TANKEROperatorea45bb970b5c70169c61-0cd083ee92972834b7bec0d968bf8995.r81.… · 2015. 1. 30. · INDUSTRY - MARKETS 04 TANKEROperator January/February 2015 Traditional crude trade

TANKEROperatorJANUARY/FEBRUARY 2015 www.tankeroperator.com

Features:�� Refinery growth� Flag states on regs� STS issues debated � NORDEN’s new MRs� Rudder protection� Enclosed space dangers

service and quality are within your reach

International Registries, Inc.��

tel: +1 703 620 4880 | [email protected] www.register-iri.com

January/February 2015 � TANKEROperator 01

ContentsMarkets� Trade routes changing� What next?

News Focus� Dealing with complexity

Middle East Report� Refinery ramp up� Tankers at ASRY

Ship Registries� Keeping a grip on regs� IRI’s success revealed

Front cover - As the competition hots up in the Middle East to win tanker repair contracts, Bahrain-based ASRY retrofitted several tankers withMewis Ducts last year during routine drydockings.

The large shiprepairer and engineering concern now claims to have stolen a march on the opposition having gained expertise in fitting the ducts,which have proved popular since they were introduced a few years ago.

With tanker rates hitting levels not seen for years, the region’s repairers should see business picking up, as owners and managers have more cash toplay with.

04

08

17

10

Commerical Operations� C/Ps need to reflect ECAs� STS issues aired� STS - a risky business

Anti-Piracy� A passive solution

Technology 25 Ship Description � NORDEN’s MRs

� LNG Ethylene Carriers 29 Ship Efficiency � Emissions Control

30 External Coatings � Protecting Rudders

� Carbon Credits’ Success � Ice Coatings

33 Tank Services � Enclosed space entry drills

29 Conference Report �Motivation need highlighted

25

13

24

TANKEROperator � January/February 201502

COMMENT

Are we over administered?

TANKEROperatorVol 14 No 3Future Energy Publishing Ltd

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The IMO is to be applauded forpublishing the findings andconclusions of its first ever publicconsultation on the perceivedburdens of administration.

The over-burdening of shipping folk was

thought caused by the slew of mandatory IMO

instruments, ie, conventions, codes and other

instruments that have appeared and keep

appearing on a regular basis.

In order to encourage the widest possible

participation by everyone with an interest in, or

relevant knowledge of, or work experience

with IMO regulations, the consultation was

launched under the banner ‘Have your say!’ on

a dedicated web page.

The web page was active between May and

October 2013 and responses could be given

either on behalf of an organisation (shipping

company, etc) or in a personal capacity.

All responses were processed and analysed

by a steering group supported by the IMO

secretariat. This steering group was established

by IMO’s Council and its tasks were to review

responses from the consultation and to develop

recommendations.

The IMO’s main objective was to identify

those administrative requirements in mandatory

instruments perceived as ‘unnecessary,

disproportionate, or obsolete’ which may

hinder effective regulatory compliance, making

it more complex and difficult, with

implications for daily shipping operations

efficiency.

In its review, the IMO said that it was very

encouraging that many seafarers took part in

the consultation as some 60% of the responses

came from Masters, senior officers and other

seafarers.

The analysis of their feedback, together with

that of other respondents, was conducted to

establish whether administrative requirements

were thought problematic, or not, by an

individual respondent (eg, a senior ship’s

officer), by a particular group (ships’ crews), or

by a variety of groups (ships’ crews and

shipping companies).

A perhaps surprising major finding was that

the majority of administrative requirements

addressed in the consultation process, 351 out

of the total of 563, or some 66%, were not

thought to be individually burdensome by any

of the respondents, the IMO said.

One respondent said the voluminous paper

work came from charterers, shipmanagement

companies, P&I Clubs and port agencies,

stating that administrative burdens emanating

from IMO instruments were “the very

minimum” by comparison.

However, even when individual

administrative requirements were justified,

their combined volume caused ships’ crews to

spend considerable time on bureaucratic tasks,

rather than actually operate the ship, which

might compromise safety.

Controlling controlSimilarly, to a large extent, inspectors focused

on verifying conformity with the correct

procedures and establishing that the necessary

check lists, reports and other paperwork, have

been produced to prove that the procedures

were followed correctly. An inspection thereby

becomes ‘control of control’, with a tendency

to evaluate the quality of the oversight system

rather than the quality of the ship and the crew.

The IMO came to the conclusion that the

nature of the listed requirements and the

stakeholder types involved provided a rather

diverse picture that cautioned against drawing

firm conclusions.

Calls were made for urgent change, for

instance, by working with ‘intelligent’

databases on websites with secure access in

order to rationalise paperwork.

This was indicative of a new, IT-savvy

generation seriously questioning the necessity

of keeping multiple records covering the same

event, or subject matter and asking why

inspectors seemingly spend more time pouring

over a ship’s certificates than physically

looking over the ship.

It was instead recommended that certificates

could be posted on a website with access

provided to accredited authorities, or,

according to one stakeholder, “a Facebook for

ships”, with all certificates available for

observation.

As another respondent put it, the tendency to

“smother everything we do with paper” is also

a result of a blame orientated and litigious

culture, encouraging everybody to increase the

paperwork as a means to demonstrate that

everything has been done to prevent mistakes

or mishaps and thus to avoid legal liability –

by pointing the blame elsewhere.

Significantly, it was noted that while the

majority of the 182 administrative

requirements thought burdensome were still

necessary, proportionate and relevant, it was

often the accumulation of requirements that

represented a burden and this was an important

issue IMO needed to address.

After hours of debate, the steering group was

able to adopt recommendations to the Council

by consensus, which addressed a wide variety

of matters. For instance, it was concluded that

the procedures perceived as burdensome –

some 24% – could be reduced by using some

form of electronic reporting, or notification.

Keen to be seen as keeping up with the ever

changing world we live in, the IMO has

produced an infographic listing the full

recommendations made following this

revolutionary questionnaire, which can be

found on its website. TO

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INDUSTRY - MARKETS


Traditional crudetrade routes changing

Long-established crude oil trade routes are being shaken up on the back of changes in

geographic supply and demand, primarily the US.

Many types of crude oil are

produced around the world.

Depending on the requirements

of a particular refinery, a blend

of heavy and light crudes is processed to

manufacture a variety of petroleum products,

McQuilling Services said in a report.

After peaking at 9.6 mill barrels per day

(b/d) in 1970, US crude oil production steadily

declined until it reached a low of 4.94 mill b/d

in 2008. During the same period, US crude oil

imports increased sharply to bridge the gap of

decreasing domestic supply and increasing

demand.

In response to declining North American

production and anticipation of rising heavy

grade imports from the Caribbean, Latin

America and Saudi Arabia, many US refineries

were reconfigured to process heavy crude in

the 1990’s.

At the turn of the 21st century, rising global

fuel costs led to advancements in crude oil

extraction technologies, setting the stage for

the development of the North American

unconventional crude oil industry. Since 2008,

supply from Canadian oil sands and US shale

reserves have grown by 80%.

The most significant aspect of the North

American unconventional crude oil

renaissance is the variety of crudes produced.

For example, the Canadian oil sands supply

heavy crudes and US shale reserves supply

light crudes. Because of the assortment of

crudes available from unconventional areas,

increased North American production has

displaced a wide range of foreign crudes,

which has led to the restructuring of long-

established trade routes.

Canadian exports to the US have had a

considerable impact on the global supply chain

and McQuilling forecast that this phenomenon

will escalate through 2019. Canada is a net

exporter of crude oil and as productivity from

its oil sands increases, Canadian exports to the

US will also expand.

Due to intermodal transportation constraints,

Canadian crudes have not reached coastal

ports to load tankers for more distant export

markets in any significant volumes. The US

remains the main beneficiary of Canada’s

growing export trade, absorbing around 97%

of its international crude sales.

Since nearly all US shale production is light,

heavy Canadian crudes are in high demand

from US refiners. Gulf Coast refineries use a

blend of light and heavy crudes to optimise the

crude types and increase operating efficiency.

Widespread effectConsidering the wide range of crude grades

available from unconventional North

American producers, commercialising the oil

sands and shale industries has had widespread

effects on global trade flows. Since 2005,

exports of heavy Canadian crudes to the US

increased by 1.5 mill b/d, while the US

simultaneously increased light crude

production by 4 mill b/d. The effect of rising

North American heavy and light crude oil

production on other trades is highlighted in

Figure 1.

By 2014, US imports from Iraq, Mexico,

Nigeria, Saudi Arabia and Venezuela declined

by 2.7 mill b/d from 2005 levels. Collectively,

about 1.5 mill b/d of heavy grade exports from

Mexico, Saudi Arabia and Venezuela to the US

were displaced by heavy grade Canadian

crudes, while the light grade Nigerian trade to

the US was almost completely decimated by

US tight oil production. As North American

imports declined, the tonnage was absorbed

into alternative markets. Figure 2 illustrates

the trade flow shift that has taken place over

the past decade, the consultancy explained.

In response to falling US imports, Nigerian

exports have primarily been diverted to the

Indian sub-continent and Europe. India’s

economy is expected to grow by about 6.5%

year-over-year through 2019. By 2019, India’s

crude demand is forecast to grow by 40% over

2010 levels. However, Indian crude production

is only foreseen to increase by 12% during the

same period, suggesting a supply deficit that

will drive greater crude imports.

Saudi Arabian exports to the US have

declined by roughly 20% since 2005. The first

U:1erugiF

stropmdnanoitcudorPliOedurCSU

erugiF 2: N

edarTnairegiN wolF nemtsujdA

stn

Source: McQuilling Services.

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INDUSTRY - MARKETS

It is far too early to see any impact for

owners/charterers in terms of operational

problems with the the new ECA

maximum sulphur limits introduced on

1st January. However, the decline in bunker

prices has at least softened the blow in the

short term.

We also expect to see the Ballast Water

Management (BWM) Convention ratified (and

implemented 12 months later) at some stage

during the year. This convention requires just

one moderately sized flag state to sign off the

code, which will compel owners to invest in

expensive treatment systems.

Several flag states are known to be keen to

sign up to the convention, but are reluctant to

be the one to tip the balance.

This year should also see the final few

single-hull tankers taken out of service. While

very few are still trading in the conventional

sense, mostly in the MR sector and below, this

could have an influence on scrapping levels,

Gibson said.

Overall, crude tanker supply growth slowed

considerably during 2014 on the back of low

ordering between 2011 and the first half of

2013 with the exception of Suezmax tonnage.

As a consequence, the crude tanker delivery

profile for this year is just 50 units of 10.6 mill

dwt.

Conversely, orders placed for product tankers

over the same period will impact rapidly into

the clean market during 2015 with almost 200

vessels of 12 mill dwt scheduled for delivery.

Ordering slumpSimilar to that seen in 2013, last year many

sectors of the tanker market finished with a

flourish. The difference between this year and

last is that thus far, we haven’t seen a

proliferation of ordering buoyed by the

improvement in the freight market. For the

time being, investments in new tonnage has

appeared to have largely dried up which for

most, must be viewed as good news, Gibson

said.

OPEC’s decision not to cut production may

have had some influence in this area and

speculation about how this decision will play

out ahead of the next scheduled meeting in

June remains rife.

Double-edged swordThe low oil price can be viewed as a double-

edged sword, stimulating oil demand but

creating downwards pressure in terms of oil

production.

The oil contango widened significantly

during the second week of January and many

protagonists assessed their position ready to

take advantage of the situation.

In addition, any changes to US/Canadian

policy on crude exports will also stimulate the

market and recent changes in condensate

exports legislation may be the first step to

achieving this, Gibson said.

significant decline in Saudi Arabian exports to

the US, besides the 2008/2009 recession

linked drop, took place in 2013, as a result of

Canadian oil sands production growth. By

2014, Saudi Arabian exports to the US had

decreased by 20%

over 2005 levels.

Figure 3 displays the

trade flow shift

caused by decreased

Saudi Arabian exports

to the US.

Growing demand

from India and China

has soaked up the

lion’s share of

displaced Saudi

cargoes.

As Canadian oil

sands production

expands in coming

years, Saudi Arabian heavy grade crudes will

continue to exit the North American markets

and into alternative growing markets, such as

China and India. By 2019, we expect that an

additional 500,000 b/d of Saudi Arabian

exports to the US will be displaced by

Canadian oil sands production, McQuilling

said.

“It is our view that economic growth in

China and India will generate enough demand

to take in the displaced Saudi production,

leading to increasing tanker demand on the

AG/East trades,” the consultancy said.

Trade flow rebalancing will be a central

theme in tanker markets for the next five

years. To better understand the changes in

global trade flows and the impact on tankers,

McQuilling Services has created a proprietary

vessel deployment model.

This model may help shipowners optimise

fleet deployments by providing the most

profitable triangulated trade routes across eight

vessel classes. This will be launched in the

upcoming ‘2015-2019 Tanker Market

Outlook’, which is due to be released this

month.

erugiF 3: ibarAiduaS

na edarT wolF stnemtsujdA

Source: McQuilling Services.

TO

Markets - into theunknown?

Leading London broking house, Gibson, has taken a look into its crystal ball to look at

some events, which could shape 2015.

TO

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INDUSTRY - NEWS FOCUS


In the short term that’s unlikely to

change so this paper will concentrate on

what the tanker operator can do to

reduce the impact on his business.

The question I want to answer is:- Does a

complex industry inevitably lead to a complex

company and complex shipboard operation?

The figure attached shows the key external

influences and internal choices that shape the

tanker operation. The external influences

provide boundaries within which the

organisation works. These boundaries can be

‘hard’ boundaries, such as are covered by the

law or they may be ‘softer’ ones, which the

operator chooses to adopt such as ’best

practice’.

Let’s look at the choices the operator can

make within those boundaries and consider

how that affects the complexity of the

operation as distinct from the industry.

The organisation’s strategy sets direction (ie

what the organisation aims to do) within the

boundaries and indeed may create further

voluntary technical, operational and moral

boundaries. Within the strategy, a number of

choices can be made that affect complexity.

For example, the scale of the organisation and

the markets it operates in will influence the

structure of the organisation, including such

things as the need for regional representation

and complexity of process.

Strategic decisions are not, however,

generally made to make business simple. So

some compromise will be required between

desired strategy and a simpler organisation.

There is a reasonable, though currently

optimistic, assumption, that in the long run

more complex markets should command a

premium, which provides the resources to

manage complexity effectively.

Ownership by a corporation, especially an

energy company, or conglomerate, can

introduce complexity. For example, incidents

in other divisions of the corporation can create

generalised, non marine, requirements for the

tanker division. While some of these

requirements can bring fresh ideas, these need

to be challenged to ensure the requirements fit

the marine operating environment.

The company’s motivation, why it does

things, is every bit as critical as strategy.

Values and culture provide a ‘sub plot’ for

people to follow when making decisions and

need to be clear and unambiguous. For

How to reducecomplexity in a

complex industryThe tanker industry is complex. Few would argue with that point and it would take a

separate article to tell the story of how that developed and how it works.*

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Key external influences and internal choices that shape the tanker industry. Source: MOAMS.


INDUSTRY - NEWS FOCUS

example a stated value such as openness is

subverted when people are punished for things

they have reported. A lack of openness means

that problems with complexity in systems and

process stay hidden.

Perceptions of the outside world are shaped

by the company’s values. For example, a

company that promotes and rewards, a

learning culture may generate more change

than the organisation can cope with. This

shows in an excessive willingness to introduce

changes from litigation, media and best

practice. The perception is that the

organisation should react to all stimuli.

Even if all the ‘what’ and ‘why’ choices are

made correctly, ‘how’ you deliver them can

create complexity.

Performance managementAn example is performance management.

Performance indicators are of great value and

there are some long established ones covering,

for example, daily running costs, downtime,

incident rates. Too many KPIs have

derivative goals and abstract measurements

which, especially when tied to inappropriate

bonus, can generate ‘cottage industries’.

An assumption that performance is linear

can mean that enduring KPIs eventually suffer

from the laws of diminishing returns.

Knowing when to stop using a KPI is as

important as starting it in performance terms!

There are very few genuinely enduring KPIs.

Another example is organisation structure.

Specialisation and layers of management are

required in all but the smallest companies. As

an organisation gets bigger, more layers

intrude and more specialisation is required.

Politics and personality can also become a

multiplier of complexity.

In the discussion thus far, one critical

dimension has not been mentioned - people

and their competence and training. In a

complex system the unexpected happens. The

nature of the system is that things happen at

the sharp end and the front line staff are the

ones who need to deal with the consequences.

To do that they need to have good technical

and non technical (human element) skills.

They also need to understand the organisation

they work for and what is expected of them.

They need to know they are supported and

trusted to do the right thing when procedures

and manuals run out of options. They should

be treated as the star goalkeeper not the red-

carded miscreant sent off for bad behaviour!!

To summarise:-

The tanker operator faces many

requirements that set his boundaries. Some

are mandated and some are not. The

operator’s perceptions are important in

understanding and applying the non mandated

ones.

In addition to externally driven requirements

there are many ‘what’, ’why’ and ‘how’

internal choices the operator can make that

define the complexity of the operation.

When the unexpected happens you need

good people to make good decisions in good

faith and feel supported

If you take these points into account then it

is not inevitable that the complexity of the

industry will drive a complex organisation and

complex shipboard operations.

*This article was written by Martin Shaw,managing director, Marine Operations andAssurance Management Solutions (MOAMS).

TO


INDUSTRY - MIDDLE EAST REPORT

Refinery capacitybuild up continues

During the past few years, there has been a huge revamp of refinery capacity involving

most of the countries that make up the Middle East.

While much of this capacity will

be used for domestic energy

and utility purposes, several

Arabian Gulf countries are

looking to export refined products to add to

their crude oil interests.

In addition, Iraq and Iran are seeking to beef

up their crude oil production from both new

inland and offshore fields. Much of this oil

will be transited via pipelines to loading

terminals in the Eastern Mediterranean and the

Arabian Gulf for export worldwide, especially

to China and India.

With both China and India also ramping up

their refinery capacities, tanker demographics

could fundamentally change in the coming

years. The unknowns thus far, which could

affect expansion plans in the longer term are

the falling oil price and any change by the US

Government over its stance on crude exports.

According to various reports emanating

from the region, the Middle East oil states are

in the middle of a surge in refinery

construction, which could increase regional

capacity by a third in five years, a recent

Bloomberg report said.

The International Energy Agency (IEA) said

last year that the oil producing countries

would have processed 8.8 mill barrels per day

of crude in 2014, almost 10% of global

consumption, the highest since the IEA started

estimates in 2006.

The Middle East saw its first wave of

refinery construction in the 1980s, but growth

in regional demand has absorbed much of that

capacity. The new refinery projects could

bring as much as 3 mill barrels per day of new

refined export capacity, reinforcing the

worldwide trend towards long-distance

products supply, resulting in longer

tonne/miles, Bloomberg said.

However, growth in exports may be reined

back, due to the countries energy consumption

rising twice as fast as the global average,

meaning greater domestic demand, according

to the US Energy Department.

Taking Saudi Arabia as an example, the

country’s refining production could overtake

its crude output, Reuters said in a report

published towards the end of last year.

The Kingdom, a key member of OPEC, also

recently committed to keep the crude oil

pumping at the same rate, despite the fall in

oil prices and the glut of crude oil worldwide.

As an example of its expansion, two new

refineries will give Saudi Arabia around

800,000 barrels per day extra capacity this

year, while its total capacity could rise to 8

mill barrels per day in 10 years time.

Product exportsWhile much of this will likely be consumed

domestically after 15-20 years to feed the

Kingdom’s growing economy, for now Riyadh

is set to become a major exporter of refined oil

products, such as gasoline, diesel and jet fuel,

the report said.

State-owned Saudi Aramco and its

subsidiaries own, or have equity interest in,

domestic and international refineries with a

total worldwide refining capacity of 4.9 mill

barrels per day, of which its equity share is 2.6

mill barrels per day, making it the world's

sixth-largest refiner.

In the kingdom, a 400,000 barrels per day

refinery- SATORP- located in Jubail, reached

full capacity during the middle of last year and

another similar capacity plant, Yanbu’s Yasref

refinery, started trial runs in September, 2014

with the first gasoil export cargo seen in

December.

Saudi Aramco's CEO Khaled al-Falih said

last May, that the company's downstream

investments would exceed $100 bill over the

next decade as high growth markets of the Far

East and the Middle East "will make us one of

the largest downstream players on the planet

by volume." To market its refined products,

the company has set up offices in Europe and

Singapore.

It has been exporting hundreds of thousands

of tonnes of product monthly to Europe and

Asia and negotiated spot deals through its

trading arm- Aramco Trading- to supply jet

fuel to the UAE and gasoline to Kuwait and

Bahrain last year, local sources told Reuters.

Aramco Trading was set up in 2012 to trade

and sell products directly to refiners. Other

national oil companies, including China's

Sinopec and CNPC, have also significantly

increased their trading arms.

"By 2018-19 Saudi Arabia will be

producing two thirds product and one third

crude. That will have great implication for

OPEC," Fereidun Fesharaki, chairman of

energy consultant FGE, said on the sidelines

of last year’s Oil and Money conference in

London, reported Reuters.

Seven refineriesAccording to Iran’s Mehr News Agency - the

National Iranian Oil Refining and Distribution

Co (NIORDC) has built, or is planning to

build, seven refineries across the country.

These are Khuzestan refinery, The Persian

Gulf Star refinery, Shahriar refinery, Anahita

refinery, Hormuz refinery, Caspian refinery

and Pars refinery.

When all of these refineries come on

stream, Iran’s refining capacity of crude oil

and gas condensates will be raised by

1,560,000 barrels per day, while 110 mill litres

will be added to its gasoline production, the

news agency reported.

While most of these refineries will be used

for domestic consumption, some, notably

Khuzestan, near Abadan and Hormuz at

Bandar Abbas, are, or will export refined

products.

However, according to a recent report from

Bloomberg, Iran’s oil exports have dropped

60% to 1 mill barrels a day, the Tehran-based

Shargh newspaper reported, citing comments

by Oil Minister Bijan Namdar Zanganeh

without detailing the time scale involved.

US and European sanctions on Iran over its

nuclear programme have curbed foreign

investment and hindered development of the

MEG state’s oil and natural gas reserves.

Predicting oil prices is impossible because

“political motives and interventions are

behind” the recent market collapse, Zanganeh

said, without explanation, according to

Shargh. He previously described the drop in



crude prices as “a political plot” and said Iran

would “under no conditions let go of its share

of the oil market,” the ministry’s news website

Shana reported on 17th December.

The drop in crude prices compounds the

pressure Iran faces from economic sanctions.

Efforts to reach a deal with the US and other

world powers over its nuclear work have

gained Iran some relief from the restrictions,

though diplomatic negotiations have been

extended until July amid differences,

Bloomberg said.

Iranian exports riseAnother report compiled by Platts said that

Iran had exported 2.94 mill barrels per day of

oil in December, 2014, some 430,000 barrels

per day higher than the month before. The

hike in exports was down to a recent deal

hammered out with the Kurdish authorities,

Platts said.

The exports include 2.76 mill barrels per

day from southern Arabian Gulf terminals,

along with 180,000 barrels per day shipped

from the Turkish port of Ceyhan, Iraqi oil

sources confirmed to Platts on 5th January.

Based on these figures, Iraq's production

during December was estimated at 3.4 mill

barrels per day, including 150,000 barrels per

day of Kurdish crude.

If confirmed, this would be the country's

highest production rate since 1979, Platts said.

November production was 2.89 mill barrels

per day, while exports were 2.51 mill barrels

per, according to the official figures.

Oil previously exported through an

independent pipeline system operated by the

semi-autonomous Kurdistan Regional

Government (KRG) was transferred to storage

tanks controlled by Iran’s State Oil Marketing

Organisation (Somo) to be exported from

Ceyhan.

This followed the

13th November, 2014

agreement between

Erbil and Baghdad

under which the KRG

agreed to supply at least

150,000 barrels per day

of oil to Somo.

The northern export

rate is expected to

increase to 550,000

barrels per day through

2015, with 150,000

barrels per day supplied

by the KRG and

300,000 barrels per day

supplied by Iraq's North

Oil Co.

These volumes will

all be transported by the

new KRG export

pipeline, according a subsequent agreement

reached on 2nd December.

The record export rate indicates an average

pumping rate of around 115,000 barrels per

hour to the Gulf terminals. If sustained

throughout this year, it will go a long way to

vindicating the assumption made in Iraq's draft

2015 budget under discussion in parliament at

the time of writing, which forecasts 2.75 mill

barrels per day of exports from the south,

Platts said.

Northern Iranian exports - excluding the

KRG's own exports by pipeline and trucks -

averaged 62,000 barrels per day in 2014,

compared with 263,000 barrels per day in

2013.

This sharp drop was as a result of the

closure of the Iraq/Turkey pipeline due to

sabotage in March and the subsequent

takeover of the pipeline area by Islamic State

militants since mid-June.

However, southern exports rose on average

328,000 barrels per day to 2.5 mill barrels per

day, compared with 2.13 mill in 2013. The

increase could have been larger if the

necessary pumping and storage infrastructure

were in place, Platts said.

As much as 3.1 mill barrels per day of

southern crude was available for export at the

end of last year, in addition to 7 mill barrels

stored in tanks, which could have added

around 200,000 barrels per day to the export

rate, Platts concluded.

Other Middle East countries known to be

involved in refinery upgrades, or the

introduction of new plants, include Egypt,

Iraq, Jordan, Kuwait, Oman, Qatar, Syria,

UAE and Yemen.

The key of course, is whether the falling oil

price is sustained through this year and

whether the Chinese economy continues to

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Political map of the Middle East and its surrounds.



Tanker success atleading Gulf repairer

Bahrain-based shiprepairer ASRY repaired 32 tankers in the first half of 2014, the same

number as in the first half of 2013.

The figures for the full year were

not available at the time of writing.

The majority of tanker work last

year was routine drydockings.

However, several dockings included the

installation of Becker Marine Mewis Ducts.

Due to the number of Mewis Duct

installations that ASRY has undertaken, the

repairer has managed to bring the turnaround

time down to be much less than most of its

competitors, the company claimed. For

example, the shipyard completed a full

drydocking, including the Mewis duct

installation, on an a Greek-owned VLCC in 10

days.

Down the years, ASRY has built long-term

relationships with many leading tanker owners

and managers, including Bahri, KOTC,

Odfjell, Springfield, BW Fleet Management,

UACC, AMPTC, Redsea Marine, Solvang,

Transpetrol, Sun Enterprises, Chandris Hellas,

and more. Recently, Maran Tankers joined the

list, thus boosting the Greek presence.

A company spokesman said that there were

positives and negatives for the shipyard going

forward in the tanker market. The positives

include the political changes in the region,

such as Iran’s sanctions loosening and Iraq’s

recent crude export highs.

In addition, this year should see the first

dockings of over 600 tankers for their statutory

five-year surveys since they entered service in

2010; the implementation of regulations, such

as the Ballast Water Management Convention

and emissions restrictions, will also result in

tanker owners/managers looking to upgrade

their vessels; while a relatively low level of

tanker fleet growth will mean current fleet

optimisation will be increased.

Negatives include the overcapacity in the

tanker market keeping spot prices low directly

impacting the owners OPEX budget; uncertain

docking schedules from the majority of

tankers being in the spot market; and the

increased repair capacity in the Gulf Co-

operation Council (GCC) region.

Based on the above, looking forward, ASRY

forecasts that tanker rates will continue to be

under pressure in

2015, due to an

overall limited

demand and

abundance in

available supply.

For crude

carriers, the

shipyard

predicted stability

to still be quite

far off, whereas

there is more

positive outlook

for product

carriers. (The

reverse in

currently true-

but for how long?

- Ed)

Although the

value per project will remain on the low side,

more dockings can be expected involving

product carriers over crude carriers.

“Overall, we look forward to the possibility

of global GDP rising, meaning oil demand

picking up and tanker fleet utilisation

increasing, resulting in better freight rates for

owners and bigger projects for shipyards,” the

spokesman said. “Realistically, this optimistic

situation is still uncertain with the political

tensions in the region looming large.”

Meanwhile, ASRY has continued its strategy

of teaming up with leading OEMs and service

providers.

The latest tie-up came last November and

involved MAN Diesel & Turbo, who now has

a permanent presence in the shipyard. The new

MDT workshop area allows its service

engineers to provide authorised support to the

company’s products installed on vessels

calling at ASRY and the Kingdom of Bahrain.

This agreement is the latest development in

‘Project Jupiter’, an initiative to give ASRY

the leading portfolio of on-site specialist

contractors in the Middle East.

“ASRY is proud to have attracted one of the

most recognised names in the global marine

industry to Bahrain,” said Nils Kristian Berge,

ASRY CEO, “and we will undoubtedly benefit

from having authorised experts on hand to

provide quick services and repairs to the many

customers which choose MAN’s products.

Combined with other recent additions to the

yard under ‘Project Jupiter’, such as Seven

Seas, ABB, Solas, and more, ASRY is securing

its position as a regional hub for authorised

marine expertise.”

Olaf Gunia, general manager of MDT

Middle East, commented, “Being able to

widen our authorised support network to

include ASRY and the Kingdom of Bahrain is

an excellent boost to MAN’s presence in the

region. ASRY’s addition ensures that

customers who choose our products can be

confident that our experts are present at the

majority of the world’s major shipyards.”

ASRY already accommodates 33 specialist

contractors at the yard, including Gates, Alfa

Laval, Blohm+Voss, Harris PYE, Goltens, and

more. As ‘Project Jupiter’ continues, 2015 will

see several more leading service companies

and OEMs take up permanent residence in the

yard, the company said.

As well as undergoing normal drydocking, Maran Tankers' VLCCElizabeth I A was retrofitted with a Mewis Duct.

TO


INDUSTRY - SHIP REGISTRIES

It seems that the world is becoming more

litigious with national and international

edicts coming thick and fast. Many of

these have come from the IMO through

its membership- the flag states themselves, but

others have been thrust upon them, mainly for

environmental reasons.

This has put an extra burden on ship

registries coming in the form of administration,

vessel inspections and trying to double guess

Port State Control (PSC) officers to remain of

the various PSC administrations ‘White Lists’

and thus avoid PSC inspections altogether.

Down the years, most flag states have come

up to speed with safety legislation resulting in

the old ITF mantra ‘flag of convenience’

almost becoming a thing of the past. Indeed,

the largest flag states by tonnage of Panama,

Liberia and the Marshall Islands are now

considered to be ‘blue chip’, a situation that

would have been unheard of some 15-20 years

ago.

Tanker Operator sought the views of two of

the leading flag states/registries on a range of

issues, which could affect vessel operations in

the future.

Perhaps the most pressing issue is the Ballast

Water Management Convention, which should

be ratified this year, meaning it will enter into

force in 2016.

For example, David Pascoe, head of

maritime operations & standards, Liberian

International Ship & Corporate Registry

(LISCR), the US-based manager of the

Liberian Registry said that Liberia has

concerns about the PSC inspection of BWM

systems, because some of the systems have

operating limitations that are still unknown.

“Liberia has strongly supported the revision

of the G8 type-approval guidelines to make the

process for approving ballast water treatment

equipment more robust. Liberia again

expressed its support for a revision of the G8

guidelines at MEPC 67 and was pleased when

the committee agreed to begin a

comprehensive review. Liberia is participating

in the review,” he said.

He explained that Liberia was participating

in the work involved. “As a party to the BWM

convention, Liberia is conducting additional

assessment of currently type-approved BWM

systems intended for installation on Liberian-

flagged ships. If potential limitations are noted,

they are included in an appendix to the type

approval certificate issued by Liberia. We

believe this additional information will help

shipowners in their decisions regarding BWM

systems.”

Liberia has also supported Resolution

MEPC.253(67), which was agreed at MEPC 67

and recognises that shipowners who have

installed type-approved BWM systems, prior to

application of the revised guidelines (G8),

should not be penalised and that PSC should

refrain from applying criminal sanctions, or

detaining a ship, based on sampling during the

trial period of two-to-three years following

entry into force of the Convention.

Goal Based StandardsAlso coming to a head is Goal Based

Standards in vessels construction following the

acceptance of the Harmonised Common

Structural Rules.

Pascoe said Liberia was pleased to learn at

MSC 94 that IACS had completed the

submission to the IMO of its member class

societies’ documentation that is needed to start

the Goal Based Standards verification audits.

“However, we have certain concerns that

some difficulties were identified that will make

the work of IMO’s five audit teams more

complex and difficult. It is hoped these will be

sorted by mid-2015,” he said.

At the end of last year, LISCR said that it

had expanded its Middle East presence not

least with the appointment of Fay Catsiba to

the position of business development manager,

based in Dubai.

Pascoe explained, “The Middle East and

Indian subcontinent is an area of strategic

importance to the Liberian Registry. The

Liberian Registry is committed to providing its

clients in the region with the highest possible

level of service and immediate access to the

quality of expert advice they demand.”

Sunil Jaitly, the founder of Dubai-based

marine consultancy and engineering services

specialist Cleghorn Wilton and Associates

(CWA), is a regional director of LISCR.

In addition to managing CWA, he represents

LISCR at all maritime events, both government

and private, in the Middle East and in the

Indian subcontinent. “This has helped increase

the visibility and presence of the Liberian flag

in the region and enabled local and

international shipowners alike to receive first-

class, prompt flag administrative and

engineering services, Pascoe said.

CWA is LISCR’s authorised agent, providing

a wide range of registration, flagging and

certification services to shipowners and

managers from the west coast of Africa across

to the Far East.

Greeks dominantLiberia has also become the flag of choice for

Greek shipowners and operators, securing the

leading position for the first time in more than

40 years, since the early 1970s.

Recent figures produced by the Greek

publication ‘Shipping & Finance’, which based

its findings on data from the Marine

Information Services database for Greek and

Issues abound thisyear for flag states

There are several regulatory initiatives in the pipeline this year that ship registries (flag

states) need to keep a grip on going forward.

LISCR’s David Pascoe.



Cypriot shipping companies, confirmed that

the Greek merchant fleet now includes 800

Liberian-flag ships, 10 more than registered

under the Greek flag and 300 more than are

registered under the flag of Panama, LISCR

claimed.

Scott Bergeron, LISCR CEO, said at the

time of the report,“This news is testament to

the strong links which have existed between

Greek shipping and the Liberian flag, dating

back to the day in 1949 when the Stavros

Niarchos-owned oil tanker World Peacebecame the first ship to be registered under the

Liberian flag.

“From that time until the present day, the

Greek shipping community has supported the

Liberian Registry, and vice-versa, through

good times and bad.

“Liberia’s dominant presence in the Greek

shipping sector owes much most recently to the

efforts of Michalis Pantazopoulos, senior vice

president of LISCR (Hellas) in Piraeus, and to

the continuing support of Capt Nick Soutos,

president of the Soutos Group of companies

and Consul General of Liberia in Greece since

1971.

“The shipping ties between Greece and

Liberia have become even stronger during the

extremely difficult economic climate of the

past six years and it is gratifying to see that the

Liberian flag is now the number one choice of

Greek owners and operators.

“Greece remains the undisputed number one

shipping nation in the world and it is

appreciable that it has demonstrated its

continuing faith in the world’s leading open

ship registry in such a transparent way,” he

concluded.

Turning to the problem of a dwindling world

vessel orderbook, Pascoe said that ship

registration, like all other sectors of the

shipping industry, is highly competitive and

will remain so throughout the continuing ups

and downs in the market.

To fail to compete is to compete to fail.

Competitiveness among ship registers, again

like that in other maritime sectors, is based on

service and price and, perhaps more than any

other part of the shipping industry, the results

are transparent through PSC findings and other

independent arbiters of safety and quality.

Ship registries, which are able to show a

healthy and consistent growth in ships and

tonnage on the strength of first-class service

provided at a competitive price, while still

appearing on all PSC white lists, should be the

registries with which quality owners look to

flag their ships.

“The safety of ships and personnel must

always be the number one priority for ship

registries. Progressive registries must be

proactive in the interests of their customers in

today’s industry, anticipating problems where

possible and providing solutions which keep

ships moving safely and profitably,” he

stressed.

As for servicing the tanker sector in

particular, he said that many of LISCR’s

managers in its US head office and in its

regional offices around the world have

operational experience on tankers and/or have

work experience as classification society

surveyors, naval architects and marine

engineers.

As a result, tanker owners and operators are

always provided with rapid access to specific

expertise and experience, wherever and

whenever they need it.

IRI provides administrative and technical

support to the Republic of the Marshall

Islands (RMI) flag. In 2014, the tonnage

of vessels flying the RMI flag increased

by 17% reaching 114.5 mill gt by year end.

The two largest vessel types under the RMI

flag are bulk carriers and tankers each

representing 36% of the fleet in terms of gross

tonnage. Gas carriers, another growing sector,

now stand at 9% of the tonnage of vessels

registered.

Ramage also indicated that the RMI Registry

still has several more tanker newbuildings to

come, despite a general downturn in ordering.

A certain amount of consolidation occurred in

tanker fleets last year and many of these new

additions to fleets, by way of mergers and

acquisitions, entered the RMI registry.

This increase in tonnage has led to a beefing

up of key personnel worldwide to service the

vessels and their owners. Ramage said that

recruiting the right people is essential and IRI

is in the fortunate position of having 26 offices

located worldwide thereby giving a wide

geographical spread for potential recruits.

The offices cover the key time zones,

enabling IRI to offer 24/7 service, which is

aided by a number of departmental specific e-

mail addresses whereby an owner, or his, or her

representative, is able to contact the relevant

department of the registry at any time and those

personnel located in the relevant time zone can

deal with the enquiry. In addition to the

departmental contacts the RMI also has a duty

officer system, which is available to respond to

emergencies 24/7.

Each of the worldwide offices has at least a

Master Mariner, a technical expert and a class

IRI expands on allfronts

“We have had an exceptional year,” claimed International Registries (IRI) Chief

Operating Officer, John Ramage.

TO

IRI’s COO John Ramage.



expert on hand, or a combination of all three, to

field any query that an owner has. It is this

focus on providing first class service that has

made the RMI the flag of choice for many

owners and operators, Ramage claimed.

Local knowledgeLocal knowledge is also deemed to be an

important element of the service, as the registry

quickly realised that it was impossible to look

after shipowners’ interests from one location.

Owners need to be able to discuss issues with

the registry in their own time zone; it is not

practical to expect them to wait 12 hours until

the office opens. “You are only as good as your

people,” Ramage stressed, and IRI is fortunate

to have a conscientious and committed team of

people.

This year will see the ramp up of a training

initiative, spurred on by the hiring of new

people, from general office staff to those with

technical expertise and for senior management.

For example, several high level people have

been recruited from class societies who have a

very good technical and regulatory background

but training is required to explain how a flag

state administration operates.

Training will be a combination of in-house

and external training including CBT packages.

A number of staff have completed a diploma in

shipmanagement to gain a better understanding

of the industry. Regular quarterly management

meetings are held at which in-house procedures

are reviewed, modernised and streamlined to

eliminate any outdated methodology within the

company.

These initiatives are now necessary as the

role of the flag state has changed considerably

over the years. A responsible flag state is one

which has a close relationship with the owner

and class and has the expertise to achieve a

balance between enforcing the various

international conventions and providing

guidance and assistance to the owner.

Ramage stressed that IRI looks for owners

who have a long term view of shipping and are

committed to operating their vessels in a safe

and secure manner. Any new potential

companies wishing to use the RMI flag for

their vessels will undergo a thorough vetting

process together with the management

company, if applicable. The management will

also be visited by registry representatives if that

company has not used the flag administration

before.

Like most flag states, IRI uses the class

societies as recognised organisations (ROs) to

conduct surveys and undertake other statutory

work on behalf of the RMI Registry. The IMO

subcommittee on Flag State Implementation

(FSI) has developed a new Code for ROs,

addressing its purpose, framework and

structure, based on all existing requirements

and recommendations of IMO instruments

regarding ROs.

RO guidelinesSome important resolutions relating to ROs

include guidelines for the authorisation of

organisations acting on behalf of��

The 2013-built Marshall Islands flag MR Front Avon seen outward bound in the River Elbe.

Fleet growth

As at 31st December, 2014 Source: IRI

Vessels

Mill g

t



Vessel

Bulk carrier

Container

Gas carrier

General cargo

Miscellaneous

MODU

MOU

OSV

Passenger

Tanker

Yacht

*As at 31st December, 2014. Source: IRI.

Number

950

304

131

117

40

159

50

169

10

899

514

Fleet %

28

9

4

3

1

5

1

5

0.3

27

15

Gross tonnes (mill)

41.1

10.6

10.1

3.3

0.6

4.0

2.6

0.4

0.3

41.6

0.1

Fleet % gt

36

9

9

3

0.5

3

2

0.3

0.3

36

0.1

administrations and guidelines on specifications

on the RO’s survey and certification functions

acting on behalf of an administration.

According to the IMO, this Code provides a

consolidated instrument containing criteria

against which ROs are assessed and authorised/

recognised and gives guidance for subsequent

monitoring of ROs by flag state

administrations.

It was adopted last year at MEPC 65 and

MSC 92. The two committees also adopted

amendments to mandatory instruments, which

were expected to enter into force on 1st

January, 2015 to make parts 1 and 2 of the

Code mandatory under MARPOL annexes I

and II, SOLAS and the 1988 Load Line

Protocol, the IMO said.

“We need class in order to fulfil our function

as a flag state administration and in this regard

it is essential to have people with expertise of

both technical and regulatory matters. We have

a person dedicated as our class liaison who is

in daily contact with the various ROs,” Ramage

explained.

As for the Ballast Water Management

(BWM) Convention, the RMI Registry is

generally happy with the port state control

(PSC) guidelines, which encourage a stepped

approach to inspection and without a need to

sample, unless there is evidence of clear

grounds to do so.

The RMI considers this to be a reasonable

approach, especially when considered in

conjunction with other agreements made by the

MEPC sub-committee, Ramage said.

Immediately as the BWM Convention enters

into force, there will be a three year experience

building trial period, including a moratorium

on sampling related detentions and criminal

sanctions.

In relation to the three year trial period,

MEPC noted that sampling and analysis

protocols need further testing before these

should be considered reliable grounds for

detaining a vessel. MEPC also addressed

another particular concern to ship operators, the

subject of ballast water sampling during tank

stripping operations, and here the committee

agreed it was inappropriate to take a sample

during the stripping process, when eductors are

in operation.

Regarding the International Association of

Classification Societies’ (IACS) Harmonised

Common Structural Rules (CSR) for tankers

and bulk carriers, which enter into force in July,

Ramage explained that the IMO assessment

teams are now making comments to be

addressed by the individual societies.

However, there is still a considerable amount

of work to be done by IMO in consolidating

the comments from all five teams before a final

report on the new rules’ compliance with IMO's

Goal Based Standards is submitted to the

Maritime Safety Committee in June, 2016.TO

IRI Registry vessel types*

INDUSTRY - COMMERCIAL OPERATIONS - ECAS


The new ultra low sulphur fuel

(ULSF) regulations in ECAs under

MARPOL Annex VI now requires

more than on board ship

preparations, they also require existing and

future charterparties to be reviewed and their

clauses to properly reflect the changes to

reduce the risk of disputes between owners

and charterers from a number of angles.

There are several issues that could give rise

to disputes between owners and charterers due

to the new MARPOL regulations, which

mandate the use of bunker fuel not exceeding

0.1% sulphur content by mass in designated

ECAs in North America and Northern Europe

from the beginning of this year.

These include:

� Trading warranties.

� Readiness of the vessel to enter an ECA.

� Fuel specifications.

� Delays and fines if a violation is alleged.

� Deviations to avoid ECAs, or limit the time

therein.

Owners and operators would be well advised

to consider these issues closely before

concluding new fixtures and also for any

existing charters, Skuld warned.

The insurance concern outlined a brief

overview of the types of issues that may arise.

Trading warrantiesCharters will typically specify the

geographical range in which a vessel can trade

and indeed usually provide a list of expressly

excluded ports, countries and areas.

This is very important, or the owner may

find that the charterer is at liberty to trade

without limit (Temple Steamship vs Sovfracht(1944) 77 LL Law Reports 257).

If a charter excludes North America and

Northern Europe, then the impact of the new

MARPOL Annex VI regulations should not be

an issue unless it is decided between the

parties to alter the trading range to include

ECA areas. Should such a decision be made,

then in particular the shipowner will have to

carefully review the position to ensure the

vessel can physically fulfil any contractual

promise to lawfully trade to such areas.

If a vessel is chartered out on the basis that

ECAs are within the agreed trading range then

an owner will have to comply with charterers'

lawful orders to go there, even if that is not

the trading pattern where the vessel was

previously employed (absent special factors or

contractual variations). English and US legal

positions will be similar on this, Skuld

explained.

Vessel readiness The shipowner typically undertakes, to a

certain degree, that the vessel is physically and

otherwise ready to perform the lawful orders

of the charterers, trade within agreed ranges

and carry agreed cargoes.

The nature and extent of this obligation,

including whether, or not, it is in the nature of

a continuing warranty, will very much depend

on individual charterparty terms, but it is

typically taken to be an obligation that goes

beyond just seaworthiness (The Derby [1985]2 Lloyd's Report 325).

For the US position, see Harloff vs Barber& Co, 150 F 185, 192 (DNY 1907). (The duty

is upon the owner of a ship to render her fit in

design, structure, condition and equipment to

encounter the ordinary perils of the voyage, to

follow and perform contractual lawful orders

and to be fit for the receipt and carriage of

cargo).

One question, however, which has come up

repeatedly in the run up to 1st January 2015, is

how extensive the obligation may be on a

shipowner to take steps to modify a vessel to

make her ready for trading in the ECAs, while

using ULSF.

Given that the ULSF will in all likelihood

have to be kept carefully segregated from any

residual high sulphur fuels, or risk cross

contamination and possible MARPOL

violation, vessels will have to check whether

tank and line arrangements, as well as

capacity, will allow this to be undertaken

safely.

Modern ships may have numerous fuel

tanks with separate lines, but older vessels

may have less capacity that can be dedicated

to the use of ULSF and tanks that previously

carried residual fuels are likely to require

extensive cleaning prior to switching to ULSF.

Modifications and cleaning are likely to

result in cost and time and it is not a

straightforward question, as to who would be

responsible, Skuld said.

While these issues may yet be tested in

arbitration, or litigation, it is likely that both

under English and US law, a vessel will be

contractually compliant if she can as a matter

of fact safely carry the ULSF separate from

the residual fuel even though she may have

limited tank capacity and may need to bunker

repeatedly while in an ECA.

It would, however, fall to the shipowner to

ensure that some tank capacity is available and

ready to be used.

Fuel specificationsBunker clauses have always been an important

part of charterparties, given that MARPOL

compliance is just one issue of many that

concern bunker fuel.

Despite the very significant price falls last

autumn for bunkers (following the drop in the

price of crude oil), fuel is still a very large

factor in a vessel's daily running costs and

ULSF costs can be double that of residual

fuels.

Bunker clauses need therefore to be carefully

drafted and inter alia address the following:

� The ISO specification and other specific

features/properties that the fuel should

possess.

� Price setting formulas for delivery and

redelivery bunkers.

� Bunker consumption criteria (typically

found in vessel performance clauses).

� Bunkering/fuel supply arrangement clauses.

� Bunker sampling and testing provisions.

Charterparty clausesneed to reflect ECAs

Insurance and P&I service provider Skuld has published an advisory notice outlining

how charterparties and their clauses should reflect the 1st January mandation of low

sulphur fuels in ECAs.


INDUSTRY - COMMERCIAL OPERATIONS - ECAS

� Specific MARPOL compliant fuel

provisions (often cited in a separate

specific MARPOL clause).

While it may be an implied legal term, at least

under English law, that fuel supplied must in

any event be fit and safe for the specific

vessel's engine (assuming engine description

criteria form part of the charterparty), it may

be prudent to have such warranty expressly

included as part of a comprehensive bunker

fuel clause. See also Wilford on timecharters'

discussion of the unreported case of NipponYusen Kaisha vs Alltrans (20th February1984). It is expected that US law may take a

similar approach to this.

Breaches delays/finesIf a vessel is inspected by Port State Control

(PSC), or other authorised government agency

(such as the US Environmental Protection

Agency (EPA)) and fuel on board is found to

violate the MARPOL standards, then it is

likely that a dispute may arise between the

shipowner and the charterers as to whether or

not contractual/compliant fuel was supplied

and what may have caused the fuel to be off

specification.

The issues that could be involved are

numerous and include:

� Possible supply problems.

� Contamination on board (tanks, lines,

mixing other fuel, etc).

� Sampling procedures.

� Testing procedures.

In any event, it is likely that a very technical

and scientific investigation would have to

follow in order to determine what the root

cause may be. Given the very low margin for

error in ensuring fuel is at no more than 0.1%

and the relative ease with which the ULSF

could be contaminated at some stage, this is an

area of concern going forward, Skuld said.

Vessel focusShipowners should expect that the policing

government agency will focus first and

foremost on the vessel for enforcement action

and penalties even if the ultimate issue is the

fuel as supplied given that contractual disputes

between an owner and a charterer will unlikely

be a way of raising a defence in such a

situation.

It may be, however, that if the issue is

indeed due to the charterers' supplied bunkers

then at least the vessel will not be offhire

(Nourse vs Elder Dempster (1922) LLoyd’sList Law Reports. 197). For the US position,

see The MV Kartini, SMA 1958 (Arb NY 23rdApril, 1984) ("the charterer is not permitted to

place the vessel offhire where the event

causing the loss of time is due to charterer's

breach of the charter party"); The MS OlympicMelody, SMA 2474 (Arb NY 26th April, 1988)

(the SMA panel ruled that hire during the

period of deviation was payable to the owners

of the vessel by the charterer since "no fault

[was] attributed to the ship. . . .").

DeviationsNo doubt charterers on a cargo voyage, or

owners on a positioning voyage, will seek to

reduce costs by reducing the need to burn the

more expensive ULSF and this may be

possible through careful voyage planning.

However, Skuld warned that practical and

commercial views should not race ahead of the

legal position under either the charterparty

contract, or the contract of carriage -in case of

a laden voyage.

Whether the deviation is taken to minimise

time in an ECA, or avoid it altogether, a vessel

needs to have the proper liberties in the

charterparty, as well as the bills of lading,

before she can take anything other than the

most direct route using utmost despatch to get

there (The Pearl C [2012] 2 Lloyd's Report533 and The Hill Harmony [2001] Lloyd'sReport 147 (HL)).

For the US position, reference may be made

to General Electric Co International Sales Divvs SS Nancy Lykes, 706 F2d 80, 84 (2d Cir1983) ("a deviation results when a vessel

'wander[s] or stray[s] . . . from the customary

course of the voyage'")(quoting Spartus Corpvs SS Yafo, 590 F2d 1310, 1313 (5th Cir1979)).

In the absence of an appropriate liberty

clause, the deviation may in breach of contract

and further it may also impact on insurance

coverage.

A careful review of existing arrangements

would be needed before changing course and

for future contracts, it will be prudent to

include appropriate liberties, Skuld advised.

Careful contracting is very important to loss

prevention, as an unsuitable contract, or an

overlooked clause, could have an unexpected

and very undesired effect that will hit the

bottom line as much as a mechanical

breakdown could.

Review arrangementsTaking the time to review existing

arrangements in the light of the upcoming

regulations and ensuring new contracts are

drafted appropriately will limit the scope and

risks for disputes in the future.

The time and effort spent on this will yield

dividends, even if it is not possible to

‘measure’ the value of the dispute avoided,

Skuld said.

Skuld acknowledged US law firm Chalos &

Co for its input on the US legal angles when

compiling this advice.TO

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INDUSTRY - COMMERCIAL OPERATIONS - STS


STS forum outlinesissues to beconsidered

Interest in ship-to-ship (STS) cargo transfer operations continues to grow worldwide, asmore than 12,000 operations were completed in 2013.

There are around 62 STS service

providers and the number is

increasing. However, not all have a

high level of safety and proper

procedures in place, a recent seminar revealed.

This and several other issues have emerged

since MARPOL, Annex 1 Chapter 8, came into

implementation in April, 2012, which regulates

STS cargo transfers, on a statutory basis.

At the seminar held last November,

organised by Clyde & Co in association with

INTERTANKO, panellists addressed various

questions, such as;

� Should STS service providers confirm the

examination of vessel STS plan prior each

STS operation?

� Should the Master rely on the advice of the

‘Person in Overall Advisory Control’

(POAC)?

� Should tanker owners sign the LOI

presented by the service provider, etc?

� On what grounds could a tanker be rejected

for participation at an STS operation?

� Should two POACs attend an STS

operation instead of one?

� Should charterers request for clearance of

service providers in the same way they

request clearance for participating vessels?

� Are the rest hours of POAC taken into

account during the planning phase of an

STS operation?

Under the chairmanship of Clyde & Co’s

Martyn Haynes, the panellists included Ajay

Gour– INTERTANKO, Dr Alexander Glykas–

OnlineSTS.net DYNAMARINe, Capt Bob

Gilchrist – SafeSTS, Eamon Moloney– North

P&I Club, Ed Mills-Webb – Clyde & Co and

Capt Keith Loffstadt – Fendercare.

INTERTANKO’s Ajay Gour described an

STS operation as a “controlled collision” and

said it was an unnatural operation. The

panellists agreed that West African operations

had improved considerably during the past

three to five years, however, from a P&I

perspective, this area is still a problem. They

said that some ‘rust buckets’ still exist and that

it was time to put pressure on charterers.

The answers provided by the panellists

commented on best practices, liabilities,

incurred logistics and statutory facts. The

overall outcome was that STS operations, as

regulated by MARPOL, have an increased

burden on tanker owners’ liability, who should

exercise their due diligence in order to protect

their reputation and actions.

Basically, third party service providers

provide an essential service to cargo owners in

order to undertake an STS cargo transfer. The

experience and level of advisory control of the

POAC is a factor that contributes to the safety

of the operation to the same extent of the

competency, training and preparedness of crew.

It was stressed that the Master should respect

and take into account the POAC’s experience

and advice, however he should not completely

rely on the POAC. At the seminar, North’s

Eamon Moloney claimed that the POAC

tended to be a “shadowy figure” and advised

that Masters should ascertain who they are

talking with and above all confirm his

qualifications prior to the commencement of

the STS. He said that a little bit more

transparency was needed on who they were and

how to get in touch with them after the event.

Gour said that there was a certain reticence to

criticise an operation after the event.

Clyde & Co’s Ed-Mills Webb urged Masters

not to handover the reins during an operation

before real caution is exercised. He warned of

accidents “in far flung places, where justified,

due diligence is lacking.”

DYNAMARINe’s Alexandros Glykas also

warned that a Master who relied on a POAC

could become complacent. He also asked;

“how do you define the experience of a

POAC?”

SafeSTS’s Bob Gilchrist said that a Master

should be gaining confidence in a pilot/POAC

during the approach to an STS operation. “A

Master should familiarise him/herself with a

POAC” and should approach an operation with

confidence.

The integrity and effectiveness of bridge

team management is an essential part of STS

operations, which builds the anticipated trust

between senior officers and the POAC. The

presentation of LOI’s from the service

providers to the Master is an “annoying”

procedure, which does not contribute in an

effective relationship between bridge team.

Tanker owners do not have a contractual

relationship with the service provider, thus such

LOI’s do not have substance, the panellists

said.

A POAC’s review of the STS plan should be

part of the joint plan preparation and tanker

owners should ascertain that such information

is made available to the provider, well before

the commencement of the operation.

A small ‘bump’ during operations could be a

financial disaster for an owner, resulting in $3

mill plus claims and possible offhire lasting

between 40- 60 days if a drydocking is

necessary.

ComplexitiesDYNAMARINe – onlineSTS.net has provided

an insight of the complexities of STS

operations that could jeopardise the reputation

of tanker owners. The procedures of

onlineSTS.net’s screening service set the

principles of a methodology of standardised,

but adaptable, actions towards ensuring safety

and vessel suitability, the company claimed.

The key element in all cargo transfer

operations is the post assessment of STS

records and to what extent those are

incorporated in the clearance and planning

phase.

Athens-based DYNAMARINe addressed

such questions as - do STS cargo transfers take

place according to OCIMF guidelines?

As mentioned above, STS transfer operations

are governed by the MARPOL chapter 8 of

ANNEX I, latest OCIMF guidelines and IMO

manual on oil pollution, section I, prevention

chapter 6.

These are the references that prescribe the



requirements for procedures towards ensuring

safety in all aspects, from the vessel

nomination and clearance until the completion

of the operation. Implementation of the

regulations and guidelines take place through

the tanker operators ISM, TMSA procedures, as

prescribed in their safety management system

(SMS).

ISM procedures and TMSA assessment

actions contain the necessary tools for

implementing the regulations for the “proper

and detailed planning”1, as well as the post

evaluation. Risk assessment procedures should

include apart from operational hazards, other

risks, associated with the involvement of third

parties, such as the service provider who

provides the POAC and STS equipment.

STS records should be retained for three

years, as a statutory requirement. Hence, the

assessment of such records provides an extra

level of valuable information for STS

operations. POAC2 screening is included as a

procedure within the IMO manual on oil

pollution and the STS equipment supplied

should be according to ISO 17357:2002.

Furthermore, the number and type of fenders as

well as rigging pattern, should take place

according to OCIMF guidelines, the company

said.

Third party quality assurance is of paramount

importance. For this reason OCIMF guidelines

provide the ability to the “users” (ie, the Master

and the vessel operator) to exercise their due

diligence with respect to the quality of the

services give by the service provider.

The Master should not proceed with an STS

operation, unless he/she is confident that the

operation has been properly planned and that

the service provider has presented a

comprehensive joint STS plan, which has

received the Master’s consent.

Master’s roleFor all STS transfer operations, each Master is

responsible at all times for the safety on his/her

own ship, including the crew, cargo and

equipment. The Masters must not allow the

safety on their vessels to be compromised

through the actions of others, such as by the

service provider and the POAC. Both Masters

must ensure that the procedures recommended

by latest OCIMF guidelines are followed as a

contractual commitment3 and assurance

towards safety.

STS operations require proper planning,

which starts from the nomination of the

participating vessel and progresses through the

technical advice to the Master, from his

principals.

DYNAMARINe stressed that the following

procedures should be followed:

� During vessel nomination, the vessel

operator should consider the clearance with

respect to vessel suitability, STS location

and past STS company records, etc. The

tanker operator should act with due care at

this stage and justify his clearance on the

basis of established policies.

� Prior to the commencement of each STS

operation, the vessel operator should

confirm that the nominated POAC is

qualified according to IMO regulations and

that he/she has sufficient experience in the

same size and type of vessels.

� The tanker operator should request the

fenders and hoses certificates to ensure that

they are manufactured and maintained

according to ISO 17357:2002.

� The service provider should present to the

Master a joint plan for the operation. This

plan should include the nominated size and

type of fenders, suggested mooring plan,

etc.

� The Master should confirm that the fenders

comply with OCIMF fender selection

guidelines. Should they be different, this

should be discussed and further clarified

with the provider.

� The STS operation should be completed

according to the approved STS plan.

� After completion, records should be

returned to the vessel operator to be

assessed for future reference for the

clearance phase and proper planning.

Footnotes[1] Bristol Crown Court. Mr Justice EderJudgment, Falkonera vs Arcadia, Case No2011FOLIO624.[2] Mooring Master.[3] Charter party requirement.

Last November, Clyde & Co inco-operation with DYNAMARINereleased a draft of a 15-pageguide, which contains 34frequently asked questions(FAQs), plus answers, regardingSTS transfer operations.

Since the ratification of MARPOL Annex

1 Chapter 8, some five years ago, greater

requirements have been imposed, which

have helped to make STS operations more

complicated for tanker owners/operators.

For example, the need for an STS plan

was an additional requirement to the rules as

laid down by OCIMF. IMO’s rules decree

that the STS plan be integrated with the

shipowners’ safety management system

(SMS), resulting in the plan being open for

scrutiny in the event of an incident and any

subsequent litigation.

Owners and operators STS responsibility

is not only defined by the existence of the

plan, they have to take a justified approach

that takes into account both commercial and

safety considerations, the authors said.

They explained that the guide was

produced to provide answers to questions

associated with the required knowledge of

tanker owners/operators and their Masters

and officers for STS operations.

This is a draft edition and the authors said

that they will soon publish the final edition,

based on questions raised by the tanker

industry during STS operations. �

STS operations FAQs

DYNAMARINe auditsTop Fenders

In December 2014,DYNAMARINe undertook anaudit on Top Fenders on behalfof its onlineSTS.net members.

This is the first time that 27 tanker

operators, with a fleet over 500 vessels,

performed a synchronised documentary

audit on a service provider, the company

claimed.

The audit did not require an on site visit

but utilised data provided by a third party,

as well as data available at

DYNAMARINe’ database- OSIS. In

addition, publicly available data was also

used, provided it was derived from credible

sources.

This audit report can be included in the

audit of the tanker operators at the

following TMSA elements - element 1

(Stage 3), elements 1 (Stage 4), 12A (all

stages) - as aiding the monitoring and

improving the services provided in STS

operations.

Top Fenders has experience in the West

African region. The company has also

recently opened up operations in different

locations in the Mediterranean.

In addition, an updated STS service

provider list is now available at the

onlineSTS.net website. �

TO



STS transfers are, however, more

risky than port-based operations.

The need to co-ordinate two

moving vessels requires specialist

assistance and, because such transfers usually

take place at sea, they can be more susceptible

to difficulties and delay.

Despite the increased frequency, the law in

this area remains relatively undeveloped.

Although standard clauses do exist, the few

reported decisions on STS transfers make it

clear that a tanker operator needs to give

careful thought to the specific operations

envisaged under a charterparty when

negotiating such clauses.

Charterparties often require the owners to

approve the second vessel in advance of an

STS operation. The wording of such

provisions varies, but a clause of this type was

considered by the Court of Appeal in The

Falkonera last year, in relation to a VLCC.

The charterers had the option of transferring

cargo to “any other vessel including, but not

limited to, an ocean-going vessel” and wanted

to conduct an operation with another VLCC.

The charterparty also provided that:

“(i) if charterers require a ship-to-ship

transfer operation or lightening… then all

tankers and/or lightering barges to be used in

the transhipment/lightening shall be subject to

prior approval of owners, which not to be

unreasonably withheld….

(ii) all ship-to-ship transfer operations shall

be conducted in accordance with the

recommendations set out in the latest edition

of the ICS/OCIMF ship-to-ship transfer guide

(petroleum)."

The charterers asked the owners to approve

the transfer to another VLCC. The owners

refused to permit the transfer, citing safety

concerns because the vessels were the same

size and, also, because such a transfer was not

envisaged by the version of the ICS/OCIMF

Guide current at that time.

The Court of Appeal decided that the

owners had been unreasonable in refusing the

charterers' request and found that, because the

charterparty provided a clear right to transfer

to another ocean-going vessel, to refuse a

request reasonably there would need to have

been "some characteristic of the [second]

vessel which would mean that the proposed

operation could not be carried out safely.”

Even though a VLCC-to-VLCC transfer

required more planning than a normal STS

transfer, in this instance there had been time

for such planning and there was nothing

inherently unsafe in a VLCC-to-VLCC

transfer, if such planning had been undertaken.

The Falkonera judgment makes it clear that,

if an owner wants an unfettered right to vet

transferring or receiving vessels, then robust

wording will be needed. Such wording would

need to give the owner the right to refuse the

other vessel based on its own discretion.

Charterers should be wary of such

amendments, however, because a broadly

drafted right to refuse an STS transfer (or to

delay while deciding whether to refuse) could

cause a charterer to incur substantial costs,

especially where there are two vessels

involved and often an ancillary web of sales

contracts.

Double banking Many timecharters contain a ‘double banking’

clause, which seeks to place the risks

associated with STS transfers onto the

charterer and, frequently, also provide an

indemnity from the charterers for any damage

that might result. The wording of such clauses

varies, with some applying only to cargo

operations (such as the current BIMCO "Ship

to Ship Transfer Clause") while others extend

to off-shore bunkering operations as well.

An earlier BIMCO clause was considered in

London Arbitration 2/99 in relation to

lightering a bulk carrier. The Arbitration

concerned damage by stevedores at three

locations in the Pipavav Roads, India. The

lightering operations took place shortly before

the monsoon, amidst "a prevailing swell and

tidal streams" with "numerous interruptions to

loading due to bad weather."

There was also some confusion about the

correct location for loading, and it was found

that the Master had moored in the first

location against the charterers' advice and

without the benefit of local charts (referred to

in the voyage instructions). The second and

third locations were specified by charterers,

however, and the vessel's hull sustained

damage in all three locations.

The double banking clause provided that the

charterers would "indemnify the owners for

any costs, damage and liabilities resulting

from such operations". The charterers were

also required to re-deliver the vessel in "like

good order and condition as on her delivery,

but with ordinary wear and tear excepted."

The owners claimed for the cost of repairing

the damage to the vessel’s hull, which they

said had been caused by the charterers

ordering the vessel to go to a place which was

"adverse, hazardous and unsafe for loading

heavy cargoes using grabs and barges with

inadequate fendering". The charterers claimed

that the damage had been caused by the

owners’ own actions and argued that the

Master had not tried to suspend the operation,

which he could "if in his reasonable opinion it

[was] not safe."

The Tribunal decided that, because the

owners had specifically agreed to load at a

named anchorage in the weeks before the

onset of the monsoon, they were deemed to

have reasonably anticipated the conditions.

Also, because the vessel had only been fixed

the day before the operation there was not

time to purchase local charts and "the Master

was entitled to anchor where he did, and had

acted reasonably in anchoring the vessel in

those places."

Nevertheless, the exception for "ordinary

wear and tear" had "to be considered in the

light of the trade for which both parties had

contracted". On this basis, the owners were

entitled to an indemnity for the damage

STS transfers- arisky business

The number of STS transfers has increased dramatically over the last decade,

particularly in UK waters where there has been a boom in operations taking place off

Southwold, Suffolk.*



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suffered in the second and third locations (to

which the vessel had been specifically directed

by the charterers) but not for the damage

suffered in the first. This could have been

avoided if the Master had followed the

charterers' advice and such damage was also

"to be expected when loading off-shore on the

West Coast of India from shore lighters."

London Arbitration 2/99 makes it clear that

an owner cannot guarantee being able to rely

on a double banking clause indemnity for all

consequences of an STS operation. The

"ordinary wear and tear" that might arise from

an STS in heavy weather in an unsheltered

location could be substantial. In addition, the

fact that damage arising from owners' own

actions might not be covered, even where

those actions were apparently reasonable and

not negligent, could have a significant impact

on the extent of the indemnity. This is

particularly important where, during an STS

operation, decisions might have to be made

quickly and without time to liaise with the

charterers.

A prudent owner will want to obtain an

indemnity from a charterer that extends to all

loss and damage incurred in an STS operation,

whether "ordinary wear and tear" or not. In

addition an owner will want to ensure that all

actions that a Master might take are covered

When negotiating a charterparty in which STS transfer is envisaged, it is important that careful thought is given as to how liability forsuch an operation is apportioned.



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by the indemnity. A charterer should,

however, be very careful about the extent of

any amendments here because some P&I

Clubs are known not to cover losses arising

from indemnities that cover Master's

negligence during STS operations.

When a vessel arrives to perform a loading

or discharging operation it tenders a notice of

readiness (NOR), which in turn starts time

running under the relevant voyage charter (and

sale contract). To tender a valid NOR, the

vessel needs to be legally (and physically)

ready to undertake the operation in question.

Approval issuesIssues have arisen regarding the need for

MCA approval before undertaking an STS

operation off Southwold. Although local STS

operators are known to obtain such approval

as a matter of course, the Merchant Shipping

(Ship-to-Ship Transfers) Regulations 2010

only apply within "United Kingdom waters",

where approval from the MCA is required

before an STS operation can take place.

Outside territorial waters (where many

transfers take place) the requirements are

different and "notification", along with a ship

transfer operations plan approved by the

vessel's flag state, are required instead of a

"permit".

This creates uncertainty where operations

often take place under way and can,

sometimes, start inside territorial waters but

finish outside. Disputes have arisen over

whether a vessel can be legally ready to start

an operation (and so capable of tendering a

valid NOR) before such approval, or

notification, has been arranged. Local

operators may want to obtain "approval" even

for operations taking place in international

waters and, even where such approval is

actually needed, there can be delays while it is

obtained.

These are issues that can be managed using

an appropriate rider clause, which clarifies the

situation and apportions liability for any delay

while approval is obtained, or notification

given. An owner will, in particular, want to

ensure there are no questions over when NOR

can be validly tendered to avoid disputes later

over when time actually started running for the

purposes of demurrage.

As these three issues make clear, when

negotiating a charterparty in which STS

transfer is envisaged it is important that

careful thought is given to how liability for

such an operation is apportioned.

Although clarity is, of course, the main aim

for both parties, an owner may want to vet a

possible second vessel if they have any

concerns (of whatever nature) and to ensure

the Master can proceed without having to

worry about the extent of the indemnity in the

charterparty.

An owner will also want clarity about when

an NOR can be tendered and perhaps to try

and make any delays in obtaining approval for

STS transfer something for the charterer's

account. These are all things which are better

clarified within appropriate rider clauses,

rather than being decided after the event in

costly arbitration or litigation.

*This article was written by Sean Gibbons andJoe Gosden. They are Partner and Associate,respectively, within the Marine andInternational Trade team at law firmStephenson Harwood. They both regularly actfor owners, charterers, oil majors andcommodities trading houses in litigation,arbitration and non-contentious matters.

TO


INDUSTRY - ANTI-PIRACY

Reports of razor wire being cut

through and armed guards not

always deterring the most

foolhardy of pirates from

boarding, (or armed guards not allowed in

certain territorial waters) means providing a

safe place for crew to muster has never been

more crucial.

Just recently, nine pirates in two skiffs

approached a tanker underway on the Red Sea.

With the alarm raised, the crew were

safeguarded by proceeding to the citadel on

board and no injuries or fatalities ensued.

Marine Armor System manufacture, supply

and install passive solutions (MAS) against

maritime piracy around the world, providing

ballistic protection to the crew. The installation

of MAS prevents pirates from being able to

take control of the bridge on board a vessel and

is also suitable for the creation of anti pirate

blockades, bunkers and armoured citadels.

MAS is manufactured using kriptonia, a

high-quality material stronger than steel.

Exclusive to the company, there are no other

comparable products on the market; it is the

only one with ballistic classification FB6

which stops military weapons.

MAS is part of the Collbaix group, which

has over 40 years’ experience in the

production, distribution and installation of

aluminium roller shutters, automatic glass

doors and high security blinds. Using this

extensive experience in providing secure

access solutions to both commercial and

residential properties, MAS was formed as a

solution against naval piracy.

Having listened extensively to industry

feedback, Marine Armor System has developed

a system with a manual override; providing a

lighter, simpler and more cost effective

solution.

The system is designed specifically for

windows, portholes and hatches and allows for

self- installation. One unit can easily be

installed by two crew members within a couple

of hours.

Weight is reduced by 25%, as the system has

no motors, no

electronic

components and is

manufactured in

lighter materials. This

results in a total cost

reduction of about

50% - while

providing the same

level of ballistic

protection against

piracy, terrorism or

sabotage. An

automatic system can

also be installed, which is essential for use on

the bridge and deploys in just a few seconds –

at the touch of a button.

Installation can take place anywhere

worldwide - onshore or offshore - as it does

not interfere with the ship’s normal

activity/operations. Designed to suit the ship’s

interior, when in use MAS does not reduce

visibility and is easy to maintain. MAS can

also be fitted during the newbuilding stage.

East & West Africa The system is currently being used on several

ships and oil rigs operating in East and West

Africa, with ongoing projects in Singapore,

Malaysia, Indonesia and Middle East.

Marine Amour System’s, Edurne del Río,

explained “Due to demand from the industry,

we have launched a manual version of our

vessel protection system that will allow self-

install. This results in no electrical work, or

installation costs for our clients, halving the

cost of the solution. This enables Marine

Armor System to provide much more

flexibility to our customers, while still offering

the highest level of security - ballistic

classification FB6, which stops military

weapons.

A passive solution tothe piracy threat

With 231 worldwide piracy incidents occurring last year, and six reported pirate attackson tankers in December alone, the threat of unwanted boarding shows no

sign of disappearing.

TOA unit can be installed by two crew members in a couple of hours.

MAS has a ballistic classification, which is claimed to stop military weapons.

TECHNOLOGY - SHIP DESCRIPTION


The vessels - Nord Superior, NordSupreme, Nord Sustainable and

Nord Swift – are to be delivered in

January, April and July, 2015,

respectively.

As a result of several improvements to the

design and equipment installed on board, the

vessels are expected to be 11-12% more fuel

efficient than the most operationally economic

tankers in NORDEN’s fleet.

Each of the four vessels will have a carrying

capacity of around 50,000 tonnes.

“This means that the new vessels in a fully

laden state and sailing at a speed of 13 knots

will consume approximately 19 tonnes of

bunker oil per day – a saving of more than two

tonnes. With a bunker price of approximately

$450 per tonne, we will obtain significant

savings with these four new vessels.

“The four new vessels are also proof that it is

still possible to optimise vessels’ fuel efficiency

without compromising their cargo carrying

capacity significantly and without it affecting

the correlation between the price for the vessel

and the financial benefits by having lower fuel

consumption,” said head of fuel efficiency,

Peter Sinding.

During the construction of the MRs, in an

effort to reach the lowest possible fuel

consumption, the yard made use of the latest

design and technology on offer.

In addition, STX also to a great extent drew

on the experience from the construction of the

four MRs that were delivered NORDEN in

2013 and which also excelled in fuel efficiency

compared to NORDEN’s tanker fleet at the

time, the company claimed.

The improvement of the vessels can be seen

directly from the shape of the hull. NORDEN’s

director newbuilding, Søren Westergaard,

explained; “Some years back, when vessel fuel

was a minor cost in the shipping companies’

accounts and environmental awareness was

smaller than it is today, many vessels had a hull

which, roughly put, looked like a shoe box that

had been shaped in the front and back.

“Now, the focus is completely different –

fuel consumption must be reduced and the

environmental impact must be as little as

possible. The yards therefore work to reduce

what is called the block coefficient– ie, the goal

is to make vessels less quadrangular and as

streamlined as possible without affecting their

cargo carrying capacity. The four new product

tankers have a slimmer hull than the first four

STX vessels in our fleet. But then they are also

two metres longer and have 15 cm more draft,”

he said.

New engine designThe four new vessels are fitted with a new type

of main engine constructed by MAN Diesel &

Turbo in Copenhagen, an 6G50ME-B9.3,

which operates at a slower speed than the

engines fitted on board on the first four STX

vessels delivered to NORDEN.

Whereas the earlier vessels were equipped

with 6.2 m diameter propellers, those fitted to

the new vessels are 6.8 m in diameter and they

are of the WTC type, designed by STX

Offshore & Shipbuilding and manufactured in

South Korea.

“A larger propeller rotating

slower is more efficient than

a smaller propeller rotating

faster. The simple

explanation is that a larger

propeller rotating slower hits

a larger volume of water. It is

therefore better at thrusting

the vessel forward – even at

smaller fuel consumption.

“In contrast, a smaller,

faster rotating propeller is

more expensive to operate -

partly due to the fuel

consumption and partly

because some of the

performance is lost in the wake,” said

Westergaard.

To further improve the propellers’ efficiency,

the vessels are each fitted with a Becker

Marine Mewis Duct, which improves the way

the propeller hits the water. At the same time,

the duct increases the water flow towards the

propeller.

The pistons in the new engines also have a

longer stroke – ie, the pistons’ bottom and top

are further apart. In addition, the engines are

fitted with equipment to automatically adjust

the settings enabling them to run at an optimal

speed at all times and ensuring that the

combustion pressure is equally distributed on

all six pistons. This not only reduces fuel

consumption, but also maintenance costs and

the engine will also be better protected against

overload, the company said.

The vessels will also be more efficient at

utilising the waste heat from exhaust gases,

which can be used for heating the fuel for the

main and auxiliary engines. Previously, only

the exhaust gas waste heat from the main

engine was used and while the main engine

was shut down during port calls, the oil-fired

boiler was operating. The exhaust heat recovery

unit was manufactured by Kangrim Korea.

Four fuel-saving MRsto enter NPP’s fleet

this yearDuring the first half of this year, Copenhagen-based drybulk and tanker owner

NORDEN will take delivery of four newbuilding MR Eco product

tankers from STX Offshore & Shipbuilding.

The MRs have a sleek hull design.



However, this will not be as necessary on

board the new vessels, as the exhaust gas waste

heat from the auxiliary engines, can be used,

which are operating during port calls.

”This initiative also contributes to total fuel

efficiency. And everything counts,” said

Westergaard. “It is common practice in

NORDEN that we continuously optimise

newbuildings, just like we constantly consider

whether a profit can be made from retrofitting

existing vessels with the purpose of reducing

their fuel consumption.

“We have always kept a young and modern

fleet. We will continue to do so and this is

possible without jeopardising any commercial

aspects,” he said. Westergaard has been

responsible for about 100 newbuildings for

NORDEN, thus far.

During the construction of the latest four

product tankers at STX, NORDEN’s

newbuilding department at the Hellerup head

office made use of feedback from the crew

members on board the earlier product tankers

delivered in 2013 to a great extent.

In total, around 60 suggestions from the crew

members were used when constructing the new

vessels. ”With regard to all the great ideas from

the crew members, it naturally applies that both

practical, as well as financial implications must

all be in order before the ideas are realised. But

if this the case, we are happy to do so,” said

Westergaard.

As the first of the four new product tankers -

Nord Superior - has already undergone trials,

this proved that the vessel more than meets the

2015 and 2020 requirements from the IMO

with regard to CO2 emissions. The trials

showed that the vessel’s CO2 emission was

reduced by 30% and thus, the vessel even

meets the 2025 requirement- the first in the

company to do so.

NORDEN’s goal is for all newbuildings to

meet the 2020 requirement, which is a

prerequisite for the company to categorise the

newbuilding as an Eco vessel.

The new product tankers will be

incorporated into tanker pool Norient Product

Pool (NPP), which both commercially and

operationally manages NORDEN’s and the

Cypriot shipping company Interorient

Navigtion’s fleet of owned and chartered

product tankers, as well as other product

tankers under management. Currently, the NPP

fleet includes 85 vessels, which is a new high.

NPP celebrated its 10th anniversary on 1st

January 2015. Today, the 85 vessels are made

up of 43 MRs and 42 Handysize vessels. In

addition, another five will enter the pool this

year.

”In order to have critical mass, the pool must

have a lot of vessels trading all over the world.

But whether there are 80, 85 or 90 vessels in

the pool is not that important from a

commercial point of view. On the contrary, it

provides us with a number of commercial

advantages that we have achieved a better

balance between MR vessels with a cargo

carrying capacity of 45,000-50,000 tonnes and

Handysize vessels with their cargo carrying

capacity of 37,000-40,000 tonnes.

“Previously, we had a large overweight of

Handysize vessels, which are important to our

business. But MR vessels are more flexible:

While Handysize vessels primarily sail in

Northern Europe and the Mediterranean, MR

vessels are used all over the world,” explained

NPP CEO Søren Huscher.

Footnote:This article was taken from NORDEN Newswith added input from the company.

Principal particulars - Nord Superior183 m

32.23 m

19.10 m

13.30 m

49,572 tonnes

MAN B&W 6G50ME-B9.3

7,570 kW at 91 rev/min

DNV GL

Danish (DIS)

Length, oa........................................

Breadth, extreme.............................

Depth, moulded...............................

Draft, summer..................................

Deadweight......................................

Main Engine.....................................

Output, SMCR.................................

Class................................................

Flag..................................................

TO

Advanced Polymer Coatings Avon, Ohio 44011 U.S.A.+01 440-937-6218 Phone+01 440-937-5046 Faxwww.adv-polymer.com

Compare MarineLine® cargo tank coating to any conventional phenolic epoxy or zinc silicate coatings and expect a major difference in enhanced corrosion protection and versatility. More than 500 tankers worldwide have relied on MarineLine®.

Over 500 Tankers Worldwide Have UsedMarineLine® Cargo Tank Coatings

Operated and managed by Anthony

Veder, the vessels are chartered

to Saudi Basic Industries Corp

(SABIC) to lift liquefied ethylene

gas (LEG) from the company’s Wilton facility

on Teesside to manufacturing plants in

Northwest Europe and Scandinavia.

The chemicals will be used to make a range

of items, such as food packaging, PVC,

detergents and adhesives.

By using LNG as a fuel, both vessels, each

with a cargo capacity of 4,768 cu m, will

reduce NOx emissions by over 85%, with SOx

and soot particles reduced by nearly 100% and

CO2 by 20%, Anthony Veder claimed.

The additional cost of the vessels LNG

equipment fitted on board was partly funded

under the European Union's TEN-T

programme.

The sisters were products of China’s Avic

Dingheng Shipbuilding, are classed by Bureau

Veritas and fly the Dutch flag. Both vessels are

fitted with two cargo tanks each of 2,384 cu m

capacity, which are served by two deepwell

pumps of 300 cu m per hour capacity each,

giving a maximum load/discharge rate of 600

cu m per hour per vessel.

They are each powered by a Wartsila

6L34DF medium speed dual-fuel engine

producing 2,700 kW at 750 rev/min. Two

Wartsila 6L20DF dual fuel engines,

developing 1,056 kW each, make up the

auxiliaries fitted on board both vessels. This

gives the vessels a service speed of 13.5 knots.

A 450 kW bow thruster has also been fitted on

board each of the gas carriers for ease of

manoeuvrability.

For the LNG, two fuel tanks of 100 cu m

capacity each have been fitted on deck per

vessel.

As well as ethylene, the vessels will also be

able to carry ammonia, butane, butadiene and

propane.

“As a responsible global company, SABIC

is committed to providing high-quality

products to its customers while doing all it

reasonably can in order to reduce the



LNG poweredethylene carriersmake their debut

Last November, two new dual-fuel powered hybrid gas carriers were named Coral Starand Coral Sticho, respectively, in a joint ceremony on Teesside, UK.

Principal Particulars - Coral Star, Coral StichoLength overall .............................................................................. 99,95 m

Length, bp ................................................................................... 93,60 m

Deadweight (ethylene draft)............................................................ 3087 t

Deadweight (summer draft)............................................................. 3604 t

Machinery

Main engine.....................................................................Wartsila 6L34DF

Power........................................................................2,700 kW at 750 rpm

Auxiliary engines........................................................2 x Wartsila 6L20DF

Power..........................................................................................1,056 kW

Average speed...................................................................................14 kn

Range..........................................................................................6,500 nm

Bow thruster...................................................................................450 kW

Cargo Installation

Tank pressure (IMO) max.............................................................. 6,0 bar

Loading/discharging rate.......................................................... 600 m3/hr

Min tank pressure......................................................................... -0,3 bar

Min tank temperature.................................................................... -104 °C

Deepwell pumps................................................................. 2 x 300 m3/hr

Booster pumps.................................................................... 1 x 300 m3/hr

Cooling ethylene, from -98°C up to -102°C................................ 35 hours

Cargo Tanks

Filled 98%: Ammonia Butane Butadiene Ethylene Propane Volume

Sp grav [t/m3] 0,681 0,600 0,653 0,569 0,582 98%

At temperature [°C] -33,4 -0,5 -4,5 -104 -42,8

Total capacity [t] 3,182 2,803 3,051 2,658 2,719 4.672 m3



environmental impact of its operations,” said

SABIC’s European supply chain director of

chemicals, Wouter Vermijs, at the naming

ceremony. “We are proud to be the first

chemical company in the world to be

transporting our products on carriers running

on LNG and to have an innovative partner in

Anthony Veder.”

“We are delighted that SABIC has chosen

Anthony Veder as its partner in the

development of a new greener way to transport

materials around the globe. By demonstrating

their commitment to using LNG powered

vessels, SABIC and Anthony Veder are leading

and embracing this cutting-edge technology.

They could be at the forefront of opening up a

whole new sector of seagoing transport,” said

Anthony Veder CEO, Jan Valkier. TO

Source:www.shipspotting.com

TECHNOLOGY - SHIP EFFICIENCY


Emissions controlsystem fitted on

board tanker Bremen-based SAACKE’s new se@vis emission control system has been installed

on Carl Buettner’s chemical tanker Levana.

The 2009-built 15,202 dwt

chemical/products tanker had

earlier been fitted with SAACKE’s

exhaust gas cleaning (EGC)

system.

se@vis makes emissions data from the

hybrid multi-stream EGC system available to

the operator both on board the ship and on land

using data transmission. Live surveillance and

optimisation using data cloud storage is also

possible from ashore, the company said.

All relevant measured data can be analysed

live and stored for up to 1.5 vessel operating

years. By monitoring the EGC components, all

emission sources can be analysed, resulting in

a savings potential for all ship operations.

“On one hand, our system creates benefits

for energy efficient and economical operations

for the ship’s crew and, on the other hand, it

opens up new possibilities for direct influence

and evaluation, especially for shipowners and

ship operators, in a way that no other EGC

systems can,” claimed Nils Homburg, manager

at SAACKE’s EGC department.

The se@vis system forms part of the

SAACKE EGC plant. The emissions cleaning

system is comprised of a sulphur washer and

an upstream soot separator. By filtering out the

soot first in the dry process, the sludge in the

exhaust gas boilers and in the wash water is

reduced. This also has added benefit of

fulfilling the requirements for reducing

emissions’ sulphur content, the company said.

The emissions control system’s automation

is integrated into the ship’s system. A user-

friendly human interface touch screen installed

in the control cabinet, displays all the relevant

operational data – for instance, operating

condition, temperature, or damper settings. A

remote screen is positioned in the engine

control room, enabling operations to be

conducted at this location.

By controlling up to 64 process and 64 status

data units – including variables relating to

specific guidelines such as the SO2/CO2 ratio,

pH value, or opacity difference for inflow and

outflow of the wash water – ship´s crew and

operators are able to monitor the system. All

the operating data can be seen using the

emission data monitor, which is installed on a

shipboard computer and networked to the

control cabinet.

Bridge alarmShould the system exceed the limits for

emissions in the water or air, it will

automatically sound an alarm on the bridge, to

ensure a quick reaction, thus avoiding

expensive fines.

According to the IMO regulations, the live

data is saved every 4.5 mins. For a more

precise analysis, shorter back-up intervals are

possible. With a few clicks, the program

creates the emission report, which not only

shows emissions data, but also compiles it with

geodata and periods of time that can be

configured individually.

The ship´s crew can transfer the emission

report to the

local

authorities

for

inspection. It

presents data

clearly and

is easily

understood,

which

accelerates

the

inspection

process.

Crew

members do

not have to

be

specifically

assigned to

accomplish this task.

“Moreover, analysing this data can provide

crucial indications about the entire ship´s

systems, such as if the boiler is working

intermittently and thus wastefully, or if the

burner control needs to be optimised,”said

Homburg, highlighting some advantages of the

monitoring system.

In addition to storing data on the ship, the

data can be stored with a mobile data

connection (cellular, or satellite), making it

available to the shipowner at any time. A

special protocol transfers the data in a

compressed, tamper-proof method, resulting in

minimal costs for data traffic. The data is then

saved on servers requiring authentication.

In the first months following installation,

SAACKE will provide service support for

daily operations and, based on the monitoring,

an analysis of the optimisation potential for the

entire emissions control system. Experienced

SAACKE engineers are able to analyse the

data and make recommendations, the company

said.

A schematic of Saacke's sea@vis system.

TO


TECHNOLOGY - EXTERNAL COATINGS

Carbon crewith

edits

.international-www

.international-wwwt:y aGet the full stor

with our premium,costs and emission

tionaImprove operat

marine.com/carboncreditsmarine.com/intersleek1100SR

00SR.11® Intersleekting,biocide-free advanced hull coatand realise the additional benefits of carbon creditsns,

reduce fuely efficiencies,environmental and energal,

During the past few months, therudders of several types ofvessels were coated with SubseaIndustries’ Ecoshield at yards inChina, Singapore and Poland.

These included a number of Pleiades-

managed tankers, for example, the sister

Panamaxes Voidomatis (applied at Yalova,

Turkey) and Nedas (applied at Tuas,

Singapore). In addition, the company has also

coated the rudders of several other tankers for

the same owner - the Panamaxes Aliakmon,Evrotas, Pamisos and Xanthos.

In most of the cases, the propeller nozzles

were also coated. Several other tankers are

scheduled to be coated this year.

According to the Hydrex Group owned

company, Pleiades has had first hand

experience of the devastating effect of rudder

cavitation when treated with a traditional

coating system. For this reason the Greek

tanker company decided to use Ecoshield to

ensure lasting protection against corrosion and

erosion damage for the rudders of their vessels

for the remainder of their service life.

Before Ecoshield was launched, the problem

of cavitation damage to rudders remained

unsolved. Cavitation causes erosion, pitting

and sometimes complete failure, necessitating

very expensive repairs, or replacements.

The need for rudder repairs, involving

welding and resurfacing in drydock, has been

almost universal. The cost of rudder

maintenance and the safety hazards connected

with worn and failing rudders are out of

proportion to the relatively small surface area

involved.

Efforts to solve this problem have taken the

form of redesigning the rudder, changing its

position relative to the propeller, trying

various materials, including stainless steel,

metal facing the surface, cathodic protection

and a variety of coatings. But the problem has

persisted.

Ecoshield is a specially reinforced version

of the Ecospeed non-toxic underwater ship

hull coating, which has been formulated for

the entire underwater hull of any vessel. Small

but significant variations of the Ecospeed

formula have been tested on rudders since

2002 with extraordinary results, Subsea

Industries said.

Ships that were experiencing heavy

cavitation damage to their rudders have seen

no further cavitation damage erosion once the

glassflake coating was applied. Some of them

have been sailing for as long as 10 years after

application with no sign that the coating will

need replacement during the life of the ship.

NewbuildingsProtection of the running gear of a vessel is

best begun at the newbuilding stage. When a

vessel comes into drydock, maintenance of its

stern area, especially cavitation damage repair,

can take a long time. There are strict

procedures concerning blasting, painting,

welding and propeller and stern tube seal

work. Painting is then assigned to the end of

the schedule. As a consequence, it may be

rushed, or not done at all, or else prolong the

vessel’s stay in drydock.

With an Ecoshield application these

problems can be avoided from the start, as the

underwater gear will not need to be repainted

during future drydockings. The coating will

remain intact for the lifetime of the vessel and

it is guaranteed for 10 years.

At the most, quick and easy touch-ups

amounting to less than 1% of the surface area

will be required. Planning the maintenance of

Protecting rudders from cavitation damage



the vessel’s stern area therefore becomes

much easier, the company claimed.

Apart from at the newbuilding stage, the

coating can also be used to protect vessels that

have been in service for some time and are

already facing cavitation and corrosion

damage, similar to the rudders coated over the

last months.

Ecoshield’s flexibility makes it easy to

adapt the application schedule to the rest of

the activities scheduled at the shipyard, or

drydock, by not interfering with them.

Overcoating time can be as short as three

hours, which means that for smaller surfaces,

such as rudders, or bow thrusters, the two

coats required can normally be applied in a

single day.

The smoothness attained by the coating also

provides optimum hydrodynamic conditions.

This allows rudders to operate at maximum

efficiency. The ship's performance therefore

remains stable, which brings savings to the

owner, the company said.

Besides offering rudder protection,

Ecoshield is also suitable for thrusters,

azimuth thrusters, azipods, thruster nozzles,

kort nozzles, thruster tunnels and other

underwater ships gear, which need special

protection from corrosion.

If an owner/manager takes into account the

costs of temporary underwater repairs and the

regular inspections required by a condition of

class until the next drydocking, the investment

in a coating system that offers extra protection

from day one has an attractive return on

investment.

A ‘White Paper’ with full details about

protecting rudders and running gear from

cavitation damage is available in the

publications/papers section of

www.shiphullperformance.org for free

download.

Ecoshield is guaranteed for 10 years and will last for a vessel's lifetime.

TO



This year, two shipowners are dueto be awarded a combined totalof almost $500,000 when the firstclaims resulting from a newcarbon credits methodologydeveloped by AkzoNobel and TheGold Standard Foundation arefinalised.The scheme allows ships to generate income

in the form of carbon credits, which are earned

by reducing CO2 emissions.

A total of 17 vessels feature in the first two

claims, while 50 further vessels were expected

to join the scheme by the end of 2014.

Launched in April last year, this

methodology is based on shipowners

converting existing vessels from a biocidal

antifouling system to a biocide-free hull

coating, such as Intersleek, part of

AkzoNobel’s International marine coatings

product line.

“With shipowners and operators under

increasing pressure to drive efficiencies and

improve sustainability, the ability of carbon

credits to turn energy efficiency into bottom

line benefits is a timely and significant step

forward,” said Trevor Solomon, Intersleek

business manager at AkzoNobel’s Marine

Coatings business, last year.

“Almost 90% of the shipping industry

considers it important to measure emissions

using a standard methodology, which makes

carbon credits particularly advantageous for

senior management teams who require

evidence of a tangible return before investing

in a clean technology, such as advanced hull

coatings,” Solomon explained. “This is

possible through our partnership with The

Gold Standard Foundation, which validates

carbon credits based on vessel data that is

collected, analysed and for Intersleek,

administered by AkzoNobel. As an additional

step to ensure rigor and transparency, the fuel

savings that are generated are also verified by

independent UN accredited auditors.”

Based on the 100 eligible ships already

converted from a biocidal antifouling to

Intersleek technology, there is an estimated

$2.8 mill worth of carbon credits potentially

available to shipowners and operators.

As well as being able to sell the carbon

credits, the scheme also offers shipowners the

option of passing them on to other

stakeholders, such as cargo owners, to offset

their emissions. They can alternatively be used

to voluntarily offset other sources of CO2

emissions.

AkzoNobel spent more than two years

developing the carbon credits methodology as

part of its research into making eco-efficiency

technologies more accessible for the wider

shipping industry. The company worked with

The Gold Standard Foundation as it was found

to be the highest quality and most trusted

carbon certification standard with rigorous

sustainability benchmarks.

Carbon credits success claimed

TO

AkzoNobel’s Trevor Solomon.

THE FOUNDATION FOR SAFETY OF NAVIGATION

AND ENVIRONMENT PROTECTION

SHIP HANDLING RESEARCH

AND TRAINING CENTRE

ILAWA

Our Training Centre offers you:

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models of large ASD and tractor tugs.

For further information please contact:

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` Conference producer

Panas Kalliantas

TankerOperator Magazine Ltd

+44 208 150 5295

[email protected]

Making Money in aTough Market

Metropolitan Hotel, Athens, April 2 2015

TANKEROperator

Produced in association with

tankeroperator.com/ath2015.htm

With the interest in ice classvessels growing, PPG Protectiveand Marine Coatings’SIGMASHIELD 1200 has seenincreasing interest from ownersspecifying ice-capable coatingsfor newbuildings and existingtonnage.

This is mainly as a result of the potential of

Arctic transits and the growth in Arctic

offshore activity.

Developed from research conducted in

PPG’s own facilities, the coating is claimed to

deliver exceptional abrasion and impact

resistance in ice, combined with very low

friction properties.

It was developed for very high abrasion and

impact applications on decks and hulls and

combines phenolic epoxy with selected

pigments to provide exceptional performance

in icy waters, the company claimed.

SIGMASHIELD 1200 has already seen

more than a decade of service on ships

operating in areas of heavy ice formation,

including the Baltic Sea and St Lawrence

Seaway/Great Lakes system.

PPG product manager, Christophe Cheikh,

said:“The combination of a top quality epoxy

matrix and extremely hard pigment is unique

in this type of application and provides

superior protection.

“We have designed this product to be easy

to use by single feed airless spray whether for

drydocking or newbuilding projects. Its quick-

curing hardener means SIGMASHIELD 1200

can be applied at low temperatures without

compromising performance and allowing for a

fast return to service,” he said.

The size of the ice class fleet is increasing,

as is the size of the ships. Currently, around

10% of the ice class order book is above

60,000 dwt, with the majority of the

investments made by owners in Germany,

China, South Korea and Norway.

German owners have the second largest

share of the order book and the largest

proportion of the ice fleet, while China has the

second largest ice-capable fleet on order.

Cheikh claimed that the coating has been

particularly successful in newbuilding projects

where owners require a higher grade product

than the standard anti-corrosive coatings.

Its excellent low friction coefficient in ice

has been confirmed by Aker Arctic

Technology, a major testing institution based

in Helsinki, which specialises in low-

temperature testing at the limits of ice-going

conditions.

Vessels serving new energy projects in the

Russian Arctic will also feature

SIGMASHIELD coatings.

SIGMASHIELD 1200 benefits claimed

include:

� Outstanding impact and abrasion resistance

in ice conditions.

� Excellent cathodic protection and creep

resistance.

� Standard and low-temperature versions for

enhanced curing and application in winter

conditions.

� Single-coat application using standard

equipment, with easy maintenance and

repair.

� Recognised by Lloyd’s Register as an

abrasion-resistant ice coating.

� Recognised by Aker as a low-friction

surface coating.

Specialist coating for ice conditions

TO



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Some of the problems occurring on

tankers, include fatalities in double

bottom spaces, ballast and cargo

tanks, as well as the various

lockers to be found on board.

Leading insurance and P&I service provider

Skuld said in a note to members that given the

continued occurrence of tragic accidents to

personnel going into enclosed spaces, owners

and operators should exercise extreme caution.

Over the years, Skuld has had to deal with a

number of accidents resulting in fatalities,

which followed the entry in to an enclosed

space starved of oxygen, or containing

harmful gasses.

These incidents occurred typically due to a

failure to follow safety procedures and this has

affected both crew, as well as people coming

on board, such as stevedores and surveyors,

repairers, etc. In the case of tankers, accidents

have happened while tanks were being

inspected, or maintenance carried out.

Tragically, these accidents have at times

been compounded, because once it had

become clear that a person was in trouble,

someone else rushed to help them - but

without themselves first taking proper

precautions and using appropriate safety

equipment, sometimes resulting in a fatality.

At sea-level, humans require air that

contains at least 19.5% oxygen. Below that, an

environment will be unsafe for human life,

basis oxygen percentage alone. It must be

stressed, however, that even at 19.5% oxygen

the air may be unsafe, given that the basic

oxygen level of air is 20.9% at sea level,

Skuld warned.

Where, for instance, the 1.4% difference is

taken up by a gas, such as carbon monoxide

then a person may fall unconscious within a

few breaths and death may follow within three

minutes.

Following the rise in accidents down the

years, the IMO developed Regulation III/19 of

SOLAS to address this trend. As of 1st

January, 2015 mandatory entry and rescue

drills are required every two months.

All seafarers who have responsibilities for

entry into enclosed spaces, or the rescue, will

have to participate in these drills. Drills shall

include the following:

1) Checks and use of personal protective

equipment (PPE)

2) Checks and use of communications

equipment and procedures.

3) Checks and use of atmosphere measuring

devices.

4) Checks and use of rescue equipment.

5) Instruction on first aid and resuscitation.

Skuld stressed that all drills should be properly

planned and carried out with a ‘safety first’

approach. As such, no entry in to an enclosed

space should be made, other than may be

strictly necessary and while all due safety

precautions are fully observed, ie, such space

should not be opened purely for the drill itself.

The intention of the new regulation is to

ensure that all relevant personnel have the

necessary awareness of the risks and are

properly trained to follow all the procedures to

ensure that any actual enclosed space entry

will be undertaken in as safe a manner as

possible.

Loss preventionGiven that the risk of an accident is very high,

as well as the risk of such accident leading to

a fatality, it cannot be stressed enough how

serious this issue needs to be taken, the

association said.

Every seafarer should be aware of the risk

that an oxygen starved environment presents

and only those crew who have received the

necessary training should conduct any entry

into an enclosed space, or perform any rescue

operation.

Vessels need clear policies that govern the

entry into enclosed spaces and all seafarers

should be advised of the same. This advice

should be repeated at periodic safety briefings

on board.

As for either a drill, or an actual entry, this

needs to cover the following:

1) Be properly planned, in particular for a

time and place where safety can be

prioritised.

2) A safety assessment should be carried out.

3) Specific vessel SMS and ISM procedures

need to be followed.

4) All crew concerned should, with the

appropriate officer, conduct a safety

briefing before proceeding.

5) All crew concerned with possible rescue

and first aid should be given advance

notice and given time to ready themselves

for possible action.

6) Throughout the entry and until its

completion, careful monitoring should be

undertaken of the crew involved until all

are safe and accounted for outside of the

enclosed space.

7) Proper logs and records should be kept of

every drill and every actual entry.

Skuld acknowledged the help of Dr John

Allum of Hannaford Forensic Services (Asia)

for contributing to this advice. The company

has also prepared a note on oxygen level

issues.

Enclosed space auditsTo help seafarers and companies to manage

entry into enclosed spaces, Videotel, in

conjunction with Mines Rescue Marine, has

launched Enclosed Space Management (ESM)

system software.

This software was designed to help

effectively assess, audit and manage the safety

of enclosed spaces on board ship as well as

combating the number of accidents and

fatalities that often occur when problem areas

are overlooked.

Beneficial to crew; contractors; surveyors;

Mandatory drills forenclosed spaces entry

now in forceFrom the beginning of this year, IMO SOLAS Regulation III/19 requires mandatory

enclosed space entry drills, as well as rescue drills, to be conducted every two months.


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port state inspectors and office staff; this is

currently the only computer-based system

available that enables vessels and installations

to comply with the IMO’ adopted resolution.

A.1050(27) “Revised Recommendations for

Entering Enclosed Spaces Aboard Ships”,

Section 3 – Safety Management for Entry into

Enclosed Spaces, as well as the latest SOLAS

recommendations for enclosed spaces,

Videotel claimed.

It provides an auditing process to follow,

allowing safety risks to be identified and

solutions to be put in place. All seafarers can

contribute to this ‘living’ system by adding

their own comments, photographs and

experiential data to each space record,

ensuring that knowledge is retained and the

risk of safety being affected by crew changes

is lowered.

The software also provides ready access to

all essential information needed to enter and

work within an enclosed space as safely as

possible. In addition, the gathered information

can be viewed onshore, as on board and a PDF

report can be sent directly to any third party

by email, as required, as the data is cloud-

based. All data entered is stored and hosted

and the system itself is updated at regular

intervals to reflect changes in laws and

regulations.

The ESM system’s auditing process allows

for the assessment of internal spaces, entry

points and rescue requirements, eg the size of

manholes; difficulty of entry; ability to rig a

man riding winch for rescue purposes;

availability and effectiveness of

communications; dimensions of the space;

internal design features; and the ability to

operate while wearing breathing apparatus.

It also prompts the user to record the

manpower and equipment requirements for

both entry into and potentially rescue from, a

space. On completion of the audit, a simple

traffic light warning system is provided, based

on the degree of difficulty to get into, operate

inside and rescue from each space.

Nigel Cleave, Videotel CEO, said at the

software’s launch: “We are very proud of the

Enclosed Space Management System which,

we believe, will make a meaningful

contribution to industry efforts in the

prevention of needless loss of life. As a further

extension of its all-encompassing programs on

enclosed spaces, Videotel is pleased to be able

to take this unique step in helping the

maritime industry take a proactive approach

towards a significant reduction in issues

involving enclosed spaces.”

Raal Harris, director of e-Learning & digital

media at Videotel, explained: “We have spent

two years working with Mines Rescue Marine

researching and developing the Enclosed

Space Management System. The Mines

Rescue Service has a vast amount of

experience and knowledge, as well as

specialist skills in the field of rescuing

mineworkers from underground.

This, combined with Videotel’s expertise in

training and e-Learning, has resulted in a

practical, easy-to-use system designed to

become an essential part of everyday life in

the shipping industry,” he said.

Adam Allan, Mines Rescue Marine’s

managing director, said: “This is the

culmination of a two-year project initiated by

our realisation that one of the major problems

on ships and offshore installations was the

lack of detailed audited information on

enclosed spaces, and a specifically designed

depository for it.

“We felt that if we could provide a facility

which shares information with not only crew

members, but others working on board, such

as surveyors and contractors, it would

considerably increase the safety of people

entering and working in these spaces.

“Together with our partner Videotel, we

developed the Enclosed Space Management

System, the only such system in the world. We

believe it will change the way in which

enclosed spaces are dealt with forever,”he

concluded.

PSM has introduced the newBMS4 multipoint pneumatic leveltransmitter system.

Joining PSM’s TankWatch range of level

and pressure transmitters, switches and

systems, the BMS4 is suitable for fuel, water,

bilge, ballast and draught measurements on all

types of vessels, the company said.

The new system is supplied as a complete

package that is engineered and configured for

each specific application. It comprises an air

handling unit, multi-channel transmitter

module and HMI display for accurate and

reliable measurement and monitoring.

Pneumatic level measurement, the

‘bubbler’ principle, is a well-established and

proven technology that can be used for many

marine tank gauging applications.

The addition of the BMS4 to its product

range allows PSM to enhance the systems it

offers to customers as part of its consultative

project solutions, the company said.

“Thanks to the BMS4 we now have even

more products at our fingertips, allowing us to

provide the best possible technical solution to

our growing global customer base,” said Mark

Jones, PSM sales director. “With over 30

years’ experience in tank gauging instruments,

our engineering sales team are dedicated to

understanding the application need and

delivering the right system – reducing costs,

minimising lead times and optimising system

performance in the process.” �

Pneumatic level measurement system

TO

Enclosed space entry audits are now mandatory to try to cut down on the number ofincidents.

For example, in Hamburg, Norman

Schmiedl, HR manager seagoing

personnel at Columbia

Shipmanagement (CSM) explained

CSM’s policy, which was to employ no more

than four different nationalities on a vessel at

any one time.

He addressed motivation by emphasising that

a dedicated/motivated crew will follow rules

and regulations, as well as procedures. As a

result, vetting inspections will be passed and

favourable terminal feedback will be received.

Costs can be controlled by saving on bunkers

whenever possible and port stays can be

reduced by good planning.

When on passage, a vessel’s trim will be

optimised, the crew will ensure that efficient

tank cleaning is undertaken, the cargo is

properly cared for and that the cargo intake is

maximised. Motivated seafarers will also

participate in management reviews to improve

the existing systems. “We have 13,500

seafarers, so we need a system to allow them to

speak,” he explained.

Turning to the shoreside management,

Schmiedl said that the managers should

communicate the company’s mission, vision,

policy and values in a clear and simple way, set

clear targets and give directions, empower the

seafarers to think like owners, pay attention to

details and stay approachable, invest in

efficient IT systems reducing double/tripple

workloads,

In addition, the shoreside management team

should ensure that shipboard and office

personnel act as a team and treat each other

with respect, share incidents, circulate lessons

learned and encourage a open reporting culture

and explain the background of the decisions

made.

The crewing department should plan crew

rotations in accordance with the contract

durations of crew on board and availability

dates of the crew ashore, arrange for a rotation

on a group of vessels and not necessarily plan

for the crew to always return to the same

vessels and consider matrix requirements while

planning (see below).

Also in Hamburg, Independent consultant,

former P&I club man and seafarer, Mark Bull,

addressed ‘synthesis’, that is where closer co-

operation and information sharing may help to

reduce costs.

In the same way as the industry needs to

come together to improve its image and

profitability, it should share and deliver

information much better than occurs today, he

said

Citing an example of his own professional

training – the radar observer’s course – classic

examples of collisions were used as part of the

course material. Are these used in training on

board? Have the current officers and crew

heard about them? He asked. Does a

company’s safety management systems (SMS)

cover these types of incidents? Ignore them at

your peril!!

He said that at the P&I club where he was

employed, the vast majority of ships did not

have a copy of the club’s safety bulletin on

board. He thought that some companies

required a minimum number of incidents and

near misses to be reported each month, which

is as bad as not reporting them at all – but it

Highlighting theneed for motivation

At Tanker Operator’s Hamburg and Singapore conferences last year in the current series

‘Making Money in a Tough Market’, the question of crew, shoreside personnel and

company culture was covered by several speakers, among other topics.

Minimum requirements Matrix Master & Chief Officer Chief Engineer & 2nd Engineer Junior Officers

Time with company

(years) - Total

2* 2* 1.5*

* If time in rank is below two years the minimum requirements for the time with the company shall be minimum two years. If the

time with the company is below two years the time in rank shall be minimum two years.

** If there is only one junior officer on board the figures will be half. If the junior officer years in rank figure does not comply and

there is more than one junior officer on board , the years of the previous rank on watch will be considered to check the

compliance. In such cases, the years of the previous rank figure is provided in parenthesis.

Time in rank (years)

- Sea service only

3* 3* 1*

Time on tankers (years)

- Sea service only

6 6 1**

Source: CSM.

Columbia Shipmanagement's NormanSchmiedl.




CONFERENCE REPORT

satisfies the tick box!

Incidents recordedHowever, he warned that today, the modern

seafarer is more clever and when he/she sees

something dangerous, it will be recorded and

posted on YouTube. “Does you corporate

policy allow the use of YouTube in the office?

Is it time to have a collective re-think about

safety management and how we get the

message across?” he asked.

As for regulations, maritime law forms a

huge part of statute law. The combination of

the many laws in place go towards providing a

safe environmentally responsible industry.

The shipping industry has been faced with an

onslaught of regulations in recent years. The

problem is that the legislators are not shredding

old and outdated legislation to ease matters.

Another issue is that some legislation was ill

considered while other legislation was badly

written.

Taking the example of ColRegs

(International Regulations for the Prevention of

Collision at Sea), the last major change was in

1976, but it remains fit for purpose and is well

written, Bull said.

As for the ISM Code, which was introduced

in 1979, this is no longer fit for purpose and is

badly written.

“Those charged with drafting such legislation

must be aware that it will have to be translated

into other languages to enable it to be used on a

global basis. Therefore, the content must be

unequivocal and the highest standard of

grammar should be employed. But the ISM

Code throughout employs the word ‘should’ –

which, in English, expresses no obligation

whatsoever. It is used 75 times whereas ‘shall’

is used in the ColRegs and ISPS Code.

“Second, the ISM Code makes no reference

to the key activities and skills performed and

used on board ship- navigation, seamanship

(example of how to fix a computer), marine

engineering, cargo handling and care. What

proportion of time does your ship spend at sea,

and what is the main activity being undertaken?

Navigation.

“Instead these functions are supposedly

wrapped up in the term ‘shipboard operations’

like some kind of dirty word. The users or

practitioners will thus feel no sense of pride, or

ownership of a Code which does not recognise

their profession. There is little wonder then that

today incidents falling under these headings

continue to form the largest proportion of

safety failures and claims,” Bull said

Maximising potentialAt our Singapore conference, Arvind Sharma,

Bernard Schulte Shipmanagement’s (BSM)

group director, HR Marine, told delegates that

there were now limitations in squeezing costs

still further, especially with technical and

maintenance costs and the trick was to reduce

operating costs in every area without

compromising on quality and standards.

Owners and operators are continuously

seeking reductions in crew costs, as this is a

major expense, sometimes by sacrificing

training, others by reducing numbers and

increasing risk. This is not the answer, Sharma

stressed. What is required is a change of focus

from minimising the cost of the talent available

to maximising its potential.

He defined motivation as internal and

external factors that stimulate desire and energy

in people to be continually interested and

committed to a job/role, or to make an effort to

attain a goal.

The delivery of services of high quality using

minimum money, resources and time is aligned

to efficiency. “There is a tight relationship

between motivation and efficiency!” Sharma

said.

An organisation’s culture, which needs to be

driven by its top management, determines staff

retention, motivation, ownership and the desire

for continuous improvement. Taking

organisational culture, a positive no blame

regime results in transparency, dedication and

ownership.

This results in - long term crew retention,

high staff satisfaction rates, improved job

performance and improved safety and loss

prevention.

Once created, a positive culture will not stay

forever, but needs to be maintained with

continuous monitoring and intervention.

However, to make the task manageable, we

need high retention and an increasing number

of staff rising up through the ranks. We also

need continuous education, of ship and shore

staff, not only in technical subjects, but more so

in soft skills and finally, we need to give

recognition and positive feedback of jobs well

done.

Sharma explained that BSM had introduced

a large number of cadets during the past six

years with a target to eventually have 80% of

the company’s senior officers coming from the

cadet intake. The company has a policy of an

extremely stringent cadet selection process

taken only from a limited number of audited

and approved schools. BSM conducts

continuous and close monitoring of cadet

training while they are in schools and when on

board using dedicated training officers.

As for BSM’s current officers, their

competence management and career

development are managed via the company’s

in-house CMS system. All officers are required

to attend BSM’s soft skills training courses, as

well as taking the company’s shiphandling

simulator course every five years. This is in

addition to STCW requirements, Sharma

explained.

Turning to shore staff, Sharma said that all

the training and positiveness will come to

naught if the shore staff behaviour is autocratic,

or blame focused, thus mandatory soft skill

training has been introduced for those in the

offices worldwide.

Risk taxonomyCapt KK Mukherjee, director (operations),

NYK Bulkship (Asia) advocated a ‘plan- do-

check- act’ philosophy by undergoing a risk

classification, or taxonomy, on all of a

company’s business processes.

Once created, a risk assessment of each

process should be completed. Connect the

business metrics of each process to mitigation

activities and connect the mitigation activities

to each of the key risks identified for these

processes. Following these steps, the process

risks should be connected to performance

management strategic objectives, he explained.

He described NYK’s business ethics as being

focused towards corporate social responsibility.

This philosophy is based on three ‘Is’ and three

‘Ms’.

� Innovation -Continually think of new ideas

for improvement, even when conditions

appear satisfactory.

� Integrity - Be respectful and considerate to

your customers and colleagues.

� Intensity -:Carry through with and

accomplish your tasks. Never give up.

Ongoing operations always give rise to the

three Ms, he said.

� Muda -Non-value-adding activities.

� Mura- Unevenness in production, or work

activities.

� Muri: Excessive burdens.

Overcome the challenges and remain

motivated, but overall keep things simple, he

advised.

BSM’s Arvind Sharma.

TO

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TANKEROperatorea45bb970b5c70169c61-0cd083ee92972834b7bec0d968bf8995.r81.… · 2015. 1. 30. · INDUSTRY - MARKETS 04 TANKEROperator January/February 2015 Traditional crude trade

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