dnv tanker update no. 2 2009

FOCUS ONCHINAAlso inside:� Long-term oil tanker demand� Maran Tankers Management

DNV Tanker UpdateInformation from DNV to the tanker industry No. 2 December 2009

Nanjing Tanker Corporation

NANJING TANKER CORPORATION . . . . . . . . . . . . . . . . . . . 4

SHANGHAI WAIGAOQIAO SHIPBUILDING CO., LTD. . . . 8

DNV IN CHINA

DNV’s current position is based on a long history . . . . . . . 12

SHAFT ALIGNMENT DNV focuses on shaft alignment

and bearing problems on oil tankers . . . . . . . . . . . . . . . . . . 14

TWICE BEST CLASSIFICATION SOCIETY . . . . . . . . . . . . . 18

VLCC SERIES FOR NITC COMPLETED. . . . . . . . . . . . . . . . 19

MARAN TANKERS MANAGEMENT INC.

Targeted improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

STS Ship to Ship Transfer Guide . . . . . . . . . . . . . . . . . . . . . . 22

LOW SULPHUR FUELS Major challenges for the

international shipping industry . . . . . . . . . . . . . . . . . . . . . . . 22

HAMMER MARITIME STRATEGIES

Long-term oil tanker demand . . . . . . . . . . . . . . . . . . . . . . . . 24

RECENT DELIVERY: Profit. . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Shanghai Waigaoqiao Shipbuilding Co., Ltd

Maran Tankers Management Inc.

Photos: front/back cover ©DNV/Magne A. Røe,

p4-6 ©DNV/Jan Koren, p8–11 ©DNV/Jan Koren,

p13 ©DNV/Jan Koren, p17 ©DNV/Magne A. Røe,

p21 ©DNV/Magne A. Røe,

p23 © Per Sverre Wold-Hansen

CONTENTS

2 | DNV TANKER UPDATE NO. 2 2009

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DNV Tanker Update

is a newsletter published by Det Norske Veritas, DNV Maritime.

It is distributed to DNV customers and stations worldwide.

© Det Norske Veritas AS

Please direct any enquiries to your nearest DNV station or

Tanker Update e-mail: [email protected]

Editorial committee:

Jan Koren, Business Director, Tankers

Editor: Magne A. Røe

Production: Lisbeth Aamodt

Design and layout: Coor Design 0911-016

Print: 07 Oslo AS, 6,000/11-2009

Online edition of DNV Tanker Update:

www.dnv.com/tankerupdate

DNV (Det Norske Veritas AS)

NO-1322 Høvik, Norway

Tel: +47 67 57 99 00

Fax: +47 67 57 99 11

An updated list of all regional offices can be seen on DNV’s website:

www.dnv.com

WE WELCOME YOUR THOUGHTS!

0804 20

DNV Tanker Update

Jan Koren

Business Director, Tankers

[email protected]

EDITORIAL

DNV TANKER UPDATE NO. 2 2009 | 3

CHINA– THE COMINGSHIPPING GIANT

DNV has a strong focus on environmental issues,

and acknowledges that there is a significant

potential for improvements to reduce the

environmental footprint of the maritime industry.

With vast technical, operational and managerial

expertise within DNV on Class related issues as well

as on a broad variety of consulting services, we are

in an excellent position to assist our customers in

making this happen.

Environmental performance –challenges and solutions

DNV serving the Maritime Industry

www.dnv.com

The international shipping

community, with yards and

owners at its centre, is

going through a major eco-

nomic crisis. While some

owners and yards are strug-

gling to survive, others have

the power to position them-

selves for future opportuni-

ties. The shipping industry

will emerge from this situa-

tion different from before

the downturn struck.

Chinese owners and yards

have also been severely

affected. Chinese shipbuild-

ing has been growing rapid-

ly during the past few years.

Even during these trying

times, with more turbu-

lence ahead, China’s ship-

ping industry is showing

evidence of strength:

according to recent reports

from the China Association

of National Shipbuilding

Industry, Chinese yard pro-

duction has risen to the

world’s second position in

the first three quarters of

the year. Its 27.78 million

dwt of completed ships rep-

resent 31.2% of the world

yard output, second only to

Korea. Further, it is claimed

that Chinese shipyards

account for 70.3% (16.9

mdwt) of new orders this

year (first three quarters)

and now have 37.6% of the

world’s backlog orders in

dwt terms.

China’s shipping industry

is determined to prepare

for the future and continue

to grow. On the back of

almost incredible domestic

growth, yards and owners

in China are well posi-

tioned for future expan-

sion. Their market is not

only domestic but also truly

international.

In this issue of Tanker

Update, we have interviewed

representatives of reputable

Chinese shipping companies

that are heavily involved in

the tanker business. They

represent the future interna-

tional shipping community,

which will be increasingly

influenced by China.

Where is the global

tanker market heading in

the long term? Nobody

knows, but analysts are mak-

ing predictions. This time,

we have included forecasts

for the next 40 years made

by the internationally recog-

nised analyst Jarle Hammer.

His thoughts are very inter-

esting.

Enjoy the read!

It’s about partnership.

“Our people and managementare most important for our

future success”Mr. Jiang Tinggui, Vice General Manager of CSC Nanjing Tanker Corporation

NANJING TANKER CORPORATION


Nanjing Tanker Corporation’s Head Quarters in Nanjing, China

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Mr. Jiang Tinggui, who is in charge of the ship management and crew manning of Nanjing Tanker Corporation explains that he believes people are crucial for the company’sfuture success. Therefore the company has high focus on training their personnel, spending

significant resources, and this will not be reduced even during difficult times.

TEXT: JAN KOREN

During a recent interview Mr. JiangTinggui, who is the vice general managerof a Chinese stock listed company, Nan-jing Tanker Corporation, told us about afast developing company, the way it worksand its challenges. Here is the summary:“Continuous improvement of quality

and safety is prerequisite for sustainabledevelopment of a company,” says Mr. JiangTinggui. The company’s superintendentshave a KPI to visit their vessels at leasttwice per year. Pure Chinese crews, beingtrained by the company based on compa-ny standards are also part of their ambi-tious human resource management. Thesignificant expansion of their fleet goingon just now has put some strain on train-ing capacity. An established cooperationwith other major tanker companies ishelping out under these circumstances. The company wants maximum influ-

ence on competence and training, andare therefore not relying on external crew-ing agents.Another important element of the

future strategy is to build the brand. Origi-nating from mainly domestic trade in theYangtze River and the nearby coastalareas, where oil products were distributedfrom seven refineries, the company hasnot been very visible on the radar screenof international shipping. Before goinginternational in larger scale, development

of the brand is part of their ‘homework’in progress. One of their VLCCs is managed by an

international management company. Thisis important for benchmarking of theirown management of VLCCs.Nanjing Tanker Corporation, with head

office in Nanjing, around 300 km up theYangtze River from Shanghai, was found-ed under the mother company CSC(Changjiang National Shipping (Group)Corporation) in 1975, then dedicated todomestic inland oil trades only. After theyear 2000, pipelines were built reducingthe demand for ship transportation. Atthat time the potential for overseas oiltransportation for the company became

more evident, and in 2007 the companywas reorganised to conduct overseas oiltransportation only. River transportationwas then transferred to the mother com-pany.Today Nanjing Tanker Corporation has

three major fleets:� VLCCs: 16 in operation and on order,all will be delivered by 2012

� Product oil carriers� Special fleet, consisting of chemical,LPG- and bitumen carriers

The company has recently experienced adramatic growth in their fleet, as the totaldeadweight tonnage was around 400,000dwt in 2007 and will be 3.8 mdwt by theend of 2009 and seven mdwt by the end of2012. This must certainly be a comfortablefoundation for future business.In line with the overall expressed Chi-

nese policy of transportation of Chineseoil import by Chinese owned tonnage,Nanjing Tanker Corporation has estab-lished strategic long term cooperationwith Chinese state owned oil companies.Nanjing Tanker Corporation has as a

basic policy to order their vessels based onstrategic cooperation, from major yardswith proven track records, e.g. theirVLCCs have been ordered from Bohaiand Dalian shipyards. The VLCC fleet is young and their ves-


Mr. Jiang Tinggui, Vice President, Nanjing Tanker

Corporation

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TOTAL FLEET IN OPERATION:

• 64 vessels

• 3.8 mdwt

• VLCC/Aframax/product oil carrier/

chemical carrier/asphalt carrier/LPG

• 5 VLCCs

sels are not complex. This, according toMr. Jiang Tinggui, is facilitating simpleroperation and reduces the need for trou-ble shooting and maintenance of compli-cated systems.One of their vessels passed vetting by

an international oil company already in1996, setting the course for internationaloil transportation in the future. As part oftheir brand building efforts TMSA hasbeen implemented, and is established as atool for continuous improvement in thecompany. According to Mr. Jiang Tinggui, Nan-

jing Tanker Corporation is definitely inbusiness for the long haul. They are set-ting the scene for overseas oil transporta-tion to China from foreign oil producers,but may also carry oil between ports out-

side China in the future according to along term plan for the new ships.Nanjing Tanker Corporation is today

among the three major tanker ship own-ers in mainland China, and including fleeton order, they are the biggest in dead-weight terms.Forecasters have recently said that

China, the most populous country in theworld with close to 1.5 billion people andthe world’s second largest consumer ofpetroleum behind the US, will most likelygrow its oil demand by 150% by 2020, i.e.an annual growth of 7.5%. To illustratethe rise in petroleum consumption amongChinese consumers it can be mentionedthat the number of cars in the country hasmultiplied ninety-fold between 1990 and2010. And the growth seems to continue.

There is little doubt that the need foroil carrying capacity for import of oil toChina will grow significantly in the yearsto come. Nanjing Tanker Corporation’sdevelopment is systematically preparing itspeople and the fleet for the new realities. The international tanker community

will certainly see more of this company’sfunnels on the seven seas in the years tocome.The most important success factors

according to Mr. Jiang Tinggui, are: People and management.



Mr. Jiang Tinggui, Vice General Manager, centre, with Mr. Yang Hui, Deputy Director President’s Office

(right) and Mr. Zhu Jinqi, Vice General Manager, Ship Management Dept.

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M/T CHANG JIANG ZHI GUANG

Delivered from Bohai Shipbuilding Heavy Industry

Co.Ltd. on 19th September, 2009 to CSC Nanjing

Tanker Corp,

Managing company: CSC Nanjing Tanker Corp.

The vessel has dual class

with Chinese Classification Society (CCS).

The vessel has the following DNV class notations:

�1A1 Tanker for Oil ESP SPM TMON E0 BIS VCS-2

NAUTICUS (Newbuilding)

Flag: Chinese

Main particulars:

DWT: 296,440

Loa: 330.00 m

B: 60.00 m

Speed: 15.8 knots

ME: 25,480kW at 79RPM

This is an artist’s impression from the DNV

2010 Calendar. If you wish to have your own

copy of the calendar, please send an email to

[email protected].


SHANGHAI WAIGAOQIAO SHIPBUILDING CO., LTD

Mr Tao Ying, Chief Engineer, Shanghai Waigaoqiao Shipbuilding Co., Ltd

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Overview of SWS site in Shanghai

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“Responsibility and trustare essential elements forsustainable business”

Mr Tao Ying, the Chief Engineer of the company, explains that after constructingmore than 100 vessels during its first ten years of existence, Shanghai Waigaoqiao

Shipbuilding Co., Ltd (SWS) has delivered all of them without delays.

TEXT: JAN KOREN

VLCCs, Aframax tankers, Capesize bulkcarriers and a semisubmersible drilling rigfor operation in 3,000m deep waters. Thelast projects are scheduled for delivery in2012.Today, SWS is ranked as one of the top

quality shipbuilders in China. From theday the yard was established, its aim hasbeen to be a first-class shipyard. Twoimportant reasons for the position theyard has achieved amongst Chinese ship-builders are its decision to get rid of out-dated habits and its early development andimplementation of quality standards inline with international shipbuilding stan-dards. Mr Tao claims these are essentialreasons for the company’s success andpresent market position. Although therewill always be room for improvement, hefirmly believes that meeting clients’ expec-



A recent in-house seminar on new rules and

regulations was held at SWS by the experts at

DNV’s Shanghai Approval Centre.

››DNV’s CEO and President Henrik O. Madsen visited SWS in late September 2009. From left: Sean Hutching,

DNV District Manager; Jörg Beiler, DNV Regional Manager; Cheng Mingjun, SWS President; Henrik O. Madsen,

DNV CEO and President; Geng, Weixiang, SWS Vice Chief Engineer; James Huang, DNV Regional Marketing

Manager; Hubert Yin, DNV Key Customer Manager.

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Mr Tao further states that it has alwaysbeen of fundamental importance to theyard to honour the signed ship contractsand deliver vessels that comply with recog-nised international shipbuilding qualitystandards. Such a track record is evenmore important when shipbuilding capaci-ty seems to be heading for oversupply.SWS aims for long-term relations with itsclients. Shanghai Waigaoqiao Shipbuilding Co.,

Ltd (SWS) celebrated its 10th anniversaryon 18 October this year and has a healthyorder book until 2012. Just a month ago,SWS was fortunate enough to win a neworder for six VLCCs to a foreign owner.SWS is the leading shipyard of China

State Shipbuilding Corporation (CSSC)and has three shipbuilding and offshoreengineering bases in the vicinity of Shang-

hai. The combined annual shipbuildingcapacity of all three sites is more thanseven million dwt. This makes SWS one ofthe absolutely biggest shipbuilders inChina. It built 4.6 million dwt last yearand completed 3.0 million dwt in the firsthalf of 2009. SWS has mainly concentrated on large-

sized vessels. For example, as at 30 Sep-tember 2009, the yard had delivered 75Capesize bulk carriers out of a total of 100ships built since the first ship was handedover in 2003. The company has also builtthree FPSOs with a capacity of up to twomillion bbl each, and more than 20VLCCs and Aframax tankers. The majorityof SWS’ deliveries and orders have beenfor leading Chinese and foreign ship andoffshore owners. SWS’ current order book consists of

tations will continue to be the key tofuture success. To meet this ambition, thecompany has been using the Manufactur-ers’ Production Quality Assessment(MPQA) system as a tool to improvebeyond the ISO standards. He also admitsthat comments and support received fromclassification societies have been and willcontinue to be valuable for the company’sdevelopment as a quality shipbuilder.SWS is fully aware that important mar-

ket drivers for design and specificationsfor future contracts in general and tankersin particular will include environmentalissues like fuel efficiency, minimised emis-sions to air and ballast water managementas required by international and some-times regional regulations. Charterers’requirements beyond statutory regulationsand class rules, as reflected through such

companies’ vetting schemes, may influ-ence developments even further. Prepar-ing to stay in the forefront of develop-ments is part of the yard’s strategy forattracting future orders, particularly dur-ing lean times like the present.When it comes to low sulphur fuels, Mr

Tao claims that this is an industry ‘chain’challenge, and there are links in the chainwhich are not prepared for the newrequirements. Efforts and cooperationfrom all parties are needed to succeed.Here we will see significant develop-

ments in the years to come. Mr Taobelieves the yard and classification soci-eties can work together for their mutualbenefit. Improvements can more easily bemade if knowledge, experience and R&Dresults are shared in order to develop newtechnology. Since early 2008, SWS and

DNV have strengthened their cooperationin the area of new ship design develop-ment and competence building. Over thepast year, about 200 SWS technicians haveattended in-house and public training andexperience exchange seminars organisedby DNV.Mr Tao believes that owners’ require-

ments and expectations will in futurebecome more demanding. Taking cooper-ation between class and yard to higher lev-els will make it easier for all parties tomeet market developments and customerneeds, and this will be beneficial for allparties involved.



“We are enjoying excellent cooperation with a yard which is very efficient,” comments the DNV newbuilding

project team working at SWS on Frontline’s VLCCs. From left: team members Zhenyu Mao, Yury Stepanenko

and project manager Kim Anderson.

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DNV IN CHINA

DNV’s current positionis based on a long history

“DNV’s history in China goes back more than 120 years. Today, we are around 1,000 DNV employees here and around half of them are working for DNV Maritime,” says Jörg Beiler, DNV’s Regional Manager for Greater China. “Our headquarters in China are located in Shanghai and we have 36 district

and site offices scattered around the country.”

TEXT: JAN KOREN

DNV’s current order book in China con-sists of some 420 vessels, equivalent toaround 20 mgrt. This is about 23% of thecurrent total newbuilding order book inChina.The DNV order book is distributed

over 50 shipyards spread around the coun-try. Included in the DNV-classed projectsare four stainless steel chemical carrierson order to Odfjell at Chuandong Ship-yard in Chongqing, 1,400 km from Shang-hai up the Yangtze River.The current order book of DNV-classed

vessels consists of 45 VLCCs and 158 othertankers.At Guangzhou Shipyard International

alone, there are 45 DNV-classed vessels onorder.Among the more sophisticated tankers

now on order to DNV class in China canbe mentioned four shuttle tankers atCOSCO Nantong Shipyard.DNV has traditionally had a very strong

market position for oil tankers on order inChina. For example, the first VLCC deliv-ered from a Chinese shipyard was DNVclassed, built at Dalian Shipyard. The firstVLCC delivered to a Chinese owner wasalso DNV classed, built at NACKS in 1996for COSCO. The same applies to the firstVLCC to be delivered from JinhaiwanShipyard.All the Chinese yards that build VLCCs

(Dalian, Bohai, NACKS, Longxue, Jinhai-wan and Shanghai Waigaoqiao) have

DNV-classed VLCCs in their order books.Similarly, the major Chinese owners ofVLCCs have DNV-classed VLCCs in theirfleets or on order.Historically, DNV has been involved in

many yards’ first tanker projects in China.This includes the first tanker project atRongsheng Shipyard, which was a Suez-max tanker built to DNV class. “The mainreason for this,” says Jörg Beiler, “is DNV’stanker expertise which is a result of ourleading position in the tanker market, butit is also not least due to the fact that DNVtends to allocate more resources andexpertise to the individual projects. This isseen as an advantage by both yard andowners. The fact that our Approval Centrein Shanghai has strong tanker expertise,able to support the yards in our local mar-ket, is of course also an important successelement.”“We want to get involved with new

designs at an early stage and give designsupport to the yards. This will simplify ourfuture approval work,” says AndersSwerke, Head of Shanghai Approval Cen-tre. “This is also an opportunity for theyards to ‘future prove’ their designs withrespect to upcoming rules and regula-tions,” he continues.“Our cooperation with China Classifica-

tion Society (CCS) in the case of dualclass is based on our general Dual ClassAgreement with that company. In order tofacilitate cooperation between CCS and

DNV in such cases making the practicali-ties simpler and more efficient for thebenefit for those involved, we have takenthe dual class cooperation a good step fur-ther,” says Jörg Beiler. “We have openedour global computerised production sys-tem to CCS surveyors, based on extensivetraining and detailed instructions.”DNV’s current order book in China

contains vessels scheduled for delivery in2012. “So far our order book has not beenseverely hit by the economic downturn,”says Jörg Beiler. “A very small part of ourorder book in China has been cancelled.We are confident and expect to be able tohandle the situation without taking dra-matic action. We even believe that the situ-ation facing the Chinese shipbuildingindustry may represent opportunities forDNV,” he concludes.

DNV’s Regional Manager Greater China, Jörg Beiler

(left) with two key members of his staff: Anders

Swerke, Head of Shanghai Approval Centre and

James Jin Huang, Regional Marketing and Business

Development Manager, outside their office in

Shanghai.

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DNV IN CHINA

There has been an increased focus on the per-formance and reliability of stern tube bearings.The FLEX R&D project (DNV’s JIP dealing withhull deflections’ influence on shaft alignment)for VLCCs, as well as recent incidents, havehighlighted the need for increased knowledgeand improved analysis methodology in order toreduce the risk of damage to the shaft and bear-ing. The failure of a shaft bearing can have asevere impact on the vessel’s manoeuvring andsafety. In addition, bearing trouble can result inoil leakage with serious environmental and com-mercial impacts.

A RECENT CASE ILLUSTRATES how DNV’sunique expertise in shaft alignment and bearingtechnology assisted a ship owner experiencingshaft bearing trouble.It also shows that cooperation between class,

technical consultancy and the resources withinDNV benefited the owner so that appropriatedecisions were made and off-hire was avoided.The vessel was a shuttle tanker with a low speeddiesel engine directly driving a single control-lable pitch propeller. A conversion of the vessel

and shafting had been carried out a few yearsearlier. The ship was scheduled for routinedocking and was manoeuvring into the shipyardwhen a high-temperature alarm was triggeredfor the aft stern tube bearing. Upon inspectionof the bearing after the propeller shaft was with-drawn, it was found that the aft stern tube bear-ing was wiped. This was a standard white metal bearing. The

yard removed the bearing and sent it to a sub-contractor to be rebabbitted. During the seatrial after completion of the docking, a hightemperature in the aft stern tube bearing wasonce more recorded and the vessel had toreturn to the shipyard. The bearing was dam-aged and was again removed and rebabbitted.However, during the sea trial after comple-

tion of the docking, high temperature wasrecorded in the aft stern tube bearing and thevessel had to return to the shipyard. Since it wassuspected that the bearing was damaged, a meet-ing was arranged the same day between theowner, class representatives, and machineryexperts from DNV Technical Consultancy.>>

SHAFT ALIGNMENT


DNV focuses onshaft alignment and bearingproblems on oil tankers

DNV Technical Consultancy is offering a range of services related to machinery and shafting for all types of ships. Especiallyfor tankers, projects and investigations related to shaft alignment

and bearing performance have highlighted the demand foradvisory services beyond class.

TEXT: JAN HAGEN ANDERSEN

SHAFT ALIGNMENT


Wiped aft stern tube bearing.

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Original design shows high contact pressure at the aft edge of

the bearing.

››Modified design shows well distributed contact pressure in the aft bearing.

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SHAFT ALIGNMENT


A senior engineer from DNV TechnicalConsultancy was immediately dispatchedfrom Norway to Asia in order to carry out adamage survey and help the owner’s on-siterepresentatives determine the properrepair work. At the same time, the shaftalignment and bearing performance wereevaluated by alignment experts from DNVTechnical Consultancy. The evaluation hadto take into account the hydrodynamicpropeller forces and the oil film formationin order to achieve a satisfactory slope boredesign in the aft bearing.The figures (p 15) show the improve-

ments in contact pressure and oil film thatwere achieved by the new design. Based on the on-site findings and meas-

urements and the results of the calcula-tions, a repair and verification plan wasexecuted. There was very close cooperation

between the engineer dispatched from

DNV Technical Consultancy, the local DNVclass representatives and DNV’s head officeso that all issues could be resolved quicklyto both the owner’s and yard’s satisfaction.

AN ADDITIONAL CHALLENGE was thedeformation of the existing bearing shelldue to the repeated rebabbitting proce-dures, resulting in too much ovality. A newbearing would not be available for at leastfour weeks, which would result in a veryexpensive delay for the owners. The solu-tion was to do the final boring of the aftbearing in-situ, such that the final slopeand geometry would be within the accept-able tolerances.The final repairs were completed within

a few days. A successful sea trial was carriedout during which the bearing was tested inall relevant operating conditions, and thevessel finally returned to normal trade.This case demonstrates the importance

of shaft alignment and of appropriateinvestigations and procedures being imple-mented during dry-docking and conver-sions, especially if bearing damage isfound.The knowledge learned from trou-

bleshooting like in this case is regularlyused as important input for updatingDNV’s Rules, as part of our continuousimprovement process.

DNV TECHNICAL CONSULTANCY providesassistance with shaft alignment and bearingissues, and carries out on-site shaft meas-urements and inspection services as well astraditional and advanced shaft alignmentanalyses, including bearing performanceanalysis. We have seen an increase in thedemand for these services.

Final condition after in-situ machining.

››

DNV surveyor at work.

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Twice Best Classification Society

BEST CLASSIFICATION SOCIETY DNVwon the “Best Classification Society” awardat the Seatrade Asia Awards 2009 held inShanghai this summer.The Seatrade Asia Awards reflect ship-

ping excellence throughout Asia. “Thewinners, as well as the finalists, havedemonstrated a commitment to bestpractices in their respective sectors that isa credit to the Asian shipping communi-ty,” said Chris Hayman, Chairman ofSeatrade.“DNV’s extensive network of offices

across Asia and expertise in the field oftankers are both well known,” said BobJaques, the Seatrade magazine editor. “In

terms of assistance to shipping firms,DNV rolled out its Academy courses inIndia during 2008 and also implementeda new Crew Appraisal and Training Sys-tem for leading tanker manager Thome,based in Singapore.”Mr Jaques said the judges considered

DNV’s versatility in being selected class forthe world’s largest shipbuilding order for12 VLOCs, each of 400,000 dwt, at JiangsuRongsheng Heavy Industries in China;successful conversion of the world’s firsttwo Floating Storage and RegasificationUnits by Keppel in Singapore; and com-pletion of the world’s first circular drillingrig at Cosco Shipyards in China.

TWICE BEST CLASSIFICATION SOCIETY


BEST CLASSIFICATION SOCIETY

GLOBALLY DNV was named the best clas-sification society globally by the maritimeindustry’s leading newspaper, Lloyd’s List,at its annual awards event held in Londonon 8 September 2009. DNV received the award because it has

focused and excelled in three areas: quali-ty, the environment and technical compe-tence. “The company has distinguisheditself in addressing environmental issues inshipping and by spending considerableresources to develop state-of-the-art com-petence and services,” said Lloyd’s List edi-tor, Tom Leander.

Ioannis Kourmatzis (left), Regional Manager, DNV

Maritime Europe and Africa, and Alistair Campbell.

››

Jörg Beiler (left), Regional Manager DNV Maritime Greater

China and Chris Hayman, Chairman of Seatrade.

››


VLCC series for NITC completed

DSME has delivered Dadgar, the last of a series of three DNV-classed VLCCs for NITC.

TEXT: STUART BREWER

Daewoo Shipbuilding and Marine Engi-neering (DSME) delivered the last of aseries of three 319,000 dwt VLCCs to Mid-dle East owner NITC. The handover alsocompleted a wider series of 17 ‘new gener-ation’ tankers: 13 VLCCs and four scaled-down suezmaxes - ordered simultaneouslyby NITC from four Korean yards in June2005.Unusually all vessels were built as far as

possible to the same design, despite thedifferent yards involved: Hyundai Heavy

Industries, Hyundai Samho Heavy Indus-tries, Samsung Heavy Industries andDSME. The common design was at NITC’sinsistence for reasons of commonality.As reported in Seatrade, these double-

hull tankers feature special design charac-teristics and enhanced safety and environ-mental features costing around 9% morethan standard yard prices. In particular,the DSME- and SHI-built vessels, classedby DNV, achieve extremely low levels ofnoise and vibration and were the first

tankers ever to receive DNV’s highest‘comfort’ notation, COMF-V(1), normallyreserved for passenger vessels, as well ascarrying its low vibration notation VIBR.DNV classed ten of NITC’s latest series

of 17 vessels. The two companies haveenjoyed a long history of working togeth-er, most notably on the first series ofVLCCs ever built in China at Dalian Ship-yard in the late 1990s/early 2000s.

NITC

This is an artist’s impression

of the recently delivered

Dadgar from the DNV 2010

Calendar. If you wish to have

your own copy of the calen -

dar, please send an email to

[email protected].

Owner: Dadgar Shipping

Company Limited

Type: Tanker for Oil

Flag: Cyprus

Yard: Daewoo Shipbuilding &

Marine Engineering Co., Ltd.

Year built: 2009

Loa: 333.00 m

B: 60.00 m

D: 30.50 m

Class Notation:

�1A1 Tanker for Oil

ESP SPM COMF-V(1)

E0 NAUT-OC VCS-2

HMON(1) CLEAN VIBR

COAT-2 BIS TMON

NAUTICUS(Newbuilding)

››

Targeted improvements through ISO 14001 and

OHSAS 18001Maran Tankers Management Inc., the oil tanker management company

owned by the Angelicoussis Shipping Group, has as its standing objectivethe operational excellence of the 34-ship strong tanker fleet.

TEXT: MAGNE A. RØE

A key factor for achieving this is the workaimed at the continuous improvement ofthe company’s Occupational Health, Safe-ty and Environmental performance. At arecent ceremony at the Maran headquar-ters in Athens, DNV Maritime COO Tor E.Svensen handed over the ISO 14001(renewal certification) and OHSAS 18001certificates to Sokratis Dimakopoulos,HSQE manager of Maran Tankers Man-agement Inc. Similar certification will beimplemented in the near future to coverthe LNG/LPG vessels of Maran Gas Mar-itime Inc., the Angelicoussis gas carriermanagement unit.“Pushing forward and adopting a

proactive approach to OccupationalHealth, Safety and Environmental mattersare regarded as key drivers for enhanced

overall business performance,” saidDimakopoulos at the ceremony. “We haveembraced an integrated managementapproach based on the requirements ofboth ISO 14001 and OHSAS 18001 andthis methodology has worked very well.We feel that the structure, contents anddirection of both management systemscomplement each other efficiently. TheOHSAS 18001 requirements, in particular,have assisted us in enhancing onboardhealth and safety, further promoting theimplementation of the risk assessmentprocess during the daily activities onboard, as well as taking new initiatives tocontinuously improve the quality of theworking and living conditions on boardthe managed fleet vessels (i.e. advancedmedical care/equipment/telemedicine,

installation of satellite TVs, Internetaccess, etc).” “Overall safety at sea, the safety and

wellbeing of the crew and the ever increas-ing need for environmental complianceand foresight are important success fac-tors for the future. I would like to compli-ment Maran Tankers Management on itsengagement and strong commitment tothese important programmes for futuresuccess,” said Tor E. Svensen.ISO 14001 is the internationally recog-

nised Environmental Management Systemstandard for environmental improvementsand regulatory compliance. The increasedawareness of sustainable developmentgives environmentally credible companiesa competitive edge in national and inter-national markets. Companies are increas-



ingly required by authorities and cus-tomers to report on their environmentalperformance. The standard provides aclear management framework based onthe well established management princi-ples of “Plan-Do-Check-Act”. It requires anorganisation to assess its operations’impact on the environment, understandhow those impacts can be managed, andset clear objectives and targets for contin-uous improvement.OHSAS 18001 is the international stan-

dard for Occupational Health and Safety(OH&S) management. It provides aframework for organisations to controltheir OH&S aspects, ensure legal compli-ance and continually improve perform-ance. The OHSAS management system isnow a legal requirement in many coun-

tries, assisting companies in investigatingthe health and safety risks related to theiroperations. Implementing the standardmeans that such risks are evaluated andcontrolled by setting clear objectives andtargets in order to improve performance.The OHSAS 18001 standard has beendesigned to be compatible and har-monised with the other international man-agement system standards, especially ISO14001. “We have selected DNV as the ISO

14001 and OHSAS 18001 certificationbody for the entire fleet,” continuedSokratis Dimakopoulos. “We are pleasedto conclude that DNV has fully met ourexpectations with an open-mindedapproach that has complemented our ownmanagement commitment and opera-

tional mode. We have already initiatedwork in relation to the corporate socialresponsibility (CSR) concept with a viewto further emphasising our approach toimproved performance in all aspects ofour operations,” concluded Dimakopou-los, as he pointed out the Maran visionstatement: “To be a leader in the shipping indus-

try requires delivering the best services toour customers and ensuring the efficienttransportation of oil while maintainingthe highest applicable health, safety andenvironmental standards.”



From left: Tor E. Svensen, COO DNV Maritime and Sokratis Dimakopoulos, HSQE Manager of Maran Tankers Management Inc.

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Major challenges for theinternational shipping industry

Ship to Ship Transfer Guide

When the new regulations for low sulphurcontent (less than 0.1%) of any fuel gradein EU ports kick in on January 1, 2010,this represents major challenges for theshipping community at large. Theseinclude: � the availability of low sulphur fuels� are the fuel consumers and fuel systemsprepared for low sulphur fuels? Whatmodifications need to be carried out?

� formal approval of modifications if any� new operational procedures associatedwith low sulphur fuels

� the competence of the personnelinvolved

� sufficient time for the preparation andimplementation of low sulphur con-sumption?

Resolution MEPC.186(59) was adopted atMEPC 59 and contains a new Chapter 8 toMARPOL Annex I on the prevention ofpollution during the transfer of oil cargobetween oil tankers at sea. The new regu-lation applies to any oil tanker of 150 GTand above engaged in the transfer of oilcargo between oil tankers at sea (STSoperations). Bunker operations and oiltransfer operations associated with fixedor floating platforms are excluded.Affected oil tankers involved in STS

operations will need to carry on board anapproved STS operations Plan describinghow STS operations are to be conducted.STS operations Plan approval is requirednot later than the date of the first annual,intermediate or renewal survey of the ship

under MARPOL Annex I to be carried outon or after 1 January 2011.The STS operations Plan shall be devel-

oped in accordance with the requirementsin IMO’s “Manual on Oil Pollution, Sec-tion 1, Prevention” as amended, and theICS and OCIMF “Ship to Ship TransferGuide, Petroleum, fourth edition, 2005.The STS operations Plan may be incorpo-rated into an existing Safety ManagementSystem required by the chapter IX ofSOLAS, 1974, as amended, if that require-ment is applicable to the oil tanker inquestion. However, it does not remove theneed for the plan to be approved asrequired by the resolution.Operations conducted on or after 1

April 2012 must be in accordance with the

approved plan. Records of STS operationsshall be recorded in the Oil Record Bookand are to be retained on board for aperiod of not less than three years sincethe transfer occurred. Any oil tanker sub-ject to the regulation that plans STS oper-ations within the territorial sea or theExclusive Economic Zone of a Party toMARPOL, shall notify the relevant coastalstate Party not less than 48 hours inadvance of the scheduled STS operations.

DNV OFFERS TO REVIEW the STS Plan inaccordance with Chapter 8 requirementsand consequently issue new Supplementto the IOPP Certificate, Form B.For more information please contact

[email protected]

SHIP TO SHIP

LOW SULPHUR FUELS

Oil tankers involved in Ship to Ship Transfer (STS)of oil cargo will from first survey after 2011-01-01 need an

approved STS manual onboard. DNV is ready to approvethis manual on behalf of the Flag Administration.

Carl Fredrik Kresse, Head of Section, Machinery Systems

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SHIP TO SHIP


DNV HAS JUST PREPARED A PAPER:

“Low sulphur fuels, properties and associated challenges.”

This paper can be downloaded free ofcharge from www.dnv.com/papers

LOW SULPHUR FUELS

There are many reasons forsuch a prediction. Repairingnature seems bound tobecome the number onegrowth industry in the future.The energy mix is changingand we use energy in muchmore efficient ways. Industri-alized countries consume lessoil than 30 years ago, whileindustrial production andGDP have more than dou-bled over the same period.This means that the oil inten-sity in developed economies has beenmore than halved. OPEC’s minimalistapproach to defend the oil price hasencouraged the search for oil and gas innew locations, with great offshore successin several sites much closer to the largestconsuming areas than the Middle East.The Atlantic has become much more self-supplied.Looking ahead, it seems reasonable to

assume that oil and gas from NorthernRussia and Russia Pacific, together withpipelines across the Asian continent to thePacific seaboard, with no or very short fur-ther sea distances to China, Japan, Koreaand Taiwan will have a substantial damp-ening effect on future oil tanker demand.The same goes for the expansion of oilvolumes through a pipeline from Kaza-khstan to China and other possible new

pipelines. On top of this come newlyfound giant fields of oil and gas offshoreBrazil and the possible development of oilfrom tar sands in Canada, both close tothe USA which is by far the world’s largestoil market. Maybe such developments incombination will have a similar, and possi-bly even stronger, downward impact on oiltanker demand than the North Sea had inthe 1970s and 1980s?The world seaborne oil trade saw fan-

tastic growth through the 1960s and until1977. Measured in tonne-miles, theworld seaborne oil trade quintupled inthe 15 years after 1962, which was thefirst year when such estimates were pre-pared by Fearnresearch. This was fol-lowed by large-scale North Sea fielddevelopments and severe productioncuts in the Middle East as a consequence

of the war between Iran andIraq. Total oil tonne-milesdecreased by 55% in the justeight years leading up to1985 and crude oil tonne-miles decreased by as muchas 62%. There was certainlyvery limited construction ofoil tankers for a protractedperiod. Shipyards, banks andgovernments became tankerowners and guarantee insti-tutes were established toprotect dwindling values. In

2006, the total oil tonne-miles for thefirst time in history exceeded those in1978 and the 2009 tonne-miles are esti-mated to be only about 6% higher thanback in 1977.In the saturated, established industrial

countries, economic growth, energy use,steel use and the demand for several prod-ucts show much lower growth (evendecline) compared to developing coun-tries and emerging economies, several ofwhich are now experiencing unprecedent-ed industrial take-offs. In industrializedcountries, most of the infrastructure isalready in place, there are limits to howmuch energy modern societies can sensi-bly consume and population growth iseither limited, flat or in some countriesnegative. Pollution and traffic jams, withhealth problems and hours spent in pri-

JARLE HAMMER

After 35 years of employment with

Norwegian shipbrokers Fearnleys

AS, Jarle Hammer (64) retired from

his position as chief economist of

the company in late 2005. He is a

strategic adviser to shipping

companies, cargo owners, banks

and others in the shipping

community. In addition, he

provides consultancy and advisory

services through his own company,

Hammer Maritime Strategies.



Long-termoil tanker demand

It took 29 years for the world tanker fleet to regain the size it hadin 1978. A forecast made back in 1978 that the world would not need more

tankers almost 30 years into the future would at that time have seemed ratherstrange. It seems less bold today to predict that the world may well

not need more oil tankers 30-40 years from now.

TEXT: JARLE HAMMER



vate cars every day, will lead to moredemand for sophisticated public trans-portation and thus reduce the demand forpetrol and energy for transport in general.Gas is cleaner than oil and there will be

more use of gas for propulsion and togenerate electricity. Newly confirmedlarge gas resources in the USA and Cana-da will in the longer term dampen theneed for seaborne energy imports. Coal isdirtier than oil but abundant in severalplaces. With high oil and energy prices,attempts to develop clean-coal technologyat competitive prices may gradually suc-ceed. After all, the Germans managed tosqueeze oil out of coal in the 1940s andthe South Africans did the same duringthe oil embargo against apartheid.Nuclear power seems to be winning morefavour among the environmentalists. Inaddition, a number of types of renewableenergy are receiving more public supportand becoming more competitive in quitea few areas. Several types of bio-fuels areon the increase. Those which involve theburning of food, like grain and vegetableoil, will face more resistance, while the useof second-generation bio-fuel, includingwaste and recycled material, could wellincrease to fairly substantial market sharesin certain locations. Oil demand forecasts issued by the IEA

in November this year show that the worldoil demand decreased by 0.2% last year

and may decrease by 1.7% this year, to befollowed by a growth of 1.6% next year.This means that the world oil demand isexpected to be somewhat lower in 2010than in 2007. Admittedly, these figures areinfluenced by the financial crisis fromwhich we will hopefully soon emerge. Inthe longer perspective, it is interesting toobserve that in the reference case in itslatest International Energy Outlook, theUS Department of Energy’s Energy Infor-mation Agency foresees an average annualgrowth of 1.5% in global energy demandand a modest 0.9% in oil consumptionbetween 2006 and 2030, with zero growthin the OECD countries and 1.9% annualgrowth in non-OECD countries. In itshigh case scenario, world oil demand isestimated to increase by 1.6% annuallyover the period leading up to 2030,whereas its low case scenario shows 0.6%annual growth. These forecasts are well inline with the latest World Energy Outlookfrom the IEA, released last week andshowing reference forecasts of 1.5% annu-al growth in world energy demand and1.0% annual growth in world oil demandbetween 2007 and 2030.As for short- and medium-term devel-

opments, the oil tanker fleet has increasedby 20% since the beginning of 2007. Thepresent order book corresponds to 30% ofthe existing fleet and remaining single-hull tankers amount to 13%. Since 2005,

the conversion of oil tankers has playedan important role in tonnage supply.Whereas tanker demolition over this peri-od totalled 15.4 million dwt, figures fromIntertanko show that conversions of oiltankers amounted to as much as 40.4mdwt. Of this, upgrading to double-hulltankers amounted to 5.4 mdwt and had alimited effect on the total tanker fleetcapacity. The remaining 35 mdwt wereconverted to dry bulk carriers, offshoreunits and heavy-lift vessels. In a recent study for DNV, Hammer

Maritime Strategies was asked to makeprojections for oil tanker demand in 2020and 2050 under different sets of assump-tions in order to provide rather roughlong-term demand prospects. In this study,2008 was used as the reference year. Theworld oil tanker fleet at mid-year 2008stood at 365.3 million dwt. At present ithas reached 413 million dwt. This exerciseresulted in rather flat fleet scenarios. Inthe reference case, oil tanker demand wasestimated to be 408 mdwt in 2020 and 421mdwt in 2050. In the high case, oil tankerdemand was estimated to be 423 mdwt in2020 and 497 mdwt in 2050. The low caseshowed an estimated oil tanker demand of393 mdwt in 2020 and 386 mdwt in 2050.Of course, there are many uncertainties,

involving politics, technological develop-ments and environmental legislation.Hence, the above must be seen as just a


starting point for evaluating future ton-nage demand. The upcoming UN cli-mate meeting in Copenhagen may leadto some agreements that could have asubstantial bearing on future seaborneenergy transportation. At present, thetransportation of energy commoditiesaccounts for some 43% of the total inter-national seaborne trade and this sharehas been decreasing for several years insharp contrast to strong developments inthe dry bulk and container trades priorto the financial crisis.It is hard to see any upside for ener-

gy demand as a consequence of globalwarming, except for air conditioning insome areas. The demand for heatingand energy use that causes pollutionwhich adds to global warming willshrink. On the other hand, there may be a

need for (redundant) tanker tonnage fortransportation of fresh water, as climaticchanges are likely to amplify the need foradditional fresh water supply in someregions of the world.In sharp contrast to the general scenar-

ios for the energy and tanker markets,global warming and extreme weather con-ditions are likely to have a considerableupward impact on dry bulk tonnagedemand. More construction materials, likesteel and cement, will be needed to repairand prevent damage from flooding and

strong winds. If sea levels increase by asmall number of decimetres over a fewdecades, there will be a need for a lot ofdikes and new infrastructure, as well ashousing on dry land. Climate changes,with wet areas becoming wetter and dryareas becoming dryer, will increase thedemand for food imports in general.More grain will be required from suitableareas, like the prairies and the pampas,where again more fertilizer will be neces-sary leading to a need for more fertilizerraw materials.

It has been observed that developmentstend to be faster and changes in trade vol-umes and trading patterns much largerthan we imagine in our scenarios. Whowould have believed 30 years ago that theworld would today not need significantlymore oil tankers than then, while the drybulk fleet has more than tripled over thesame period?


RECENT DELIVERY: PROFIT


This is an artist’s impression of the recently delivered Profit from the DNV 2010 Calendar. If you wish to have your own copy of the calendar,

please send an email to [email protected].

››

PROFIT

Owner: Profit Shipping Ltd.

Type: Tanker for Oil

Flag: Malta

Yard: Jiangsu Rongsheng Heavy Industries Group Co., Ltd.

Year built: 2009

Loa: 274.50 m

B: 48.00 m

D: 23.70 m

DWT: 156,644

Class Notation: �1A1 CSR Tanker for Oil ESP SPM E0 NAV-O

VCS-2B BIS TMON

GREAT WALL OF CHINA

Built, rebuilt, and maintained between

the 5th century BC and the 16th century

to protect the northern borders of the

Chinese Empire from Xiongnu attacks.

©Wikipedia

dnv tanker update no. 2 2009

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