ence in, and provides risk-based services to,
the cleaner energy market. We need the assistance of DNV, which has years of experience, particularly within the wind seg-ment. We trust that DNV will be a competent partner for us,” he says.
“In 50 to 100 years, renewable energy will be our
only source. We are talking about a great potential
market that can grow indefinitely.”
Kwon Tae Kim, Executive Vice President & COO
Hyundai Heavy Industries
no 02 2010 – 25
26 – no 02 2010
Mr Yang Zupei is the closest one comes to a veteran in the oil and
gas pipeline industry, with experience from various high-level positions within China National Petroleum Corporation (CNPC) Pipeline Company. Today Mr Yang serves as General Secretary of the Petroleum Storage and Transportation Committee of the China Petroleum Society. He is also proactively promoting technol-ogy advancement of the Chinese pipeline industry in general.
CHANGES AT THREE LEVELS
Having been on the inside for more than 35 years, Mr Yang has witnessed several shifts in the oil and gas pipeline industry. First and foremost within the industry itself.
“First of all, the total mileage of pipe-lines built in China over the past ten years exceeds the overall mileage built between 1949 and 1999. At the same time the con-struction capacity has grown by 5,000–6,000 kilometres a year, and we have seen a dramatic diversification in the transmis-sion flow – from crude oil only to gas and product oil. Furthermore, the diameter of the pipelines has grown and we have seen more and more long-transmission pipe-lines. Finally, there has been the devel-opment of a national pipeline network – ensuring safe and efficient energy supply throughout the country.”
Also, the outlook of the Chinese gov-ernment on the pipeline industry has changed.
“In addition to the changes within the
industry,” Mr Yang elaborates, “there has been a renaissance in the way the Chinese government focuses on the construction of new pipelines – mainly as a response to the concern for energy security. Over the past few years, the Chinese government has even started negotiating with other coun-tries on strategic cross-border pipeline cooperation.”
Finally, there is the technological advancement. Says Mr Yang: “I am im-pressed by the giant leap in terms of new and improved technology. We’re approaching a global leading level – in particular with regard to pipeline materials, adjustments to complicated geographical conditions and welding techniques.”
STAYING AHEAD OF THE PROBLEM
Global pipeline infrastructure is expected to grow at 7% per year through 2020, with 231,900 km of oil and gas pipelines already planned or under construction. Meanwhile, the world’s 3.5 million km of existing oil and gas transmission pipelines must continue to operate, often beyond their original design lives.
“We need to stay ahead of potential problems. In particular those associated with ageing infrastructure, corrosion and material degradation. DNV has helped the Chinese pipeline industry ensure safer operations and extended asset life. DNV has provided various services to CNPC, including Asset Integrity Management Solutions (AIMS), ISRS and QRA,” says Mr Yang.
He claims that this risk-focused ap-proach of CNPC and other pipeline companies has had positive results.
“A great example of the effectiveness of AIMS comes from the as-usual opera-tion of the strategic oil and gas pipeline to the Sichuan province throughout the major earthquake in 2008. Thanks to the implementation of Pipeline Integrity Management (PIM), the pipeline operated as normal and provided energy supply to the disaster-struck region throughout the catastrophe.”
CREATING NEW OPPORTUNITIES
In his current position as General Secretary of the Petroleum Storage and Transportation Committee, Mr Yang is
+ Focus: Asia
GROWTH IN THE PIPELINE“CLOSE TO 70,000 PEOPLE DEAD AND ABOUT 4.8 MILLION PEOPLE HOMELESS. THESE WERE AMONG
THE CONSEQUENCES OF THE DEVASTATING EARTHQUAKE IN THE SICHUAN PROVINCE OF CHINA IN MAY 2008. HOWEVER, THROUGHOUT THE CATASTROPHE AND ITS AFTERMATH, ENERGY SUPPLY TO THE DISASTER-STRICKEN AREA WAS STABLE. “ONE OF THE GREAT EXAMPLES OF A SUCCESSFUL IMPLEMENTATION OF PIPELINE INTEGRITY
MANAGEMENT,” SAYS YANG ZUPEI, A LONG-TIME VETERAN IN THE FIELD.
“A great example of the effectiveness of Asset
Integrity Management comes from the as-usual operation of the oil and
gas pipeline to the Sichuan province throughout the
earthquake in 2008.”
Yang Zupei, General Secretary of the Petroleum Storage and
Transportation Committee of the China Petroleum Society
TEXT: JANNICKE WITSØ PHOTO: GETTY IMAGES
no 02 2010 – 27
preoccupied with identifying the best of Chinese and international competence and know-how – with a view to identifying new opportunities.
“The major task of the Committee is to promote exchange and communication between various actors, both domestically and across borders. For instance, we pro-mote technology-based communication
between Chinese operators and their overseas counterparts. We frequently organise workshops and seminars on specific subjects. DNV is an important contributor in this respect, in particular as an active participant in our annual pipeline conference. The Committee furthermore works closely with compa-nies such as GE in the area of fuel gas
turbines, and has established a close dialogue with companies in the USA and Canada on management and technology improvement.”
In the end, Mr Yang is confident in the future of pipelines. “For the Chinese pipe-line industry, the future looks bright. And we will stay focused on the further develop-ment of a safe and highly efficient industry.”
28 – no 02 2010
+ Focus: Asia
From Upstream week 32, Vol. 15, 6th August
2010. Printed with permission from Upstream.
Few people would imagine that China National Offshore Oil Corporation
(CNOOC) vice president Zhou Shouwei started his working life as a farmer. After leaving high school in 1969, at the height of China’s Cultural Revolution, Zhou was sent to the Sichuan countryside to become one of millions of young farmers as part of a nationwide campaign to “learn from the poor peasants”.
He says his childhood aspiration was simple and practical – to earn decent money for his family – which prompted him to study oil production engineering.
“With a petroleum diploma, I was pretty sure at that time that I would get a stable job in the oil industry with good pay,” he says. Zhou graduated from China Southwest Petroleum University in 1982 and later received a doctorate from the same university.
The 60-year-old, who is now perhaps the most senior technocrat and academic at the helm of China’s offshore oil and gas exploration and development, says his life has had two turning points – receiving a college education, and joining CNOOC in
1982 just after the company was inaugu-rated.
“We started from scratch,” he says, add-ing that, at the time, CNOOC was a pio-neer in China’s reforms as it opened up to the outside world. Zhou’s current focus is greater operational safety for CNOOC’s offshore sector following the Macondo blowout and oil spill in the Gulf of Mexico. “Macondo is a result of repeated small mistakes for which we can’t blame just BP alone,” says Zhou, adding that offshore oil and gas exploration and development involves dozens of industry segments, and a mishap at any link in the chain could lead to disaster.
At CNOOC, Zhou and his team are reassessing every detail that could lead to potential offshore hazards. However, sitting in the office is not enough for Zhou, who boarded a helicopter in early July to start on-site checks of how the new standards are being applied at the company’s Bohai Bay fields. The previous month, he trav-elled to Shanghai Waigaoqiao Shipyard to spearhead the upgrading of the blowout preventer system for CNOOC’s first deep-water drilling rig.
Zhou is attempting to take a positive approach to the fallout from the Macondo disaster, arguing that while it has put
deepwater drilling in the spotlight for the public, it could also be a catalyst for the industry to research new technology and apply tougher management and supervi-sion rules.
“The disaster should not serve as an excuse to delay deepwater projects, and CNOOC is not going to reverse its long-term strategy,” he says.
CNOOC and its production sharing con-tract partner, Canadian independent Husky Energy, are continuing to press ahead with the Liwan 3-1 project in the South China Sea, China’s first deepwater gas develop-ment.
“Development activities are going ac-cording to plan,” says Zhou, implying that the project is on schedule to produce its first gas in late 2012 or early 2013. Zhou is one of CNOOC’s few remaining employ-ees to have witnessed the company’s evolu-tion from offshore novice to major player with a market value of more than 500 bil-lion yuan ($73.5 billion).
Also, as a member of the Chinese Academy of Engineering (CAE), which gives Zhou lifelong tenure with CNOOC, he could further contribute to the compa-ny’s aim of becoming one of the world top oil and gas companies, with more than one trillion yuan of assets by 2015.
HELPING CNOOC STAY ON RIGHT TRACKCNOOC VICE PRESIDENT ZHOU SHOUWEI HAS FOLLOWED THE CHINESE COMPANY’S PROGRESS
FROM OFFSHORE NOVICE TO MAJOR PLAYER.
TEXT: XU YIHE PHOTO: CNOOC
no 02 2010 – 29
Zhou’s first 18 years with CNOOC were spent as an engineer at the com-pany’s Tianjin outfit, developing heavy oil projects in Bohai Bay. As China’s top heavy oil scientist, he pioneered a number of heavy oil development technologies, including cold heavy oil recovery with sea-water injection. Zhou was promoted to president of CNOOC Tianjin before being appointed vice president of CNOOC’s listed unit, CNOOC Ltd in Beijing in 1999, and then president in 2002.
In 2009, he was appointed an academic with the CAE, China’s top academic body,
in part for his work in heavy oil develop-ment, optimal and fast drilling and com-pletion, and efforts to develop floating, production, storage and offloading vessels in China, as well as setting up CNOOC’s oil spill response system. Also, as one of the pioneers of China’s offshore oil and gas industry, Zhou was appointed chair-man of DNV’s Greater China Offshore Committee.
The Committee is a forum for the ex-change of information on new technology, innovation, experiences and practices related to offshore engineering, and is the
first of its kind organised by a classification society in China.
Zhou Shouwei says that the worst days at CNOOC were during the crude price collapse in the early 1990s, when all company employees were asked to cut their salary by 10%. However, the hard-ship had a silver lining. CNOOC capi-talised on the low-price environment at the time by buying stakes from its PSC partners and stepping up developments in Bohai Bay and the South China Sea, emerging from the crisis with a stronger portfolio.
I As one of the pioneers of China’s offshore oil and gas industry, CNOOC vice president Zhou Shouwei was appointed chairman of DNV’s Greater China Offshore Committee.
30 – no 02 2010
+ Focus: Asia
The Vietnamese government has decided to start importing liquefied natural gas
(LNG); gasification terminals are already under development.
“We have a great belief in the Vietnamese market, and we look forward to contribut-ing to the development of Vietnam in the wider sense through our broad range of competence including on LNG. This frame agreement will take our already strong position in Vietnam a step further,” says DNV CEO Henrik O. Madsen.
The agreement will enable DNV to assist Vietnam on risk management issues associ-ated with the use of LNG, how to use the waterways to distribute it, how to utilise it as fuel for the coastal shipping and river transportation, and to assist in creating an appropriate legislative safety regime.
Vietnam has a growing demand for ener-gy and will in the future be dependent on imports. At the same time, it is – next to Bangladesh – the country in the world that will be most affected by the expected rise in sea level due to climate change. The nation is trying to find a balanced solution; energy sources such as hydropower, wind energy and LNG will, along with oil and coal, be part of the final solution.
BIG LNG PLANS
By the end of this year, PetroVietnam Corp (PV Gas) plans to select an aggregator to buy LNG in the spot market for three years before committing to long-term supplies. The supplies will be received at a floating storage and regasification unit to be com-pleted in 2012; this is a fast-track option in case the country needs gas earlier.
PetroVietnam is finalising the location of a proposed gasification terminal in the south of the country. The one million tonne-per-year terminal is scheduled to be ready in 2015. Its capacity will be increased to three million and six million tpy in 2020 and 2025 respectively.
EXTENSIVE EXPERTISE
DNV has extensive competence regarding the use of LNG. The company has provided services to almost one third of the world’s LNG terminal projects. Furthermore, DNV was the first class society to introduce rules for LNG-fuelled ships back in 2001. DNV has invested considerably in research and development work to ensure further improvements.
Over the past decade, 20 LNG-fuelled ships – all classed by DNV – have been delivered and are today operating. The practical experience achieved from these vessels has been invaluable. Since 2004, DNV has been involved in a large number of studies where different aspects of the use of LNG have been analysed – such as value chain assessments, consequences of LNG marine incidents, and operability evaluations for multi-user terminals.
TEXT: EVA HALVORSEN PHOTO: NINA E. RANGØY
VIETNAM’S DEPUTY PRIME MINISTER HOANG TRUNG HAI VISITED DNV’S HEADQUARTERS IN OSLO WHEN THE FRAMEWORK WAS SET FOR HOW DNV WILL WORK PROACTIVELY WITH PETROVIETNAM AND THEIR SUBSIDIARY PV GAS TO SAFELY AND
EFFICIENTLY INTRODUCE AND DISTRIBUTE LNG WITHIN VIETNAM.
ADVISING VIETNAM ON LNG
I From left: Norway’s Minister of Trade and Industry Trond Giske, Vietnam’s Deputy Prime Minister Hoang Trung Hai and DNV’s CEO Henrik O. Madsen at DNV’s headquarters this summer.
no 02 2010 – 31
32 – no 02 2010
+ Focus: Asia
Applied Research International (ARI), a knowledge-centric organisation
offering a portfolio of simulation solu-tions to enterprises across the globe. The organisation has specifically been one of the key drivers of simulation in India and abroad, offering a comprehensive range of world-class simulators that are being widely recognised as “best of breed”. In an inter-view with DNV, Shravan Rewari emphasises the importance of quality of maritime edu-ca tion for seafarers in today’s changing environment.
Tell us about your journey since the company
started and how you have gone beyond the
vision of your late father, the founder of ARI
Capt. S. S. S. Rewari?
My father devoted his life to the education of seafarers. He founded ARI with a vision to take maritime education to the next level. ARI started up in 1994; we released our first simulation products then. Today ARI Simulation has delivered more than 250 large-scale simulation solutions to cus-tomers worldwide, and we have extended our product range across all industries associated with marine operations.
Whilst we have developed over the years, we have never lost sight of our commit-ment to education. Simulators alone do not make for an education; perhaps the legacy of my father persists today in the
fact that at ARI we create solutions, not just simulators; we recognise that simulation technologies are but one part of a holistic education process.
How is ARI positioned to effectively cater to
the training needs of the maritime industry?
The maritime industry today is charac-terised by tight regulation and the rapid propagation of technologies onto vessels. Many technologies considered “nice to have” before are now becoming manda-tory. At ARI, we offer simulation products which cover almost all aspects of seaborne trade. These products can be used inde-pendently, but they can also co-exist. Our customers can then create simulations of entire processes rather than just one part of a process.
ARI is renowned for its fidelity simulation products
which are customisable to individual client equip-
ment, ships and environments. How did you
achieve this level of customisation capability?
We recognised early on that, in order for simulation technologies to be most effective, they should accurately reproduce the exact operating characteristics of the real equip-ment. We have always seen the value in offering our customers simulations of their equipment operating in their locations.
Our SafePORT products, for example,
are widely used in feasibility analyses of new vessels, ports and terminals; they have to be completely customised to individual customer and environmental requirements. SafePORT customers include some of the most demanding companies in the world, and the need for accuracy and customisa-tion is paramount in such solutions.
How important is “Quality of education” for
seafarers today?
Quality of education is one of the most important factors; today there is a com-pletely different landscape to the career paths of seagoing personnel. People are in short supply; they typically do not spend their entire professional life at sea, hence a fast-track approach to promotion through the ranks. What is lost here is pure seatime and experience. This has led to a measurable and significant experi-ence gap. Addressing this gap remains a key challenge for the industry. Simulation technologies provide perhaps the only way to supplement the experience gap, by ena-bling seagoing personnel to gain exposure to operations on simulators and build the experience that is needed.
What can be done to ensure that the quality gap
between the requirement and supply of person-
nel to the maritime industry is zero … to achieve
100% quality of education?
SHAPING TOMORROW’S SEAFARERS
“OPERATIONS AT SEA DO NOT EXIST IN ISOLATION; THEY ARE ALL PART OF A LARGER PROCESS. SAFETY STATISTICS DEMONSTRATE THAT THE RISKIEST OPERATIONS TAKE PLACE WHEN TWO OR MORE ENTITIES HAVE TO WORK TOGETHER,”
SAYS SHRAVAN REWARI, MANAGING DIRECTOR OF APPLIED RESEARCH INTERNATIONAL (ARI). THIS COMPANY IS TAKING MARITIME EDUCATION TO THE NEXT LEVEL.
TEXT: MEARL COLACO PHOTO: ARI
no 02 2010 – 33
I Training is not a one-off thing – the provision of a continuous, organic and evolving framework for training and skills development is critical for organisations to ensure that their operations are carried out safely, efficiently and to the standards required in today’s tightly regulated world, according to Shravan Rewari, managing director of Applied Research International (ARI).
34 – no 02 2010
+ Energy efficiency at sea
I would have to say that there is probably no such thing as 100% quality of education. But it is tempting to say that wider deploy-ment of simulation and blended simulation learning tools across educational and operational environments would be a pow-
erful tool to improve the general quality of education. Hands-on operations will always provide a better learning environment than passive, linear training, as they bring theory to life and build experience.
ARI was conferred a National Award by the
Indian Ministry of Science and Technology for
excellence in R&D in computer software in 2006.
What did this award mean to you?
no 02 2010 – 35
This was not something we had expected. It was a great honour to be recognised at such a level in India. But on a practical basis, what this award really means to us is that we are recognised for innovation – and not just for computer services. Taking
the decision to be an innovative software business in India was never going to be an easy path.
The DNV SeaSkill team has recently been involved
in the certification of some of your newly released
simulator products. What does this certification
mean to you?
DNV SeaSkill has played a significant role in the entire maritime simulation market through its pioneering work of defining and setting standards for maritime simula-tors. The visionary role taken by DNV – in recognising that simulators should be classified and certified as fit for purpose (much as ships themselves are) – has provided a powerful benchmark set of standards for the simulation industry to aim for; perhaps more importantly, it has done a lot to provide customers with the confidence they need when acquiring simulation solutions.
Since our simulators were first certified some years ago, we have recognised the
value of this certification – to both our-selves and our customers. DNV certification provides significant value for us in achiev-ing our vision as it acknowledges the qual-ity of our products to international stand-ards. DNV’s role in providing assurance and confidence to users of simulators, through its certification standards, cannot be over-estimated. We have always found the DNV teams that we have interacted with – in both Norway and Asia – to be extremely professional; we look forward to close co-operation in the future.
I Shravan Rewari, managing director of Applied Research International (ARI).
I ARI recognised early on that, in order for simulation technologies to be most effective, they should accu-rately reproduce the exact operating characteristics of the real equipment.
36 – no 02 2010
+ Maritime industry
ON 9 June 2009, the HS Elektra was on its way to Quintero, Chile from
Brazil loaded to 90% capacity with 88,000 tonnes of light crude, with a specific grav-ity of 0.880 t/m2. This last fact would play a critical role in the ensuing drama.
After clearing the Straits of Magellan, Captain Sunil Augustine encountered heavy seas. He took advice to head toward sheltered waters closer to the Chilean coast, a route used frequently by even the largest ships.
When the HS Elektra started shaking and vibrating, Captain Augustine shut down the engines to determine what was happening. The ship started listing heav-ily to port and then going head down in three-metre swells. It soon became clear that they had struck an uncharted under-water rock.
All ballast tanks had been breached and seawater was seeping into the pump room and engine room. Things went from bad to worse when the auxiliary engines tripped and the crew had to work in total darkness until power was restored. With Force Six winds nudging the ship to shore in tough conditions, the unfolding crisis and the impending disaster required action. It was a calm June afternoon in Hamburg when Captain Corcoran’s phone rang.
DON’T PANIC
Captain Corcoran immediately connected Captain Augustine’s call to the Wallem emergency team in Hong Kong. Then he quickly gathered his emergency team in Hamburg, including DNV’s Emergency Response Service team (ERS). Once assembled, his command centre in Hamburg was receiving hourly updates from Captain Augustine.
The emergency process requires notifi-cation of many parties – the ship owner, charterer, cargo owner, underwriters, lawyers, and the Chilean authorities. This brought a lot of people together. Captain Corcoran continues: “On the other side you have a crew working in impossible conditions, blackouts, filthy weather, waves coming over the bow, the ship listing – it’s easy to panic. But helping everyone stay calm was one of the most important things we did to ensure that the right decisions were made.”
DNV’s ERS team was in place within an hour, supplying technical information to Captain Corcoran’s team and to Captain Augustine on the performance expectations of the ship based on what was known. “The early hours of this crisis were the most dif-ficult. We didn’t know the extent of the damage, so making decisions was difficult.
Every hour we’d get updates that made the situation sound worse. But the ERS team was very supportive and helped us make some good decisions.”
Due to the remote location, it took days to get the personnel needed onto the ship – from technical superintendents and naval architects to salvage experts and lawyers – and for the anti-pollution equip-ment to be brought up from Punta Arenas, 30 hours away. Captain Corcoran and his team ramped up for a worst-case scenario.
With the support of his Hamburg and Hong Kong emergency teams, the Chilean Navy (for whom he has only high praise) and DNV, Captain Corcoran was able to get a clearer picture and make decisions that would pull the situation back from nightmare territory.
NOT A SINGLE DROP
With the vessel stable, it was possible to prepare for offloading the crude from the HS Elektra. Due to cabotage, a Chilean ves-sel was required, but none of sufficient size could be located. On 22 June, 13 days after the accident, a vessel capable of taking half the cargo arrived.
DNV determined that even if the ship were totally flooded, it would not sink if it was in calm water and balanced due to
MASTERS OF CALMAFTER 45 YEARS IN THE INDUSTRY, CAPTAIN JOE CORCORAN, WALLEM’S MANAGING DIRECTOR IN HAMBURG, HAS SEEN HIS FAIR SHARE OF SCARY MOMENTS. BUT AS HE RECOUNTS, WHEN A FULLY LOADED TANKER HITS AN UNCHARTED ROCK IN A REMOTE SPOT, AND ONE NOTED FOR ITS OUTSTANDING BEAUTY, THE TERM ‘SCARY’ TAKES ON A WHOLE NEW MEANING.
TEXT: KENNETH R WINDSOR PHOTO: NINA E. RANGØY
How Wallem’s Joe Corcoran and team prevented another Exxon Valdez
no 02 2010 – 37
I Captain Corcoran is proud of the entire team. “I was especially proud of the ship’s crew, how professionally they acted and how they gave us timely information in such difficult circumstances. It’s because we had such experienced people involved that we were able to keep things calm and avoid another Exxon Valdez.”
38 – no 02 2010
+ Maritime industry
no 02 2010 – 39
the specific gravity of the crude, being lighter than water. But before any offload-ing could be performed, calculations were required to determine the right transfer sequence to prevent the change in pres-sure from exacerbating the damage. It was clear from the divers’ reports that the damage was significant. The wrong pres-sure could split the vessel in half, spilling all 88,000 tonnes of crude.
Working together with DNV’s Hull Department to determine the right steps, the ERS team developed over 200 dis-charging sequences before finalising the recommended ten steps for offloading the crude. Everything went to plan and by 02.51 on 25 June, the first transfer was complete. The second discharge finally took place on 9 July. Not a drop had been spilled.
BACK TO THE YARD
Wallem’s owner and Captain Corcoran flew to Oslo on 30 June to meet with DNV’s experts to discuss options for how to get the damaged vessel back to the ship-
yard for repair – and whether it should be Europe or Asia – once the discharge proc-ess was complete.
With DNV’s help, it was revealed that the transatlantic voyage would do serious dam-age because of the greater wave impact on the vessel. This guidance helped Wallem secure agreement from the insurer to go for the Chinese route, despite the greater expense.
With the arrival in Hong Kong on 17 September (much quicker than expected, thanks to additional DNV input), the HS Elektra was able to make the journey up the Guangzhou River to the shipyard.
If Master Mariner is the highest rank in the industry, it seems that after the HS Elektra incident, Captain Joe Corcoran should have one higher – Master of Calm.
ERS is an annual fee-based subscription service for
fleet owners providing rapid response guidance and
technical support to help ship captains, owners and
operators make informed decisions in crisis situations.
I“By providing state-of-the-art technical advice during a crisis that an operator might not have, ERS frees up senior executives to focus on the management of the crisis, rather than drown in details. The case of the HS Elektra is a classic example of how DNV’s expertise not only resolved a crisis for the owner, operator and cargo owner, but for the South American environment as well,” says DNV’s Rossen Panev, ERS group leader.
40 – no 02 2010
+ Maritime industry
Says John Angelicoussis: “Since the Second World War, shipping crises
have been caused by aggressive expansion of fleets, usually accompanied by a world-wide, economic downturn in most of the important markets. The most recent major crisis that I can recall was in the mid-1980s; it had its origin in high oil prices and consequently high inflation. Interest rates sky-rocketed to fight inflation. Business was affected negatively, as were the cash flow of shipowners. Banks arrested many vessels and bankrupted a number of shipowners.
“But in 2008, the world crisis emanated from the banks. They got involved in risky investments, mainly in bad-quality real estate, which their management did not understand. Almost all banks and invest-ment banks in the West overextended their balance sheets and found themselves grossly undercapitalised. Few could survive without government intervention.
“In contrast, most shipowners found themselves in very strong financial posi-tions,” he continues.
BANKRUPT BANKS – SOLID SHIPOWNERS
“The origin of the bubble was too much liquidity. We have seen excesses in liquid-ity in the past; never before, however, any-thing like the period 2001–2007. Money was running out of fashion and cheap over-lending to unknown entities was fre-quent. This is financial mismanagement by the people responsible for extending
credit to industry. Credit, the life-line of most industries, automatically disappeared. Defaults became common by receivers, charterers and some shipping companies,” he says.
When looking back at 2008 and 2009, what
were the biggest hurdles?
“Non-availability of bank credit. Now, for good companies and solid balance sheets,the situation is much better than it was a year ago. In shipping we need cash. Thisgives you strength. But cash is also dan-gerous, as it may lead you to make invest-ments that are not based on good, solid business decisions.”
What are some good and some “not so good”
business decisions these days?
“Many Greek shipping companies, particu-larly the medium-size or small companies that did not order newbuildings during the good years, have amassed quite a lot of cash. Several of them are taking the deci-sion to start investing now. My opinion is that the crisis is not over yet. The latest trend in Greek shipping is to buy contain-er ships. In the current container market, these are relatively cheap purchases. The problem is that the container market seg-ment is oversupplied.
“Laying up a container ship and waiting for better times is also expensive – and
who knows when these better times will come? In two years from now or maybe in five? The Kamsarmax bulk carriers that are being ordered by many seem a better investment to me. The prices are decent and these ships are filling slots at the yards. This is a good opportunity for owners and yards alike. But too many have been ordered already.”
You mentioned the role of the banks – can
you comment on this?
“Banks in the West have too many non-shipping problems to solve. Shipping was the least of their concerns. So they are adopting a ‘wait and see approach’, extending time to the least problematic loans and even deferring principal pay-ments. This approach has paid offhandsomely, for the banks and for the shipowners.”
So investing in container ships may be not so
good, but what about the bulk and oil tanker
markets?
“These two sectors show better promise. Europe has a lot of economic problems but the USA is in a much better position. China appears to be the healthiest major economy in the world today. Domestic demand is growing fast and exports are improving. Between them, China, India, Korea and Japan and the remaining East
CRISIS NOT OVER YET
“THE FINANCIAL CRISIS IS A TYPE OF CRISIS THAT WE HAVE NEVER EXPERIENCED BEFORE. MY OPINION IS THAT THE CRISIS IS NOT OVER YET,” SAYS JOHN ANGELICOUSSIS, CEO, ANGELICOUSSIS GROUP OF COMPANIES.
TEXT AND PHOTO: MAGNE A. RØE
no 02 2010 – 41
I “In spite of the current problems, I am optimistic about Greece. We will have to sort this out and we are on the right track. I am proud of being Greek,” says John Angelicoussis, CEO, Angelicoussis Group of Companies.
42 – no 02 2010
+ Maritime industry
Asian countries have a total population of some three billion people. This is where you find the best market demand right now, and this will increase. China will continue to grow in the dry market, and India is also growing fast and will need more local coal and iron ore. More oil will also be needed by both. South Korea is also doing reason-ably well. I would like to state that every downturn creates opportunities.”
The problems in the Greek economy have become
a hot issue for Greece and the European Union.
What are your comments on this?
“In spite of the current problems, I am optimistic about Greece. We will have to sort this out and we are on the right track. I am proud of being Greek. Greece is one of the best countries in the world for ship operations. Europe needs us as we need
them. Most countries, like for instance Germany, have their own issues to handle,” concludes Mr. Angelicoussis.
no 02 2010 – 43
Maran Tankers has a long-term com-mitment to reducing the environ-
mental footprint of the managed ships and, so far, has been relatively successful in doing so.
“We have to be proactive in shaping our future by focusing on energy saving. This is very important from an environmental perspective but also from an economical point of view. Shipping is by far the most energy-efficient mode of transport; how-ever, in our industry there is room for im-provement. This calls for a synergy of all stakeholders including builders, owners, class, operators, and charterers,” say the two gentlemen.
Maran Tankers has established and implements a number of environmental programmes on energy efficiency which are based on three pillars: operation optimisation, introduction of technical innovations/better design, and training of personnel. Several projects are in place to support these initiatives.
WIN-WIN SITUATION
They continue: “Our improvements are the sum of all our efforts. When we trans-late this into how we work on a daily basis within the company, it is important to demonstrate how these efforts also yield financial benefits for the owners of the ships. All the efforts make us more effi-cient; we consume less fuel, we operate
and maintain our fleet in a smarter way, and we can read this directly off the bot-tom line of our balance sheet. It really is a win-win situation – we achieve better results while reducing our environmental footprint.”
Concerning the legal developments in this area, they are fully supportive of the action in the IMO, and they believe that since the reduction of the CO2 emissions is a global problem it needs global solutions.
“It is important for us that the shipping industry influences the process so as the targets to be set would be promising but at the same attainable and practicable ensur-ing also a level playing field. In this process,
we actively participate in various industry committees and forums with the aim of promoting environmental considerations and actions as well as safe shipping.”
According to these gentlemen, the role of the classification societies should be underlined, as well as their responsibility in assisting the owners and the yards in evaluating, selecting and installing the best technical solutions available. This would ensure energy efficiency improvements as well as safer, more robust, reliable and user-friendly vessels. Class should re-focus on their technical work and use their exper-tise to the benefit of the industry and the society in general.”
Maran Tankers:
ACTIONS TO FURTHER REDUCE THE ENVIRONMENTAL FOOTPRINT“MARAN TANKERS MANAGEMENT INC. ACTIVELY SUPPORTS THE INDUSTRY INITIATIVES TO INCREASE ENERGY EFFICIENCY
BOTH BY OPERATIONAL MEASURES AND BY THE INTRODUCTION OF TESTED TECHNICAL INNOVATIVE SOLUTIONS,” SAY STAVROS HATZIGRIGORIS, MANAGING DIRECTOR OF THE OIL AND GAS TANKER UNITS OF THE ANGELICOUSSIS
SHIPPING GROUP, AND SOKRATIS DIMAKOPOULOS, HSQ MANAGER OF MTM.
I “Our environmental performance improvements are the sum of all our efforts,” explain Stavros Hatzigrigoris, managing director of the oil and gas tanker units of the Angelicoussis Shipping Group, and Sokratis Dimakopoulos, HSQ manager, MTM. Here they are together with DNV President Tor E. Svensen (middle).
TEXT AND PHOTO: MAGNE A. RØE
44 – no 01 2010
+ Research & development
TAKING MARITIME RESEARCH ONE STEP FURTHER
no 02 2010 – 45
TEXT: MAGNE A. RØE
FOUNDED IN 1836, THE NATIONAL TECHNICAL UNIVERSITY OF ATHENS IS THE OLDEST AND MOST PRESTIGIOUS TECHNOLOGICAL EDUCATIONAL INSTITUTION IN GREECE. ONE OF ITS NINE FACULTIES IS THE SCHOOL OF NAVAL ARCHITECTURE AND MARINE ENGINEERING, WHICH WAS ESTABLISHED IN 1969. DNV HAS A STRATEGIC RESEARCH COLLABORATION AGREEMENT WITH THIS UNIVERSITY FOCUSING ON THE MARITIME INDUSTRY. EFFECTIVE MARITIME TRANSPORTATION AND SHIP DESIGN OPTIMISATION ARE THE TWO MAIN TOPICS. >>
© iS
tock
46 – no 02 2010
+ Research & development
His office is loaded with knowledge, as the bookshelves, tables and every avail-
able space are full of reports, binders and books. “I was one of the first students at the School when it started some 40 years ago,” says Professor Psaraftis. Since then, it has slowly grown into what it is today.
“In the study with DNV, we are not try-ing to design a better propeller. We are examining the specifics of the operational matters. The results are very important and will be reported to the IMO’s MEPC (Maritime Environmental Protection Committee). The SOx and NOx emis-sions are under some sort of control, but the CO2 emissions are not. Typically, it is hard to reach an emissions reduction agreement with many countries, as could clearly be seen from the lack of success at the recent COP15. Some 65 submis-sions regarding reductions have been made to the IMO, but how to ever come up with a solution may be a key ques-tion.”
DNV’s collaboration with the university focuses on the maritime industry; 2009 was the second year of a three-year initial phase. In the context of effective maritime transportation a sub-objective is entitled ‘Emission/Logistics tradeoffs’ examining various tradeoffs towards the goal for
reduced ship emissions; it may impact the cost-effectiveness of the maritime logistics chain. Sub-objective two is entitled ‘Impact of security using game theory’; its purpose is to address maritime security problems with the use of game theory. Various papers have been produced on the project. On
behalf of the University, Professor Psaraftis expresses his gratitude to DNV for its con-tribution and collaboration.
SPEED AND APPLIED SECURITY GAME THEORY
“The studies show that for container car-riers there is huge potential in adjusting the speed of any voyage, as the idea of going at full speed just to wait a week or two for a cargo at port is not very envi-ronmentally friendly. The safety is basi-cally built into the ships, the security is the owner’s responsibility and the whole risk picture, complex as it may be, must be evaluated.
“Game theory is a great way to do just that. Several topics are included here, but typical items include piracy as well as con-tainer scanning facilities in ports. All con-tainers going to the USA must be scanned for contents; here container handling and operational modes are put into the game programmes,” says Professor Psaraftis.
PORTS AND TERMINALS
“DNV has a strong R&D focus, and we have worked together on EU port and terminal projects. As the EU wants to shift cargo from land to sea, it is becoming more important to examine the whole transpor-tation chain,” says Professor Psaraftis.
MAKING MARITIME TRANSPORT MORE EFFECTIVE
“PART OF THE WORK WE DO FOR DNV IS ON THE IMPORTANT ISSUE OF HOW TO REDUCE EMISSIONS,” SAYS PROFESSOR HAILAOS N. PSARAFTIS, WHO HEADS THE LABORATORY FOR MARITIME TRANSPORT
AT THE NATIONAL TECHNICAL UNIVERSITY OF ATHENS.
TEXT AND PHOTO: MAGNE A. RØE
I “It is important to have a holistic approach to emis-sions, safety, the whole transportation chain and secu-rity in the light of the increased consumption worldwide and more demand for ships in the long-term perspec-tive,” says Professor Hailaos N. Psaraftis, who heads the Laboratory for Maritime Transport at the National Technical University of Athens.
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48 – no 02 2010
+ Research & development
Professor Papanikolaou spent almost half his life in Germany at the University of
(West) Berlin, and before that a few years at the University of Hawaii.
“All my background is within ship design and hydrodynamics, which fits in very well with the Laboratory of ship design’s focus. I came to the university in Athens in 1985; after a few years we initiated the founding of the laboratory. Our discipline focus area is applied hydrodynamics with a broad and fresh look at future and unconventional ship designs such as catamarans. We also work actively on design optimisation,” says Professor Papanikolaou.
RISK-BASED DESIGN FOR OIL TANKERS
“DNV is one of our partners in the risk-based design project. This is a new area that I find very interesting and challenging, and the study we conduct is extensive. We look at historical data and various accidents and assess the consequences of the accidents, focusing on the probability of loss of life, cargo and ship. We need to integrate a lot of data to optimise the ship and minimise the pollution and conse-quences caused by accidents.
“In addition, a main objective is to reduce the fuel consumption. I find what we are doing here to be unique in areas such as optimising the tank design, so that it has a minimum impact for cargo capac-
ity, as well as for steel weight. We have found this very interesting beyond the semi-empirical IMO rules. As a result of this risk-based work, we may conclude that the size of tanks will be limited to some 30–40,000 tonnes of oil. We find it reward-ing to be advising the technology drivers of class societies like DNV,” he says.
“When the Americans introduced the double hull, this did much to reduce the impact of accidents and vastly improved safety,” adds Professor Papanikolaou. “Together with DNV, we have been calcu-lating the cost of cleaning one tonne of oil spill; this is now estimated at USD 60,000. Insurance companies and ship
design companies can now implement measures to ensure that the right tools are used in the future. The results of our stud-ies may be a sloped double bottom design as well as increased ship height in the bow area – to get the cargo away from possible accidents. More oil cargo at the rear of the ship, less up front.
“In addition, we are looking at the side separation of cargo holds. This will lead to cargo capacity being reduced by maybe one third compared to a normal, say Aframax, tanker. Smaller ships will eventually lead to a larger number of ships, but we have to remember that the transport cost is only 3% of the cost of getting the oil from the producer to, for instance, a petrol station pump.”
NEW RULES FOR LARGE CRUISE SHIPS
Professor Papanikolaou continues: “On behalf of 18 partners – flag administra-tions, class societies, countries, yards and owners – we are working on GOALDS, which means Goal Based Damage Stability. The current rules for building ultra-large cruise ships are being examined and will eventually be changed. The objective is to increase a vessel’s damage stability so that either the ship can make it to port in a damaged state or it will be safer to aban-don ship if necessary. A ship must be able to stay afloat for at least three hours.”
TEXT AND PHOTO: MAGNE A. RØE
IMPROVING SHIPS’ DESIGN“IT TAKES CONTINUED EFFORTS IN MARITIME R&D AND THE EDUCATION OF SCIENTISTS, ENGINEERS AND SEAFARERS TO
ENSURE THE COMPETITIVENESS OF THE EUROPEAN MARITIME INDUSTRY,” SAYS PROFESSOR APOSTOLOS D. PAPANIKOLAOU AT THE LABORATORY OF SHIP DESIGN, THE NATIONAL TECHNICAL UNIVERSITY OF ATHENS.
I “DNV is one of our partners in the risk-based design project. This is a new area that I find very interesting and challenging, and the study we conduct is extensive,” says Professor Apostolos D. Papanikolaou at the Laboratory of Ship Design, the National Technical University of Athens.
no 02 2010 – 49
The National Technical University of AthensThe university is divided into nine academic faculties – eight for the engineering sciences, including architecture, and one for general sciences.
More than 700 academic staff, 140 scientific assistants and 260 administrative and technical staff. There is a total of around 8,500 undergraduate students and 1,500 graduate students. The nine faculties are divided into 33 departments.
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50 – no 02 2010
+ IT risk management
The AXA Group is a giant in the world of insurance and financial services,
with a client base comprising some 96 mil-lion individuals and businesses. The Group focuses on protecting the physical and financial assets of people and businesses. AXA France Services was established in 2003 to develop and implement solutions tailored to meet the company’s needs in terms of processes and information systems. The purpose was to ensure that AXA information systems were flexible enough to cope with any developments within the profession itself, and to become the pre-ferred supplier of advice and services to the company’s internal clients.
In order to reach its objectives, AXA France Services has over the past few years gone to great lengths to restructure its organisation and widen the skills and exper-tise of its staff. The results have been very positive. Today AXA has one of the most comprehensive change management centres in France, with 50 persons employed full time. And the quality of its change man-agement has been praised by publications such as the well known CIO Magazine.
During this journey, an important mile-stone has been working with DNV IT Global Services to standardise several best practices used for overseeing and
implementing projects, using the CMMI (capability maturity model integration) process improvement standard as a term of reference.
But how did AXA France Services arrive at its current position?
NEW BUSINESS REQUIREMENTS
Alexis Dugas de Baudan, head of the pro-fessionalisation programme at AXA France Services until 2010, saw a shift in the way the organisation regarded itself starting around six years ago.
“In 2004, we started looking at things in a new, more scrutinising way. Change management became an embedded con-cept, and we were suddenly looking at how to answer questions such as ‘how am I sure that my IT solutions are correctly used by the end-user’ and ‘how sure are we that my solution is a good solution for the end-user in an actual work situation’. This way of thinking emerged in consulting competen-cies around 2000 and became prevalent in AXA France Services in 2002.”
The shift in thinking in 2004 conse-quently triggered the professionalisation programme, which has been at the very core of the transformation of AXA France Services ever since. “In its initial phases, the professionalisation programme
focused on defining competencies and mapping functions, whether they related to the supervision, project management or quality of services. We focused on capi-talising on and describing internal best practices in maintenance, project man-agement, HR, and so on,” says Mr Dugas de Baudan.
In 2006, however, the focus shifted. Mr Dugas de Baudan explains: “Prior to 2006, the organisation was very traditional. For instance, our IT needs were still defined by using business analysis. And our focus was very much project-aligned, with for instance one IT support team allocated on a needs basis to the business areas. In 2006, we saw it becoming clearly neces-sary to have one dedicated organisation for each business area. And as a result of this we allocated dedicated teams, instruct-ing them to look at the business areas in a holistic manner: covering fields such as change management, IT and product management with one dedicated project manager.”
COLLABORATING WITH DNV
According to Mr Dugas de Baudan, through starting to collaborate with DNV IT Global Services in 2006, AXA France Services was able to identify and define the objectives
TACKLING VULNERABILITYTHE AXA GROUP REALISES THAT STAYING AHEAD OF THE GAME IN A TURBULENT AND UNPREDICTABLE GLOBAL ECONOMY
REQUIRES AN ABILITY TO CONSTANTLY ADAPT TO CUSTOMERS’ NEW EXPECTATIONS AND REQUIREMENTS.
TEXT: JANNICKE E. WITSØ PHOTO: AXA
no 02 2010 – 51
and targets that correspond to level two of the CMMI certification.
Mr Dugas de Baudan emphasises that DNV IT Global Services was the only company able to deliver both expertise in CMMI and the certification itself as well as guidance and coaching on the new project management practices.
“The good thing about DNV IT Global Services is that here we have a company that can deliver services for the entire CMMI process. After the initial phases, in which DNV IT Global Services explained what was possible with regard to level two of the CMMI and helped us to define specific measures, we sat down with its experts and created a plan to reach our goals. The last step of the process was
the dissemination of the practices devel-oped throughout the organisation. This was done by mixed teams consisting of experts from both DNV IT Global Services and AXA France Services – through aware-ness workshops and training.”
GAINING PREDICTABILITY
According to Mr Dugas de Baudan, the most important net gain from the CMMI process has been the increased level of predictability. “To me, one of the most important values added is that project management has become a predictable activity. With management quality services, we can now predict the future of projects. We can conduct risk analysis based on facts and see which projects won’t make it. Prior
to the professionalisation programme, we often thought there was something lacking, but we didn’t have the analysis to support backing out. Our new tools help us spend time more wisely while also enabling us to stop and redefine projects.”
I Alexis Dugas de Baudan.
52 – no 02 2010
+ Wind energy
HALF of the states in the USA, including the District of
Columbia, have mandatory goals for adopt-ing renewable energy portfolio standards with binding target dates; five other states have voluntary goals. A renewable port-folio standard is a state policy that requires electricity providers to obtain a minimum percentage of their power from renewable energy sources by a certain date.
Maryland Governor Martin O’Malley knows that this is a tough goal. Today, only 4% of Maryland’s energy require-ments come from renewable sources. Since Maryland has no hydro-electric power sources, solar power may generate about 2% of the state’s power needs, and more than 36% of the renewable energy will have to come from offshore wind farms. This will require about 825 x 3.5MW tur-bines. Fortunately, the US Department of Energy estimates that Maryland has “out-standing” wind energy potential that rivals or exceeds land-based wind resources in the Midwest.
Tough challenges, indeed, particularly since no offshore wind farms have yet been built in the USA. When Governor O’Malley met Ross Tyler, now Director of Clean Energy in the Maryland Energy Administration, he knew that Mr Tyler had the vision, experience and senior executive
capabilities to lead Maryland’s renewable energy programme.
A native of the United Kingdom, Mr Tyler has seen the development of offshore wind farms in the UK grow from 200 to 400 megawatt to two gigawatt installations. He knows the experiences gained in the UK, and he understands the unique chal-lenges in the USA.
“A successful plan for offshore wind energy in the USA requires the skillful bringing together of a lot of complex issues,” he says.
NO MAGIC BULLET
Today, Maryland is in the forefront of offshore wind development in the USA. When DNV Forum asked Mr Tyler to describe Maryland’s roadmap to meet its renewable energy goals by 2022, he quickly stated that Maryland’s plan does not have a magic bullet, but is the harmonisation of major building blocks.
“An important building block is that any renewable energy plan must equally recognise the energy and economic benefits – each may stand out on its own, but they are not mutually exclusive,” he explains. While the renewable benefits, such as energy security and diversity and a reduction of pollutants and greenhouse gas emissions are obvious, the economic benefits may not be.
“The American Wind Energy Association estimates that each megawatt of wind power generates 20 to 30 jobs. So, one gigawatt of offshore wind energy may create 20,000–30,000 clean energy jobs. In addition, Maryland estimates that about 80–100 off-shore wind turbines, of the initial demand for about 825 turbines, provide the size and
MARYLAND, USA:
825 WINDMILLS TO SOLVE THE CLIMATE CHALLENGE
THE STATE OF MARYLAND HAS A RENEWABLE PORTFOLIO STANDARD, REQUIRING 20% OF ITS ELECTRICITY TO BE GENERATED FROM RENEWABLE ENERGY SOURCES BY 2022.
TEXT: BLAINE COLLINS PHOTO: PETE ALBERT
I “A successful plan for offshore wind energy in the USA requires skillfully bringing together a lot of complex issues,” says Ross Tyler, Director of Clean Energy in the Maryland Energy Administration.
no 02 2010 – 53
scale to attract manufacturers,” Mr Tyler continues.
A predictable and stable federal regula-tory regime is necessary for financing, as well as for owners and operators to budget and plan for new energy power generation.
“Another aspect is cooperation,” he says, recognising that teamwork with the neigh-bouring states of Delaware and Virginia, primarily, but now most states along the East Coast allows for more attractive power purchase agreements and optimum solu-tions for a number of decisions, such as connections to the power grid.
PARTNERSHIP OPPORTUNITY
In addition, there is a unique partnership opportunity between the federal govern-ment, Maryland and Delaware to join together in a long-term power purchase agreement for one gigawatt of offshore wind energy. This would create the econo-mies of scale necessary to significantly
reduce the cost of offshore wind develop-ment, attract manufacturers of offshore wind equipment and installation vessels and accelerate the creation of green energy jobs.
“Of course, there is a long list of ocean planning issues, such as fishing, recreation, shipping, birds, marine life and eco-systems, telecommunications cables and many more to be taken into account,” he says.
On all accounts, it appears that Mr Tyler is successfully bringing additional renewable wind energy to Maryland. For example, in response to the Maryland Energy Administration’s request for expressions of interest, six offshore wind energy developers and three transmission companies responded positively. Indeed, all of the key factors these companies identified to reach Maryland’s renewable energy goals were anticipated, and fully addressed, in Maryland’s offshore wind energy plan.
ON THE PATH
2022 may seem like a long way, but Mr Tyler has Maryland on the path, step by step, to meet their target.
“There is a will by developers and the states alike, but all are hostage to the fed-eral regulatory process,” Ross concluded. “It is imperative that we work together to rapidly find solutions to expedite the per-mitting process and that the investment environment is supported with long-term mitigated risk, so that our nation and each coastal state are not left to trail behind Europe and China.”
He figures that the first offshore wind installation will be in place and generat-ing power within five years; admittedly an ambitious time line, but Maryland seems to be on its way to obtaining one-fifth of its energy needs from renewable sources by 2022.
54 – no 02 2010
+ LNG
SUMMER STUDENTS:
“WE HAVE FAITH IN LNG”ACCORDING TO DNV’S SUMMER STUDENTS, LNG COULD EASILY BECOME THE MOST FEASIBLE FUEL FOR SHORT SEA
SHIPPING. THE STUDENTS’ REPORT WAS PRESENTED IN FRONT OF AN AUDIENCE OF MORE THAN 200 PEOPLE – INCLUDING SHIPOWNERS AND REPRESENTATIVES OF THE SUPPLY INDUSTRY AND NORWEGIAN AUTHORITIES.
TEXT: JANNICKE E. WITSØ PHOTO: LEILA ASDAL
Ten master’s degree students from Nor-way, Sweden and Nigeria, chosen from
among 150 applicants, have worked on this year’s summer project assignment – LNG in
short sea shipping – for six weeks during the summer. The scope of the project was to set up a fictitious ship owning company operating ships fuelled by liquefied natural
gas (LNG) in the Nordic region. The stu-dents, who study technology and economics, investigated the challenges and opportuni-ties involved in using LNG to operate vessels.
no 02 2010 – 55
Says project manager Harald Gundersen: “DNV Summer Project 2010 has been a unique experience. We started off with a lot of input from DNV colleagues that helped us spin some ideas on the scope and possible approaches to the problem. I’m really impressed by the support DNV gave us throughout the project.
“Working on a project like this gives you the opportunity to use the knowledge you’ve gained during four years at university, and see that the tools actually work in a real-life situation.
“In school, we often face either outdated or futuristic cases that might be hard to relate to. In this project we got a scope that was realistic but at the same time up to date. The realistic approach motivated us and added credibility and feasibility to our results. In addition, the fact that we could use existing resources in DNV in the process made us comfortable about the quality of our final delivery.”
FACTS: SUMMER PROJECT 2010
I DNV’S SUMMER STUDENTS “With their report the students have provided shipowners with a blueprint – once and for all proving that it is fully possible to overcome the challenges relating to LNG as a fuel,” says DNV CEO Henrik O. Madsen.
During the six weeks, the students inves-tigated the preferred trade and ship type for LNG operations, created specifications for the ship design and provided a viable fuel logistics solution. They have proven that using LNG to operate a vessel is safe, environmentally friendly and economically profitable.
RESULTS
The market analysis conducted by the students showed that acquiring four Aframax-size oil tankers shipping crude oil was the most promising option when taking market attractiveness, technical feasibility, economic advantage and envi-ronmental impact into account.
The most relevant ports within the trade were identified, and Primorsk, Mongstad and Teesport stood out as exporters while Rotterdam stood out as an importer. While the major advantages of LNG as a fuel are superior environ-
mental performance and lower price, the weaknesses are the immature LNG market and the limited distribution infrastructure.
However, the students identified and presented a realistic approach to deal with these weaknesses.
Among other things, the students sug-gested that, in order to make LNG avail-able at a competitive price, large volumes of LNG should be bought on the global market and then shipped to an onshore storage facility near Rotterdam. The bun-kering of other vessels should then be provided by a refuelling barge.
DNV CEO Henrik O. Madsen says: “I was very impressed to see what the stu-dents produced during six hectic summer weeks. At times, I have found it difficult to understand why the shipping industry has not switched to LNG – given the great commercial and environmental advantag-es. However, with their report the students have provided shipowners with a blueprint – once and for all proving that it is fully possible to overcome the challenges relat-ing to LNG as a fuel.”
I DNV’s CEO Henrik O. Madsen opened the show and was impressed to see what the students produced dur-ing six hectic summer weeks.
56 – no 02 2010
+ Last word
MAGNE TØRHAUGDirector of Market and Business Development,Division Norway, Finland and Russia
The purpose of risk management is to take the right actions to handle the right risks. Do we know all the safety risks involved in offshore fields? In broad terms, yes of course we do. All the operator organisa-
tions have in-depth knowledge of risks and make great efforts to ensure the risk picture is kept up to date. However, there is still room for improvement. Two areas in particular can be mentioned: the first is risks due to the extrapolation of design principles. The second group of difficult safety risks is those due to the dynamics of change. An example is the handling of safety during complex operations, where safety barriers change during the operations. A major contributor to several large accidents has been ongoing repairs or unrepaired system failures, i.e. systems which were temporarily changed to be outside their intended design conditions.
Do we manage the safety risks we know in the right manner and, above all, do we deal with the right risks?
A well known challenge in risk management is structuring risk governance to ensure good risk reporting, the escalation and allocation of important risks in the organisational hierarchy, and good routines for the transfer of risks between different organisational units. We also experience that some decision makers have problems prioritising issues in order to handle the risk of rare accidents with major consequences. These risks tend to be undervalued due to their complexity. From a safety risk management point of view, this may not be optimal.
Looking beyond the immediate causes of accidents – what can we learn? The development of new technol-ogy and new organisational practices has provided useful tools for optimisation. The effects are highly valu-able improvements in technology and operations. This has, however, also changed the conditions for suc-cessfully practising safety risk management. In design and fabrication, there is much less room than before for failures and deviations from technical tolerances, i.e. a small deviation that was once harmless could now cause a serious failure. The requirements of accuracy in decision-making and work execution are higher than before.
We think there is a need to upgrade safety risk management. The most important improvement areas are:
1. Bring higher quality into risk management leadership, including governance structure. 2. Dealing with the dynamics of handling the risk of changing conditions during operations. 3. Improve the accuracy of risk assessments.
DNV is working to contribute to these improvements through joint industry projects and internally funded developments.
For the sake of good order – this is a general discussion and not based on any specific information from the Deepwater Horizon accident, and the experiences referred to are from a range of companies, including operators and suppliers to the offshore industry.
RISK MANAGEMENT AFTER DEEPWATER HORIZON
THE OFFSHORE INDUSTRY INVESTS CONSIDERABLE AMOUNTS IN SAFETY; THESE INVESTMENTS HAVE RESULTED IN A STEADY IMPROVEMENT IN SAFETY PERFORMANCE. DESPITE THIS – ACCIDENTS STILL HAPPEN. WHY IS THIS, AND WHAT CAN WE DO TO IMPROVE EVEN FURTHER?
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GLOBALPRESENCEDNV IS A GLOBAL PROVIDER OF SERVICES FOR MANAGING RISK, HELPING CUSTOMERS SAFELY AND RESPONSIBLY IMPROVE THEIR BUSINESS PERFORMANCE. DNV IS AN INDEPENDENT FOUNDATION WITH A PRESENCE IN MORE THAN 100 COUNTRIES.
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