tankeroperatorea45bb970b5c70169c61-0cd083ee92972834b7bec0d968bf8995.r81.… · tankeroperator may...

TANKEROperatorMAY 2014 www.tankeroperator.com

fuel saver

May 2014 � TANKEROperator 01

ContentsMarkets2014 - the MR year?

FinanceIPOs - timing is everything

News Focus� Ensuring ECA compliance � IoM welcomes ‘green’ tankers

Greece Report� Fleet expands� Posidonia - biggest yet?

Norway Report� Opening of the Arctic� Energy losses identified� BASS upgrades system� Knock-for-knock cases increase

Anti-Piracy� Gulf of Guinea worry

Front coverThousands of vessels are now fitted with various Becker Marine products, aimed at greater efficiency and fuel savings.In the tanker sector, perhaps the most well known is the patented Mewis Duct, which once fitted, can produce good fuel savings. Manytanker owners have fitted ducts to their propulsion systems, while others are tank testing the equipment to gauge the results. Tankers are incredible difficult to modify externally to attain greater efficiency, due to their shape, so any piece of equipment, for examplea duct, will quickly produce a return on investment. fuel saver

C_Anz_Tanker_Operator_Title_210x247.indd 1 09.05.2014 10:00:37

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Satcoms� Airbus joins the shipping sector� Terminal connections keep up

Technology34 Technology Focus � PureDry becoming standard

ECDIS� ENCs at the right time� ECDIS procedures laid down� PAYS introduced

Tanker Efficiency� Danish owners outline progress� Carbon credits for efficiency

Tank Servicing� Small becomes large

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TANKEROperator � May 201402

COMMENT

To pay up or not to pay up- that is the question

TANKEROperatorVol 13 No 6Tanker Operator Magazine Ltd

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Perhaps the most significantannouncement to come out ofMEPC 66 was an agreement toreview the timing of theimplementation of the globalsulphur limits. In essence, a correspondence group is being

set up to decide whether the adoption of the

0.5% global sulphur cap should be as early

as 2020, or put back to 2025.

However, whatever the outcome of the

IMO’s pronouncements, the EU has already

decided on a global cap by 2020. This means

that in 2020, a 0.1% sulphur cap will be

implemented in the European ECA region,

while a 0.5% cap will be introduced in the

remaining EU waters.

Another study is being set up to decide

whether there will be enough fuel available

to satisfy the needs after the global cap

comes into force. The study group is due to

report back to the IMO by October this year

when, if accepted, the study will go ahead

and report its findings by 2017.

The industry appears to be divided on the

question of low sulphur fuel availability,

according to London brokers EA Gibson. A

joint UK/Netherlands paper on this subject

has said that 2020 refining capacity will

exceed the demand for low sulphur fuels,

which will reduce the price.

However, another industry expert recently

said that the refiners were being constrained

by the lack of upgrading in Europe, minimal

upgrading in the US and possible delays in

the Middle East capacity coming on stream.

This may lead to a significant price

differential within different bunkering

regions resulting in more product being

shipped to areas of low availability and more

low sulphur fuel requirement. This could put

extra pressure on supply and thus raise prices

still further.

According to Gibson, the average price of

HSFO in Rotterdam last year was $598 per

tonne, but MGO averaged some 30% higher,

at $900 per tonne. Some industry players,

most notably the Danes, said that the

differential could go as high as 50%.in the

future.

Another problem highlighted by Moore

Stephens recently was the ability to find

enough money to remain compliant with the

forthcoming environmental regulations, apart

from the cost of bunkers.

Moore Stephens shipping partner Michael

Simms said, “The Ballast Water Management

(BWM) Convention, for example, has not yet

entered into force, although some countries,

including the US, have already implemented

BWM regulations independently of the IMO.

“But it is known that BWM systems can

cost between $500,000 and $5 mill per

vessel, depending on the system, as well as

on the size and design of the ship. That cost

may increase as a result of demand

requirements and shipyard capacity. There

are also operational costs to consider of

between $10,000 and $50,000 per annum per

vessel,” he said.

Apart from the ECAs, where the 0.1% SOx

emissions will come in on 1st January, there

are more complex calculations for 2016,

when IMO NOx limits based on the vessel’s

age and engine’s rated speed enter into force.

UnclearHowever, Simms acknowledged that the true

cost of regulatory compliance is still unclear.

He said, “Think of a number. Any number

will do, so long as it is very big. Then double

it. The answer is likely to be as accurate as

any supposedly informed estimates currently

circulating in the shipping sector about the

likely size of the industry’s bill for achieving

compliance with incipient environmentally-

inspired regulations governing the operation

of ships. Individual owners and operators

may plot their own path through the

regulations. One thing is certain, however.

Shipping is going to have to find a great deal

of money over the next few years simply to

stay within the rules.”

The mention of shipowners plotting their

own path to stay within the rules brings me

to the point made by several people during

meetings with leading players in Copenhagen

recently- the most vocal of which was the

Danish Shipowners’ Association.

They thought that many shipowners and

operators will simply ignore the low sulphur

caps and burn HSFO in ECAs regardless,

knowing that they have only a one in 1,000

chance of being detected, due to lack of

policing.

Massive savings It was calculated that a bulker, or tanker,

sailing into or out of an ECA to other areas of

the world, except to/from the US, could save

around $150,000-$175,000 by not buying

LSFO. By contrast, the maximum fines for

ignoring the rules and burning HSFO might

be as little as $20,000.

Then there is the case of short sea

shipping, which will have to pass on the

extra costs to their customers and maybe

drive cargo back onto the roads, as shipping

becomes uncompetitive in the Baltic and

North Sea ECA areas.

The message to the authorities is clear.

There are those who will pay up and those

who will not. The whole process needs

enforcing, but just how you do that with a

vessel transiting an ECA is unclear to say

the least. TO

INDUSTRY - MARKETS


Will 2014 be the yearof the MRs?

In this market round up, we look at current activities and forecasts through the eyes of both BIMCO and McQuilling Services.

Taking BIMCO first, the

organisation’s report said that the

spike in VLCC earnings that began

at the end of 2013 continued into

2014, hitting the highest levels since 2010.

Suezmaxes and Aframaxes also enjoyed the

ride. The Winter strength in the crude oil

market was a result of a rise in oil demand

from the fast growing economies of Asia.

However, the ride was very turbulent with

fluctuations meaning that earnings dropped

from record highs to lows, only to climb to the

same levels again shortly afterwards. This is a

common occurence for VLCC rates, especially

around the Chinese New Year. VLCC rates

now appear more stable, albeit steadily

declining since mid-February.

The first quarter of this year was

disappointing for product tankers, with a flat

rate environment prevailing. Despite holding

on to the gains achieved in 4Q13, all product

tanker segments - from Handysize to LR2 -

have had to settle for $10,000-$17,000 per day

today (early April). This is slightly higher than

expected and was a result of the steadily

improving market.

Particularly relevant for the product tanker

market was that vehicle gasoline consumption

experienced the largest increase since 2004, as

highway travel surprisingly grew during the

second half of last year. Consumption grew by

1.1% to reach 8.8 mill barrels per day.

Record lowUnfortunately, this did not help the product

tanker market, as gasoline imports in 4Q13

and 1Q14 were at a record low.

While BIMCO forecast a four-year high for

delivery of newbuilding product tankers, very

few ships are being sent to the breakers to

counter the influx. There have been just seven

ships in total, six of which being below 40,000

dwt and two of those also being single hull.

Owners are displaying a strong belief that a

firm product tanker market is just around the

corner, BIMCO said.

Looking at crude oil tanker capacity, the

fleet has only increased by 0.2% since 1st

January, despite delivery of six new VLCCs,

as demolition took its toll. Only two

Suezmaxes and no Aframaxes entered the

fleet, signalling that the extremely poor freight

markets of recent years have had an affect on

the appetite for placing new orders.

For the remainder of 2014, 25 VLCCs, 19

Suezmaxes and 14 Aframaxes are scheduled

for delivery. BIMCO expects an average of

one year postponement/delay of 25% of the

scheduled orderbook, especially to ease the

VLCC pressure somewhat.

Last year, Aframaxes saw a 12-year low

delivery level at just 18 new ships. This

caused the fleet size to shrink for only the

second time since 1985.

Whichever way you look at it, 2014 will be

the year of the MRs, BIMCO said. Last year,

74 new MRs were delivered – year-to-date

deliveries had already reached 19 by mid-

March. In the size range of 40,000-60,000

dwt, 270 product tankers are on order, of

which 93 are scheduled for delivery in 2014.

However, BIMCO expected actual deliveries

to fall short of scheduled ones. As regards the

total product tanker orderbook, it had dropped

down to 406 units by the end of March, from

420 units two months before.

In January and February, new orders for 12

VLCCs were signed, all for 2016 delivery.

Last year, 49 were ordered of which 29 were

placed in December. Another example of more

confidence today is the re-sale of seven VLCC

orders, placed in South Korea in December

2013, all due for delivery in 2016 for a price

of $93 mill each. The resale price of $100 mill

confirmed both the increased optimism in

VLCC tanker market, as well as owners

expectation for the future.

OutlookThe tension around the Russian annexation of

Crimea has not affected the oil market thus

far, as Ukraine is not a transit country for

Russian oil sold to the West. According to

EIA, OECD Europe received as much as 36%

of its net crude imports from Russia, which in

turn relied on Europe for 71% of its crude

exports in 2013. Should trading with Russia be

affected, oil product imports into Europe is the

likely solution, with Russian crude export

instead going East.

As the energy intensity of global economic

growth is slowing down, changes in economic

activity will translate differently into oil

demand growth than during the past decades.

1,400

1,300

1,200

2013-2014anker IndexBaltic TTa

Crude 2013

MFeb.Jan.

1,100

1,000

400

900

800

700

Ind

ex v

alu

e

600

500

Jul.Jun. Sep.Aug.MayApr.Mar.

PrCrude 2014 Products 2013

Dec.Nov.Oct.

roducts 2014

Source - BIMCO, Baltic Exchange, CRSL.

INDUSTRY - MARKETS

May 2014 � TANKEROperator

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However, a significant economic step forward (+3.7%) is expected for

2014, which is currently estimated to result in a 1.5% higher demand

for oil (IEA forecast).

For April/May, BIMCO forecast earnings for the all the crude oil

tanker segments to stay above $10,000 per day. VLCCs may go as

high as $25,000 per day, while Suezmaxes could reach $22,000 per

day with the Aframaxes expected to peak around $20,000 per day.

In the product tanker segment, BIMCO expected earnings on LR1

benchmark routes from AG to Japan to hover around $10,000-15,000

per day, with LR2s inching a bit higher at $12,000-17,000 per day.

Handysize rates are set to outperform MRs at a level of $12,000-

18,000 per day with MR average rates expected to remain around

$8,000-13,000 per day.

Improved earningsAlso looking at the first quarter of this year, McQuilling said that in

early 2014, earnings in the large crude tanker segment reached levels

that hadn’t been obtained in three years and in the smaller dirty

segment, in five or more years.

But, with all things in life, “what goes up must come down,” a

famous quote by physicist and mathematician Sir Isaac Newton, that

quickly became the mantra for 1Q14, McQuilling Services said in a

recent industry note.

The prevailing factor behind the downturn in the crude tanker

market was an overall decline in activity. Ultimately, this led to an

increased oversupply situation, specifically in the VLCC segment.

In January, there was a record high of 212 global spot VLCC

fixtures reported, of which 46% were destined to China and Singapore.

That number was further reduced to 167 fixtures in February and 144

fixtures in March, a 32% decline over three months in spot activity

without a corresponding increase in period chartering, McQuilling

said.

Spot rates out of the Arabian Gulf fell in tandem with this decline.

From an average of WS55 in January, rates fell to an average of WS43

in March on the AG/Japan benchmark trade. Meanwhile, rates from

the AG to the US Gulf, lost an average of 6 WS points from January.

However, VLCCs found some support from the growing West

Africa/China trade, due to a significant amount of tonne/mile demand

provided by this route.

In 1Q14, there was an increase in fixture activity on this route by

about 5% when compared to 1Q13. The downside was the number of

owners looking to cash in on the earnings, effectively adding

additional supply to the region. As a result, rates also fell throughout

the first quarter from an average of WS58 in January to WS45 in

anCrude TTa owthnker Supply Gr

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ion

DW

T

40

30

20

10

0

-10

anCrude TTa owthnker Supply Gr

ow

th r

ate

p.a

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r

8%

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-2%

2013A2012A2011A-20

o be delivered p.a.T

2017E2016E2015E2014F

Demolition Growth rate (RH axis)

-4%

Source - BIMCO, CRSL.


INDUSTRY - MARKETS

March, a 22% decline. Fortunately for this

overtonnaged sector, net fleet growth was

minimal.

McQuilling’s proprietary data showed that

through March, there was a net fleet growth of

just two VLCCs.

Suezmaxes have also been subject to a

decline in global fixture activity. For example,

activity dropped from a healthy 226 fixtures in

January to 200 in March. The bulk of the lack

of volume stemmed from the weakening

WAF/USAC trade. In the past, Suezmaxes

dominated this route, but since the increase in

US domestic shale oil production, this route

has essentially become non-existent.

Since charterers rely mostly on VLCCs to

transport their crude from West Africa to the

Far East, longer-haul employment

opportunities from this region have become

increasingly limited for this class. Unless, of

course, it becomes more cost effective to

employ two Suezmaxes over one VLCC. We

did see some of that transpire in the first

quarter, which provided some support. But, for

the most part, rates out of West Africa

remained depressed like last year.

Rates dipped from around the WS111 level

in January to an average of WS62 in March, in

line with last year’s low numbers. In the Black

Sea/Mediterranean region, rates remained high

at the beginning of the quarter on the back of

the strong close at the end of 2013. However,

as delays subsided and tonnage supply

mounted, rates tumbled.

On average, this route declined about 54%

from January to March. One positive

development for the Suezmax sector was that

there was no net fleet growth in the first

quarter.

In the Aframax sector, Caribbean rates in

January traded at their highest levels for six

years. Weather delays were the main reasons

behind the surge in rates, which peaked at

WS305 in mid-January.

FFigure 44: MMR YYTD SSpot FFixtures

0

50

100

150

200

250

300

Carib/US Atlantic Coast UKC/US Atlantic Coast Singapore/Japan USG-UKC

# of Spot Fixtures

2013 2014

Source - McQuilling Services.

INDUSTRY - MARKETS

May 2014 � TANKEROperator

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As weather and activity subsided, rates fell throughout the rest of the

quarter. By March, rates dipped to an average of WS99, 10 WS points

below 1Q13 levels. The Cross-Mediterranean Aframax market also

reached significant highs as 1Q14 commenced due to delays in the

Turkish Straits and the re-opening of the Zawia Terminal in Libya.

This route traded at an average of WS172 in January. In February, it

lost a massive 87 WS points as it traded at an average of WS85 and

then firmed in March to WS95.

As for vessel supply, the Aframax fleet continued to contract in

1Q14, as eight ships exited the trading fleet, while no ships were

delivered.

Panamaxes trading in the Caribbean rode on the coat tails of their

larger counterpart in the beginning of 1Q14. In fact, when the

opportunity presented itself, larger Panamaxes cannibalised Aframax

cargoes, which helped to alleviate supply. Rates on the TD10

benchmark traded at an average of WS223 in January However,

weakness in the Aframax segment seeped into the Panamax market,

pressuring rates. By March, rates traded at an average of WS116, down

107 WS points from January, McQuilling said.

LR1/LR2 gainsTaking an opposite tack were the LR2s and LR1s. Oversupply capped

earnings potential in January and LR2s on the AG/Japan benchmark

began 1Q14 rather weak, as they traded at an average of WS74, down

19 WS points when compared to January 2013. A much needed boost

in activity helped to support rate levels as the quarter progressed. By

March, LR2s gained an average of 14 WS points from January.

LR1s, on the same route, mirrored the LR2s, as they traded at

WS89 in January, followed by a 24% increase in March to the WS110

level. There has been minimal change in the size of the LR2 and LR1

fleets, as one LR2 was deleted in 1Q14 and fleet growth of two in the

LR1 segment.

In the MR sector, spot fixture activity on the TC2 (UKC/USAC)

benchmark has declined by about 23% year-on-year. Meanwhile, what

was once the backhaul trade, TC14 (USG/UKC) has become the more

active route and fixture activity has increased by about eight fixtures

year-on-year. This has mainly been due to Europe’s increased need for

refined products on the back of reduced refinery utilisation in the

region.

MR rates can be volatile, which was evident throughout 1Q14 . TC2

started off the year at an average of WS144 in January, fell to WS126

in February before making its way back up to WS132 in March. TC14

on the other hand, steadily declined throughout the first three months

as it lost 17 WS points from January to March.

A triangulated voyage in the Atlantic Basin earned around $16,000

per day in January and fell to around $9,400 per day in March.

Similar to all of the other segments, MRs have faced their own

oversupply issues. This was further exacerbated by deliveries hitting

the water at a rapid pace. By the end of 1Q14, 15 MR2s (IMO III) and

one MR1 (IMO III) were delivered.

What can market participants expect in the second quarter?

McQuilling said that seasonal maintenance at Asian refineries will

likely keep downward pressure on the larger crude tanker segment.

Clean tankers will be challenged by new deliveries in addition to

refinery capacity coming online near demand centres. However, as US

refiners exit seasonal maintenance, an increase in cargo availability

should help absorb some clean tonnage in the region, the consultancy

concluded. TO

INDUSTRY - FINANCE


When to undertakeshipping IPOs-

timing is everythingThe current year had started on a very optimistic note, as freight rates in the drybulk

and tanker markets were the strongest they had been in a long while.*

The market’s performance was

exceptionally commanding when

framed in the six month window

between the summer of 2013 and

first two months of this year. This was a

period in which freight rates for Capesize

bulkers and VLCCs showed a tenfold

expansion.

Such strength in freight rates was duly

reflected on the capital markets and was

epitomised by the M&A activity of 15 VLCCs

from Maersk Tankers to Euronav for just short

of one billion dollars and subsequently, the

acquisition of seven VLCCs from Scorpio

Tankers by interests affiliated by the Peter

Georgiopoulos group for about $750 mill.

Product and gas tankers had also been

enjoying a period of strength on the back of

the game changing US shale oil market that

proved beneficial for these vessel segments.

This market strength encouraged several

IPOs, such as Scorpio Tankers and Ardmore

Shipping (product tankers) plus Navigator

Gas, BW Gas (LPG) and Dynagas (LNG), but

decimated the crude tanker market on the back

of weak crude oil imports into the US.

On the back of the market’s renewed

strength, besides the enthusiasm and

preparatory work, there have been several

filings for IPOs in the tanker markets, some

public and a few private, plus several road

shows.

However, two abortive efforts seemed to

dampen the enthusiasm for the tanker markets.

Diamond S, the WL Ross-sponsored product

tanker company failed to obtain public listing

as did Stalwart Tankers in the chemical tanker

segment.

The disappointment from these two road

shows should not be regarded as negative, as

their failure was relative and the outcome was

transaction specific. To make it clear,

Diamond S would have had a successful

listing should the price obtained – at discount

to NAV – deemed to be acceptable by the

seller. The vessels, the asset class and the

management were solid, just that the pricing

hurdle was set exceptionally high – compared

to the historical cost basis.

Not attractiveFor the Stalwart Tankers road show, although

pioneering the stainless steel tanker market,

the package of vessels on offer was not the

most attractive in terms of age. Also, size was

not sufficient enough to have critical mass

(EBITDA of less than $2 mill in 2012), plus

just five vessels in the water and several of the

proposed acquisitions deliverable too far

forward (as late as 2017).

It has also to be noted that the timing of

both of the above road shows – especially the

latter – coincided with an overall declining

financial markets, due to macro, global, or

geopolitical events (heightened debate about

the end of quantitative easing and the events in

Ukraine).

At the time of the road shows, the freight

market was not at its best since product tanker

rates had dropped to $10,000 per day. In short,

the fact that these two road shows didn't result

in successful listings should not be discounted

across the tanker market overall - it was just

that the market had already peaked.

On the secondary offerings market, in early

March and about the same time of the above

two road shows, Ardmore Shipping was very

successful at raising an additional $90 mill in

the product tanker market and in April, Tsakos

Energy Navigation also raised $80 mill in the

crude tanker market.

Both of these secondary offerings were

priced at slight discount to NAV, which

emphasises two corollaries: if investors have a

choice of investing in shipping with

established companies at discount to NAV,

why should they invest at NAV for IPOs? And,

second, that the financial markets were not

shut at all to shipping; just that those two IPOs

didn't materialise as planned.

Diamond S has made it abundantly clear

that it will be returning to the markets in due

course in the hope of better pricing. In the

interim, another private equity-sponsored

tanker company – Principal Maritime

sponsored by Apollo, has publicly filed for an

IPO and the market is buzzing with hopefuls

lining up to subscribe

It is encouraging to see shipping back on the

capital markets’ radar after such a long

hibernation period; however, the impact of the

above mentioned failed IPOs notwithstanding,

there have been many hopefuls aiming at the

capital markets that are not even remotely

qualified for such effort, in our opinion.

Probably, going forward, it may be more

bizarre to see poorly qualified companies on

the road show catwalk than the capital markets

for shipping while it exits in its perma-frost

phase. And, having overly ambitious

companies to put it mildly, on the road show

circuit, doesn't serve the shipping industry

well.

There are plenty of investment opportunities

in shipping still and many qualified

management teams. Probably the best legacy

of the horrendous down cycle would be a

better bunch of shipping IPOs than those seen

in the last decade.

*This article was written by Basil M Karatzaswho is CEO of Karatzas Marine Advisors, ashipping finance advisory and shipbrokeragefirm based in Manhattan.

TO

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NEWS FOCUS - ECAS

Early action key toensuring 2015 ECA

complianceThe impending enforcement of next year’s 0.1% Emissions Control Area (ECA)

regulation is causing considerable challenges to owners and operators*.

Among others, concerns over

increases in operational costs,

product availability and the most

appropriate compliance option will

create challenges.

However, while it will create added

complexity to the supply and use of marine

fuels, those who plan in advance and work

closely with a trusted fuel partner to develop a

compliance strategy that is right for their

business, are more likely to better adapt and

increase their competitive advantage. Not just

from keeping fuel costs as low as possible, but

also ensuring compliance and avoiding fines, as

well as managing the technical complexities of

switching to distillates, which, if done

incorrectly can cause significant damage to

vessels.

In managing the shipping industry’s adoption

of the stricter 2015 ECA regulation, while we

are now seeing more of a consensus of opinion

taking shape, more planning needs to be done.

Presently there are three options that have

dominated most recent debates:

� Scrubbers - We have seen some uptake of

scrubber technologies, but as a key

component to retrofitting scrubbers is

finding significant upfront capital, they will

not be the immediate ‘silver bullet’

solution.

� LNG – This can deliver from an emissions

reduction perspective, but it is still a very

immature market with limited global, port

and shore-based infrastructure.

� Distillates – There is current consensus

that this is going to be the most viable

compliance solution for the vast majority of

shipowners and operators, at least in the

medium term, both in terms of meeting

emissions requirements and operational

feasibility.

It is acknowledged that distillates command a

significant premium above heavy fuel oil and

there are cost considerations that must be

addressed. For distillates, we are currently

looking at a minimum of $300 premium above

heavy fuel oil in Rotterdam, for example.

Therefore, creating the right fuel procurement

strategy that maximises efficiencies, reduces

costs and helps owners and operators to

operate as profitably as possible is critical.

There are also considerations with the

availability of distillates, particularly in Europe,

that must be addressed. Europe is a region of

net-importers of middle distillates and it is

unlikely that there will be a significant increase

in MGO refining capabilities over the coming

years given the costs involved for refiners.

This means that distillates need to be sourced

from the Middle East and Asia/Pacific, where

refinery capacity is increasing to meet global

demand. To do this, it is important to know

what our customers needs are in advance, in

order to provide both reliability and flexibility

across distribution infrastructure and to ensure

that refuelling solutions are right for their

business and operational requirements.

Implications While other shipping sectors, such as ro-ro

operators, which spend the majority of their

time in ECA waters and will be most

significantly affected by the 2015 regulations,

for tanker operators, the emissions requirements

will still add additional complexity to their

operations.

As a physical fuel distributor and reseller that

has control over the fuel supply chain, we

recognise that reliable access to a wide range of

high-quality fuels worldwide and flexibility in

how we can supply fuel, is going to be even

more imperative.

Whether it is in high, rough seas, or on the

road close to shore, the pressure on operators to

safely and efficiently switch fuels, without

risking engine damage, or non-compliance,

needs to be alleviated as much as possible by

their fuel provider.

In practice, ensuring compliance with

increasingly stringent emissions regulations is

also about providing guarantees on product

quality and specifications, as well as ensuring

that these are delivered where customers need

them, at the right time and in the right

quantities.

OW Bunker has introduced a global quality

standard where all of our customers are

provided with a full specification analysis in

advance of any physical delivery, prior to the

usual test procedures conducted by an external

fuel quality inspection company.

Flow metersThis provides added assurances and additional

measures to detect off-spec, non-compliant

fuel products. We have also been equipping

our global distribution fleet with Coriolis flow

meters to ensure accuracy in the quantity of

fuel supplied, thereby avoiding increasingly

expensive margins of error as fuel prices rise.

Managing the 2015 ECA regulation,

therefore, requires marine fuel distributors to

look beyond just the cost of fuel to providing

real value throughout the entire fuel supply

chain, investing in innovation and developing

the highest quality in service standards that

maximises operational efficiencies.

For tanker operators in particular, it is about

having the fuel supply networks and

infrastructure to provide optimum choice and

flexibility across different routes and

conditions. This includes working as partners to

help streamline the fuel distribution process,

increase operational efficiencies and reduce

avoidable expenses by mitigating risks, as

much as possible so that the 2015 regulations

can be a force for positive change rather than a

costly, complicated problem.

*This article was written by OW Bunker.

TO


NEWS FOCUS - ISLE OF MAN

Green tankers benefitat the Isle of Man

Ship RegistryThe Isle of Man (IOM) Ship Registry has thrown itself into attracting new business from

tanker operators, writes Brian Warshaw.

Following an initial 25% fee

reduction on joining the Ship

Registry, a 10% discount is now

offered in subsequent years.

Tankers currently registered will be eligible

for the 10% annual registration discount. At

the end of 2013, the IOM Ship Registry had

93 oil tankers, 57 gas tankers, and 35

product/chemical tankers; representing 42% of

its total merchant fleet registrations.

The caveat is that the vessels must produce

an International Energy Efficiency (IEE)

Certificate, or a pre-verification report

demonstrating that the ship’s attained Energy

Efficiency Design Index (EEDI) reduction

factor exceeds the IMO’s reduction factor

relevant for that class of vessel.

Amendments to MARPOL Annex VI

Regulations for the prevention of air pollution

from ships came into force on 1st January,

2013, and apply to all ships of 400 gt and

above. The new chapter IV makes mandatory

the EEDI for new ships. Other amendments

added new definitions and a requirement for

survey and certification, including the format

for the IEE Certificate.

High qualityDick Welsh, IOM Ship Registry director,

explained that the Isle of Man had originally

set up the registry to provide a high quality

international registry that would be the catalyst

for generating maritime sector business on the

Isle of Man. It is now pro-actively pursuing

green technologies and is establishing a

reputation as a jurisdiction to which ‘clean

tech’ businesses are choosing to relocate.

When asked a direct question by TankerOperator, Welsh was forthright in his

response. “Yes. We are throwing our net

wider to increase the number of vessels sailing

under our flag. Our registry provides great

service, high quality and all at a very low cost.

Unlike many international ship registries, our

fees are based on the ship, not the tonnage.

The larger the vessel, the greater is the

financial saving for the owner who registers in

the Isle of Man.”

According to Welsh, vessels of less than 10

years old will not normally require a pre-

registration if their Port State Control

inspection history is acceptable. Depending

on the shipyard where a newbuild tanker was

constructed, it would generally be accepted

without a pre-inspection if the owner has other

ships registered with the IOM Ship Registry,

or has previously delivered to IOM flag

requirements.

”Under normal circumstances we do not

make annual ship inspections. We focus

instead on an overview of the vessel’s

operation by carrying out the initial

International Safety Management (ISM) Code

and International Ship and Port Facility

Security (ISPS) Code audits. We will send a

surveyor to visit the ship at 2½ yearly

intervals, timed to fit in with the ship's

ISM/ISPS/ILO certification”, explained Welsh.

“We do these visits using our team of Douglas

based surveyors and 11 ship surveyors located

throughout the major ports. During the audits,

they will issue the relevant certificates, make a

general flag state inspection and complete an

inspection of crew accommodation, welfare

and working conditions in accordance with

ILO MLC,” he explained.

Citizens of most nations can register a

vessel under the Isle of Man flag, along with

limited companies and corporations from a

small number of countries. With the exception

of its barges and one LNG vessel, BP

Shipping has flagged its entire fleet of oil and

products tankers in the Isle of Man and

Pritchard-Gordon Tankers, another British

owned company, has registered nine of its 11

tankers. MOL has put its 2009-built VLCC ‘Pacific Voyager’ under the Isle of Man flag.

TOPhoto credit- MOL Tankships.

INDUSTRY - GREEK REPORT


Greek controlledshipping on a role

The Greek controlled fleet has increased in terms of ship numbers and also in terms ofdeadweight and gross tonnage, compared with the previous year, said the annual report

from the Greek Shipping Co-operation Committee (GSCC).

For the 27th consecutive year, the

GSCC has published statistical data,

in both tabular and written form, on

Greek controlled ships of over

1,000 gt, registered under the Greek and other

flags in co-operation with IHS Fairplay.

According to the data compiled as of 26th

March, 2014, Greek interests controlled 3,901

vessels of various types, of 290,847,132 dwt

and 170,984,684 gt.

Compared with the previous year’s data, this

represents an increase of 224 vessels, of

25,510,612 dwt and 14,996,300 gt. The total

deadweight tonnage represents the highest ever

recorded, the GSCC said.

The figures also include 378 vessels, of

various types, of 22,492,621 gt, on order from

shipyards worldwide.

However, the fleet registered under the Greek

flag decreased slightly in terms of ship

numbers, now comprising 819 ships, but

increased in terms of deadweight and gt -

standing at 76,107,917 and 44,190,793 tonnes,

respectively, as against 829 ships, of

73,449,021 dwt and 43,316,618 gt recorded in

2013.

It is to be hoped that the severe loss of

confidence created by the uncertainty of the tax

regime, will not result in heavy losses in the

future, the GSCC said.

The Greek controlled fleet is registered under

some 43 flags- see Table 1 below for the major

changes.

A comparison of the flag analysis of ships

owned by Greek parent companies, which gives

the total number of ships, total deadweight and

total gt, registered under each of the main

registries used by Greek owners, compared

with last year, shows that there were no

significant losses in terms of ships.

On the contrary, the Marshall Islands gained

123 ships, Liberia 36, Malta 31, Cyprus 7 and

Singapore 6.

The table below shows the biggest

gains/losses in number of ships, GT and DW.

After the Greek flag, Liberia follows with

678 Greek-owned ships of 49,053,034 dwt, the

Marshall Islands with 642 ships of 47,574,128

dwt, Malta with 592 ships of 44,687,046 dwt,

Panama with 393 ships of 23,334,889 dwt,

Cyprus with 242 ships of 16,598,126 dwt and

the Bahamas with 231 ships of 16,496,242 dwt.

Comparing Table 2 overleaf with the

corresponding table of the previous year there

are increases in all ship types with the

exception of cargo and passenger ships. The

greatest increase is in ore and bulk carriers,

reversing the trend of previous years (116),

followed by liquefied gas tankers (43), oil

tankers (32), chemical and product tankers (28)

and containerships (19).

The GSCC said that it was very satisfactory

that with the exception of the pure cargo, other

cargo and passenger ship types, the percentage

of all other types of Greek controlled vessels,

had increased relative to the corresponding

world fleet type during 2013.

As against the previous year, the position is

as follows for the tanker types:

Oil tankers

Percentage of number of ships 2014: 24.9


Percentage of total dwt 2014: 24.0


Chemical & products tankers




Percentage of total dwt 2013 13.5

Liquefied gas carriers





The average age of the Greek controlled fleet

of all types decreased during the past year by

0.3 years, and is currently 2.5 years below the

average age of the world fleet. The average

age of the Greek controlled fleet in term of

ships now stands at 9.9 years as against 12.4

for the world fleet. It is 7.7 years in terms of

gt and dwt.

However, the average age of the existing

Greek flag fleet increased slightly, in terms of

ships, gt and dwt, standing at 11.5, 8.5, and 8.3

years, respectively, as against 11.3, 8 and 7.7

years in 2013.

The following seven major IACS class

societies have the lion’s share of the Greek

controlled fleet on the their books.

� Lloyd’s Register = 824 ships (795 ships in

2013).

� ABS = 732 ships (710 ships in 2013).

Source: GSCC; IHS Fairplay.

Country Number lost/gained dwt gained gt lost/gained

Greece

Liberia

Malta

Cyprus

Marshall Islands

Panama

Singapore

-10

36

31

7

123

5

6

2,658,89636

3,480,941

3,151,346

1,039,259

11,006,137

320,001

1,685,951

874,175

2,119,654

2,239,202

461,381

6,453,454

-607,276

1,833,498

Table 1


INDUSTRY - GREEK REPORT

� Nippon Kaiji Kyokai (ClassNK) = 644

ships (567 ships in 2013).

� Bureau Veritas = 603 ships (536 in 2013).

� *Det Norske Veritas (DNV) = 468 ships

(453 ships in 2013).

� *Germanischer Lloyd (GL) = 291 ships

(260 ships in 2013).

� RINA = 171 ships (175 ships in 2013).

*Figures compiled before the merger.

According to the Posidonia organisers, on the

back of a positive sentiment for the future, 2013

saw Greek shipowners placing a record number

of orders estimated at 25% of the global

orderbook, with shipbuilders remaining upbeat

as to future newbuilding investments funded by

Greek interests.

Quoting Newsfront, Greek Shipping

Intelligence, last year Greek shipowners

committed almost $13 bill to newbuilding

orders for 275 vessels of more than 24.5 mill

dwt and at the same time, increasing the

deadweight tonnage total on order for Greek

interests by 364%.

“As the Greek-owned, ocean-going fleet

continues to ride the wave of a dramatic

expansion spearheaded by a strategic

diversification drive, designed to cement its

leadership position globally, the world’s top

shipbuilding nations are vying for a prominent

position under the spotlight at this year’s

Posidonia Exhibition,” said Theodore Vokos,

project director, Posidonia Exhibitions.

Greek investment dominated the global

shipping orderbook across most vessel

categories in 2013 investing $4.5 bill on

bulkers, which topped the shopping list with

134 orders with a further $4 bill destined for

niche LPG carriers and LNG builders for a

combined 51 Greek-ordered vessels. The list

also included 65 tankers worth $3 bill.

“This robust Greek newbuilding orderbook

underlines the shipowners’ forward looking

spirit that makes them willing to spread their

asset portfolio between the safe bets of

traditional shipping sectors and the more

investment-intensive sophisticated tonnage such

as LNG and LPG carriers.

“These orders reinforced the strong ties

between Greek owners and Asian yards, as

China received 72% of bulker orders from

Greece, South Korea secured over a third of

Greek gas carrier orders with Japan also doing

well in most segments,” Vokos said.

PosidoniaTurning to the forthcoming Posidonia

exhibition, to be held outside Athens from 2nd

to 6th June this year, plus its accompanying

conferences and seminars, lobbying and

networking with the owners of the world’s

largest independent fleet worth in excess of

$100 bill and accounting for 15% of the global

total value of bulk carriers, containerships, gas

carriers and tankers, is not the only reason why

the world’s shipping community converges to

Greece every two years.

“Few events can match this scale of

international buyers. In 2012 the stands of more

than 1,850 exhibitors attracted over 18,500

buyers from 92 countries. Posidonia 2014 is the

opportunity for all players in world shipping to

meet and review challenges, opportunities,

trends and innovations with the owners of more

than 4,000 vessels approaching 260 mill tonnes

carrying capacity and their executives ” added

Vokos.

This year’s exhibition will welcome three

new national pavilions, from Hong Kong-

making a comeback after a 10 year absence –

Turkey, returning after 2006 and a total

newcomer, Georgia, promoting its maritime

services.

Apart from Posidonia’s regular and traditional

exhibiting sectors, there will be an enhanced

presence of oil majors, bunkering specialists and

traders and lubricants suppliers, such as Saudi

Aramco, Emirates National oil Company

(ENOC) , Chevron Marine Products, Lukoil

Marine Lubricants, Gulf Oil Marine, JX

NIPPON Oil and Energy Europe, KPI Bridge

Oil, ECO Lubricants, Baluco, joined by

companies such as Aegean Marine Petroleum,

Avin Oil, Elinoil, ETEKA, Cyclon, SEKA and

many more.

Posidonia is about to hang a ‘sold out’ sign

for exhibition space, as it is expected to attract

over 1,870 exhibitors from some 85 countries

across 35,000 sq m.

Type Ships dwt

Oil tankers

Chemical & products

tankers

Liquefied gas tankers

Ore & bulk carriers

Containerships

Cargo ships

Other cargo ships

Passenger ships

32 (44 on order)

28 (48 on order)

43 (70 on order)

116 (148 on order)

19 (61 on order)

-11 (1 on order)

-3 (6 on order)

-9

8,397,429

1,862,789

1580,345

11,910,743

1,887,166

-75,555

-32,009

Source: GSCC; IHS Fairplay.

The Posidonia organisers are keen to attract more seminars/conferences/meetings.

Table 2

Bunkering also features in this year’sPosidonia. Photo credit- OW Bunker.

TO


INDUSTRY - NORWAY REPORT

As Arctic waters open up for

offshore exploration and

production, the race is on to

develop Norway into a critical

cog in the energy supply chain for the

emerging Arctic corridor.

According to the ‘2012 Arctic Opening’

report from insurance specialists Lloyd’s,

investment in the Arctic region could exceed

$100 bill within the next decade. The areas of

particular strategic importance include

Hammerfest, Kirkenes and Spitsbergen in

Norway, as well as Greenland, Murmansk in

Russia and key ports in Canada and Alaska.

Co-ordination across these countries will be

critical as it is in these regions that tanker

owners and operators should be poised to

respond to opportunities in the coming years.

However, there are challenges to be

addressed in developing a safe and robust

infrastructure the energy services across

Norway to ensure that the country remains

competitive and positions itself to respond to

increased demand from Arctic activity, while

also supporting and further developing its

domestic offshore energy sector.

Norway’s existing offshore oil and gas

sector is well established and benefits from

favourable tax regimes that support service

providers across the supply chain, from energy

majors and refinery operators through to third

party service providers. Government subsidies

for oil and gas exploration refund up to 78%

of exploration costs and taxes on oil and LNG

shipped internationally are significantly lower

than many other major energy exporting

countries.

GAC currently handles about 2,800 port

calls annually across Norway and provides

professional logistics services, handling

around 12,000 shipments each year. We also

provide project cargo chartering, marine

equipment, shipbroking for supply vessels,

mooring/unmooring services and marine

surveys, as well as a range of shipping support

services, such as bunker fuel supplies, weather

routing and training.

As Norway looks to diversify its energy

sector, there are further opportunities to align

both Arctic and domestic development in

Norway. To give an example, Solarctic, a new

company co-owned by GAC’s local Russian

and Norwegian partners and focused on Arctic

services, has recently been established to cater

for the oil and gas industry in the Arctic region

in particular and there is little doubt that the

offshore industry in the region will continue to

grow.

Infrastructure growthWe have already seen an increase in demand for

agency and freight forwarding services in

Norway’s northern territories, as the ‘High

North’ fields have opened up and the need for

land-based hubs closer to these fields has been

recognised.

In Hammerfest, for example, there is

increased demand for services in and around the

LNG terminal, but it can be difficult to get

supplies, crew and materials to the area, given

that accommodation is limited, the airport is

very small, and the journeys by road from

optional airports take a long time and can

become impassable in the winter months.

Hammerfest is also an important hub for

servicing vessels in the Barents Sea and as such,

developing a reliable service infrastructure now

and developing strong partnerships with local

service providers in the area is an important

consideration for owners and operators looking

to develop opportunities in the region.

As a result of Norway’s fragmented coastline,

there are rarely total solutions in place for

onward transportation. For example, some areas

may have a very well serviced port, but no

connecting air, or rail services for the movement

of freight across the country. Addressing such

issues is going to be key to ensuring operational

viability for Arctic development.

Local knowledge, on-the-ground support and

a regional support network for the supply of

services - are absolutely fundamental to

companies operating in Norway, where prices

for goods and services, transportation and

materials are much higher than in many other

energy hubs.

For tankers, the time spent in port has a

measurable impact on their bottom line.

However, importantly, service providers such as

GAC also have an important role to play in

helping customers to ensure compliance, from a

legal and regulatory perspective, as well as at

the HSSE level.

This is something that GAC focuses on

globally, but particularly given that the IMO’s

draft Polar Code is still undergoing a

comprehensive review process, it is critical that

we work with customers to enable them to

maintain the highest environmental standards

and ensure that their operations and procedures

are undertaken with the protection of the

environment in mind.

*This article was written by HermanJorgensen, general manager, GAC Norway.

Norway and theopening of Arctic

watersNorway’s energy industry is critical to the energy security of Europe, according to a

leading service provider operating in the region.*

GAC’s Herman Jorgensen.

There could be a lot of tanker and gascarrier traffic in the ‘High North’.

TO



Shipboard energylosses identified

DNV GL has unveiled a novel approach to overcome challenges of assessing on boardenergy efficiency in a consistent manner. As a result, priorities for improvement can be

determined accurately.

In a new report recently presented in

London, DNV GL said that it had

answered the question - How can a ship

manager identify the biggest sources of

useful energy that are currently being wasted on

their ships?

“Ship operations and environmental

legislation have become more complex and it

has become increasingly difficult to assess or

even define efficiency with consistency and

accuracy,” said Rune Torhaug, director, strategic

research & innovation, DNV GL. “We have

therefore revisited the basic and universal laws

of thermodynamics to develop a methodology

based on exergy, sometimes called available

energy, which is a metric for describing the

maximum useful energy that can be derived

from a process, component or system.”

The methodology can be adjusted to suit

newbuilds still in the design phase, or operating

ships and it is designed to help managers make

the most out of their Ship Energy Efficiency

Management Plans (SEEMP).

Using both on board measurements and the

DNV GL modelling suite COSSMOS, energy

losses throughout the ship, including hull,

propulsion power train, machinery and electrical

systems, are quantified and ranked. Even

difficult-to-capture processes, such as throttling

and fluid mixing, can be incorporated.

The report includes an analysis of a waste

heat recovery system. These complex systems

can easily contain 70 components. “Through our

exergy-based methodology, the true sources of

useful energy losses were identified, revealing a

picture far from self-evident. Subsequent

optimisation in DNV COSSMOS yielded an

increase in fuel savings that halved the payback

time of the system,” said George Dimopoulos,

DNV GL senior researcher and project manager

of this position paper.

When the main engine of an Aframax was

analysed using operating data in combination

with DNV GL’s proprietary COSSMOS

modelling software tool, the true sources of

losses were identified with greater accuracy than

a traditional energy analysis, said Dimopoulos.

“In fact, the standard energy analysis failed to

identify the turbocharger as being the second

largest contributor to exergy loss,”he said.

Aframax analysisBoth energy and exergy analyses were

conducted in order to assess the performance of

the main engine of an existing Aframax. The

analyses were based on actual operational data,

as recorded in the main engine periodic reports

submitted by the crew to the vessel operators.

The study’s goal was to highlight the

significant increase of useful information, the

improved insights into the system and its

processes, plus the accurate mapping of the

sources of useful energy losses that can be

� Energy efficiency: 51.5%

� Cooling losses: 26.6% of fuel input

� Largest contributor!

� Exhaust losses: 25.1%

� Two equally important sources of losses identified

� Prioritise:

� Cooling: e.g. VFDs, ORC

� Exhaust: e.g. adv. WHR Cooling losses

Exhaust losses

Figure 1.

Main engine of an aframax tanker Energy analysis



achieved through DNV GL’s exergy-based

methodology.

The ship was fitted with a 2-stroke slow-

speed marine diesel engine delivering 11,300

kW at 97 rev/min at its maximum continuous

rating. For this study, the engine was considered

as a sub-system, comprising the turbocharger

(compressor, turbine), charge air cooler, main

engine cylinders/combustion block and exhaust

gas economiser.

The data available mainly consisted of

pressures and temperatures at different locations

in the fuel, air, water, steam and exhaust gas

path, plus fuel flow rate. In addition, using the

turbocharger performance maps, DNV GL said

that it was able to accurately estimate the air

and exhaust mass flows. Finally, DNV

COSSMOS was used for the thermophysical

property calculations, as well as the derivation

of the exergy and energy rates. The performance

report obtained was for a sailing condition in

which the engine operated at 80% of its nominal

load.

First, an energy-based analysis was

performed. From this it was observed that the

energy efficiency of the main engine sub-system

was 48.1%. The heat losses (charge air, jacket,

lube-oil coolers and radiation) amounted to

26.6% of the fuel energy, while another 25.1%

of the fuel energy left through the exhaust

gasses. Finally, 647 kW of heat was recovered

and converted to service steam in the exhaust

gas economiser.

This led to an overall system efficiency of

51.5% based on the results, the greatest sources

of losses were the charge air cooler, jacket

cooler and the exhaust gasses. Therefore, the

attention and efforts of the operators should be

focused towards accurate monitoring and

improvements in these sources, the class society

said.

Picture changeHowever, the picture changed significantly

when exergy analysis was applied, as shown in

Fig 2. The first important difference between the

two approaches was the significant increase in

information gained through the better

decomposition of losses and exergy destruction

per component. This led to improved mapping

and better understanding of energy/exergy flow

in the system.

Taking into account the exergy input of all

resources used (fuel, air and cooling water), the

exergy efficiency of the main engine sub-system

was 44.9%. With respect to cooling and heat

losses, the exergy-based figure amounted to

only 1.9% of the total exergy input, since these

are low grade heat losses that have limited

potential for useful energy extraction.

In addition, another 2.2% of the total exergy

input was destroyed in the charge air cooler.

Figure 2.

Thus, a significantly different picture was

reached, with 4.1% (exergy losses and

destruction) compared with the 26.6% of losses

derived through 1st law energy analysis.

The exergy flow of the exhaust gasses

leaving the engine was 10.4% of the total

exergy input, compared with the energy-based

25.1%. Furthermore, through the exergy

analysis, the engine turbocharger was identified

as an important source of exergy destruction,

with 6.9% of the total exergy input; this figure

cannot be determined by 1st law energy

analysis. Finally, the largest source of exergy

destruction was the combustion process, with a

contribution of 33.9%.

This comparison of energy and exergy

analysis revealed important disparities and

distinctions. When using exergy analysis, the

mapping of losses was different and more

detailed. From exergy analysis DNV GL

identified the major sources of exergy

destruction in the system - the combustion

process contributed 77.9% of the total exergy

destruction, turbocharger 15.7%, charger air

cooler 5.1% and exhaust economiser 1.2%.

The total exergy destruction amounted to

43.5% of the total exergy input to the system,

while losses to the environment (cooling and

exhaust) were only 10.8%. Finally, the overall

exergy efficiency of the system (power and

steam production) was 45.9%. TO

� Exergy efficiency: 44.9%

� Losses ranking:

1. Combustion: 33.9% (of total fuel exergy input)

2. Exhaust: 10.4%

3. Turbocharger: 6.9%

4. Cooling: 4.1%

� Significantly different picture than energy analysis

� Prioritise:

� Combustion tuning

� (WHR)

� Turbocharger

Cooling losses

Turbocharger losses

Combustion losses

Exhaust losses

Main engine of an aframax tanker Exergy analysis



BASS upgradesmanagement offering -

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To help ensure compliance with the ever-

changing guidelines related to crew safety,

BASSnet 2.9’s work & rest hours module has

now been enhanced to ensure compliance with

the OPA90 regulation.

Built on the Microsoft .NET platform,

BASSnet environmental management software

module was designed to help reduce a vessel’s

negative impact on the environment.

Users can track all information pertaining to

the calculations for environmental emissions

based on date ranges and voyage legs. This data

can then be used for comparison and for

generating environmental

impact trends.

Port operations have

become complex and now

involves a lot of

administrative work,

which is ultimately time

consuming. With this in

mind, BASS developed

the new port form

management module,

which contains a list of

country-specific port

forms for pre-arrival

clearance to be tendered

to the immigration,

customs, health and

security authorities at a

port and for statutory

bodies, such as the IMO.

This software can

integrate with other

BASSnet™ modules to

ensure that all the forms

have the relevant data that

is required for reporting.

The relevant port-specific

forms can be easily

printed and the system

can also store and print

non-port related forms

such as those related to

the environment, class, regulatory, etc. The

module also contains company-specific forms.

“BASS is foreseeing the future technology

in reducing paperwork involved in order to

create a green environment. We are pleased to

introduce our solution to meet the imminent

needs,” said BASS’ CEO, Per Steinar

Upsaker. “BASS prides itself in creating and

designing tools to generally simplify the

work-load of the average user while

maintaining a paperless workplace.

“With the new Excel forms management

feature, users can now create as many forms

as they require using Microsoft Excel. These

forms can then be linked to various records in

the system, for instance, link a form to a job

order in the maintenance module and users

can access and fill them up during the

reporting process. The values entered in the

form will then be captured and stored as a

record in the BASSnet documents’ record

manager,” he said.

BASS has recently signed a contract with

Simosa Shipping, marking the company’s first

foray into the Taiwanese shipping sector.

The BASSnet Maintenance module will be

implemented within Simosa Shipping. BASS

said that it had won the contract following a

tender exercise.

“The advantages of BASS shipping

software in optimising shipmanagement

through automation are truly impressive,” said

ML Sang, executive vice president of Simosa.

“We expect to see stellar gains in efficiency in

our fleet management with the deployment of

the BASSnet Maintenance module.”

For Simosa, the software will create

significant productivity improvement through

the streamlining of work processes using the

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planned maintenance system’s labour-saving

features to handle vessel components, spares

list and job maintenance procedures, BASS

claimed.

“Taiwan spells a huge potential for BASS,

as shipping is a very important part of the

country’s economy,” said Chris Long, BASS’

regional sales manager.“We can expect

Taiwanese shippers to take a keen interest in

the efficiency gains that the company will

enjoy with BASS’ fleet management systems.”

Despite being a relatively new company,

Simosa has an established pedigree through its

sister company, Simosa Oil and Gas. This

concern deals in asphalt, liquid CO2 and other

derivatives for export to China, South Korea,

Vietnam, the Philippines and Malaysia, among

other markets.

For BASS, the downturn in the shipping

industry underlines the crucial importance of

saving operating costs while improving

efficiency through intelligent solutions, the

company said.

This market strategy has helped BASS to

grow its list of clients to include several major

players in Singapore

Three-year old Simosa was set up to ship

Simosa Oil and Gas’products. The company

has three vessels at present but is looking to

expand in the near future.

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This regime is a contractual

arrangement whereby each party

agrees to bear the risk of damage to

its own equipment, property, or

personnel occurring in the performance of the

contract and agrees to provide an indemnity

where any such liability is misdirected to the

other party.

Liability for damage to third parties is

apportioned on the basis of fault or, more often,

as in the case of pollution, on the basis of each

of the party's sphere of control.

In its purest form, the knock-for-knock

regime enables both parties to put in place

effective insurance cover that matches each of

their liabilities and avoids the need for lengthy

enquiries, or litigation, to determine liability

based on fault.

The knock-for-knock regime diverges from

the ordinary allocation of liability and there is

recent evidence of a trend towards an increased

willingness to depart from the traditional

regime. Parties are looking for certain acts,

particularly gross negligence, or wilful

misconduct, to be dealt with outside the

contractual liability regulation.

Courts in England and Norway have also

indicated a willingness to apply such carve-outs

from the knock-for-knock regimes where, as in

the case of English law, such limitations have

been expressly agreed by the parties and under

Norwegian law as a matter of principle.

Shuttle tanker services are generally operated

on the basis of terms and conditions developed

by the major international oil companies. The

current knock-for-knock clauses are

significantly more detailed than those of five, or

10 years ago. Modern versions generally

exclude gross negligence. Furthermore, these

standard terms generally exclude the right to

claim indirect and/or consequential losses

arising from any claim.

Introducing carve-outs within knock-for-

knock clauses is intended to create a more

balanced liability system. The exclusion of

indirect and consequential losses is in turn

intended to ensure that the most severe loss in

the offshore section, namely loss arising from a

halt in production at an offshore field, is carried

by the party most easily able to carry the

consequences of such losses, namely the oil

companies.

Finer detailsIt is easy to stumble on the finer details of this

type of regulation. For example, the term

‘consequential loss’ is interpreted differently

under English and Norwegian law. The much

narrower interpretation applied by the English

courts considers how the loss has been caused

rather than the nature of the loss incurred. If the

clause is not drafted widely enough, it may end

up providing much less protection than

expected. Furthermore, ‘gross negligence’ is not

a defined concept under English law and, in the

absence of a contractual definition, the manner

in which the exemption is applied may be

difficult to predict and could end up being far

wider than the parties intended.

The Norwegian courts are also increasingly

willing to apply carve-outs from contractual

regimes even where the parties have not

expressly agreed that this should happen. In

doing so, the courts have applied various

techniques, such as restrictive interpretations,

concluding that the conditions for relying on the

clause could not be met, or stating that it would

be contrary to the parties’ intentions and/or

assumptions at the time the agreement was

entered into to allow application of the clause.

In the recent Njord B case before the

Norwegian appeal court, the court did not

elaborate on the basis on which it set aside a

knock-for-knock clause, due to gross

negligence, but rather proceeded on the basis

that the clause could not be applied as a matter

of law where the loss was due to gross

negligence. The case concerned a collision

between a shuttle tanker and an FSO caused by

a blackout on the shuttle tanker’s dynamic

positioning system.

The English courts, on the other hand, have

been more willing to apply knock-for-knock

clauses even in the face of gross negligence.

One example is the decision in the A Turtlewhere, due to poor planning, a tug ran out of

fuel and disconnected the rig, which was left

drifting in the South Atlantic until it grounded

on a remote island. The rig owners argued that

the knock-for-knock clause should not apply as

the breach by the tug owner was so fundamental

that it fell outside the scope of the clause.

This argument was rejected by the judge, who

held that the clause would be applied since the

loss occurred in connection with the

performance of the contract. The case has led to

some criticism on the grounds that it creates

uncertainty in relation to the application of the

knock-for knock regime.

*This article was written by Gaute Gjelsten andNina M H Hanevold of Wikborg Rein lawoffices, Oslo.

Knock-for-knockcarve-outs on the

increase The traditional knock-for-knock regime has been utilised in offshore contracts and

related shuttle tanker contracts for many years*.

Nina MH Hanevold.

Gaute Gjelsten.

TO

INDUSTRY - ANTI-PIRACY


The presence of international naval

assets, Best Management Practice

(BMP) along with the increased

employment of armed guards has

helped to contain the problem. Consequently

attacks on shipping in this region have

dramatically declined.

However, as the maritime community can

justify a sense a satisfaction for the suppression

of piracy in east Africa, a different problem has

arisen in the west. The Gulf of Guinea is now

widely recognised as being one of the world’s

most hazardous regions for mariners.

Last year this area accounted for 19% of

global piracy incidents with a total of 51

Gulf of Guineaattacks continue

For the past 18 months, the once prevalent threat of pirate attack around the Horn of

Africa has almost diminished.*

attacks, 31 of them directed by Nigerian gangs.

During 2013, it was reported that 36 crew

members were kidnapped and forcibly taken

ashore for ransom and one crew member was

killed.

Sadly, that trend has continued into 2014.

According to senior officials from the US

military’s Africa Command, 40 vessels have

been attacked thus far this year by armed

gangs. The waters around Nigeria remain the

epicentre of the problem with 12 attacks and

multiple kidnappings being reported thus far

this year.

The modus operandi of West African pirates

ranges from petty theft of ships at anchor to the

hijacking of vessels by heavily armed and

organised groups. Tankers have often been

targeted for hijack and taken to the Niger Delta

swamps where their cargo has been syphoned

off to vessels belonging to the criminals. For

the victims of these attacks, the ship’s Master,

officers and crew, the ordeal is typically

harrowing as the criminals in this region are

renowned for their violence and brutality.

The Gulf of Guinea Commission claimed

that the region supplies around 40% of

Europe’s oil and around 29% of petroleum

products to the US, but fears are growing that

the piracy issue is spiralling out of control.

Phillip Heyl, US Africa Command chief of the

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piracy is increasing because West African

countries do not make maritime safety a

priority.

“The criminals are winning, criminals act

with impunity on African waters,” Heyl said.

“They fish illegally, they move illegal drugs,

arms, weapons, they attack ships and shipping

and that has a very negative impact on trade for

Africa and for the economic development for

Africa.”

In the aftermath of the successes achieved in

containing piracy on the east coast of Africa,

the question remains as to why the same

procedures aren’t being applied to tackle the

problem in West Africa.

Territorial boundariesFirst, the majority of attacks on shipping are

taking place within the territorial boundaries of

the sovereign state. Consequently, the

responsibility for the policing of these waters

lies with that particular sovereign government.

At present, the available resources and the

efforts of local authorities to protect shipping

operating within their territorial boundaries are

wholly inadequate.

Second, under international law, vessels that

enter the territorial waters of a sovereign state

are bound to the rules and regulations of that

particular state. Local laws in this region

stipulate that foreigners are prohibited from

being armed. In October 2012, the authorities in

Nigeria arrested and imprisoned 15 Russian

crew members after firearms were discovered

on board their vessel.

Ships seeking armed protection in this area

have the single option of hiring local law

enforcement personnel. However, this brings its

own complications, as questions are raised of

their level of training, competence and integrity.

Some shipping companies have utilised the

services of a reputable private maritime security

companies (PMSCs) to provide consultants

operating in an unarmed capacity to bring an

additional layer of security expertise. This too

has proven to be problematic as two British

security contractors have recently been arrested

without charge in Nigeria.

Mariners with experience of operating in this

region will most likely harbour unpleasant

sentiments of their time spent here. Corrupt

officials and bribery are commonplace. Visitors

may be forgiven for assuming that the majority

of the local population are impoverished and

unwelcoming. These are all conditions that

contribute to a challenging working

environment made even tougher with the added

threat of attack by pirates.

In many ways, piracy in the Gulf of Guinea

remains unique in nature, however the threat

remains as high as ever. Security procedures

must be region-specific with consideration of

local laws and pirates’ tactics. Vessels operating

in this challenging region are strongly advised

to seek the advice of a reputable PMSC, or risk

management company, to receive updated

intelligence reports and remain abreast of the

latest mitigation measures.

*This article was written by Ed Hill ofIntrepid Risk. Hill is a former Royal MarinesCommando where he served for over 14 years.Having left the forces in 2005, he has sincespecialised in security in hostile environments.He has been actively involved in maritimesecurity since 2008 and has recentlygraduated with a Masters’ Degree in MaritimeSecurity with distinction.

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INDUSTRY - SATCOMS

Airbus Defense and Space is now a

division of Airbus Group and was

formed by combining the business

activities of Cassidian, Astrium,

formerly Vizada and Airbus Military. The

Marlink brand was included in the purchase

but will continue as an autonomous service

partner.

In a presentation in London recently, Tore

Morten Olsen, head of the maritime satcom

activities of the division, outlined a few of the

company’s new offerings in the maritime

satcoms sector.

A couple of months ago AuroraGlobal was

launched. This is a new high throughput suite

of satcom services for the shipping industry.

A new all-in-one maritime VSAT offering is

claimed by the company to double high-speed

data and allowances, with unlimited L-band

back up, without the replacement of existing

antennae.

Olsen said that demands were changing to

higher speed communications. He also said

that reliability had also increased and admitted

that Airbus’ offering was not always the

cheapest, but the group had the financial

stability needed to operate a good service.

There are around 120 players in the market

selling various services, some of which were

formed just to be sold off, he said.

The new VSAT offering is part of the new

AuroraGlobal service, delivering high

throughput satcoms, via one global multi-band

portfolio to maritime and other markets.

Shipping companies can now double their

VSAT speed with throughput at up to 2Mbps

and 60GB data allowance per month, with

unlimited L-band back up, to better

accommodate their communication needs and

budgets, he said.

They also have the option to upgrade to

future Ka- and Ku-band services without

having to invest in new VSAT antenna

systems for future high-throughput satellites

(HTS), as Airbus Defense and Space is a

strategic distribution partner for Inmarsat’s

Global Xpress Ka-band services and has

recently signed an alliance agreement with

Intelsat enhancing its Ku-band network and

bridging customers to the EpicNG platform.

New AuroraMaritime services include

Pharostar Plus/WaveCall Plus based on Ku-

band VSAT today, with the possibility to

transfer to Ku and Ka based HTS satellites in

the future. The high speed broadband with

increased data allowances, or throughput

speed to meet the growing demand for IP

applications and Internet connectivity is

available for all types and size of vessels.

Examples of the new Plus services include-

� If a shipping company already has a 10GB

monthly data allowance, this will double to

20GB (if transferring to this package)

� If a shipping company has an agreed

256kbps bandwidth it doubles to 512kbps

(if moving to this package). More data. or

speed can be achieved at no extra cost.·

� If already using Intellian 100GX, SAILOR

900 B, or Seatel 4012 antennae, a field

Airbus moves intomaritime

Much has happened to the maritime division of Airbus Defense and Space since the

grouping was launched a couple of years ago, as part of the parent

company’s expansion programme.

Airbus Defence and Space haslaunched the global field-servicealliance (GFSA).

GSFA is designed to ensure fast,

professional and cost-effective VSAT

installation and service support for maritime

VSAT satellite service providers.

The objective of the GFSA is to bring

together expertise of maritime field

installation and equipment to enable 24/7

installations and maintenance in major ports

worldwide.

Three service partners have already been

fully certified as members. Pro Nautas

Marine Electronics in Germany, Livewire

Connections in the UK and SRH Marine in

Greece, have met Airbus’ requirements

covering areas such as: antenna installation,

training and certification, logistics,

warehouse and spare parts capabilities,

guaranteed response times and local,

regional and global operating areas.

Each certified partner will provide the

complete range of installation and technical

service to ensure uninterrupted operation of

Airbus’ VSAT services. This includes

installation, demobilisation, repair, upgrade,

replacement and maintenance of VSAT

equipment.

The number of certified companies and

engineers operating under the GFSA is set to

expand in the coming months, the company

said. Ultimately, the alliance will consist of

a highly qualified network of VSAT service

partners, including both independent service

partners and Airbus’ service engineers.

“Alongside our new AuroraGlobal

network, this initiative will help to improve

customer support of current Ku-band and

future Ka-band based services via our

service provider partners, while

strengthening end-user confidence and

satisfaction in the satellite services they

choose,” said Tore Morten Olsen, head of

maritime satellite communications activities

at Airbus Defence and Space. “We are

committed to expanding the GFSA in order

to build a substantial resource that is capable

of performing installations and maintenance

to the highest standards anywhere in the

world.” �

Airbus offers VSAT support service

INDUSTRY - SATCOMS


upgrade kit will be supplied for GX

compatibility. No upgrade needed for

existing antennae for services on Intelsat

Epic.

� Unlimited backup on FleetBroadband, or

Iridium Pilot, as standard. Most extensive

Ku-band..

As mentioned, Airbus, the world’s second

largest space company and Intelsat, the

world’s leading provider of satellite services,

have announced that they have entered into a

new agreement bridging maritime VSAT

services to Intelsat’s HTS EpicNG platform.

This new agreement now provides global

high throughput satcom services with secure

access to Intelsat’s global Ku-band satellite

capacity and terrestrially managed network

IntelsatOneSM as from March of this year.

Airbus now offers an extended usage of these

new high performance solutions in its services

portfolio, which is upgradable to the new

Intelsat EpicNG platform.

For Airbus’ maritime customers, EpicNG

brings the potential for new services that

enable throughput in the range of 25-60 Gbps

– around 10 times that of traditional satellites,

the company claimed. Each EpicNG spot

beam can support Airbus’ maritime users with

1 m antennae featuring downlink speeds of up

to 290Mbps and uplink speeds of up to

225Mbps.

Intelsat’s open- architecture, flexible and

backward compatible EpicNG platform, which

operates with the existing Ku-band wide beam

fleet, enables customers to achieve higher

speeds without changing on board hardware.

When the EpicNG platform becomes

available, shipping companies will be able to

easily upgrade to Intelsat’s HTS technology,

Airbus said. Under the new agreement, Airbus

will grow its current and future requirements

for maritime Ku-band VSAT services with

Intelsat.

This new VSAT offering also includes the

latest XChange solution -XChange v3 - that

manages the switch between VSAT and MSS.

By using this system, IT managers and others

can remotely manage their ships’ IT and

operational communications with simplified

network administration on board and across

fleets.

XChange is an all-in-one solution to manage

communications services. It gives more

control with less operational overhead, while

on board administrative tasks can also be out-

sourced to onshore offices. It is fully

integrated with Airbus Defence and Space’s

Pharostar (entry and premium) services and v3

makes VSAT voice and data management even

more intuitive, the company said. Improved

features include an ability to flexibly prioritise

traffic, in order to give corporate traffic

priority over crew traffic, thereby securing

delivery of critical data.

“Combining XChange with our Pharostar

VSAT delivers the most complete and efficient

IT and communications solution for global

shipping companies available today. It is fully

focused on giving more flexibility and saving

money for the shipowner through enhanced

management of crew and voice data usage.

The latest upgrades secure its position as the

leading choice for efficient communication at

sea,” said Olsen.

This new solution has full VSAT and MSS

compatibility. Being fully compatible with the

largest range of VSAT terminals means that

shipping companies can use the antenna

systems available on board and simply

integrate XChange as the optimal network

management device.

As a single, powerful device offering

Value for seafarers • Privacy while communicating.

• Lowest airtime rates thanks to post paid allowance sharing.

• Free on board content access (documents, manuals, videos, training, etc).

• Access to personal account via any PC on board.

• Personal real-time usage- and cost control.

• Embraces personal equipment like laptops or smartphones.

Value for vessel operations• All-in-one multi-service/user platform for ship’s business and crew needs.

• Always-on with automatic fallback to most cost-effective connectivity (VSAT)

• Easy to deploy and install (one-click preconfig =30 mins). Easy to operate

and use.

• Reduced coms management & administration cost (prepaid recharge, secure

user authentication for crew calling on shore usage monitoring).

• Real-time cost control & user monitoring (incl M2M).

• Allows flexible sharing of communication cost.

XChange v3 highlights

complete connectivity control, regardless of a

vessel’s existing network configuration, it

enables easy access to the preferred satcoms

connection. It only takes a few minutes to

configure XChange v3 to enable access to the

new features on offer.

Enhanced voiceVoice functionality has also been enhanced

with this new version, with the choice of

VSAT voice and up to three MSS optimised

voice connections. Available lines are

automatically selected for more convenience.

It improves network access for end-users,

while seafarers benefit from a single account

with an automatically remembered login for

data and telephone services on their individual

devices. All data and voice costs can be

charged to each crew member’s account.

XChange v3 also includes the BYOD (bring

your own device) Wi-Fi solution, allowing

shipping companies to provide crew with the

most cost-effective voice and Internet services

delivered to their own smartphones, laptops

and tablets.

This will allow shipping companies to

provide an affordable and easy-to- use Internet

café on board, while maintaining full control

of their communications budgets.

“Our state-of-the-art VSAT service offers

the largest coverage and cost-effective high-

speed broadband available today on the

market,” said Olsen. “Offering twice as much

value for money, it allows maritime users to

embrace more efficient IT applications in their

daily operations, while also improving crew

connectivity and keeping an eye on the cost of

their communications.”

As of the first quarter of this year, some 900

XChanges had been installed on board ship

since its launch late last year and it was hoped

to reach 1,500 by the end of this year. Among

the shipowners to have taken advantage of

XChange are Scorpio, Anglo-Eastern, Geden

and Hartmann.

In another move, the company has expanded

its Ku-band VSAT coverage in the Indian

Ocean Region, using the Intelsat IS-702 S2

satellite.

The new coverage gives improved

availability of Pharostar, Sealink and

WaveCall VSAT voice and data services for

vessels transiting, or operating primarily in the

Seychelles area, north to Ethiopia and south to

Madagascar. An improved Ku-band footprint

will also enhance security and anti-piracy

efforts in the region.

“By bringing up this network, we enhance

our market leading global VSAT coverage to

support service providers serving customers in

the IOR. The new coverage enables delivery

of reliable connectivity up to 3.8Mbps,” said

Ghani Behloul, head of product marketing,

maritime, Airbus Defence and Space. “The

IOR coverage extension is part of our

commitment to maintaining the most extensive

maritime VSAT coverage for global users.”

Email recordLast year, the company reached a new record

for its dedicated SkyFile Mail software with

more than 50 mill emails sent by some 40,000

seafarers worldwide – a 25% growth in email

volume over the previous year. There are now

some 15,000 subscribers and the demand is

crew driven, Airbus said.

SkyFile Mail is an email solution for

business and crew and has been taken up by

some of the world’s largest shipping

companies. It is a messaging application

optimised for satcom and a partner for Airbus’

Pharostar, Sealink and WaveCall VSAT

services.

The increased use of SkyFile in 2013 was

similar for both VSAT and MSS, reflecting the

ease of migration to SkyFile from other email

platforms and from L-

band satcom, as users

do not need to be

retrained when a vessel

upgrades its satcom

from MSS to VSAT,

the company said.

Skyfile optimises

bandwidth efficiency

on board through data

compression, which

further reduces the size

of emails sent. The

remaining VSAT

bandwidth can be used

for other operational,

or crew applications.

Further efficiencies

come from enhanced

remote management

features.

“Owners and

operators looking to

change to our

dedicated maritime

email solution can

keep their existing

email addresses and be

confident in SkyFile’s

ability to enhance their

email communications

regardless of the

satcom band they use,”

said Olsen.

SkyFile Anti-Virus also saw growth, with the

amount of licences in operation nearly

doubling throughout 2013. New over-the-air

updates also attracted more users.

Olsen said that shipowners should not worry

about who is providing the satellite services,

but about the service itself. Airbus sells

satcoms both directly and indirectly though its

service agreements. He said that thus far, the

VSAT market was only running at about 30%

but will grow.

He said that shipowners/operators want a

simple, integrated, single service with one

invoice for all the services provided. Airbus is

rolling out global alliance partners to cater for

shipboard installations and maintenance. An

antenna can be installed without the use of a

crane in a few hours, he claimed.

Olsen explained that owners and operators

were more concerned about the cost per

Megabyte rather than bandwidth. As the cost of

Megabytes decreases, so larger capacities will

be used at sea, at no extra cost, he said.

Finance options are being explored to turn

the purchase of the equipment into a vessel

operations expense.


INDUSTRY - SATCOMS

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INDUSTRY - SATCOMS

New deals, packages and solutions

vying for the shipowner and

operator market are announced

with predictable regularity –

reflecting how Internet is expected to be

ubiquitous – even at sea.

Faster connections, bigger data allowances,

better coverage and improved functionality all

serve to enhance vessel and fleet operations and

crew welfare, so the speed at which the market

moves can only be positive for tanker owners

and operators.

But regardless of the quality of services and

the various network infrastructures that enables

them, one link in the chain brings everything

together – the on board satellite terminal – or

antenna, as it is often referred to.

Cobham SATCOM claims to know a lot

about maritime satellite terminals. The company

is a combination of two of the largest players in

the maritime communications field during the

past 30 years: Sea Tel and Thrane & Thrane.

Cobham acquired Sea Tel in 2003 and Thrane &

Thrane in 2012. The latter managed the

SAILOR product line of maritime radio

communication, which dates way back into

1960s.

Today, Cobham SATCOM develops and

markets maritime satcom terminals for VSAT

(very small aperture terminal) and MSS (mobile

satellite services) under both the Sea Tel and

SAILOR brands. Sea Tel is a pioneer of vessels’

stabilised antennas, having built the first

Inmarsat-A antennas (L-band) in the 1980s and

then moving its capabilities into satellite TV and

VSAT (Ku, C, X-bands) since the 90s.

SAILOR meanwhile has dominated the

Inmarsat L-band MSS terminal market since the

beginning of the century. Well over 100,000

Inmarsat-C terminals have been installed and

with more than 20,000 SAILOR Fleet and more

than 35,000 SAILOR FleetBroadband terminals

shipped, the brand has become the de facto

industry standard for Inmarsat’s popular L-band

services. FleetBroadband currently features

heavily in the tanker sector, with a huge number

of vessels benefiting from the up to 432kbps

connectivity it offers.

But times change and today, with ever

increasing and maturing satellite coverage,

VSAT services are also beginning to penetrate

the tanker sector. While talk of VSAT often

comes down to increased bandwidth – more

speed – perhaps the more important benefit of

Ku-band VSAT is that unlike MSS, it is not a

‘pay per MB’ service and offers more

throughput for the same, or less money. VSAT

users receive a single predictable monthly bill,

meaning budgets can be set and use of on board

connectivity can be managed better – therefore

increasing functionality for operations and

offering improved, but usually less costly voice

calling and Internet service to crew members.

Simplifying VSATWith Sea Tel being first to the maritime market

with stabilised VSAT antennas over 20 years

ago, its Cobham SATCOM stable mate entered

the scene much later. So, though SAILOR is

generally recognised for high quality design and

manufacture, the engineers needed to have

something to ensure SAILOR had the same

impact on VSAT, as it did on MSS. Unlike for

instance, FleetBroadband, VSAT traditionally

was not a fit and forget affair. Recognising that

Terminal connectionsevolve with new

satcoms offeringsThe market for maritime satcoms services for ships and indeed tankers is moving fast.

Sailor 800 internal view.

INDUSTRY - SATCOMS


the process of VSAT procurement and

maintenance can be complex and time

consuming, due to needing to source and

integrate components – antenna, RF components

from multiple manufacturers, modem, router, etc

– from different suppliers, the product team saw

an opening that would significantly help VSAT

service providers and end-users.

In 2012, the SAILOR 900 VSAT antenna

system was launched. It was designed and

developed from a clean slate with high

performance, ease-of-use and global

serviceability in mind. This superior

performance enables a maritime service

provider to deliver higher bandwidth, better

quality and availability of service, Cobham

claimed. However, one of the key values

SAILOR 900 VSAT offers is its ability to

eliminate much of the complexity often

associated with maritime VSAT projects.

The SAILOR 900 VSAT requires no

evaluation, planning, procurement, or

installation of RF components – it’s all built in –

making it the ideal solution for standardised

VSAT installations and services; the kind that

are most suitable for tankers. Sea Tel VSAT

antennas are more regularly used for customised

solutions with specific high power requirements,

normally for other ship types such as offshore,

or cruise liner projects.

With the SAILOR system, the need for

labour-intensive testing and balancing of the

antenna is removed as Cobham SATCOM

installs universal RF-components and live tests

the antenna during production so that it will

work on any Ku-band service, anywhere. The

importance of this cannot be understated; it

really is a step change in the world of maritime

VSAT, which makes it a far more attractive

prospect to potential users, the company

stressed.

To accommodate this approach, an antenna

testing and simulation facility was built at the

Cobham SATCOM HQ in Lyngby, just outside

Copenhagen. Critical to the success of the

‘Advanced Dynamics Simulator’ facility

and SAILOR 900 VSAT was obtaining real

vessel data using special measurement

equipment deployed on board various

vessels.

It recorded heading, roll, pitch, yaw,

acceleration, position, temperature and

random vibrations data, which was then

fed into a multi-axis hydraulic motion

testing and simulation platform that

replicated exactly the movement of any

vessel.

Using real vessel motion and conditions,

while connected to a live satellite provided

a realistic long-term testing ground, which

supported live sea trials and enabled a huge

amount of data to be acquired in a

relatively short period, which is an

important factor as it enabled Cobham

SATCOM to overcome the limitations that

antenna manufacturers face on carrying out

live testing during the development phase.

Following on from the success that this

approach created for SAILOR 900,

Cobham launched a smaller version, which

will be suitable for installation on smaller

vessels, or when a vessel is operating

regionally, for instance, shuttle tankers of

any size. Test facilities at Eutelsat and

extensive tests at teleports have confirmed

that at 83 cm, it provides the same radio

performance as other antennas in the 1 m

class.

The result is an antenna capable of

delivering more bandwidth compared to

competing 80 cm antennas, while being

easy to install and using less real estate on

board. It is based on the same technology

as the 900 VSAT, which itself sets good

performance standards within the 1-1.2 m

antenna sector. Cobham’s newest Ku-band

VSAT antenna offers the same benefits as

the 900 VSAT, in terms of simple

procurement and installation in addition to good

RF performance, the company said.

Fast forward to 2014 and the world of VSAT

is changing. The SAILOR VSAT platform is

being used to inform a new line of SAILOR

antennas for the Inmarsat Global Xpress service,

which will offer full global service availability

in 2015. Global Xpress is a new service, which

is using Ka-band for high throughput and

bandwidth, with FleetBroadband for redundancy

with out-of-band-management as standard.

Customers will pay a flat rate similar to VSAT

services but including the redundancy of the L-

band service.

The new SAILOR 100 GX sports a 103 cm

reflector dish and is aimed at Cobham

SATCOM and Inmarsat’s core global shipping

Sailor 900 ACU.

Sailor 500 FleetBroadband.


INDUSTRY - SATCOMS

customers. The compact SAILOR 60 GX

features a 65 cm reflector dish making it

suitable for enabling Global Xpress’ high

bandwidth connectivity on a wide range of

smaller vessels.

The first GX terminals will be available

during summer 2014, to help to ensure that

Cobham SATCOM’s maritime service provider

partners can begin installing the systems on

customer vessels for Inmarsat’s commercial

service introduction. Both new terminals

continue the ‘all-in-one, ready-to-go’ approach

introduced with the 900 VSAT antenna. It was a

natural step to employ this for the launch of

Global Xpress to ensure simplicity and high

reliability for service providers and shipowners,

Cobham said.

Global Xpress isn’t the only high-throughput

service in the offing. Intelsat will launch

EpicNG in 2016 reinforcing globally available

Ku-band networks with several more satellites

and high power beams providing very focused

bandwidths in highly dense areas like the Great

Circle routes across the Atlantic and Pacific

Oceans and offshore energy hot spots. Telenor

will also launch Ka-band services on its new

THOR 7 satellite.

Cobham’s SAILOR VSAT antennas have

been approved for operation on the existing Ku-

band, as well as the forthcoming THOR 7 Ka-

band satellite from Telenor Satellite

Broadcasting (TSBc). THOR 7, TSBc’s latest

satellite, is expected to be launched in the fourth

quarter of this year and is equipped with a Ka-

band HTS payload. The SAILOR 800 and 900

VSAT have been approved to support Ku-band

services on the existing THOR fleet while

SAILOR 900 Ka and the new SAILOR 800 Ka

will be compatible with THOR 7.

Covering the 1 deg West region, THOR 7’s

Ka-band capacity is strategically positioned over

the main shipping routes in Europe and major

oil and gas exploration and production areas,

including the North Sea. The THOR 7 Ka-band

HTS payload offers 6-9 Gbps throughput with

up to 25 simultaneously active spot beams.

Services will offer reliable speeds in the tens

of Mbps downlink, even from small antennas.

Uplink speeds will be anywhere from 2Mbps to

6Mbps depending on antenna size. Service

reliability is key, with TSBc implementing a

package of solutions to mitigate rain fade on

Ka-band, including a new uplink site in Norway

to provide antenna site diversity.

THOR 7’s Ka-band HTS payload has been

specifically designed for the mobility VSAT

market, offering highly concentrated and high

powered coverage over TSBc’s main market

area, including the North Sea, Mediterranean

and the Baltic Sea. Approval of Cobham

SATCOM’s Maritime VSAT antennas for

THOR 7 strengthens a longstanding co-

operation between the companies and is

testament to the standardisation approach it has

for SAILOR antennas, Cobham claimed.

When looking at next generation VSAT, it’s

important to note that Ku-band services already

have the potential to deliver very high

throughput, with near global coverage on a very

cost effective basis. So though Ka-band services

are currently in the spotlight, standardised Ku-

band services will continue to be an important

option for tanker owners.

Regardless of the satellite operator or service,

Cobham SATCOM VSAT users will be among

the first to benefit from the power of HTS with

innovative, reliable Ka-, Ku- and Ka/Ku-band

antennas from both SAILOR and Sea Tel

already prepared for the next generation of

maritime VSAT services., the company

concluded.

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TECHNOLOGY - WASTE FUEL RECOVERY

Waste fuel recovery -an industry standard

overnight?Alfa Laval is seeing increasing take up of its PureDry separator system. Orders have now

been placed by leading shipowners in nearly every vessel category, including the tanker segment.

Since 2008, MARPOL rule

MEPC.1/Circ.642 has allowed the

recovery and reuse of the heavy

fuel oil (HFO) percentage of waste

oil as engine fuel. Thus far, however, only

Alfa Laval’s PureDry system has been

developed to take advantage of this waste oil

possibility, the company said.

This separator lets vessels recover nearly all

of their fuel oil losses, which range from 0.5

to 2% of their total fuel consumption.

“In general, I can only think of this as an

excellent idea,” said Jacob Norrby,

newbuilding project manager for Stena. “We

recover something that is normally wasted,

and that we sometimes have to add energy to

in order to burn it.”

The Gothenburg-based company is

installing the systems on board the Stena

Weco 50,000 dwt MR series of Eco tanker

newbuildings. In general, the larger the

installed power on a vessel, the more savings

can be made by using PureDry, Alfa Laval

explained.

Stena is just one of the leading shipping

companies who together have ordered around

120 PureDry systems for their newbuildings.

In the tanker sector, joining Stena in ordering

systems, is Frontline, while other owners

include Carnival Corp, MSC, Norwegian

Cruise Line and Wallenius. All of their vessel

designs were modified by the shipyard to

segregate fuel and lube oil waste. This marked

a paradigm shift, as vessel design changes

were made to accommodate the new

separation technology, Alfa Laval said.

Previous attempts with traditional separators

have marginally reduced waste volumes, but

process water and discharge losses have

allowed a large amount of waterlogged, fuel-

containing waste to remain. “The treatment

and disposal aspect was normal, in that it’s

been addressed over the years,” said JS

Narayanan, manager newbuilding projects for

Frontline. Naranayan had expressed surprise to

learn of a solution that gets fuel out of the

sludge, rather than simply reducing its volume.

“This is new,” he said, “the recovery of fuel

from what was previously thrown out.”

“Knowing that there’s 1-2% fuel (losses) in

the sludge, it’s not surprising that this

application should develop,” said Norrby. “But

what’s encouraging is that we see PureDry as

a quality product. It’s engineered well, and the

technology Alfa Laval has built on is good.”

Breakthrough technologyPureDry is a hybrid technology: a high-speed

disc-type centrifugal separator with a solid

bowl, yet one that is also self-cleaning.

As the name suggests, PureDry requires no

process water and leaves no liquid in the solid

waste. Nor does it have a bowl aperture, or

hydraulics. Norrby explained; “The separator

looks fairly simple, which is some of the

beauty of it.” Alfa Laval said that the only

major moving parts are an outer bowl and a

separator insert, which rotate at slightly

different speeds. Attached to the insert is the

XCavator, a patented spiral device that

transports the separated, super-dry solids into

a container at PureDry’s base.

Yet another departure from traditional self-

cleaning separators claimed by the company is

the way that maintenance is performed.

PureDry relies on maintenance and service by

exchange, whereby the separator insert and

XCavator are replaced at fixed intervals. “This

is attractive, because the crew on board are not

high-tech experts,” said Narayanan. “The

complete renewal of the rotating assembly

makes maintenance simpler and easier, so we

don’t expect much workload on the crew.” The

systems are skid mounted for ease of

installation.

By using PureDry, virtually all of a vessel’s

fuel oil losses can be recovered to ISO 8217

quality. The elimination of this energy leak has

a strong environmental implication, but above

all it makes for a bullet proof business case,

the company claimed. Norrby said; “These

two things go hand in hand. This is not a

All 12 of Stena’s MR newbuilding series at Guangzhou Shipyard International will be fittedwith PureDry.



cheap investment, so it’s nothing you just run

out and buy. You have to support the

purchase.”

For many shipowners, there is also a strong

business case in minimising the sludge

volumes, which PureDry is claimed to reduce

by 99%. PureDry leaves just 5-10 kg per day

of non-pumpable, super-dry solids, which are

landed simply as dry waste. All of the water,

with an oil content of around 100 ppm, is

passed on to the bilge water system. This

negates the necessity of offloading waste to a

barge.

Alfa Laval said that if there is anything to

complicate the PureDry business case, it is the

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OHSAS 18001�

fact that modifications in vessel design are

needed to achieve all the benefits. On the one

hand, PureDry makes it possible to reduce

sludge tank holding capacities by at least 50%

under current legislation. But to recover fuel

in addition to reducing waste, the streams of

waste fuel oil and waste lube oil must be

segregated.

Segregating the tanks, rather than

demonstrating PureDry’s effectiveness, has

thus far been the main hurdle, the company

said. For a newbuildings, the procedure is

easier, since the changes can be made on the

drawing board. Yet for shipyards unfamiliar

with waste fuel recovery, even this has led to

some discussion. “The product is unique, so

there was no challenge in selecting it,” said

Frontline’s Narayanan. “The challenge was

making the shipyard understand the simplicity

of it. But once it has been done with one

shipyard, others can simply follow.” As

shipyards grow more familiar with the

application and with PureDry itself, smoother

integration can be expected.

With the savings documented thus far, it is

hardly surprising that there is talk of waste

fuel recovery as a new standard, Alfa Laval

said.

Leaving the last words with the tanker

owners, Fronline’s Narayanan said; “We

welcome anything that can lead to savings in

our fuel use and the reduction of emissions.

We welcome the new technology.”

“If we expect to recoup 1% of the bunker

consumption, that’s on the margins of what is

possible to measure. But we believe in the

technology. And we expect it to work as

intended in regard to performance and

maintenance,” said Stena’s Norrby. TO

PureDry is skid mounted and can be exchanged for ease of maintenance.

TECHNOLOGY - ECDIS


This service can only improve still

further once Inmarsat and Intelsat

introduce their new products. The

cost of using satcoms will also

continue to fall in relative terms, as the service

providers increase the scope of their offerings.

One of the big three in terms of distributing

global charts is Oslo headquartered Nautisk

Forlag. For example, of the 140 plus UKHO

charts agents, only three have a worldwide

portfolio coverage, of which Nautisk is one.

At the end of March, Nautisk received DNV

GL approval for the company’s Neptune Pay as

you Sail (PAYS) solution.

PAYS enables users to access global ENCs

for use with on board ECDIS systems, while

only paying for those that are actually used.

Peter Pran, Nautisk global sales manager

said:“Despite a positive market outlook,

demands on shipowners and vessel operators to

make cost savings and optimise operational

efficiency are continuing to increase. We are

working with our customers to find bespoke

solutions that enable them to benefit fully from

our global portfolio of ENCs through an on-

demand system.

“Our PAYS solution gives both shore-based

and on board teams access to any number of

ENCs that may be required for one particular

trading route. ENCs are downloaded onto the

ECDIS for planning purposes and we then track

the vessel. As the vessel sails through a

particular area, the shipowner is charged for the

use of those ENCs only.”

As no hardware installations are required to

use the service, additional on board equipment

is not required. The system is fully compliant

with SOLAS regulations and take-up has so far

been positive, he claimed.

Pran added: “We know that where voyage

planning is concerned, one size does not always

fit all, and many of our customers are choosing

to combine PAYS with our pre-paid service,

which means ENCs are available in advance,”

he explained.

In conversation with Tanker Operator, he

further explained that the main advantage of

digital downloading was that it could be

undertaken the same day as the order is

submitted, as opposed to waiting for a CD to be

delivered when a vessel arrives at a port. Only

the ENCs are downloaded for which the

shipowner has a license.

During a voyage planning exercise, all the

ENC cells needed for a particular voyage can be

identified and ordered digitally.

Nautisk’s Neptune is a real-time vessel

information service compatible with both bridge

and shore-based systems. The data is

downloaded on demand. It is essentially a vessel

information system which takes away the day-

to-day administration of ENCs and other

downloads.

It works by combining electronic Notices

from British Admiralty, the Norwegian

Hydrographic Service and NOAA with an

update service for ENC cells from the UKHO

and PRIMAR and also includes marine

management tools, digital IMO publications,

reports, weather forecasting, routing, online

news and information.

Nautisk has been supplying maritime charts

and publications to commercial shipping since

1896. It has had a strong focus on the shipping

market since its beginnings as the chart division

of NHST.

Pran explained that fully staffed warehouse

centres have been set up in Oslo, Singapore,

Hong Kong, Bristol (UK) and New Orleans, as

the company has invested heavily in expansion

during the past couple of years. This allows

Nautisk to offer a 24/7 service covering every

time zone by employing specialists at each of its

centres and to cater for the so called ‘rush’

orders, where a vessel needs to divert from its

original route.

A former serving Norwegian Navy

navigation officer, Pran thought that an ECDIS

should purely be used for navigation. All the

various layers now available should be

installed on the back of the bridge in a

monitoring station, he said, as the prime

reason for fitting an ECDIS could be lost in

the detail.

Proper procedures should also be put in

place by the shipowner/manager covering the

bridge team management. For example, when

an alarm goes off on the bridge, the bridge

team should deal with it, according to the

procedures laid down by the company.

He also explained that down the years,

Nautisk had built up considerable expertise in-

house using both academics and former

serving navigation officers, which he thought

was an important contribution to the

company’s success - a mixture of theory and

practice in the use of electronic charts.

For ECDIS training purposes, he said that

the preferred method was beginning with

computer-based training (CBT) followed by

practical training on board ship using a system

with an experienced navigator.

In the future, Pran thought that to cater for

possible ECDIS malfunctions, an exchange

service could be introduced whereby the

damaged system is taken away for repair and

immediately replaced on board by another

identical ECDIS, thus keeping up with the

IMO’s twin ECDIS ruling.

Providing the rightENC service at theright time is vital

As can be seen from our Satcoms feature on pages 26-32, it is now much easier to sendelectronic data to vessels, as the satcoms service providers are increasingly offering

more bandwidth and transmission speeds at little extra cost.

Nautisk’s Peter Pran. TO


TECHNOLOGY - ECDIS

Entitled The Admiralty Guide to

ECDIS Implementation, Policy

and Procedures (NP232), it

complements earlier publications

such as The Admiralty Guide to the Practical

Use of ENCs (NP231) and The Admiralty

Guide to Symbols Used in ECDIS (NP5012).

It was published to provide clear guidelines

for those responsible for the introduction of

ECDIS on board ship and in particular to those

responsible for developing procedures for

operating an electronic chart system.

The guide is also intended to provide an on

board reference to support a company’s

procedures put in place for ECDIS operations.

This will help in the preparation for audits and

inspections and provide clarification of a

company’s ECDIS policy and procedures, the

UKHO said.

It has been produced in two parts. The first

of which reflects the nine specific stages

identified by the UKHO as needing to be

considered by a company when making the

transition from paper charts to an ECDIS.

Each of the nine stages, listed overleaf, are

covered by separate sections in the book. The

UKHO estimated that all nine stages would

take around 12-18 months to complete.

Part 2 is devoted to the development of

policies and procedures to support shipboard

ECDIS operations, once the transition from

paper charts to an electronic system has been

achieved.

This section includes -

� Bridge organisation - aspects of procedural

bridge environment to promote a system’s

safe and efficient operation.

� Voyage planning - using ECDIS features to

plan and appraise a voyage.

� Officer of the Watch duties- how ECDIS

affects voyage monitoring and execution

and how situational awareness and digital

data can enhance bridge navigational

practice.

� ECDIS maintenance - best practice

guidance top ensure that the system

remains functioning.

Here, the guide complements the ICS’ Bridge

Procedures Guide (2007) and the UKHO’s

Admiralty Guide to the Practical Use of

ENCs, the publisher said.

Instead of regarding the transition to an

ECDIS as a standalone activity, away from the

practical day-to-day vessel and crew

management and operations, the UKHO said

that the guide focuses on how this transition

should be managed within a company’s Safety

Management System (SMS). This change

should be influenced by ISM Code

requirements and activities within a company’s

SMS.

The guide then explains the ISM Code and

How to implementand write ECDIS

procedures The UKHO has published an ECDIS guide in which the reader is taken through various

stages of electronic chart operations from the very beginning.*

TECHNOLOGY - ECDIS


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SMS. Usually, the SMS documentation is

contained in one or more safety manuals and

these are normally organised to reflect the

ISM Code’s layout and its 12 sections.

However, with the introduction of ECDIS

navigation, a company will need to develop a

series of new policies and procedures to

specifically cover its use on board ship for

navigational purposes and to manage the risks

associated with its introduction.

As each stage of the transition to ECDIS is

highlighted, this guide identifies key issues

and the ISM Code’s relevant sections to which

they apply, the UKHO said.

*Admiralty Guide to ECDIS Implementation,Policy and Procedures (NP232) 1st Edition,118 pp, illus, published by the UnitedKingdom Hydrographic Office (UKHO).

1) Legal- mandating different vessel types.

2) Risk - Identifying potential problems.

3) Training - Appropriate on board familiarisation and training.

4) Installation - purchase options, installation and maintenance.

5) Policy and procedures- creating policies and procedures for system

operations.

6) Supply - establishing a supply chain for chart data.

7) Assessment - identify, assess and manage ship specific risks.

8) Transition - planning ahead to transfer from paper charts to an

ECDIS.

9) Implementation - safe and efficient navigation through

implementation.

Stages to be considered when changingto an ECDIS

The UKHO is continuing its

free-to-attend global series of

seminars this year.

Capt Paul Hailwood is leading

the seminars, of which one will

be held at Posidonia in Athens

and another at SMM in

Hamburg.

For further details see

www.admiralty.co.uk

TO


TECHNOLOGY - ECDIS

The Smedvig family backed

Norwegian e-navigation service

provider, which claimed to have

introduced the world’s first DNV

type-approved PAYS service in 2012, launched

the NAVTOR PAYS with AVCS solution in

early April.

AVCS is claimed to be the world’s leading

ENC service for ECDIS, offering the widest

coverage in the market. With over 12,500

ENCs, AVCS allows seafarers to navigate a

significant number of international shipping

routes.

Business and communication manager Willy

Zeiler explained: “PAYS allows navigators to

instantly access the ENCs they need for

planning purposes, levying charges only for the

charts they actually use during voyages. It’s a

flexible, user-friendly and efficient way to

navigate, making it easier to order and manage

an ENC portfolio.

“It is something that the market has eagerly

been waiting for. This collaboration between

NAVTOR and the UKHO marks a significant

step forward in the way that e-navigation

solutions are delivered to the end user. We’re

proud to be working with the UKHO and using

NAVTOR’s advanced technology to connect

with its customers,” he said.

The NAVTOR PAYS with AVCS solution is

distributed on a pre-loaded NavStick USB

device, which when inserted into a ship’s

ECDIS, will instantly install the required AVCS

coverage. The latest AVCS charts and updates

can then be regularly retrieved using

NAVTOR’s online programme NavSync,

ensuring that all vessels are kept up to date

easily.

Jason Scholey, UKHO’s senior product

manager - charts, said: “AVCS is the world’s

preferred ENC service for ECDIS. We’re very

pleased Navtor are launching the NAVTOR

PAYS with AVCS solution to provide customers

with additional choice when purchasing their

ENCs.”

Navtor claimed that the majority of its

customers now opt for a PAYS solution. Zeiler

is keen to stress that it’s not only ECDIS-

mandated vessels that are signing up with

NAVTOR. “Many shipowners appreciate the

tangible benefits of a service that provides safe,

efficient and predictable operations, whether

they are subject to IMO regulations, or not.

NAVTOR offersAVCS on ‘Pay As You

Sail’ NAVTOR is one of the latest companies to offer UKHO’s ADMIRALTY Vector Chart

Service (AVCS) on a ‘pay as you sail’ (PAYS) basis.

Transas Navi-Planner 4000 voyageplanning software is nowequipped with the extendedfunctionality to manage papercharts and publications.

For several years, Navi-Planner 4000 was

known for electronic charts, publications and

other data management. Recognising the fact

that a lot of shipping companies continue to

use paper charts, Transas has added a new

functionality to its voyage planning software

providing one tool for both, electronic and

paper charts management for it´s customers.

Users can import a complete vessel’s

inventory, or manually select paper charts held

on board. Navi-Planner 4000 then connects

directly to the Transas chart server ashore to

gather all outstanding Notices to Mariners

within a few seconds.

Navi-Planner also provides a clear overview

of paper charts status and any paper chart used

during a voyage will be automatically listed in

the passage plan, thus making voyage planning

easy and safe, Transas claimed. �

Transas Navi-Planner 4000managing paper charts

TO

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TECHNOLOGY - EFFICIENCY

The Copenhagen conference looked

at how tanker operators should

best turn Eco pressures into

opportunities, with the help of

speakers from NORDEN, Thome, TORM,

Maersk Tankers, Lauritzan Kosan, Knud E

Hansen and MAN Diesel & Turbo.

Opening the conference, Capt Steven

Sandorff, director, head of tanker operations

at NORDEN said that the Eco tanker concept

is an operational challenge taking in three

elements.

These were the vessel’s design, the

equipment fitted and the competency of the

crew and shore staff.

He considered that design consideration was

the most important issue, taking into account

the shipyard’s production and the capability of

the terminals to be served.

He said that such was the design of

NORDEN’s 40,000 dwt newbuildings, that

benefits would be accrued without the

installation of specialised equipment, such as a

Mewis Duct.

The question of which main engine to be

installed should also be considered. He said

that NORDEN has opted for MAN Diesel &

Turbo’s 6S50MEB.6.3 type for the company’s

product tanker newbuildings.

Capt Sandorff explained that these engines

were cheaper and of a simpler construction

compared to other engines, which would lead

to ease of maintenance and repair. The next

generation MAN ‘G’ type engines are also

being considered for future newbuildings.

The new MAN engines are de-rated and will

be connected to large diameter propellers.

Tank tests have been conducted with Mewis

Ducts, propeller boss cap fins (PBCF) and

anti-foulings, which were all taken into

consideration.

He said that the equipment installed on

board should be optimised with frequency

controls, etc. Energy saving light bulbs with

timers could also be used, he advised.

In addition, a company must focus on

educating the staff, both on board and ashore

to ensure the correct mindset behind the Eco

tanker concept. “It is a much more complex

scenario with sophisticated monitoring

equipment, such as that provided by Marorka,”

he said. A company should also evaluate all

the possibilities thrown up by the Eco tanker

concept with the various stakeholders.

By using continuous monitoring software on

board, companies have been forced to look at

the quality of data transferred and spend more

time on evaluating the data, compared with the

traditional noon day report, Capt Sandorff

said.

Do somethingAddressing the question of fuel optimisation

and monitoring, Thome Ship Management’s

Stig Holm said that there were no right ways,

or wrong ways, as long as you do something.

Ensure you have sufficient dedicated

manpower to run a project, either in-house, or

third party. ”If you squeeze the budget, then

you won’t be successful,” he warned. It is a

matter of time and cost management, as well

as people management.

“You need a clear understanding of the

starting point and the goal – a strategy for the

final destination,” he said.

There are decisions to be made about the

requirements of quality data collection, such

as the quality of the measuring equipment, the

reporting tools and the evaluation tools, plus

the ability of the organisation to handle the

information both ashore and afloat.

For many years, operators and owners have

relied on the daily noon reports from the

Danish ownershighlight tanker

efficiencymethodology

Tanker Operator’s first in a series of conferences on the theme ‘Navigating Ecotankers’took place in Copenhagen on 27th Mar, 2014.

NORDEN’s Capt. Steven Sandorff.

Thome’s Stig Holm.



vessel to the office. These can still be used

retrospectively for an end of voyage

evaluation, historical learning patterns and for

knowledge sharing.

However, today an owner or operator can

continually monitor a vessel’s performance,

which enables corrective action to be taken via

a screen on the bridge. The trim of a vessel

can be changed in a ‘trial and error’ operation.

However, by using the continuous monitoring

method, there will be no historical learning, or

knowledge sharing, Holm said. He advocated

for a mixture of both methods to be adopted.

Next he posed the question – what is

technology related and what is behaviour

related? Technology includes the equipment,

project management, installation,

commissioning and the expense incurred. The

human aspect takes in knowledge, education,

motivation, competition, pride in performance

and buying into the company’s culture.

Everybody should be involved in the

discussions and people who do well should be

rewarded. He gave an example of seafarer

awareness as simple monitoring of the

equipment in the crews’ mess where savings

could be made.

He explained that in Thome’s case, the

company was not the sole decision maker and

cannot incur expenses without agreement from

the vessels’ principals. The shipmanagement

concern also looks after vessels of varying

types. However, on the plus side, the vessels

managed number about 200 and he claimed

that the Thome human element was strong and

that the company operates by using vessel

support teams, ie having managers both on

board and in the office.

Thome has developed its own reporting

system, which alerts those responsible when a

vessel operates out of the conditions as laid

down in the charterparty. Fuel consumption is

measured per voyage, month and year.

Finally, Holm said that tomorrow’s solution

would necessitate retro-perspective and

continuous monitoring with self-financed fuel

savings by screening, evaluating, calculating

(return on investment), financing and project

management.

Return on investmentTORM’s vice president energy efficiency and

innovation, Allan Rasmussen, also confirmed

that the company examined its fleet to see

what could be done about efficiency. The

company found that in general, its five year

old MRs consumed 27 tonnes of fuel per day.

A retrofit solution would have a return on

investment of around three years and reduce

the gap on today’s Eco tankers by around 2-4

tonnes per day.

However, the company decided to retain the

option of sailing at maximum speed, if

required. Rasmussen described the operation

as ‘value of fuel versus value of time.’ He

also said that TORM’s commercial department

were good at triangulation, ie keeping the

vessels on laden legs, rather than ballasting to

pick up cargoes. “It is all about making money

and not just fuel consumption,” he said.

He thought that to de-rate engines and fit

new propellers on an older vessel would cost

around $3 mill with a payback time of 10

years, which was far too long. He said his

main message was ….”know how to operate

your vessel.”

Rasmussen said that one tonne of fuel can

be saved by fitting new technology, but also

one tonne of fuel can be saved by shipboard

staff. He explained that TORM operates a two-

day training course for officers, one day of

which is taken up by fuel efficiency. “We have

dedicated people in the office to look at route

planning,” he explained.

The company runs a project with the

charterers and both on board the vessels and in

the office. The technical department has been

reorganised as it was found that

superintendents running five vessels each

could be a bottleneck. A concept called ‘Vessel

Managers’ has been adopted whereby a vessel

is likened to a factory with a CEO- the vessel

manager. Decisions are therefore empowered

to the vessels in co-operation with the office,

which operates in a technical support function,

so a vessel manager is able to delegate

functions as necessary.

In the office, vessel managers sit next to the

operations people, so both departments can

hear what is going on. In the past the

superintendents were only looking at operating

expenses, but now they have become involved

with fuel consumption, Rasmussen explained.

To help run a vessel efficiently, he advised

that propeller inspections should take place

every four to six months and when at anchor,

or idling, the hull should be inspected. He also

claimed that modern antifoulings do not need

to be polished and that a good antifouling was

worth paying for in the long term.

He also thought that a vessel of say nine

years of age was not worth retrofitting, due to

nearing her special survey and oil majors’ 15-

year age barrier on chartering.

Test projectIn April 2013, Maersk Tankers completed a

comprehensive test project looking at various

retrofit technologies for a VLCC. With the

technologies, annual savings of around 8%

were demonstrated, said Steen Sander

Jacobsen, head of fuel efficiency in Maersk

Tankers.

Tests were carried out on the VLCC MaerskIngrid, which included the fitting of a Mewis

Duct and a propeller boss cap fin (PBCF) at

separate times. Finally, both were fitted.

Before the vessel was drydocked, trials were

undertaken before any modifications were

made. Following this, the vessel was docked

and a Mewis Duct was installed and trials

were re-run. This was repeated with a PBCF

fitted and finally with both a Mewis Duct and

a PBCF fitted together.

It was calculated that with the combined

Mewis Duct and PBCF fitted, savings of

around 6.2% could be made. With all the

retrofits included, the savings went up to about

8% with an ROI of around two and a half

years for a VLCC operating at 12.5 knots.

In addition, the VTI turbocharger was

optimised and frequency control equipment

was installed on the pumps, as well as the

engine room fans. LED lighting was installed,

as was an auxiliary economiser.

Other improvements made to the fleet were

main engine de-rating, main engine auto-

tuning, a turbocharger cut out facility and

harbour circulation pumps were fitted.

Antifouling is another important area to

consider, Jacobsen said.

Existing ships can be upgraded to operate

with a high energy efficiency with a certainty

of a marginal ROI, he said.

Retrofits were a real alternative to buying

new, even if newbuilding prices were low and

promises of energy efficiency from the

shipyards were high. Various interesting

retrofit technologies already exist, but more

radical solutions must be considered to

achieve significant fuel savings, he thought.

Jacobsen also thought that the crew did not

need too much training to operate a retrofitted

vessel. A performance management system

TORM’s Allan Rasmussen.



should to be installed and the information

should to be validated for benchmarking

purposes for which scorecards should be kept

on sister vessels.

He also said that voyage planning was

essential and that it was better to operate

tankers at a constant speed of 13 knots, rather

than 50% of the voyage at 14 knots and the

other half at 12 knots.

For Maersk’s new MRs, the hull has been

optimised and he said that Maersk Tankers

would probably fit Mewis Ducts on its LR

types.

Lauritzen Kosan has introduced an energy

efficiency project, which is called ‘Rejuice’.

Sverre Patursson Vange, the company’s

head of performance management said that

this project was started from a DNV

consultancy report, resulting in various focus

areas being identified in 2012.

The long list of suggestions recommended

that 15.8% savings could be accrued and the

target was set at 10%.

Data loggersSince 2008, Lauritzen Kosan had used a semi-

automated system to collect data based on

noon-reports. However, an automated data

logging system has been introduced, which

results in high frequency simultaneous data

sampling without occupying the crew’s time.

The data logger fitted on board the vessels

analyses the ECDIS, GPS and log speed; the

power meters fitted on the generators and

consumers; the mass flow meters on the fuel

systems and the torque meter.

Vange said that reliable data should be

produced, which the vessels’ crew and their

managers could trust using highly accurate

metering. The human factor could be

eliminated with transparency and the

possibility to monitor 24/7 for all the

stakeholders involved.

He claimed that the company had a huge

increase in positive vetting results, due to the

introduction of KPIs and a reliable comparison

between sisterships, which has led to bonus

lead KPIs. Vange said that the company was

currently working on energy efficient KPIs.

Anticipate changesKnud E Hansen’s Brian Bender Madsen

warned owners and operators to anticipate new

fuel regulatory changes going forward and

agreed that it was generally cheaper to add

fuel saving technologies on a newbuilding,

rather than opt for a retrofit solution.

He advised owners/operators to co-operate

with a proven design house to ensure high

overall efficiency, as the shipyards main focus

is on optimised production.

Madsen said that there were many solutions

available for old, bad and/or large vessels, but

for smaller and newer vessels, few solutions

Energy Efficient Project- Rejoice (based on a consultant’s report,various focus areas were identified in 2012).

Maersk Tankers’ Steen Sander Jacobsen.

Lauritzen Kosan’s Sverre Patursson Vange.

Source: Lauritzen Kosan.



are available to improve their efficiency.

He thought that there basically four methods

to improve the fuel efficiency of a vessel -

� Reduce the hull resistance in loaded/ballast

condition.

� Increase the propulsion system efficiency.

� Improve the power plant efficiency.

� Improve the crew behavioural and

operational efficiency.

For newbuildings, a fifth method is the

vessel’s operational profile, ie draft, speed,

laden/ballast and operation area.

As for hull resistance, the general

characteristics of a full-form/high block

coefficient vessel, such as a tankers were;

� 60-80% of the hull resistance is in the form

of viscous resistance.

� 10-20% can be attributed to wave

resistance.

� 5-10% to hull roughness.

� Up to 5% to air resistance.

The largest areas for improvement here lie in

optimising the hull form (optimise carrying

capacity), applying smooth coatings and keep

the hull and propeller clean. For tankers

already in operation, hull form optimisation

has very limited applicability. But on

newbuilding it has high value, Madsen said.

There are a range of options available for

increasing the propulsion system’s efficiency,

all of which are highly customised and

designed specifically for each vessel.

Each system has advantages and

disadvantages and in some cases combining

different devices has been shown to give good

improvement, such as the Mewis Duct, which

combines a duct and pre-swirl fins. In general

the efficiency improvements to be gained are

highly dependent on the geometry of the

vessel in question, Madsen said.

Generally, the variable frequency drive,

waste heat recovery and automation are the

key to power plant efficiency, Madsen said.

There are a range of options on the market for

systems, which improve the plant efficiency.

In a few cases, mainly on larger vessels and

for bad designs, larger conversions could be

undertaken resulting in big savings and a

quick ROI.

Another feature to consider is the

operational efficiency. Trim optimisation can

offer reductions in fuel consumption in the

range of 1-5%. This can either be verified by

model test, or computerised fluid dynamics

(CFD) – depending on whether a model is

available. Other possible features available for

operational efficiency include - route planning

(weather, adjust speed according to the ETA).

Crew training and awareness can answer

such questions as – do the vessel’s systems

operate in the most efficient mode? A lack of

maintenance and overhaul increases the

vessel’s energy consumption. Other

possibilities include slow steaming and taking

advantage of the currents and avoiding bad

weather and the monitoring of hull and

propeller fouling.

Engine refitMAN Diesel & Turbo, PrimeServ’s manager

retrofit sales, Jan Jensen discussed the merits

of a 2-stroke engine refit.

For example, the Alpha lubricator could be

upgraded and PMI auto and low load tuning

could be undertaken. Like most of the

speakers, he also mentioned engine de-rating

and propeller optimisation.

In addition, MAN Diesel & Turbo has been

involved in engine gas conversions to ME-GI,

or LGI, type mode, primarily with large

LNGCs, but the company has also won orders

for new ME-LGI engines for a series of six

methanol carriers.

For conversions, Jensen explained that

MAN’s MC, ME-C, MC and MC-C engines

could be used. By the beginning of April,

some 46 MAN dual fuel Tier II engines had

been ordered, either new, or for retrofits.

The gas engine retrofits for the QatarGas

LNGCs are specifically designed and

engineered and are not off-the-shelf engines,

he explained. A study was started with

QatarGas some three years before the

conversions, which will take around 540 days

per vessel.

For gas conversions, as well as the main

components, operators need to consider the

other systems needed, including the

installation of inert gas plants for flushing the

gas system, a double piping system in the

engine room, block and bleed valve systems, a

silencer for gas venting, a fuel gas supply

system, LNG tanks and bunkering systems,

gas detection system and fire fighting systems.

For de-rating the engine and the correct

propeller, the savings potential is around 10-

15%, but the cost runs at €1-3 mill, Jensen

said. Recently, MAN Diesel & Turbo

purchased the Kappal propeller solution,

which is offered in all size ranges and in fixed

pitch and controllable pitch modes, which

together with a de-rated engine can represent

significant savings.

MAN PrimeServ has completed specific

vessel studies both at optimised and at low

speed operation. “We can then develop

systems to suit,” he said. He advised that the

propeller design with the hull shape should be

decided upon before selecting the engine type.

He gave an example of the percentage cost

split for a conversion from an ME to a ME-GI

type dual fuel engine. The installation at the

yard represents some 40% of the cost. This

includes the installation, hull work, auxiliary

systems piping/structural engineering, piping,

etc.

Project management would account for

about 25% of the total cost, which involves

class documentation, QHSE, HAZID/HAZOP,

plus external consultancy fees. Also

amounting to about 25% of the cost is the fuel

gas supply system, while the engine retrofit

would total the remaining 10% of the total

cost.

In a case study involving a 74,000 dwt

Panamax tanker, the savings potential was

calculated at 12-15% and the cost was

estimated at €1.2 mill with a return on

investment in about 2.5 years.

Existing De-rated

Panamax tanker case study

Max speed (kn)

Optimised speed (kn)

Operating speed (kn)

SMCR (kW)

Rev/min

15.2

15

12.5

11,300

105

14

12.5

12.5

6,850

79

Source: MAN PrimeServ.TO



Certification by the Swiss-based

non-profit organisation The Gold

Standard is claimed to be the first

methodology to allow ships to

generate carbon credits, thus income, for the

CO2 emission reductions they achieve.

The methodology is based on shipowners

and operators converting existing vessels from

a biocidal antifouling system to a biocide-free

advanced hull coating, such as International’s

patented Intersleek.

A baseline emission level is determined for

the vessel prior to the application of Intersleek

with the same data source then used to

determine the emission savings after its

application. The carbon credits generated are

directly related to reduced emissions as a

result of reduced fuel consumption.

Using a ‘results based finance’ approach,

carbon credits are awarded annually, based on

vessel data that is collected, analysed and for

Intersleek, administered by International and

submitted to The Gold Standard Foundation

for validation.

To ensure validity and transparency, the fuel

savings that are generated are verified by

independent UN accredited auditors. Once the

carbon credits are issued to International, they

can be sold at market price and the revenue

shared with customers in a new form of

finance.

Many owners and operators are already

eligible to benefit from the process and receive

credits that have already been accrued.

International 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 said that it chose to work with

The Gold Standard Foundation because it is

the highest quality and most trusted carbon

certification standard with rigorous

sustainability benchmarks over three

categories - environmental, social and

economic, as well as technological.

The environmental credentials for Intersleek

technology have already been established

through an ‘eco-efficiency analysis’ conducted

according to ISO14040 and ISO14044 and

independently validated by the Swedish

Environmental Research Institute.

“This landmark methodology enables

shipowners and operators to benefit twice

when they invest in Intersleek technology.

First, they can increase operational,

environmental and energy efficiencies, which

reduces fuel costs and emissions and then they

can reap the additional financial benefits of

carbon credits, which we will share with them.

We will also handle all the administrative

requirements, so customers don’t have to

invest time, capital or resource in generating

the carbon credits,” said Trevor Solomon,

Intersleek business manager.

The project started in 2009 when data had

showed that up to a 9% fuel saving could be

achieved by switching to Intersleek hull

coating.

At a presentation in London, International’s

John Willsher explained that other energy

devices fitted would make a vessel ineligible

for the scheme, as it would be impossible to

gauge which individual system is contributing

to the energy saving.

He also explained that the measurement

would be based on the noon reports with no

monitoring equipment needed. Although in

general, the cost of Intersleek is higher than an

antifouling, around 20-40% of the costs could

be offset using this scheme.

Fouling risk toolIn addition, AkzoNobel has introduced what is

claimed to be the shipping industry’s first

digital tool that enables operators to accurately

assess and predict the risk of hull fouling,

depending on which routes are being traded.

Developed by International, Intertrac

analyses various data streams in order to draw

up an accurate fouling risk profile. This can

then be used to tailor a coatings system to a

vessel’s specific route, helping to maximise

operational efficiencies and reduce costs.

“This is a valuable tool that enables us to

recommend optimal fouling control coating

specifications, which in turn helps to generate

major cost savings for customers,” said

Conrad Keijzer, AkzoNobel’s executive

committee member responsible for

performance coatings. “It is also an excellent

example of how we are always looking to

innovate and set ourselves apart from the

competition.”

The patent pending Intertrac software

divides the world’s oceans and coastal waters

into 64 large marine ecosystems, each with its

own fouling risk and characteristics, including

salinity, temperature, thermal range,

seasonality and typical pH levels.

AIS dataRoute information is obtained from data

provided by a vessel’s AIS, which is available

in the public domain. This establishes

operating profiles and helps to quantify the

hull fouling challenge that a specific vessel

has faced while in operation.

Rob Molenaar, managing director marine

and protective coatings said “This is a unique

tool which can offer important benefits to

owners and operators. By combining details of

a vessel’s voyage with our in-depth analysis of

the fouling challenge, we can provide our

customers with detailed information on the

level of fouling risk that they face.”

The Intertrac software will also help

AkzoNobel to refine future product

development as more and more is learned

about both the marine environment in different

parts of the world and how it affects different

vessels.

Already tried and tested having been in

operation for a number of months, an

unnamed oil company has asked for a fleet-

wide fouling risk assessment across all of its

ships.

Carbon credits forhull efficiency

AkzoNobel’s International marine coatings business and The Gold Standard Foundation

recently unveiled a new marine-based methodology to reward

improved vessels’ fuel efficiency.

TO

TECHNOLOGY - TANK SERVICING


Atypical Suezmax may consume as

much as 500 tonnes fuel oil for

cargo heating to maintain cargo

temperatures of Boscon crude in a

voyage from Venezuela to the Far East.

Around 30% reduction in this consumption

can be achieved through estimation planning

and monitoring of cargo heating, which could

mean a considerable saving to a tanker

operator/owner. This reduction in fuel oil

consumption is certainly big for a seemingly

small cargo heating operation, said Blue Water

Trade Winds.

“Blue Water Trade Winds, a pioneer in the

innovative service of cargo heating

management, touched the milestone of 58,000

tonnes fuel saving since its inception in 2008,

corresponding to approximately $35 mill, ” the

company said.

Not many years ago, fuel efficiency was a

neglected topic of many marine conferences

and journals. But today, sustainable

technologies and concept rank top of the

agenda in the maritime industry. What made

such a dramatic change in awareness in this

area?

The answer may be complex and the causes

are numerous. But above all, it is clearly the

result of the phenomenal rise in fuel cost. This

significantly reduced the voyage earnings for

those ship operators who lacked the ability to

adopt newer cost effective measures.

Also the far sighted shipowners have now

realised the need for their contribution towards

reducing harmful emissions by cutting down

on avoidable fuel consumption.

As the world's most reliable, cost-effective

and energy-efficient mass transportation

system, maritime transportation is central to

sustainable development. There is a growing

international movement to protect our oceans

in the marine industry.

A step aheadBlue Water focuses on maritime energy

efficiency areas, harnessing the experience of

its professionals from diverse industries, the

company said. These services are additions to

the upcoming methods of saving fossil fuels

and reducing environmental impact from

emissions; primarily by designing new

methodologies to optimise the fuel

consumption across diverse operations,

including cargo heating.

With several top oil company clients, Blue

Water said that it had come a long way in it’s

effort to create an effective cost cutting

platform. In addition, this service was able to

provide much needed support for giving

insight into operations, green policies and core

business processes.

The company is now focusing on pushing

the need for next-generation sea transport

sustainability methods to the tanker shipping

sector— leading towards extending fuel saving

objectives to a higher level, such as carbon

budgets, environmental impact gauging and

energy efficiency methods.

It is often said that what gets measured, gets

done. Although shipping companies set

ambitious energy optimisation initiatives given

the multitude and complexity of variables

involved, accurately measuring and tracking

such performances remains a major challenge.

When it comes to achieving energy

efficiency, shipping companies can choose

different ways to measure and assess their

energy use. Blue Water claimed that it had

recently developed a simple yet effective and

unique mechanism to specifically address this

challenge - the Cargo Heating Performance

Indicator (CHPI).

This was developed by a group of students

from Indian Institute of Technology (IIT)

through regression analysis and in-depth

statistical study of over 1,400 heated cargo

voyages, managed by Blue Water.

CHPI has now allowed owners and

operators to track and compare the cargo

heating performance on heating cargo voyages

in any given condition. In other words, the

system now allows logical comparison of an

apple to a mango. This is done by obtaining an

empirical relation between fuel oil

consumption and factors affecting it, Blue

Water explained.

The end result, in the form of fuel oil

consumption expressed in tonnes per day,

signifies the cargo heating efficiency on any

given voyage (see overleaf).

Small methodologyleads to large savings

The rule of thumb may not always work for managing cargo heating.

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inInvesting

jetsgroup.com

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TECHNOLOGY - TANK SERVICING

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