tankeroperatorea45bb970b5c70169c61-0cd083ee92972834b7bec0d968bf8995.r81.… · 2014. 2. 7. · 2...

TANKEROperatorJANUARY/FEBRUARY 2014 www.tankeroperator.com

Features:� Will momentum continue?� Contractual problems� Flag state analysis� NORDEN’s eco tankers� STS - a complete guide� New antifoulings

January/February 2014 � TANKEROperator 01

ContentsMarkets� GDP set to rise� Momentum set to continue?

News FocusAsset prices to rise?

Commercial Operations� C/P renegotiation problems� EU waste decision welcomed� KVH looks to new markets

Ship Registries� Flags analysed� Mandatory audit scheme

Front cover

Ship-to-ship (STS) transfers feature heavily in this issue of Tanker Operator. The is due to the publishing of a comprehensiveguide on the subject by Witherby with help from the CDI, ICS, OCIMF and SIGTTO. STS operations have grown significantly in the last decade, or so and now encompass all types of tankers, including LNGCsand LPG carriers, which is reflected in the latest guide. While the main rules for conducting STS transfers are perfectly clear, there are still some anomalies to be sorted out, whichare outlined in this issue.

18

04

08 27

24

12

Anti-Piracy� Inadequate security issues� Lessons Learned

Technology27 Fuel conditioning28 Virtual navaids29 Ship description� NORDEN eco tankers�Damen coastal tankers

35 Ship-to-Ship Transfers� A complete guide� Standards needed�Operational problems42 Coatings� New antifoulings�Optimising vessel earnings� Rudder and gear protection48 Tank Servicing� Tank sampling warning�Duplex steel guidelines

TANKEROperator � January/February 20142

COMMENT

Tempting fate again

TANKEROperatorVol 13 No 3Tanker Operator Magazine Ltdc/o Digital Energy JournalUnited House39-41 North RoadLondon N7 9DPwww.tankeroperator.com

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In the first issue of the New Year, we always try tolook back at the highlights of the previous year andprognosticate for the forthcoming 12 months.

While the freight rates are obviously at the top of everyone’sthoughts there are perhaps more concerns now than ever before on amultitude of issues, not just the charter market.

We make no apology for highlighting BIMCO’s excellent insight intoseveral of these concerns, aided by various industry bodies, includingthe International Chamber of Shipping (ICS), which has analysed flagstate performances and published a paper on piracy and security.

As can be seen from our Markets pages, 2013 ended on a high withowners and operators making up for lost time. Of course, they arefacing a regime of higher costs, both in terms of fuel, crewing andequipment, as new regulations kick in.

When will the Ballast Water Management Convention enter force, Ihear you ask? It has been close now for a year, or so and the prudentowners have already put plans in place to retrofit, or place equipment,on their newbuildings.

As usual, the US Coast Guard is one jump ahead of the other multi-national legislators but even the US Port State Control inspectors arewavering, realising that it is impossible for many owners to meet theirballast water criteria.

As we enter the New Year, the arguments over the best way to comeinto line with the forthcoming environmental regulations are hotting up.LNG as a fuel seems to have edged ahead of distillates and scrubbertechnology, but the final decision for an owner does depend to a certaindegree on where his, or her, vessel trades.

We are hearing much about eco ships. Is this about designing vesselsbetter, or installing cost saving equipment, which in itself can beexpensive? It is all about ‘return on investment’ as far as the equipmentsuppliers are concerned and this also includes the paint manufacturers.

Will owners continue to opt for slow steaming this year? The raterises seen during the past couple of months seem to have put thedampener on this argument, however, at the time of writing (mid-January), rates had started to soften again, especially for large crudecarriers. Once a vessel is fitted for slow steaming, it is usually anexpensive job to get a tanker back to her normal service speed. Andhow does the charterparty reflect this in the speed and consumptiondeclaration?

Traders influentialTraders have become the largest commercial ship operators over oil

majors and most are taking this new function very seriously opening uptheir own commercial departments to take a keen interest in the postfixture work and the reconciliation of accounts following a charter.

Accidents continue to happen with the investigators putting more andmore of the blame on the poor old seafarer. Where has all theexperience gone, they ask? Some companies have opted for humananalysis type consultants who come in and try to predict humanbehaviour in stressful conditions.

Training is on everybody’s lips – again another cost for the owner tobare. Simulators seem to opening up on every street corner, asacademies vie with each other to get the best cadets, both deck andengineering and woo the shipowners through their doors.

Is cost cutting the way forward? This has always seemed to me to bea false economy, as operating with the cheapest crew and equipment tosave operating costs is often a recipe for disaster. That is not to say thatan owner, or operator, should not be fully aware of where a saving canbe made, but do not do it just for the sake of it. “We want to give valueto our shareholders,” is often quoted by those companies that have gonepublic. They can achieve this by operating their vessels to theirmaximum efficiency, rather than just cutting back to save a few bucks.

Serious players Don’t get me wrong, there are many serious owners out there, both

public and private, who are looking to gain that bit of greater efficiencyover their rivals. They do take research and development seriously, bothin-house, as well as with a whole host of consultants, including theclass societies.

Reading this, you would think to yourself – who would be ashipowner? However, thank goodness there are enough positive peopleout there trying to make a difference in a very volatile market situation.

Another positive dropped into my in-tray during mid-January,proving that tanker owners and operators must be doing somethingright. This was the annual ITOPF oil spill analysis. Although the figuresfor last year had gone up since 2012, there have been no majorpollution disasters caused by tankers since 2007 when the VLCC HebeiSpirit spilt 11,000 tonnes of oil following a collision with a crane barge.

Gone are the days when VLCCs bumped into each other, or caughtfire and exploded, seemingly in a fit of self-destruction. Technology hasmoved on since the 1960s and 1970s. A large tanker today is a muchsafer vehicle, or am I tempting fate? TO

INDUSTRY - MARKETS


World’s GDP set torise – higher tanker

demandDuring 2013, it was the turn of the developed economies to show growth, while

developing and emerging economies suffered slower growth.

Despite key economic regions’efforts to stimulate growth, therewas not a full blown self-sustained economic recovery, said

BIMCO in its annual publication –Reflections.

For the second quarter of last year, Europerecorded its first positive GDP growth figuresin 18 months. However, rising unemployment,particularly among the young, continues toblight the Eurozone.

The US is projected to grow by 2.6% thisyear and as for the world’s second and thirdeconomies, China is on track to grow by 7.3%in GDP, while Japan is being driven forwardby a determined effort labelled ‘abenomics’that is set to boost the country’s monetarybase, resulting in the return of inflation and agrowth in GDP, BIMCO said.

However, looking at the various shippingsectors, the move in the distribution ofeconomic growth to a demand situation drivenby the advanced economies will affect thesectors differently.

The IMF has forecast that 2014 GDP andworld import volume growth will climb to athree-year high of 3.6% and 4.8% respectively.Europe will slowly recover resulting inslightly higher demand for tankers. The USdriving force will be strong private demandand increased domestic oil production, whichshould benefit the product tanker trades.

Growth in emerging markets and developingcountries is forecast to remain strong at 5.1%this year, BIMCO said. This advance will besupported by solid domestic demand,recovering export levels and supportive fiscal,monetary and financial conditions, which is apositive sign for all shipping sectors.

All the main shipping sectors are weigheddown on the supply side, causing significantvolatility in freight rates. Fortunately, theshipping industry has now improved its ability

to apply counter balancing measures to suchan extent that even the most over suppliedsectors may experience periodic healthyearnings, BIMCO said.

Newbuildings Looking at the newbuilding market last year,the attempt to fill yard capacity continued topersuade owners to order by yards offeringlower prices, which met with some success.

With the continuing high cost of fuel,shipowners quest for more fuel efficient, oreco designs, continues to be the mainmotivator in filling shipyard slots and is nowdriving newbuilding costs upwards. Thereappears to be no lack of capital for investorswho think shipping is a healthy business.However, the more traditional bank lendinghas declined in favour of new capital sources,such as private equity and debt investors.

Shipping demand last year was a bit weakerthan originally forecast, but on the supply side,the size of the fleet continued to outweighdemand across all sectors. However, this yearcould see a change for the better, as the paceof new deliveries slows, except possibly forproduct tankers.

For this year, BIMCO said that it expectedthe dirty tanker segment to grow by 2.9% asagainst the 2013 estimate of 2.3%. However, itwill be negatively affected by low recyclingvolumes. As for the clean segment, this isforecast to reach a four-year high of 4%growth, compared with the 3.2% estimated forlast year.

During 2013, an uninspiring crude tankermarket was suddenly given a boost by aspectacular rally in VLCC freight rates duringthe fourth quarter of last year. In the producttanker segment, expectations are firming, asthis was the first segment to recover from thegeneral tanker downturn.

This year is set for stronger product tanker

demand than seen in 2013, but this year willalso herald a larger fleet to cater for thisdemand. However, the fundamentals improvedlast year, although this has not been reflectedin freight rates, thus far.

Most of the changes to the more traditionaltanker routes have stemmed from the fastchanges seen in the US domestic oil market.As a result of these changes, the front haulroutes into the US have reversed into oilproducts exporting trades.

For long term participants in the crude oilsegment, the question will be whether China’sefforts to switch its oil supply sources infavour of West Africa and South America willoffset tonne/mile losses caused by the USsignificantly reducing its crude oil imports.

BIMCO said that a quick calculationshowed that for every barrel of oil lost fromthe MEG to the US, two extra barrels will beneeded to be shipped to the Far East in orderto prevent a reduction in tonne/mile demand.

Oil demand to increaseIn another report, with global economicgrowth in 2014 projected to increase to 3.5%from 2.9% in 2013, world oil demand isforecast to rise by one million barrels per day,according to a recent monthly bulletin of theOrganisation of Petroleum ExportingCountries (OPEC).

Helping the crude oil tanker market, the oildemand is expected to grow by one millionbarrels a day this year, compared with 900,000barrels per day this year. This forecast issupported by improved performances by theemerging economies and as the globaleconomy continues to recover in general, thereport said.

“Oil demand growth continues to comemainly from non-OECD (Organisation forEconomic Cooperation and Development)countries, while OECD oil demand is expected

INDUSTRY - MARKETS


to show a further contraction, albeit at aslower rate,” OPEC’s Monthly Oil MarketReport (MOMR) said.

However, the MOMR article pointed outthat the latest forecast is faced withuncertainties related to the pace of economicgrowth in the OECD region, China and India,as well as to policy reforms in oil productretail prices in some emerging economies.

The improving picture is backed by astrengthening of the global economy in 2014,which is forecast to expand by 3.5% against2.9% in 2013, mainly as a result of momentumin the OECD economies.

“However, many challenges remain, rangingfrom the outcome of postponed fiscalnegotiations in the US, the future monetarypolicy of major central banks, the resilience ofthe Eurozone recovery and continued reformsin the emerging economies to improvestructural issues,” the report said.

It stressed that the signs of a recovery arealready visible in rising global industrialproduction.

According to the MOMR, on the oil supplyside, non-OPEC supply growth in 2014 isexpected at almost the same level as last yearat 1.2 mill barrels per day with some risks inboth directions, given possible early start-ups,or delays, as well as political, technical and

meteorological factors.Output of OPEC natural gas liquids (NGLs)

is expected to rise by 100,000 barrels per dayin 2014, following an increase of 200,000barrels per day last year.

The report noted that non-OPEC supplygrowth in 2013 performed better than initiallyexpected, supported mainly by the US andCanada, which added around 1 mill barrels perday.

Other contributions to 2013 growth camefrom the Sudans, Russia and China, whileoutput disruptions in Syria, along with thedecline in North Sea production, partiallyoffset this growth.

“While the above forecasts indicate thatincremental non-OPEC oil supply and OPECNGL growth will outpace projected world oildemand growth, the 164th OPEC MinisterialConference (held in Vienna on 4th Decemberlast year) decided to maintain currentproduction of 30 mill barrels per day in theinterest of maintaining market equilibrium.

“In taking this decision, the organisation’smember countries re-confirmed their readinessto promptly respond to unforeseendevelopments that could have an adverseimpact on an orderly and balanced oilmarket,” the report said.

Looking at 2013, the MOMR said the price

of the OPEC Reference Basket experiencedsignificant quarterly swings.

After reaching close to $115 per barrel inthe first quarter of last year, the basket pricecame down steeply to around $96 per barrel inthe second quarter, before regaining strengthto rebound sharply in the third quarter.

By the middle of January this year, Brentcrude stood at around $107 per barrel.

RecyclingAccording to a report from EA Gibson, indeadweight terms, tanker tonnage sold fordemolition last year amounted to 12.6 milltonnes, the highest total seen since 2003.

Lightweight prices remained fairly firmthroughout the year and closed December atabout $435/lwt tonne (sub-continent) – around$15 higher than the corresponding period lastyear.

Of the 105 tankers of 25,000 dwt plus soldfor scrap, exactly one third were less than 20years old and importantly 72 vessels weredouble-hull.

Of these, 22 vessels were VLCCs with anaverage age of 18.9 years. There were also 11 Suezmaxes and 28 Aframaxes/LR2s soldfor scrap last year, plus 36 MRs/Handysizetankers.

International accountant andshipping adviser MooreStephens believed that theshipping industry’s fortunesshould be noticeably improvedby 2015 if it maintains therecovery, which got under waylast year.

But it warned that the prospects forrecovery may still be fragile if the industryfails to meet a number of challenges,including tighter regulation and increasedoperating costs.

Moore Stephens shipping partner RichardGreiner said, “New Year resolutions areinvariably a case of in one year and out theother. Generally speaking, it is wise not tomake resolutions which are too ambitious;American troubadour Woody Guthrie hadthe right idea when he settled for, ‘Washteeth, if any’. But the shipping industry canafford to be a little more bullish thanpreviously in its aspirations for 2014.

“Shipping is in a different space to that

which it occupied a year ago. Confidencerose to a three-year high over the course of2013. Good things are predicted for freightrates in 2014, more companies are startingto consider new investment and economicand political issues with the potential to hurtshipping are deemed less severe than 12months previously.

“Over the next 12 months, we can expectto see more shipping money raised in thepublic and private equity markets. We maysee more non-shipping money invested inshipping than for some time, although notnecessarily by dentists. Supply and demandlevels should come closer into alignment.Consequently, freight rates are likely to riseand, with them, vessel values.

“Increased levels of demolition will berequired to offset new tonnage. China isalready offering subsidies to shippingcompanies to scrap vessels before theiroperational expiry date and to replace themwith new ships, which are eco-friendly andwhich fly the Chinese flag. So everybody is

happy – owners, shipyards,environmentalists (except those worriedabout the perceived evils of irresponsiblerecycling) and politicians alike,” he said.

However, Greiner warned that all thepositive indicators remain somewhat fragile.Further, he said, “Operating costs areexpected to go up in 2014. Shipping cannotoperate without fuel and skilled manpower.Meanwhile, increased regulation of crewwelfare, fuel quality and ballast watermanagement are big-ticket items.Environmental regulation is self-perpetuating, witness the news that IMO isto debate plans for shipowners to compilefuel-consumption data to support steps tocreate CO2 reduction regulations.

“It is to be hoped, however, that theindustry can sustain the upturn which beganin 2013. If it can, we may see a return torude health by 2015 although, as JohnMaynard Keynes warned, ‘The market canstay irrational for longer than you can staysolvent’,” Greiner concluded. �

TO

Industry set fair for 2015


INDUSTRY - MARKETS

Will the momentumcontinue?

When looking back at the tanker spot market in 2013, a few keywords come to mind -oversupply, weak freight rates and continued poor earnings.

Although these occurances weremore prevalent in some sectorsthan others, overall, 2013 is notlikely to be remembered fondly

by owners, McQuilling Services said in areport published at the end of December.

The largest of the tanker classes, VLCCs,made little headway throughout the year asquite a few factors kept them from advancing.The biggest being oversupply, which stemmedfrom a decline in demand, a heavy refinerymaintenance programme and a consistentdelivery profile.

The US increase in domestic crude oilproduction has significantly limited itsdependence on foreign sources, specificallyfrom West Africa. Figure 1 shows the dramaticdecline in US oil imports from West Africaover the past few years and, as of September2013, imports were as low as 618,000 barrelsper day. Further supporting this, McQuilling’sproprietary data showed a decline in activityon the WAF/USAC trade by nearly 31% year-on-year.

With respect to deliveries, as of November,there have been 31 VLCC newbuildings addedto the fleet and less than half of that numbersent to the breakers for demolition, bringingnet fleet growth to 17 ships.

When combining these factors, rates on theAG/Japan route traded between WS32-40, on

average, for the majority of the year, whileAG/US Gulf traded between WS18-27.

In the Atlantic basin, WAF/China tradedbetween an average of WS35-41.

However, as the end of 2013 drew near, theVLCC market made a notable comeback. Thiswas due to a seasonal hike in production ofheating fuels ahead of peak winter demandand the rush to secure business ahead of theholidays.

In addition, there was an increase in activityas China, the world’s second largest consumerof crude oil, rushed to fill its strategicpetroleum reserve. Position lists were alsomuch tighter, which gave owners the room topush rates in their favour.

As the year closed out, December rates onthe AG/Japan route traded at an average ofWS62, while AG/USG traded at an average ofWS38. From WAF/China, rates averagedWS61, the consultancy said.

The Suezmax sector was also no stranger tothe issue of oversupply. Requirements out ofWest Africa for these vessel sizes werepressured by 2012’s US East Coast refineryclosures and the fact that US refiners weresubstituting foreign imports with domesticBakken crude.

This caused rates to trade at an average ofWS57 for the year, down five points from the2012 average.

This route also closed 2013 on a morepositive note on the back of the strongerVLCC market, as rates reached their highestlevels of the year at the WS112 mark.

In the first half of the year, BlackSea/Mediterranean rates traded at an averageof WS62 due to the lack of Libyan cargoes,but gained some momentum in the second halfas rates averaged WS66 through mid-December. The recent rate hike was attributedto delays in transiting the Bosporus.

Volatile AframaxesAs for the Aframax sector, this was quitevolatile throughout 2013 with temporaryspikes brought on by weather delays in the USGulf and seasonality factors in the Baltic.

In the first half of 2013, rates from theCaribbean to the US Gulf averaged WS97,down 13 points year-on-year. However, as therest of the year progressed, rates remained inthe lower WS100s (with the exception ofOctober) and averaged WS103, up eight pointsyear-on- year.

The strongest levels of the year were againrecorded in December, when rates reachedWS175, the highest level recorded since 2010.

Similar to Suezmaxes, Aframaxes trading inthe Black Sea/Mediterranean were alsopressured by the loss of Libyan cargoes. As aresult, rates traded at an average of WS79,

Figure 1: US Oil Imports from West Africa

Source: US Energy Information Administration.

Figure 2: Historical YTD VLCC Spot Rates

Source: McQuilling Services.


INDUSTRY - MARKETS

down five points year-on-year.In the smallest of the crude oil tankers,

Panamaxes also found themselves in a bit ofan oversupply situation. This was brought onby reduced US imports from the Caribbeandue to rising supplies of Canadian crude.

Despite this, rates in the Caribbean did notfare too badly in the first half of the year, asdelays in the US Gulf helped to support themarket. However, as the year progressed, thelonger term effect was realised and ratesdwindled, losing an average of nine pointsfrom the first six months of the year.

Much like other sectors, rates made acomeback in December and traded at anaverage of WS122. This was again due todelays and the rush to secure tonnage ahead of

end-year holidays.On the opposite side

of the spectrum, therewas a bit moreoptimism in the cleanproducts market in thebeginning of the year.This sector, specificallyMRs, captured theattention of marketparticipants throughoutthe year. Fromtimecharter deals tonewbuilding orders, itwas clear where

confidence resides,McQuilling said

Beginning with the larger class of cleanships, LR2s and LR1s found support early inthe year from the growing naphtha trade to theEast. As demand waned and oversupplypressured the market, rates dropped on thebenchmark trade mid-year and as the yearprogressed, rates gained some traction, butfailed to meet the peaks that were recorded inFebruary and March. Year-to-date rates forLR2s on the AG/Japan benchmark averagedWS85, while LR1s on the same routeaveraged WS103.

MR demand In the MR market, with strong demand in

the beginning of the year, due to regional

product imbalances on the back of refinerymaintenance, vessels on the Cont/USAC routetraded as high as WS171. A weaker drivingseason put a damper on the market beginningin May/June and rates continued to fallthroughout the rest of the year.

This decline was also partly due to the factthat US refiners were operating at highutilisation rates and counteracting the need forEuropean gasoline imports.

What used to be the backhaul trade for cleanproduct tankers, the USG/Cont route, gainedquite a bit of momentum and attention in2013. This route averaged WS99, up astaggering 21 points year-on-year, due toincreased exports to Europe and owners’desire to be compensated for the lack ofbarrels they would have on their trip backtothe US Gulf, McQuilling explained.

So, as one year closes and the marketprepares for a fresh start, market participantscan only hope for a prosperous 2014. ‘Ourassessment for DPP trades remain cautiouslyoptimistic, while preliminary data indicatesrelatively bearish developments for CPPtrades, specifically on MRs, in favour of LR-sized ships,’ the report concluded.

*McQuilling’s full five-year forecast will befound in the 2014-2018 Tanker MarketOutlook, which was due to be published in thesecond half of January this year after TankerOperator went to press.

Figure 3: YTD MR Spot Rates


TO

After a miserable 10 months forcrude tanker owners, the endyear spot market levels becomefavourable, especially for thosethat successfully fixed theirvessels, Gibson Research said.

The VLCC market started to move at theend of October after a sustained three monthperiod of relatively high fixing in the MiddleEast and Atlantic Basin.

Sustained support and charterers fixingfurther ahead in the run-up to the holidayperiod, meant that earnings were maintained ataround $50,000 per day on the benchmarkAG-Japan (TD3) route for the final twomonths of the year.

In the first instance, there was no move inthe Suezmax and Aframax markets, withrepresentative earnings for these vessels atonly $15,000 per day and $8,000 per dayrespectively, during most of November lastyear.

Then, at the end of that month, the pressure

on the VLCC market finally spilt over into theSuezmax sector, with VL cargoes out of WestAfrica being split into Suezmax cargoes.

Aframax boomFinally, in December the Aframax marketstormed ahead to levels even higher than theVLCC and Suezmax levels. In the North Sea,bad weather, delays,charterers re-entering themarket for replacementtonnage and the holidays allconspired to push spot ratesto more-or-less double theirearlier levels and earnings tohit $70,000-80,000 per day.

Aframax marketselsewhere in the Westfollowed the same trend,with Caribbean andMediterranean rates alsodoubling. Rates alsoincreased East of Suez, but at

more muted levels of 35-45%. Expectations are that rates and earnings will

come down in January, but this goes to showthat in what is a relatively weak fundamentalcrude tanker market, there are conditionswhere rates and earnings can spike at extremelevels.

Ignoring the fundamentals

Source: EA Gibson.

TO

NEWS FOCUS - ASSET PRICES


Asset prices appear to have reachedsome equilibrium in 2013 afterenduring a continuous downturnsince 2009.

Average annual composite tanker priceswere down 0.42% year-on-year with mixedperformances seen on a sector by sector basis.End of the year momentum could have set thestage for what may be the first positive yearsince 2008 registering a current 5% returnbased on January 2014 levels over 2013averages, McQuilling said.

Table 1 illustrates current asset prices forthe tanker market as of January 2014.

VLCCs saw mixed results in newbuildingand secondhand tonnage values year-on-year.Overall, the segment saw a slightly downwardtrend by 0.2% year-on-year using averageannual prices.

By the end of 2013, we saw increased spotmarket activity and renewed optimism, whichhas supported asset prices heading into 2014.Current (early January) asset prices represent a6% increase over 2013 average levels withnewbuildings and 10-year secondhand tonnageincreasing 6% and 16%, respectively.

In contrast, asset prices for five-yearsecondhand tonnage are down 4% from 2013levels. McQuilling’s proprietary seasonalratios show the experiential adjustments inrates over the course of the year. Using abasis of one, the observed premium, ordiscount, was recorded on a monthly basis by

using a multiplier factor. For example, a 30% increase in December

rates from the annual average rates willindicate a 1.3 seasonal factor for December.As indicated in Tanker Operator’s Marketspages in this issue, a seasonal uptick andsecuring of tonnage ahead of the holidaystraditionally helps to push up both spot ratesand subsequently asset values in the latter halfof the year.

Figure 1 illustrates the relationship betweenthe seasonality factor on the AG/East routeand VLCC newbuilding prices for 2013.

Future expectations of spot rates based ontonne/mile demand and tonnage availability,combined with access to financing and steelprices, are the basis for the five-yearprojection results in the consultancy’sforthcoming 2014-2018 Tanker MarketOutlook.

Asset prices for the Suezmax sectorunderperformed the industry average,registering a 4% drop in average annual pricesyear-on-year. Significant weakness waspredominant in older secondhand tonnage as10-year average annual Suezmax asset priceswere down 8% year-on-year (2012-2013).

Figure 2 illustrates the volatility in assetprice changes for the Suezmax segment. Ten-year secondhand tonnage experienced the mostnegative volatility, as compared withnewbuildings and five-year old vessels.

Terminal restrictions in West Africa, alongwith special survey costs, were the primaryreasons for the poor performance. Oldervessels will be more limited in their load anddischarge options than their younger peers,decreasing the availability of demand for thesevessels.

In addition, in a down market when newer

Are tanker assetvalues set to climb?

In this article, we look at tanker asset prices courtesy of a report recently published by McQuilling Services.

Figure 1: VLCC Seasonality, Jan-Dec




NEWS FOCUS - ASSET PRICES

tonnage is available at softer levels, potentialbuyers of older tonnage may be less willing topay up for an older vessel, due its second orthird (and typically more expensive) specialsurvey.

Average annual Aframax/LR2 pricesremained flat year-on-year, recording a slightdecrease of less than 1%, despite rate volatilitythroughout the year. Disruption in Libyanproduction pushed rates lower in theMediterranean. However, a lack of availabletonnage and weather disruption in theCaribbean/USG pushed rates significantlyhigher towards the end of the year. Similar toits peers, the Aframax class has seen scrapvalues, as a percentage of their market value,increase significantly over the last five-years.

The significant increase in percentage termsmay be explained by higher steel prices, whichhave increased by about 25% over the lastfive-years, due to improving demand,particularly from China. However, amovement towards historical trends wouldlikely indicate a future increase in either assetprices, a decrease in the price of steel, or somecombination of the two. In the soon to bepublished 2014-2018 Tanker Market Outlook,McQuilling incorporates steel prices in themodel for asset price forecasting, as it hasestablished a very strong correlation using itsproprietary quantitative analysis.

The Panamax/LR1 sector shifted gears, witha focus on coated ships, as more than 80% oforders in the last five-years have been forLR1s. McQuilling’s analysis shows LR1fixtures for CPP cargoes out of the US Gulfalmost doubled year-on-year, which enabledowners to benefit from economies of scale.

Comparing current prices to 2013 averagelevels, a positive growth of 7% was seenhighlighted by a 12% rise in 10-yearsecondhand tonnage. The dynamics betweentonne/mile demand and the orderbook will beexmamined in 2014-2018 Tanker MarketOutlook. The analysis will indicate adisconnect between current prices and marketfundamentals.

Given the robust interest in the sector overthe last two years, it should come as nosurprise that the MRs performed better thanthe rest of its peers, returning a 4% growth inaverage annual asset prices year-on-year.Looking at current prices, compared to 2013average levels, an increase of 10% was seen.A massive move for MR tankers has beenwitnessed, including a wave of publicofferings and private equity investment.

Current newbuilding prices are up 9% ascompared to 2013 average levels, McQuillingconcluded.

Figure 3: Aframax Scrap Values % of Market Values 1995-2013

Source: McQuilling Services

Figure 4: MR Asset Prices Jan 2013-Jan 2014

Source: McQuilling Services.TO

Figure 2: Suezmax Price Changes 2008-Jan 2014



COMMERCIAL OPERATIONS - LEGAL MATTERS

Often the parties will agree toexplore such possibilities, evenin the absence of a clauserequiring them to do so, in an

attempt to protect their commercialrelationship.

However, even where renegotiation provesto be possible, the task of agreeing revisedterms is often far from straightforward and canlead to problems of interpretation.

It is against this background that late lastyear, the High Court issued it’s decision inDS-Rendite-Fonds Nr.106 VLCC Titan GloryGmbH & Co Tankschiff KG v Titan MaritimeSA [2013] EWHC 3492 (Comm) in which theeffect of a charter restructuring agreement(CRA) was considered.

The decision is of particular interest becausethe Court opted to rectify the CRA to reflectthe agreement reached by the parties. Thesuccessful shipowners were represented byClyde & Co.

The facts The claimant owners had entered into a seriesof long term time charterparties in relation to afleet of eight vessels. When the marketscollapsed at the end of 2008, all the contracts(which were based on the Shelltime 4 form)had several years to run.

The charterers said that they were facinggreat difficulty in meeting the hire paymentsand in early 2009 stopped paying the fullamount of hire.

Commercial discussions directly betweenthe parties took place in an attempt torestructure the hire payments in a way thatwould preserve the commercial relationshipand enable the charterparties to continue. Theresult of those discussions was the CRA thatformed the basis of subsequent dispute.

The CRA addressed both the position ofoutstanding unpaid hire and how hire was tobe paid in the future.

A new rate of hire was agreed as beingpayable during a ‘restructuring period’ of 1stJanuary, 2010 to 31st December, 2014.

The full charter rate of hire would still beearned during that period but with paymentdeferred until the end of the restructuringperiod. For the hire payments that fell dueduring this period, the CRA set out a formulathat referred to a ‘market rate’ derived from aClarkson Index - a ‘floor rate’ of $22,000 perday and six-monthly adjustments.

Early in 2011, a dispute arose between theparties concerning the meaning and effect ofthe floor rate and how it was to be taken intoaccount in the six-monthly adjustments. Thespot market (on which the relevant ClarksonIndex was based) had for a sustained period oftime fallen below the floor rate of $22,000 perday.

The charterers had argued that whencalculating the six-monthly adjustments, theClarkson Index rate should be relied on evenon those occasions where it had fallen belowthe $22,000 floor rate.

The owners contended that only the higherof the two rates should be used for thiscalculation. Owners sought a declaration fromthe Court concerning the proper constructionof the CRA. In the event that charterer’sconstruction was held to be correct, in thealternative the owners sought rectification ofthe agreement on the grounds of commonmistake.

Construction When construing the CRA the Judge held(relying on Chartbrook Ltd v. PersimmonHomes Ltd [2009]) that the general approachis to consider what a reasonable person havingthe background knowledge available to thecontracting parties would have understoodthemselves to be agreeing by using thelanguage they used in their contract.

The owners argued that a key consideration

was that a right to be paid at least $X (thefloor rate) could have no real meaning, oreffect if it was held to be attached to anobligation to refund some or all of what hadbeen paid via the six-monthly adjustment.

However, the owners accepted – and theJudge recognised – that there was a problemwith the language that the parties had actuallyused in the CRA given that it referred to acomparison between “the average of themarket rates for the previous period of sixmonths …” and “the average rate actually paidin respect of those months”.

The Judge held that: “[t]he Owners’construction involves rewriting the clause in amanner inconsistent with the words used andthe agreed contract terminology.” Accordinglyhe held against the owners on the constructionpoint.

Rectification The Judge set out the requirements to establishrectification for common mistake (as approvedby the House of Lords in Chartbrook vPersimmon) as follows: “The party seekingrectification must show that: (1) the partieshad a common continuing intention, whetheror not amounting to an agreement, in respectof a particular matter in the instrument to berectified; (2) there was an outward expressionof accord; (3) the intention continued at thetime of the execution of the instrument soughtto be rectified; (4) by mistake, the instrumentdid not reflect that common intention.”

This test places a significant burden on theparty seeking to invoke the remedy but theJudge was persuaded on the facts of this casethat the owners had been able to meet therequirements.

Charterers had placed reliance on the entireagreement clause in the CRA but the Judgeheld that such a clause is not a bar torectification, noting: “The entire agreementclause defines where alone the terms by which

Charterpartyrenegotiations cause

problemsOccasionally charterparties will contain provisions such as ‘hardship’, or ‘renegotiation’clauses that seek to provide an opportunity to review and, perhaps, amend the contract

to reflect the realities of the market.*

COMMERCIAL OPERATIONS

January/February 2014 � TANKEROperator

the parties agree to be bound are to be found. However, the remedy ofrectification does not seek to find contractual terms outside the fourcorners of the document, but rather to ensure that the documentcontains what it was supposed to contain.”

Following an extensive review of the evidence it was held that theparties had a common continuing intention that a minimum hire rate of$22,000 per day per vessel would always be payable and not deferred.

In addition, there had been an outward expression of this intentionand this had continued at the time of the execution of the CRA. Incircumstances where, by mistake, the CRA had not reflected thiscommon intention, the Judge felt able to allow owners’ rectificationclaim and to amend the CRA accordingly.

Comment The facts of this case provide an interesting illustration that even inthose cases where there is a strong commercial will on both sides torenegotiate the terms of a charterparty, the uncertainty caused by aprolonged bad market can create considerable difficulties in reaching aworkable solution.

The decision produces an outcome that makes commercial sense inthe context of the situation in which the parties had found themselves,but it is notable that the Court rectified the contract – a difficult remedyto establish in practice – in order to achieve this

*A reference to this case first appeared in Maritime Advocate lastNovember. Tanker Operator is indebted to Clyde’s legal team for thiscase - Bethan Bradley (legal director) and Lucinda Roberts (associate)- for permission to reproduce this article.

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COMMERCIAL OPERATIONS - LEGAL MATTERS


This move will be welcomed by allsuppliers of fuel oils and bunkers,Rotterdam-based law firm AKDclaimed.

Shell Nederland and Shell Belgium haddisputed a ruling by the Dutch environmentalauthorities (ILENT), which tried to force themto handle a parcel of diesel oil rejected by aBelgian client as waste, when Shell intendedto up-blend the fuel to specification for sellingon.

Carel van Lynden, an AKD partner, said,“This is a good decision for bunker suppliers.This case reverses the very strictinterpretation, which ILENT had placed onoff-spec bunkers. By insisting they wereclassed as waste, they invoked all sorts ofdomestic and EU regulations for their handlingwhich imposed disastrous and totallyunnecessary costs on the bunker industry.”

The EU court ruling will have a majorimpact in the key North European bunker hubof Rotterdam where a lower Dutch court andsubsequently ILENT had interpreted EURegulations (259/93), which describe ‘waste’as a substance, or object …which the holderdiscards or intends, or is required to discardliterally with respect to off-spec bunkers.

van Lynden said; “The problem is that whenoff-spec bunkers are defined as waste, all sortsof environmental regulations kick in. Forstorage, transportation, blending and recyclingof waste, prior permission from ILENT isrequired. Such permission will only be givento a licensed waste collector, or processor. Aregular bunker supplier cannot take thebunkers back unless it has such licenses,which of course it has not. So the value of theoff-spec bunkers to the supplier drops to niland extensive costs have to be incurred for de-bunkering and processing.”

This literal interpretation of EU waste

regulations has resulted in odd situations. Forexample, bunkers with an aluminium/siliconcontent of 82 (80 being the 2005 industrystandard), which were refused by a vesselcould only be de-bunkered by a licensed wastecollector.

Normal practiceThe normal practice in the Netherlands untilthen would be de-bunkering by the supplier,blending with a parcel with a loweraluminium/silicon content and resale on themarket. There has even been a case where theMaster of a vessel wanted to reject highsulphur fuel because low sulphur had beenordered, and where, for the mere reason thatthe Master wanted to discard the perfectlysound high sulphur fuel, it was qualified aswaste.

Wrong interpretationThe European Court came to the rescue ofsuppliers in December. In cases C-241/12 and242/12, the Court had ruled that such literalinterpretation is wrong. The case concernedcontamination of a parcel of ULSD withremnants of MTBE. As a consequence, theflashpoint became too high, and the ULSDwas therefore off spec.

This was discovered when the parcel hadbeen delivered to the buyer in Belgium. Thebuyer requested Shell to take the parcel back.Shell did that and re-transported the parcel tothe Netherlands for up-blending tospecification. ILENT found out and qualifiedthe parcel as waste.

In subsequent proceedings before theRotterdam Court, Shell argued that thequalification as waste was wrong becauseILENT was misinterpreting the EURegulations.

The Rotterdam Court asked the European

Court to give guidance. The European Courtruled that, in determining whether a substanceis waste, one should take into account whetherthat substance is still of use to the holder. Inthe Shell case the parcel had no use for theBelgian buyer, but that was not decisive: thebuyer handed the parcel back to Shell againstrepayment of the purchase price.

The buyer did not ‘discard’ the parcel in thesense of the Regulation, ie, a manner ofdiscarding, which is detrimental to theenvironment. The fact that the parcel retaineda considerable value was of importance. Shelltook the parcel back for the purpose of up-blending it to specification.

The European Court decided that the strictwaste legislation does not apply to cases likethis, where the parcel can easily bereconditioned and will be resold for aconsiderable value.

Bunker suppliersapplaud EU waste

decisionRecent guidance handed down by a European Court of Justice ruling saying that

off-spec fuel oil does not have to be handled as waste is a triumph of common sense, a leading law firm said.

AKD’s Carel van Lynden.

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COMMERCIAL OPERATIONS - COMMUNICATIONS

This follows an agreement tomulticast Jeppesen’s electronicchart database to its clients on aweekly basis. Jeppesen will use

position reports from KVH’s TracPhonesystem for its ‘pay-as-you-sail’ services.

Other services on the horizon includeweather and sea conditions services, includingchart updates; navigational chart updates;interactive training; voyage planning;equipment services and security threatupdates, plus the expansion of the company’salready growing media offering through lastyear’s purchase of Headland Media.

KVH is the market share leader in maritimeVSAT according to three independent industryreports by Euroconsult, Comsys, and NSRissued in 2012. KVH has installed nearly4,000 mini-VSAT Broadband systems onvessels worldwide since creating the mini-VSAT Broadband network and TracPhone V-series hardware in 2007.

In addition, KVH Media Group (formerlyHeadland Media) has an existing customerbase of 10,000 ships for licensed contentincluding newspapers, Hollywood films,television programs and maritime safety films.

Brent Bruun, executive vice president KVHMobile Broadband Group told TankerOperator that communications both onshoreand on board ship is increasingly importantand that the company was continuing todevelop this side of the business through mini-VSAT Broadband offerings.

He claimed that using mini-VSATBroadband was a more efficient way ofcommunicating as the antenna used wasnormally in the range of 30-60 cm, comparedto a 1-2.4 m antenna used with ku-band and c-band communications systems. In addition,systems such as Inmarsat’s GlobalXpress

usually requires two radomes to be fitted, oneas a back up.

Bruun said that the company had found thatthe priority among seafarers is the ability tomake a phone call, while their secondaryconcern was the ability to browse the internet.Crew morale was now very important and acontented crew gives shipowners/operators acompetitive edge over their rivals, he said.

Media purchaseThe purchase of Headland Media gave KVHaccess to licensed content for the maritimeindustry, including film, television, news,sports and newspapers.

Commercial maritime users are onlypermitted to use commercially licensedservices on board their vessels. KVH licensesdaily news from 27 newswire services andcreates 78 different publications in 17languages every day of the year. These can bedelivered in digital format for print, or display.The company also licenses content from all ofthe world’s major motion picture studios,major television networks, sports leagues likeFIFA and the English Premiere League and themajor music producers.

KVH uses its new service – IP-MobileCast– to deliver content. This can include largefiles, which are able to be directly transferredvia multi-casting technology to every vessel ina fleet, simultaneously. This multi-casttechnology is defined as from one to manycommunications over an IP networkinfrastructure and is available from all ofKVH’s hubs worldwide.

The company’s TracPhone V3-IP, V7-IP andV11-IP systems all include an IntegratedCommBox Modem (ICM) below decks unitthat is integrated with the IP-MobileCasttechnology. The IP-MobileCast content

delivery service will support the use ofsmartphones, laptops, tablets and TVs, as wellas deliver the media offerings, digital chartdownloads and detailed weather information.

The service is delivered automatically in thebackground over the top of mini-VSATBroadband networks and does not use theclient’s data plan and does not affect the onboard speed of communications, the companyclaimed. It can deliver terabytes of content peryear to a vessel through a separate datastream.An owner/operator will only pay for themovies and content as there is no charge forthe delivery.

It is available globally throughout the mini-VSAT Broadband network and enables largefiles, such as the entire ECDIS ENCworldwide chart system, to be deliveredautomatically. For example, with KVH’s


Leading mini-VSATBroadband supplierseeks new markets

Maritime communications network operator and hardware supplier KVH is planningfurther co-operative deals with software service suppliers to deliver applications over the

mini-VSAT Broadband service.

KVH’s Brent Bruun.

COMMERCIAL OPERATIONS - COMMUNICATIONS


partnership with Jeppesen, a 3GB chartdatabase can be delivered weekly.

The network is sized for peak capacity andthe IP-MobileCast only transmits downunused bandwidth.

For on board network management, KVHoffers the patented CommBox NetworkManager, which is a ship-to-shore networkmanager. CommBox has been fitted on around1,300 vessels as standalone hardware, and it isbuilt into all TracPhone V-IP series systems.

Other KVH hardware includes theTracPhone V7-IP, the newest version of theTracPhone V7, which was the first FCC-approved 24-inch VSAT antenna when it was

introduced in 2007. In addition, theTracPhone V3-IP is the world’s smallest andmost affordable maritime VSAT system. The14-inch antenna weighs just 25 pounds.

The TracPhone V11-IP uses a single,compact antenna to access both the C- andKu-band satellites of the mini-VSATBroadband network. The three-axis, gyro-stabilised antenna system is claimed to be theworld’s only dual-mode, 1.1 m (42.5-inch)diameter VSAT antenna.

It features KVH’s new IntegratedCommBox Modem (ICM), a streamlinedbelow decks unit that includes an IP-enabledantenna control unit, CommBox networkmanager, partner ViaSat’s ArcLight spreadspectrum modem, Voice over IP (VoIP),Ethernet switch and Wi-Fi capabilities.

PartnershipKVH uses spread spectrum technology fromits partner ViaSat to deliver reliable, high-speed Internet access to seagoing vessels overthe vast majority of the busiest shippingroutes. The mini-VSAT Broadband serviceoffers speeds similar to cable modems,enabling customers to connect to a virtualprivate network, send and receive email withattachments, make VoIP phone calls, browse

the internet and transfer large files, exactly thesame as from a land-based business office.

The network uses the patented ArcLightspread spectrum technology, which wasdeveloped by ViaSat, specifically for mobileuse. ArcLight is claimed to be unique due toits efficient reuse of satellite channels, fastspeed, low latency and its ability to supportvery small antennas that provide reliableservice, even in poor weather conditions.

KVH’s network operations centre (NOC)monitors domestic and international satellitenetworks with varying degrees of operationalsupport based on a customer’s individualneeds. NOC provides 24-hour-a-day, 7-day-a-week network monitoring Customer service.

Disaster recovery services and facilitiesmanagement are also available.

The mini-VSAT Broadband networkdelivered 370 terabytes of data and 23 millminutes of voice calls in 2013, with 99.5%uptime. The network utilises optimalcommercial satellite capacity provided byleading satellite operators, such as Intelsat,Eutelsat, Telesat, SES, and SKY Perfect JSAT.

An example of a recent shipowner contractcame in the shape of Singapore-based BW,which chose KVH’s mini-VSAT service for itsfleet of LNGCs and LPG carriers.

KVH’s latest offering - TracPhone V11-IP.

TO

modern global industry, distinctions betweenso called ‘traditional’ flags and ‘openregisters’ are increasingly meaningless andactually unhelpful. Illustrating this, the ICStable shows that flag states, such as Liberia,Bahamas and the Marshall Islands are amongthe very top performers alongside manyEuropean registers and Asian flags, such asJapan, Hong Kong and Singapore, that mightbe expected to perform very well.

In the same way that the shipping industryis committed to the concept of continuousimprovement and transparency with respect toits performance, through mechanisms, such asexternal auditing under the InternationalSafety Management (ISM) Code, ICSbelieved that the same principles apply to theperformance of flag administrations. ICStherefore reiterated its support for the decisionby IMO to make its Member State AuditScheme mandatory.

“ICS member national shipowners’associations will be looking at ways in whichwe might take account of this importantdevelopment in future updates of the table,”

SHIP REGISTRIES - FLAG STATES


ICS director external relations, SimonBennett explained: “The ICS table isintended to encourage shipowners tomaintain a dialogue with their flag

administrations to help bring about anyimprovements that might be necessary in theinterests of safety, the environment and decentworking conditions.”

Following the entry into force of the ILOMaritime Labour Convention (MLC) inAugust 2013, the latest ICS table requires flagstates to have ratified the ILO MLC in orderto receive a positive indicator.

“The level of ratification of this importantnew ILO Convention as of the end ofDecember is impressive,” Bennett said.“However, those flag states that have not yetratified the MLC but had previously ratifiedILO Convention 147, have now received anegative indicator on our table with respect toILO standards for the first time. But we hopeand expect this situation to change this year,as more and more flags finalise ratification ofthis core Convention before Port State Control(PSC) enforcement of the MLC begins inearnest this August.”

PSC recordsMinor changes have also been made with

respect to the way in which PSC data is

Flag states’performance

analysedThe International Chamber of Shipping (ICS) has published its latest Shipping IndustryFlag State Performance Table. This takes into account the MLC 2006 ratification, which

came into play last year.

ICS’ Simon Bennett.

recorded in the ICS table. Followingdiscussions with governments about thetreatment of flag states whose ships makerelatively few port calls in certain PSCregions, the ICS table now includes data onthose flags with fewer than the requirednumber of inspections/arrivals to be includedin PSC ‘white lists’ but which havenevertheless suffered no detentions within aparticular region during previous three years –consistent with the way in which regional PSCauthorities now publish this information.

ICS advised that the absence of a couple ofpositive indicators next to a flag in the tableshould not be seen as a serious concern. Theyare only potential indicators and a flag with asolid row of ‘green squares’ should notnecessarily be viewed as superior to anotherthat is missing one or two ‘green squares’, forwhich there may be good reason.

For example, a flag state may not haveratified a particular maritime convention dueto a conflict with its national law whilenevertheless implementing the convention’smain requirements.

“But if a flag is lacking a large number ofpositive indicators in the ICS table thenshipowners may want to ask seriousquestions,” Bennett explained.

ICS was keen to emphasise that in today’s

The level of ratification of this importantnew ILO Convention as of the end of

December is impressive..

“

”- Simon Bennett, Relations Director, ICS



Bennett said. With the exception of data for maritime

convention ratification, the ICS table usesinformation derived from the public domain,as at the end of June 2013, the Chamberexplained.

The purpose of this Flag State PerformanceTable is two-fold, the ICS explained: 1) To encourage shipowners and operators to

examine whether a flag state has sufficient substance before using it.

2) To encourage shipowners and operators to put pressure on their flag administrations toeffect any improvements that might be

necessary, especially in relation to safety oflife at sea, the protection of the marine

environment and the provision of decent working and living conditions for seafarers.

How to use the Table The table reproduced on pages 21-22summarises factual information in the publicdomain that might be helpful in assessing theperformance of flag states. Sources are shownin the footnote.

Positive performance indicators are shownas green squares on the table. Like allstatistics, the table needs to be used with care.

Where a flag state is missing, a single positiveindicator in itself does not provide a reliablemeasurement of performance. For example, aflag state might be unable to ratify aconvention, due to conflict with domestic lawbut might nevertheless implement its mainrequirements.

However, if a large number of positiveindicators are shown as being absent, thismight suggest that performance isunsatisfactory and that shipping companiesshould ask further questions of the flag stateconcerned.

Footnotes:PSC source: Paris MOU Annual Report 2012; Tokyo MOU AnnualReport 2012; USCG Qualship 21 Fully Qualified FlagAdministrations for 2013 and USCG Targeted Flag Administrationsfor 2013, USCG SC Annual Report 2012. Paris and Tokyo MOU data relate to their ‘black lists’ but not their‘grey lists’. Many flag states which are on neither the MOU ‘whitelist’ or ‘black list’ are included in the ‘grey list’. However, it shouldbe noted that flag states whose ships have been inspected less than30 times in the last three years do not appear in any of the MOUlists. This principle applies in both the Paris MOU and Tokyo MOUregions. The USCG methodology for evaluating PSC detention ratios (UCSGtarget list and Qualship 21) uses the detention ratio formula ofdetentions/distinct vessel arrivals, rather than detentions/inspectionsas used by the Paris and Tokyo MOUs. In order to be considered forQualship 21 status, a flag state’s ships must have made at least 10distinct arrivals per calendar year for the previous three years.The table now also identifies those flags whose ships suffered nodetentions within a particular PSC region over the previous threeyears, but did not meet the relevant minimum requirement ofinspections, or arrivals, to be included in the MOU whitelists/Qualship 21 programme. In order to be identified in this way with the respect to the Qualship21 programme, a flag must have made at least three distinct arrivalsin each of the previous three years. Some flag states may therefore not receive a positive indicatordespite having had zero detentions.There are various other regional and national PSC regimesworldwide, but in the interests of simplicity this performance tableonly uses data from the three principal regional PSC authorities.Ratification of Conventions Source: IMO report ‘Status ofConventions’, IMO website (www.imo.org), ILO website(www.ilo.org) (all as at 1st December, 2013). The criteria for the Conventions listed in the Table are:International Convention for the Safety of Life at Sea, 1974 asamended (SOLAS 74) - includes the 1988 Protocol.International Convention on Standards of Training, Certification andWatchkeeping for Seafarers, 1978 as amended (STCW 78) includingthe 2010 amendments which entered into force in January, 2012.International Convention for the Prevention of Pollution from Ships,1973 as modified by the Protocol of 1978 (MARPOL 73/78) - thetable includes one column for the ratification of MARPOL and itsmandatory Annexes I (oil) and II (bulk chemicals); and a second

column for the remaining Annexes III (dangerous packaged goods),IV (sewage), V (garbage) and VI (atmospheric pollution) which as ofJanuary, 2013 also covers CO2 reduction.International Convention on Load Lines, 1966 (LL 66) - includes the1988 Protocol.ILO Maritime Labour Convention, 2006 (ILO MLC) which enteredinto force in August 2013.International Convention on Civil Liability for Oil Pollution Damage,1992, and the International Convention on the Establishment of anInternational Fund for Compensation for Oil Pollution Damage, 1992(CLC/Fund 92) - includes the 1992 Protocols. Average Age Source: IHS Fairplay Ship Database (3rd quarter,2013).Second register ships are incorporated under main national register.Includes trading ships over 100 gt. Reports Source: Report of the ILO Committee of Experts on theApplication of Conventions and Recommendations 2013,www.ilo.org; various IMO MSC circulars.IMO Attendance Source: IMO Meeting Reports.The purpose of this Flag State Performance Table is two-fold: To encourage shipowners and operators to examine whether a flagstate has sufficient substance before using it. To encourage shipowners and operators to put pressure on their flagadministrations to effect any improvements that might be necessary,especially in relation to safety of life at sea, the protection of themarine environment, and the provision of decent working and livingconditions for seafarers.

How to use the Table It is worth repeating that this Table summarises factual informationin the public domain that might be helpful in assessing theperformance of flag states. Sources are shown above. Positive performance indicators are shown as green squares on theTable. Like all statistics, the Table needs to be used with care. Where a flagstate is missing a single positive indicator, in itself this does notprovide a reliable measurement of performance. For example, a flagstate might be unable to ratify a Convention due to conflict withdomestic law but might nevertheless implement its mainrequirements. However, if a large number of positive indicators are shown as beingabsent, this might suggest that performance is unsatisfactory and thatshipping companies should ask further questions of the flag stateconcerned. �

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GREEN SQUARES SUGGEST POSITIVE PERFORMANCE INDICATORS

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Albania � � � � � � � � � � � � � �N/S � � � �Algeria � � � � � � � � � � � � � � � � � �Antigua & Barbuda � � � � � � � � � � � � � � � � � �Argentina � � � � � � � � � � � � �N/S � � � �Australia � � � � � � � � � � � � � � � �Bahamas � � � � � � � � � � � � � � � � � �Bahrain � � � � � � � � � � � �N/S � � � �Bangladesh � � � � � � � � � � � � � � � � � �Barbados � � � � � � � � � � � � � � � � � �Belgium � � � � � � � � � � � � � � � � � �Belize � � � � � � � � � � � � � � � � �Bermuda * � � � � � � UK UK UK UK UK � UK � � UK UK UK

Bolivia � � � � � � � � � � � � � � � � � �Brazil � � � � � � � � � � � � � � � � �Bulgaria � � � � � � � � � � � � � � � � � �Cambodia � � � � � � � � � � � � � � � � � �Canada � � � � � � � � � � � � � � � � �Cayman Islands * � � � � � � UK UK UK UK UK � UK � � UK UK UK

Chile � � � � � � � � � � � � � � �China � � � � � � � � � � � � � � � � � �Colombia � � � � � � � � � � � � � � � � �Cook Islands � � � � � � � � � � � � � � � � �Costa Rica � � � � � � � � � � � � � � � � � �Cote d'Ivoire � � � � � � � � � � � � � �N/S � � � �Croatia � � � � � � � � � � � � � � � � � �Cuba � � � � � � � � � � � � � � � � � �Cyprus � � � � � � � � � � � � � � � � � �Dem. People's Rep. Korea � � � � � � � � � � � � � � � � � �Dem. Rep. of the Congo � � � � � � � � � � � � � �N/S � � � �Denmark � � � � � � � � � � � � � � � � � �Dominica � � � � � � � � � � � � � � � � � �Egypt � � � � � � � � � � � � � � � � � �Estonia � � � � � � � � � � � � � � � � � �Faroe Islands � � � � � � � � � � � � � � � � � �Finland � � � � � � � � � � � � � � � �France � � � � � � � � � � � � � � � � � �Georgia � � � � � � � � � � � � � � � � � �Germany � � � � � � � � � � � � � � � � � �Ghana � � � � � � � � � � � � � �N/S � � � �Gibraltar * � � � � � � UK UK UK UK UK UK UK � � UK UK UK

Greece � � � � � � � � � � � � � � � � � �Honduras � � � � � � � � � � � � � � � � � �Hong Kong (China) � � � � � � � � � � � � � � � � � �Iceland � � � � � � � � � � � �N/S � � � �India � � � � � � � � � � � � � � � � � �Indonesia � � � � � � � � � � � � � � � � �Iran � � � � � � � � � � � � � � � � �Ireland � � � � � � � � � � � � � � � � �Isle of Man * � � � � � � UK UK UK UK UK UK UK � � UK UK UK

Israel � � � � � � � � � � � � � � � �Italy � � � � � � � � � � � � � � � � � �Jamaica � � � � � � � � � � � � � � � � �Japan � � � � � � � � � � � � � � � � � �Jordan � � � � � � � � � � � � � � � �Kenya � � � � � � � � � � � � � �N/S � � � �Kuwait � � � � � � � � � � � � � � � � � �

UK – Indicates where a UK dependent territory’s entry is based on the ratification, reporting or IMO meeting attendance of the UK ‘mainland’ flag. – Indicates where a flag administration suffered no detentions within the particular PSC region for the period, but did not meet the relevant minimum requirement of

inspections/arrivals to be included in an MOU white list or the USCG Qualship 21 program.

Source: ICS.



GREEN SQUARES SUGGEST POSITIVE PERFORMANCE INDICATORS

* UK dependent territories

Port State Control Ratification of Conventions A739 age Reports IMO

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Latvia � � � � � � � � � � � � � � � � �Lebanon � � � � � � � � � � � � � � � � � �Liberia � � � � � � � � � � � � � � � � � �Libya � � � � � � � � � � � � � � � �Lithuania � � � � � � � � � � � � � � � � � �Luxembourg � � � � � � � � � � � � � � � � �Malaysia � � � � � � � � � � � � � � � � � �Malta � � � � � � � � � � � � � � � � � �Marshall Islands � � � � � � � � � � � � � � � � � �Mauritius � � � � � � � � � � � � � � � � �Mexico � � � � � � � � � � � � � � � � �Mongolia � � � � � � � � � � � � � � � � � �Morocco � � � � � � � � � � � � � � � � � �Myanmar � � � � � � � � � � � � �N/S � � � �Netherlands � � � � � � � � � � � � � � � � � �New Zealand � � � � � � � � � � � � � � � � �Nigeria � � � � � � � � � � � � � � � � �Norway � � � � � � � � � � � � � � � � � �Pakistan � � � � � � � � � � � � � � � �Panama � � � � � � � � � � � � � � � � � �Papua New Guinea � � � � � � � � � � � � � � � � � �Philippines � � � � � � � � � � � � � � � � � �Poland � � � � � � � � � � � � � � � � �Portugal � � � � � � � � � � � � � � � � � �Qatar � � � � � � � � � � � � � � � �Republic of Korea � � � � � � � � � � � � � � � � � �Republic of Moldova � � � � � � � � � � � � � � � � �Romania � � � � � � � � � � � � � � � � �Russian Federation � � � � � � � � � � � � � � � � � �St. Kitts & Nevis � � � � � � � � � � � � � � � � � �St. Vincent & Grenadines � � � � � � � � � � � � � � � � � �Sao Tome & Principe � � � � � � � � � � � � �N/S � � � �Saudi Arabia � � � � � � � � � � � � � � � � �Sierra Leone � � � � � � � � � � � � � � � � � �Singapore � � � � � � � � � � � � � � � � � �South Africa � � � � � � � � � � � � � � � � �Spain � � � � � � � � � � � � � � � �Sri Lanka � � � � � � � � � � � � � � � � �Sweden � � � � � � � � � � � � � � � � � �Switzerland � � � � � � � � � � � � � � � � � �Syrian Arab Republic � � � � � � � � � � � � � � � � �Thailand � � � � � � � � � � � � � � � � � �Tonga � � � � � � � � � � � � � �N/S � � � �Trinidad & Tobago � � � � � � � � � � � � � � � � � �Tunisia � � � � � � � � � � � � � � � � �Turkey � � � � � � � � � � � � � � � � � �Tuvalu � � � � � � � � � � � � � � � � � �Ukraine � � � � � � � � � � � � � � � � �United Arab Emirates � � � � � � � � � � � � � � � � �United Kingdom � � � � � � � � � � � � � � � � � �United States of America � � � � N/A N/A � � � � � � � � � � � �Uruguay � � � � � � � � � � � � � �N/S � � � �Vanuatu � � � � � � � � � � � � � � � � � �Venezuela � � � � � � � � � � � � � � � � � �Viet Nam � � � � � � � � � � � � � � � � �

�N/S – No data submitted to IMO - can be regarded as negative indicator.N/A – Data not applicable - US not eligible for Qualship 21 or USCG target listing.

Source: ICS.



As mentioned by the ICS in theprevious article, the IMOAssembly adopted key resolutionsand amendments relating to theorganisation’s mandatory auditscheme.This effectively paved the way for the schemeto come into effect by 2016, once amendmentsto mandatory instruments have entered intoforce.

The Assembly met from 25th November to4th December last year for its 28th bi-ennialsession.

The IMO said that the mandatory auditscheme is seen as a key tool for assessingmember states’ performance in meeting theirobligations and responsibilities as flag, portand coastal states under the relevant IMOtreaties and then offering the necessaryassistance, where required, for them to meettheir obligations fully and effectively.

At the meeting, the Assembly adopted theIMO instruments implementation code (IIICode), which provides a global standard toenable states to meet their obligations as flag,port and/or coastal states; the framework andprocedures for the IMO Member State AuditScheme; the 2013 non-exhaustive list ofobligations under instruments relevant to theIII Code; and a resolution on transitionalarrangements from the voluntary to themandatory scheme.

The Assembly also adopted amendments tothe International Convention on Load Lines,1966; the International Convention onTonnage Measurement of Ships, 1969; and theConvention on the International Regulationsfor Preventing Collisions at Sea, 1972, as

amended, to make the use of the III Codemandatory in auditing member states todetermine how they give full and completeeffect to the provisions of those conventions towhich they are party.

Following this, the IMO is expected toadopt similar draft amendments this year(which have already been approved by theMaritime Safety Committee (MSC) and theMarine Environment Protection Committee(MEPC)) to the International Convention forthe Safety of Life at Sea, 1974, as amended;the Protocol of 1988 relating to theInternational Convention on Load Lines, 1966;the International Convention on Standards ofTraining, Certification and Watchkeeping forSeafarers, 1978, as amended; and Annexes I toVI to the International Convention for thePrevention of Pollution from Ships, 1973, asmodified by the Protocol of 1978 relatingthereto, and its 1997 Protocol, as amended.

The adoption of the various amendmentsand their entry into force will form the basisfor an institutionalised audit scheme, the IMOexplained. .

The Assembly also adopted a number ofresolutions submitted by the various IMOCommittees and by the Council’s 27thExtraordinary Session. The topics covered bysuch resolutions include: � Prevention and suppression of piracy,

armed robbery against ships and illicit maritime activity in the Gulf of Guinea;

� Guidelines on the preservation and collection of evidence following an allegation of a serious crime having taken place on board a ship or following a report of a missing person from a ship, and

pastoral and medical care of persons affected;

� Revised guidelines on the implementation of the International Safety Management (ISM) Code by Administrations;

� Revised guidelines for a structure of an integrated system of contingency planning for shipboard emergencies;

� Guidelines to assist investigators in the implementation of the Casualty Investigation Code;

� Fair treatment of crew members in respect of shore leave and access to shore-side facilities;

� Application of the International Conventionfor the Control and Management of Ships’ Ballast Water and Sediments, 2004;

� Implementation of the Convention on Facilitation of International Maritime Traffic (FAL);

� Amendments to the survey guidelines under the Harmonized System of Survey and Certification (HSSC);

� Guidelines for the designation of special areas under MARPOL;

� Amendments to the International Convention on Load Lines, 1966 (1966 LL Convention), to shift the Winter Seasonal Zone off the southern tip of Africa further southward by 50 miles;

� Recommendation on the use of adequately qualified deepsea pilots in the North Sea, English Channel and Skagerrak; and in the Baltic Sea;

� Recommendation on the use of national tonnage in applying international conventions.

IMO’s mandatory audit scheme comes closer

Sub-Committee on Ship Design and Construction (SDC)

Sub-Committee on Pollution Prevention and Response (PPR)

Sub-Committee on Human Element, Training and Watchkeeping (HTW)

Sub-Committee on Ship Systems and Equipment (SSE)

Marine Environment Protection Committee (MEPC)

Legal Committee (LEG)

Maritime Safety Committee (MSC)

Technical Co-operaton Committee (TCC)

Council

Sub-Committee on Safety of Navigation, Communication and Search and Rescue (NCSR)

Sub-Committee on Implementation of IMO Instruments (III)

Sub-Committee on Carriage of Cargoes and Containers (CCC)

Facilitation Committee (FAL)

Marine Environment Protection Committee (MEPC)

36th Consultative Meeting of Contracting Parties (London Convention 1972)

and 9th Meeting of Contracting Parties (London Protocol 1996)

Maritime Safety Committee (MSC)

Council

IMO meetings planned for 2014 Dates

20/01/2014 24/01/2014

03/02/2014 07/02/2014

17/02/2014 21/02/2014

10/03/2014 14/03/2014

31/03/2014 04/04/2014

28/04/2014 02/05/2014

14/05/2014 23/05/2014

11/06/2014 13/06/2014

16/06/2014 20/06/2014

30/06/2014 04/07/2014

14/07/2014 18/07/2014

08/09/2014 12/09/2014

22/09/2014 26/09/2014

13/10/2014 17/10/2014

17/11/2014 21/11/2014

03/11/2014 07/11/2014

01/12/2014 05/12/2014

TO

INDUSTRY – ANTI-PIRACY

BIMCO points outinadequacies insecurity issues

Shipping continues to be exposed to many security threats, including contraband, peopleand weapons smuggling, narcotics, terrorist attacks and piracy.


The freedom of use of the seas isenshrined in the United NationsConvention on the Law of the Sea(UNCLOS), which is a

prerequisite for shipping to effectively, reliablyand cost efficiently perform its role in thesupply chain.

A somewhat firmer application of UNCLOSby certain governments would be desirablewhen it comes to security and safety at sea,BIMCO said in an article in Reflections.

As a consequence of this lack ofapplication, the industry itself has had toidentify security risks and perform appropriatevoyage risk assessments. This requires soundintelligence and risk analysis before cargoesmove and making efficient use of the limitedenforcement resources that exist. By liaisingand communicating with all stakeholders on aregular and well co-ordinated basis, threatscan be identified and responded to effectivelyand in a timely manner, BIMCO said.

The dynamic piracy situation will likelycontinue and will remain at the top ofBIMCO’s list of security priorities. As attackshave tailed off in the Gulf of Aden where therehave been no successful attacks reported sinceMay 2012, work on land to resolve the causeof the problem continues. However, theorganisation stressed that there is no room forcomplacency. “The situation at sea remainsreversible if we lower our guard and at leastfor now, piracy continues to be a real threat,”it said.

Issues such as the forming of InternationalCode of Conduct for Private Security ServiceProviders (ICOC) with the potentialimplications for GUARDCON and thecontinued successful implementation of ISOstandard ISO PAS 28007, as well as the debateon High Risk Areas (HRA), have thrown upnew complexities.

The Gulf of Guinea (GoG) attacks are acompletely different issue and cannot be

compared with Somali pirate activities. Here,the attacks take place in territorial waters andare much more violent and life-threatening forseafarers. They usually involve the theft ofhydrocarbons from a vessel, which hasbecome a lucrative business, although therehave been more recent cases of seafarers beingheld for ransom.

At present, a coalition of stakeholders,including GoG sub-region member states,defence representatives, plus representativesfrom the energy and transport sectors, arereviewing all aspects of law and enforcementactivity to provide the strategic andoperational means to ensure a sustainable andlong term security solution for this area.

BIMCO said that its efforts during the pastfive years in global maritime security has beenaimed at supporting and endorsing suchinitiatives as the ISPS Code, the Customs andTrade Partnership Against Terrorism and forpiracy matters, the Contact Group on Piracyoff the Coast of Somalia (CGPCS). Theseinitiatives have helped to introduce a degree oftransparency to what was a highly opaquesecurity domain.

However on the negative side theseprogrammes as they are currently configuredsuffer from three critical shortfalls –

Limited in scope- largely directed atstrengthening the security ‘wall’ aroundcommercial seaborne traffic, paying littleattention to contingencies not involvingcontainer shipping.

With particular reference to the ISPS Code,there is still no definitive means of effectivelyauditing how well measures are beingimplemented by participating states, or togauge their utility in terms of docksidesecurity – a growing issue for shipowners andmanagers.

Limited in functional ability – particularlythe CGPS, which has no authority and hasbeen unable to change the conditions that

create piracy off Somalia. There are at least four major contributions

that the shipping industry could make to bettersafeguard the global maritime map and whereBIMCO has a major role to play. These are -

Help to further expand the emerging regimeof post 9/11 maritime security by not justbeing involved but proactively contributing toit. These controls and procedures should notbe seen as just an overhead but as a way toreduce risk and protect the bottom line.BIMCO’s ShipMaster’s Security Manual(SMSM) provides information on how thisshould be achieved.

The main driver of bi-lateral and multi-lateral maritime security collaboration has tobe the effective implementation of riskmanagement and mitigators necessary toreduce risk to an acceptable level. Conductingregular and rigorous threat assessments on a24/7 basis helps to protect trade. In addition,probably through the IMO – we need to pushfor better standards of port security byinsisting on standards, such as the ISO 28000series, being applied.

Leveraging the closer military liaisonsresulting from the past few years of co-operation and planning undertaken with naviesin forums, such as SHADE (shared awarenessand deconfliction), which should be cementedby establishing permanent and regular contactsin order to play a more effective and inclusiverole in countering maritime threats.

Continuing to stress the importance ofsecurity of maritime trade to the globaleconomy. For example, the Indian Ocean seesmuch of the world’s energy requirementsbeing shipped. This sea lane is crucial to beglobal economy yet there still seems to be anambivalent attitude towards this and othermaritime strategic choke points, which ifclosed, would significantly affect the world’seconomy. TO



What are the lessonslearned?

The International Chamber of Shipping (ICS) has published a paper on the shippingindustry’s experience of Somali-based piracy from 2007 to 2013.

“The intention is to identify lessonslearned in order to shape future policyresponses, wherever in the world theymight be needed,” explained ICS

secretary general, Peter Hinchliffe. At the time of writing, the number of

successful attacks against ships by Somalipirates had reached a five-year low. While theexact reason for the reduction in Somaliattacks is unclear, the combined success of themilitary forces, the use of the Industry’s BestManagement Practices (BMP), plus theincreased deployment of private armed guards,would all appear to be important factors. Thepolitical situation in Somalia itself has alsoevolved.

However, it is premature to conclude thatthe crisis is over, that shipowners should inany way adjust their practices outsidecompliance with the BMP, or thatgovernments should reduce current levels ofmilitary protection to shipping.

Moreover, a parallel crisis, involvingdisturbing levels of violence against seafarers,is now developing in West Africa, to whichrecent experience derived in the Indian Oceanis already proving useful - although in manyrespects the situation that prevails in the Gulfof Guinea is very different.

The ICS said that the significant challengesthat the shipping industry has faced inresponding to the crisis in the Indian Oceancould be summarised as follows: � Getting the initial attention of governments

and making them appreciate the scale of the crisis, plus demonstrating that isolated incidents were escalating into a situation that threatened the safety of thousands of ships and seafarers, with the result that a vast and strategically vital area of the Indian Ocean, including major trade lanes, had become a virtual ‘no go’ area to merchant shipping;

� Getting the attention of mainstream news media, and then maintaining it throughout the course of a crisis that has so far lasted for five years;

� Clarifying the rights and obligations of sovereign states to address piracy

(complicated by the breakdown of a functioning state in Somalia);

� Engaging with military authorities, and persuading them that the prevention of piracy/hostage taking has a most important strategic and humanitarian function that should not be dismissed as mere ‘low level’law enforcement and fostering understanding that protection against attacks was a shared responsibility in whichboth the military and the industry had to play their part;

� Developing and disseminating appropriate and acceptable BMP recommendations on preventative measures to be taken by shipping companies, ships and crews;

� Maintaining constant pressure on shipping companies and ships to sustain BMP compliance at the highest possible level;

� Responding to the legal and practical challenges associated with the capture and prosecution of piracy suspects;

� Responding to the legal and practical challenges created by the employment of private armed guards;

� Responding to the humanitarian challenge of thousands of seafarers being left traumatised by the experience of being heldhostage for several months, or years, prior to release;

� Addressing the legal and moral dilemma created by the necessity for shipping companies and their insurers to make ransom payments;

� Addressing the challenges of promoting capacity building onshore and the reconstruction of civil society;

� Seeking to address the crisis in an appropriate but proportionate manner that recognised that it was likely to continue forseveral years, while avoiding a situation in which the threat presented by pirates was regarded as ‘normal’, or that some of the necessarily extreme measures adopted, such as the use of armed guards, did not become institutionalised.

Obtaining the necessary and appropriatelevel of military protection requires very high

level political engagement (ie, from seniorpoliticians in foreign affairs and defencedepartments, as well transport ministries) at anearly stage.

Notwithstanding the existence of clearinternational law with respect to theobligations of governments to respond topiracy as defined by UNCLOS, specificcircumstances, such as operations in theterritorial waters of coastal states, or responsesto attacks from bases ashore - as well as theorganisation of multilateral military protection- may require high level internationalagreement and the adoption of several andvery specific diplomatic resolutions by the UNSecurity Council.

The ICS suggested that the reportedincidents of piracy, or hostage taking, shouldremain a standing item for discussion betweentransport/shipping and foreign/defenceministries in order to establish an earlywarning mechanism should future situationsdevelop.

Early warningOn the diplomatic front, it is vital to bring anyemerging problems to the UNSecurityCouncil, as soon as possible,particularly with the assistance of those ICSmember national associations whosegovernment holds a seat on the Security

ICS head Peter Hinchliffe.



Council, as well as via the offices of the IMOsecretary general.

In order to monitor future worldwideincidents, it is important that the industrycontinues to support independent sources ofmonitoring of incidents and trends, especiallythe ICC International Maritime Bureau (IMB)which, together with industry associationssuch as ICS, was among the first to identifythe pattern of increasing Somali-based attacks.

Regional counter-piracy initiatives are alsovital and ReCAAP was held up as an example.

Shipping companies must also continue tobe encouraged to submit incident reports toIMB, as well as flag states and, whererelevant, coastal states, as required by IMOguidance. This is equally important duringperiods when the number of such incidents isrelatively low, the ICS said

Media problemsEnsuring high level political engagement alsorequires the generation of high level mediainterest among mainstream national mediaoutlets.

One of the challenges faced by the shippingindustry, which was highlighted by the crisis,is that in many nations shipping lacks a largepolitical constituency. Moreover, the majorityof seafarers that are victims of attacks arelikely to come from nations that are differentto that of the nationality of the ship- both theflag state and beneficial ownership nation.This makes media coverage by nationalmainstream press a matter of crucialimportance.

Rights and obligations While the fundamental rights and obligationsto address piracy, as defined by UNCLOS,remain unchanged, the crisis has demonstratedthe need for greater clarity over theinterpretation of current international law andgreater endeavours by nations to take theselaws into their domestic legislation.

The Contact Group on Piracy off the Coastof Somalia (Working Group 2) has developeda ‘lexicon’ of interpretation and clarification oflaws around piracy and its counter measures.

However, this might benefit from furtherwork, perhaps under the auspices of a body,such as the Comité Maritime International(CMI) - the international association ofmaritime lawyers, which might also be taskedwith compiling and tracking developmentsunder flag state legislation with respect to suchissues as the legality of using armed guards,the regulation of private security companiesand implementation of rules for the use offorce There is a need to clearly differentiate

between piracy and terrorism and to take thisinto account in deciding how to respond.

Engaging with the military The structures that have been put in place tofacilitate co-operation between military forces of the many different countries thathave provided protection to merchant shipping are very impressive, as are themechanisms that have been established to liaise with the shipping industry. However,they have understandably taken time to evolve.

It is therefore most important for industryorganisations, when calling for action, todistinguish between the military and theirpolitical masters, especially in view of the realdangers to which military personnel have toexpose themselves in order to protectshipping. It should also be recognised that,regardless of the level of military protectionthat might be available, ship operators alwayshave a responsibility to protect themselves.

In the future, military structures that haveevolved to deal with the current crisis will nodoubt be wound down and replaced with newones. However, it will be important to ensurethat military partners maintain some kind ofmechanism, whereby continuous informationexchange can occur on threats presented bypiracy, in order that a means of co-ordinatedaction can again be readily re-established ifneeded.

BMP maintenance The widespread use of BMP in the Gulf ofAden and the off the Coast of Somalia,developed by industry with advice from themilitary, was a major achievement consideringthat the distribution and adoption was on avoluntary and non-statutory basis.

Ownership of the BMP by the industry wasone of its greatest features and an enabler inresponding quickly when changes wereneeded. While adherence by ships to the latestversion - BMP4 - will continue to be vital inthe immediate future, a time will hopefullycome when some of the requirements can berelaxed.

However, BMP4 and any subsequentrevisions, should be maintained as a resourcethat can be adapted to address futuresituations, if needed. For example, BMP4 hasalready been used as the model to produceInterim Guidelines for Owners, Operators andMasters for Protection against Piracy in theGulf of Guinea.

Armed guards useFrom an initial position of strong opposition to

the use of private armed guards (as opposed tomilitary or police personnel), the severity ofthe situation led to a reluctant but widespreadacceptance of their use. However, the industrysees their deployment as an exceptionalresponse and neither normal, nor permanentand a number of legal issues remain withrespect to their use on ships of many flags,especially in the event that someone wasinjured, or killed. Nevertheless, in the eventthat a similar situation were to arise elsewhere,it is likely that armed guards may be seen bysome as part of the response.

Given these circumstances, it is importantfor the international community to finalise thedevelopment of Rules for the Use of Force(RUF) by the International Organisation forStandardisation (ISO), alongside the new ISOstandards for the regulation of PrivateMaritime Security Companies (PMSCs),which were adopted in 2012 and subsequentlywelcomed by IMO.

Further work is still needed with respect to auniform approach by flag states and coastalstates towards the legality of the use of privatearmed guards. Regardless of the prevailing, orfuture level of threat from piracy and theambivalent attitude of many shipowners withrespect to the use of armed guards, it issuggested that flag states should finaliseoutstanding work and policies on these issues,the ICS said.

It is also of the utmost importance thatcoastal States fully comply with UNCLOS,

especially regarding the presence of privatearms guards within their EEZ, provided thatarms are secured within territorial waters andports.

Ransom payments The payment of ransoms to pirates andcriminal gangs to secure the release ofseafarers has been a controversial issue.However, it will be important for governmentsto continue to recognise the necessity for suchpayments by the shipping industry, as they arethe only means to secure the release ofseafarers held hostage.

The ICS stressed that ransom paymentremains an element of the company’s duty ofcare and of the humanitarian response insupport of those unwittingly caught up in actsof piracy and is a factor in reducing what canotherwise be protracted periods in captivity.

The core lesson of responding to illegalityrobustly and without delay will be more easilydelivered next time if these basic lessons are kept readily to hand, the ICS reportconcluded. TO

TECHNOLOGY FOCUS


Much has changed since AlfaLaval launched its fuelconditioning module (FCM) in2001.*Today, booster systems must deal with morefuel parameters than ever before, whileproviding the same safety and even greaterenergy efficiency. As a result, last year AlfaLaval’s launched the FCM One.

Booster systems adjust fuel to the flow rate,pressure and viscosity specified by enginemanufacturers. When Alfa Laval launched theoriginal FCM, it provided a compact andflexible way of securing these targets.

On show at December’s Marintec Chinaexpo, the new FCM One is similar at a glanceto its predecessor. Behind the familiarappearance, however, lies a great deal ofchange. “The FCM One combines thestrengths of the original FCM with newadvantages and a completely new level offlexibility,” said Paolo Golla, Alfa Laval’sFCM product manager.

What sets the FCM One apart, claimed AlfaLaval, is the ability to integrate heatingfunctions, cooling functions and more into thesame module, driven by the same controller. Inits standard version, the FCM One filters thefuel and regulates its viscosity, pressure andflow. However, for vessels working withmultiple fuels, blended fuels, or moreadvanced requirements, a broad range ofadditional functions can be integrated into thesystem.

“Whatever the configuration, the FCM Oneis a single module with a compact design anda simple touchscreen interface,” said Golla.“Though the FCM One meets different needswithout under- or over-delivering, it’s verymuch one system – with one frame, one logicand one-point access to any function.”

The FCM One’s unified approach is both acontrast and an answer to the diverse needs ofthe market, the company claimed. When theoriginal FCM was launched, HFO was thenatural choice and energy efficiency was notan issue for most. But with today’s emissionslegislation and high fuel prices, most vesselshave at least two fuels on board and seriousconcerns about energy consumption.

Though scrubbers allow the continued useof HFO, other fuels may be needed whendischarge limits cannot be met and theresiduals cannot be stored on board. Moreover,fuel suppliers have suggested that access tocertain fuels may be limited in the future. Thiscreated a need for options, which became thefocus of FCM One’s development.

With its multiple configurations, this systemgives ship operators the flexibility to workwith any fuel available. Likewise, it comprisesspecific options for improving energyefficiency, the company said.

Dealing with multiple fuels on board isharder than it sounds for a traditional booster.Temperature shocks and low viscosity at theengine inlet are typical booster failings.Likewise, a traditional booster offers noindication of which fuel is in use whenentering an ECA.

Because engine protection and efficiencydepend on the correct temperature andviscosity of the fuel, effective control of fuelparameters is critical. But during fuelchangeover, the viscosity of lighter fuels isnotoriously hard to maintain. Even creating asmooth and controlled temperature transitioncan be difficult, especially when unpredictableseas, or unforeseen operating conditions, forcea change in engine load.

Single systemSince 2009, Alfa Laval has offered theAdvanced Cooling System (ACS) to drive thechangeover between HFO and distillates. ButAlfa Laval claimed that there are significantadvantages in the FCM One’s ability tointegrate cooling functions with heatingfunctions and support for multiple fuels.Having all this in a single system not onlysaves space and installation problems, but alsoallows greater efficiency in process control.

The new system handles automaticchangeover with a single controller and aunified algorithm, which takes into account itsinternal volume. This means excellentviscosity control, resulting in smooth and

continuous ramping at any engine load. “Theviscosity is kept in a tight range as thetemperature changes,” Golla explained. “Sincethere are no viscosity fluctuations to triggeralarms and slow down the process, the resultis a shorter changeover where less expensivedistillate is consumed.”In addition to switching between fuels, todaymany vessels are meeting sulphur emissionstargets by blending their own fuels on board.This process can also be integrated into theFCM One, which then calculates and mixesthe ideal blend. “This makes it easier to createan economical match for ECA requirements,”said Golla, who emphasised that the systemalso manages the changeover to and from theblend.

Using the defined fuels available on board,FCM One determines the blend as a new fuelbased on the given sulphur target, along withthe changeover procedure from the fuelcurrently in use. All that remains for theoperator is a manual check of fuelcompatibility, which is prompted by thesystem and must be confirmed before thechangeover begins.

No matter which fuels or blends are used, itcan provide everything needed to demonstratecompliance with MARPOL regulations, AlfaLaval claimed. Among the options included isan electronic fuel record book, whichsimplifies interaction with the relevantauthorities.

This option makes documentation easier byrecording fuel and changeover parameters,together with a time stamp and GPS data. Theinformation can then be printed, or exporteddigitally in a secure, read-only format.

Of course, emissions compliance is not the

Fuel conditioning challenges answered

Alfa Laval’s recently launched FCM One system.

TECHNOLOGY FOCUS


only concern when it comes to fuelmanagement. Shipowners and operators arealso looking for energy efficiency, which is yetanother area covered by the FCM One.

It arrives quickly at target values withoutspikes, or oscillation. “Quickly zeroing in onthe correct values has always been an FCMstrength,” said Golla. “In the FCM One, thenew algorithm makes the process even faster,which means faster arrival at the bestparameters for engine efficiency.”

In addition, it offers options to furtherreduce energy consumption. One option isVFD-based control of the fuel supply pumps,which enables a direct reduction byminimising their energy use when slowsteaming.

Equally important is the possibility ofindirect savings, which can be achievedthrough engine-specific fuel consumptionmonitoring.

This is a feature that has long beenrequested by shipowners and operators. While

not related to the engine’s efficiency per se, itquickly indicates when engine efficiencylosses occur, which allows immediate action tobe taken.

Until now, this obvious benefit has beendifficult to achieve. Even fuel mass flowmeters are influenced by the pulsation ofpressure created in the pipework by the fuelinjection system, which causes a slightbackwards and forwards movement of thefuel. This movement affects measurement,since some fuel passes through themeasurement device with each pulsation.

In the FCM One, this difficulty has finallybeen overcome, the company claimed. Theinjection system’s pulsations are taken intoaccount, which allows an accuratemeasurement of the flow through the engine.It is thus possible to detect increasing fuelconsumption at an early stage, giving the shipoperator accurate control over the vessel’sprimary cost.

For Niclas Dahl, Alfa Laval market manager

marine energy, the energy aspects of the FCMOne are among the most exciting. “Engineefficiency improves when the booster reachestarget values quickly, which the FCM Onedoes even better than its predecessor,” he said.“But the pump control and engine-specificmonitoring of fuel consumption createopportunities to optimise energy efficiencyelsewhere.”

As Dahl sees it, these options allow astronger integration of the fuel line that canprove as valuable as the integration of thebooster module itself. And in this way, thenew FCM One fulfils two key Alfa Lavalgoals. “On the one hand, the FCM One lets usadapt to growing diversity in fuel handlingrequirements - but just as importantly, it’s akey step in creating a more adaptive andefficient fuel line,” he said.

*This article was submitted by Alfa Laval.

Fleet operators are well-acquainted with the use ofAutomatic Identification System(AIS). They may be less aware,however, that shore-side usershave also been taking advantageof AIS in recent years to enhancea wide variety of businessactivities.* These AIS shoreside benefits range frommarket intelligence and process optimisationto training, compliance and customer service.Now, AIS is moving into yet another potentialrole - aids to navigation (ATON).

ATON typically refers to physical elementsincluding lighthouses, buoys and beacons.However, the concept can also extend to usingAIS data to create a ‘virtual ATON’. By usingAIS as a virtual ATON, an authority cantransmit navigation information where nophysical ATON exists.

This is possible because AIS provides theability to send addressed messages to aspecific bridge. These messages are addressedto the unique MMSID assigned to the vessel’sAIS transponder. AIS safety-related messagescan also be broadcast to all vessels that arewithin range of the broadcast base station.

The International Association of MarineAids to Navigation and Lighthouse Authorities(IALA) has addressed the subject of virtualATONs in its 2011 publication entitled - TheUse of the Automatic Identification System(AIS) in Marine Aids to Navigation Services.

IALA recommended that those providers ofmarine aids to navigation services should useappropriate AIS units as part of their marineaid to navigation services. It wasrecommended that these AIS units be used for1) the provision of information and data toshipping and, 2) monitoring and controlpurposes.

The authority also recommended that virtualAIS ATON be used where a physicalinstallation is technically, or operationallydifficult and to enable timely marking of newfixed, or dynamic hazards.

Although AIS-based virtual ATONs are asomewhat new concept, they have alreadybeen used in several applications within USwaters. These include broadcasting weatherand sea state information and notifyingmariners regarding area whale migrationactivity.

Another application, which is beingexplored in the Gulf of Mexico, involves theuse of AIS as a virtual ATON to alert vesselsthat may be slowing, or anchoring, in pipelineareas. These fixed underwater assets can bedamaged by anchors and direct vessel impacts,especially in shallow water where thepipelines are most densely distributed.

An AIS-based virtual ATON network cancreate virtual pipeline markers and provide asystem for warning approaching vessels. AIS-addressed messages can be sent directly to thevessels’ bridges, warning them not to dropanchor and sent to a vessel’s owner.

The use of AIS-based virtual ATONnetworks and warning systems can also beparticularly important in areas where there arechanging coastal conditions, due to erosionand other factors.

Its numerous benefits include eliminatingthe costs and deployment requirements ofphysical buoys and other monitoring devices.In addition by using AIS base stations, thesecan extend an area an ATON may serve –often more than 50 sq miles per station. Plus,since the AIS base station is typicallydeployed in a fixed location on land, or anoffshore platform, they are typically lessexpensive to acquire and maintain than aphysical ATON. The only requirement is thatseafarers have the minimum equipmentconfiguration.

There is another important benefit of AISdata in virtual ATON applications - the abilityto access historical playback data related tovessel movements in selected areas. Today’sAIS-based vessel-tracking systems providereal-time information about every commercialvessel in an area, as well as up to five years ofhistorical data.

This data is often used in a forensic capacityto identify responsible parties after anincident, investigate the causes of theseincidents and prepare cases for compensatorydamage claims.

*This article was written by Jason Tieman,director of maritime operations, PortVision.

Creating virtual aids to navigation (ATONs)

TO

TO

TECHNOLOGY - SHIP DESCRIPTION


Explaining the reason for fitting thenew engine, the Danish tankerowner said that its goal was tooffer vessels with considerable

lower fuel consumptions than comparableproduct tankers.

NORDEN’s director newbuilding SørenWestergaard, explained; ”We are talking abouta semi-electronically controlled engine. Itexcels in having the same very low specific oilconsumption in the entire operational spectreas the fully electronically controlled engine.But at the same time, it is a more simpleconstruction, which is easier and cheaper tomaintain.

“In addition, the engine has been designedwith a very low rotation speed, which,together with a propeller with a largerdiameter than usual, results in significantefficiency improvement,” he said.

The two new product tankers are underconstruction at Guangzhou ShipyardInternational (GSI) in China, a yard whichNORDEN has used since 2002. Including thetwo new vessels, the yard has delivered a totalof 15 product tankers to the company –

including the eight vessels named after HansChristian Andersen characters, which weredelivered in 2006-2009.

The length of the two new vessels will be183 m and the width - 31 m. They will berelatively beamy but will have a

NORDEN’s two newbuilding ECO Handysize product tankers – Nord Geranium andNord Gardenia - are to be fitted with MAN Diesel & Turbo 6SME-B9.3 type engines.*

* Aalborg Boiler and Toftejorg** Damcos*** Svanehoj

Source: NORDEN

Danish Equipment Suppliers

Alfa Laval Atlas Incinerator Danfoss Danish Crane Deif Emerson Hempel Logstor MAN Diesel & Turbo Nordhavn Novenco Scanvent Viking Wartsila

Boilers and tank cleaning equipment*Incinerators

Frequency controlsE/R crane

Power management systemsValve remote control system, tank gauging**

CoatingsPre-insulated pipes

Main enginesEmergency generator

HVAC, fans, water mist systemP/V valves

liferaftsCargo pumps***

NORDEN opts fornew engines



shallowerdraft when loaded. The cargocarrying capacity will be 40,000 tonnes each.

The idea of improved fuel economy hasbeen incorporated in the entire design andconstruction phase, as not only are the newlydeveloped main engines, which significantlyimprove fuel consumption, installed, but also avery thorough optimisation of the vessel’s hulllines, an aerodynamic navigation bridge andaccommodation, as well as an optimised andhighly efficient propeller will be fitted.

”For many similar newbuildings, it is todayvery popular to equip the hulls with energysaving devices. But for the two new GSI

vessels, theoptimisation of thehull lines has been soefficient that it wouldonly have resulted in amarginal efficiencyimprovement if wehad equipped thevessels with, forexample, a MewisDuct – ie a nozzle infront of the propeller -which contributes tooptimised propulsionby leading the watermore optimallytowards the propeller,”said Westergaard.

He furtherexplained to TankerOperator that theshipyard haddeveloped the hulllines. The possiblefitting of energysaving devices on theship hull was closelydiscussed andevaluated betweenshipyard, shipownerand energy savingdevice supplier. Thepossible benefits of

fitting an energy saving device were –due to the fine hull lines – finallyfound to be marginal and hence notinstalled.

The propeller to be fitted on eachvessel is of a large diameter and slow-turning design - the diameter beingoptimised within the given designconstraints (ie, ballast, draft, etc).

Initially there was competitionbetween the various propeller designs.NORDEN opted for a propellerdesigned by Stone Marine andmanufactured by Dalian MarinePropeller.

Technology leaderNORDEN has said that its ambitionwas to be in the lead in technology.Therefore, Westergaard said that hewas very pleased that the companywill be one of the world’s firstshipping concerns to receive a vesselwith the newly developed mainengine.

”This has only been possible

A look through the base frame of the newly developed main engine on Nord Geranium before thecrankshaft was installed. Photo: machinery supervisor Per Vestergaard from NORDEN’s site office atthe GSI shipyard.

NORDEN’s SSren Westergaard.



thanks to the close dialogue and close co-operation between NORDEN and MANDiesel & Turbo at Teglholmen in the SouthHarbour of Copenhagen – more or less justaround the corner from NORDEN.

“Through the efforts of a lot of people, wesucceeded in completing the last constructiondrawings for the new main engine right ondeadline from the yard,” Westergaardexplained.

The Nord Geranium and Nord Gardeniawill not only be fitted with equipment from anumber of Danish sub-contractors, but alsofrom many other Nordic sub-contractors.

Length, oa…………………............183 m

Length, bp………………….........178.5 m

Beam…………………………....…..31 m

Depth……………………………......16 m

Draught, design…………...........…..9.5 m

Draught, scantling……….............10.95 m

Deaweight…………………40,000 tonnes

Main engine…………..MAN 6SME-B9.3

Principal Particulars- NordGeranium, Nord Gardenia

”The Danish sub-contractors are in fiercecompetition with especially suppliers from theFar East. It is pleasant to see that they arecompetitive in terms of both quality and price.

“All things being equal, we get added valuefrom choosing Danish, or Nordic suppliers, asit is easier for us to keep in close contact withthem and more quickly get updates on newdevelopments and new regulations. We canalso more quickly receive notice of possiblearising problems when the equipment isinstalled at the yard,” Westergaard concluded.

An illustration of the scale of Danishmanufacturers’ involvement in the supply of

equipment to the two vessels can be seen fromthe table on page 29.

*Sections of this article were taken from thelatest edition of NORDEN News and indiscussions with Søren Westergaard.

In addition, the engine has been designedwith a very low rotation speed,

which,together with a propeller with alarger diameter than usual, results insignificant efficiency improvement.

“

Søren Westergaard, Director, Norden ”

TO



General arrangement drawings ofNORDEN's new eco tanker pair.

The Kestrel Fishers followed hersister vessel King Fisher, whichwas delivered in June 2013. Bothwere built by Damen Shipyards,

Bergum. James Fisher Everard has assumedtheir commercial management, as their namessuggest.

The 7,076 dwt, 8,363 cu m cargo capacitytankers were christened at the DSB-yard inHarlingen where they were outfitted. Theirhulls were built by Damen Shipyards Galati,Romania.

Both vessels will mainly carry gasoline,diesel oil, lubrication oil and jet fuels alongthe UK, the Continent and in Scandinavianand Baltic waters. Whereas the company willoperate the two new tankers on an openmanagement basis, James Fisher previouslyhad two of its own tankers built by DamenShipyards Bergum, the Shannon Fisher andSolway Fisher, delivered in 2006. With thefleet of oil tankers ranging from 3,000 to14,000 dwt, the company is a full serviceprovider to the oil industry.

King Fisher and Kestrel Fisher represent thelatest newbuildings in the patented ‘DamenDouble Hull Oil Tanker 8000’ design series.The figure 8000 represents the 8,363 cu mcargo carrying capacity.

“We design oil tankers up to 15,000 dwt,which are then constructed at a yard in theDamen Shipyards Group,” Erik Schultz,director sales with Damen Shipyards Bergumexplained.

Schultz oversees all cargo vesselnewbuilding contracts within the Group,irrespective of which yard will actuallyconstruct the vessels, or where.

“It is a Damen product, with the contractingand co-ordination done from our offices in theNetherlands. Equally, engineering and designof most, if not all cargo vessels, isconcentrated at the DSBe head office inBergum, be this dry cargo, gas or oil tankers,or otherwise. This way we can assure thequality and the performance of the vessels at atrue ‘Built in Europe’ grade,” he said.

“Given the nature of their operation,

maximum safety must be observed,” Schultzsaid. “The vessels therefore feature powertake-in, whereby the diesel generator sets willimmediately power the shaft generator –mounted on the gearbox – should the mainengine fail. Furthermore, much of thegenerated heat is captured by heat exchangersto be redeployed for heavy fuel oil pre-heating, or other use.”

Superior accommodationAnother feature that Schultz emphasised, isabove-standard outfitting of accommodation.“In view of the extra strain an oil producttanker’s crew has to take, De Opfaert, thevessels’ technical and crewing management,has opted for a very high level of comfort.

Aimed at securing better crew satisfactionand consequently performance, they havespecifically made additional investment in theso-called ‘Damen Business Line’. Akin to themotor cars, such a package includes lowestinterior noise levels, finer colouring, interiordesign and materials, for a better and morepleasant working environment. A joy to the

crew, and to the dedicated shipyard workersrespectively,” he said.

Both Lloyd’s Register classed vessels are of104.52 m in length, overall, with a 17 mmoulded beam and are fitted with 10 epoxycoated cargo tanks, allowing for fivesegregations. The accommodation caters for acomplement of 10 plus one guest. Theirservice speed is about 12.5 knots.

Fixed tank cleaning systems and 10 electricdriven deepwell pumps are fitted in the tanks,while the midships manifold has threecrossovers for loading/discharging threegrades simultaneously, There is also a forwardmanifold fitted on each vessel capable ofhandling two grades simulatenously.

The vessels’ main propulsion unit is anMaK 8M25C type diesel engine developing2,640 kW at 750 rev/min. This drives a 3,850mm controllable pitch propeller and thevessels are fitted with 400 kW electric motordriven bow thruster with a fixed pitchpropeller. The trials speed on a summer draftat 90% mcr was 12.3 knots.



Two coastal tankersfrom Damen

At the end of last year, the second of two Damen Double Hull Oil Tanker 8000 types wasdelivered to Dutch shipmanager De Opfeart Beheer.

Class- LRS *100 A1, Double Hull Oil Tanker, ESP, *LMC, UMS, IP, LI,SCM, NAV1, spec gr 1,025 t/m3, settings PV +14kPa/-3.5 kPa, IMO II.

Length, oa……………………………………………………....104.52 mLength, bp……………………………………………………......99.92 mBeam, moulded………………………………………………….......17 mDepth.…………………………………………………………........9.30 mDraft, ballast…………………………………………………….....3.80 mDraft, summer…………………………………………………......6.30 mDeadweight……………………………………………………......7,076 tGross tonnage……………………………………………………....4,631CapacitiesCargo tanks x 10……………………………………………..8,363 cu mHFO……………………………………………………………...258 cu mMDO……………………………………………………………....43 cu mLuboil……………………………………………………………...21 cu mBallast water…………………………………………………..3,330 cu mSlop tanks x 2…………………………………………………..172 cu mMain machinery1 x MaK type 8M25C…………………………….2,650 kW @ 750 rpm

Principal Particulars

TO



��

Above is the second of the two Damen tankers, while below are the general arrangement drawings.

January/February 2014 � TANKEROperator . 35

A complete guide toSTS operations

Last December, Witherby Publishing introduced the Ship to Ship Transfer Guide forPetroleum, Chemicals and Liquefied Gases.*

This comprehensive guide was co-authored by the ChemicalDistribution Institute (CDI),International Chamber of Shipping

(ICS), OCIMF and SIGTTO, the lattercovering the gas sector.

This guide differs from the previousvolumes in that it includes all types of tankers,plus gas carriers and thus supersedes all theother guides published by Witherby on thesubject.

This completely updated guide supports theMARPOL amendments introduced on 1stJanuary, 2011. It looks at a wide range ofvessel types, including barge operations andreverse type ship-to-ship transfers in which asmaller laden vessel comes alongside a largership to transfer her cargo.

It also addresses STS operations involvingvessels at anchor, underway, alongside jetties,or lying at buoys and has also been expandedto include in port transfers for the first time,which may involve multiple vessel transfers,especially in the case of chemical tankers.

The publisher stressed that the requirementsof MARPOL Annex 1, Chapter 8, should beadhered to for all operations involving oil

cargoes. For other cargoes, such as LPG, orLNG, the requirements should be followed asa matter of best practice.

The guide starts with a description of thegeneral principles involved in an STSoperation, including the need for a thoroughrisk assessment on the location beingconsidered together with the operation itself.

There should be one person in control of anoperation – the so called ‘person in overalladvisory control’ (POAC) – who will either beone of the Masters involved, an STSsuperintendent, or the POAC, depending onthe cargo to be transferred. A POAC ismandatory in the cases of MARPOL Annex 1cargo transfers. The guide points out that theappointment of a POAC will not jeopardisethe Master’s authority, as he, or she, willremain in control of the ship at all times.

Each component of the operation should bethoroughly discussed by the Masters involved,the STS superintendent, or PAOC, beforestarting an STS transfer. These discussionsare usually centred around fendering,manoeuvring, mooring hose connection, cargotransfer, hose disconnection, unmooring andunfendering, as applicable.

Other principles listed includemanning levels to overcome thepossibility of fatigue, the role of anSTS superintendent and a PAOC, plusthe training and familiarisation neededfor the ships’ crews. Security is alsodiscussed regarding one vessel, plusmultiple vessels.

Next is a section on conditions andrequirements. This includes the compatibilityof the vessels to conduct an STS operation,especially the problems associated with anoperation involving vessels of a similar length,where for example, the bridge wings could betouching. The use of dumb barges is alsodiscussed in this section.

The notification to and approval from therelevant authorities is covered for MARPOLAnnex 1 cargoes, chemical cargoes and othercargoes. The transfer areas needed are alsodiscussed, especially if the operation requiresthat both vessels remain underway. Here, alarger area will be needed than say an STStransfer while at anchor.

Weather and sea conditions in the transferarea also need to be taken into account, asdoes an operation in cold climates and in iceconditions. Inclement weather and currentscan also lead to tank sloshing, which shouldbe avoided, as this motion could damage thecargo tanks.

Service companiesThere are several service companies offeringSTS operations’ management and personnel. Avessel owner, or operator, should undergo aquality assurance to assess their competencebefore hiring service companies to undertakean STS operation. Service providers canundertake a self-assessment scheme to ensuretheir suitability for the task and tocontinuously improve their operation.

In Section 3 of the 160-page guide, which

TECHNOLOGY - SHIP-TO-SHIP TRANSFERS

Possible final approach manoeuvre at sea. Mooring plan for multi-vessel chemical transfers.



also contains a CD, safety is the theme. Riskassessments should be carried out on theproposed location and the STS operation to beundertaken. Personal protective equipmentand life saving appliances are discussed as isthe use of checklists, which are considered tobe of great importance. Material data sheetsshould be kept for the products beingtransferred.

There maybe cases of gas accumulation onthe open decks during a transfer and anyinfringement of safety requires action, as doesany cargo leakage. Helicopter operations arealso discussed.

Finally, in this section, about three pages aretaken up by different safety aspects to look out

for during cargo transfer operations. A separate chapter covers communications,

including language use, pre-arrivalinformation, navigational warnings, duringmanoeuvring and cargo transfer operations,plus the procedures in the event of acommunications failure. Then comesoperational preparations including the jointplan, vessel preparation, the use of lighteringsupport vessels and navigational signals.

Manoeuvring and mooring merits its ownsection in the guide covering comingalongside at sea while both vessels areunderway, at anchor and an underway cargotransfer. Paragraphs deal with manoeuvringwhile one vessels it anchor, in port operations,

while one vessel is alongside a terminaland the mooring operation itself indifferent operations and circumstances.

Alongside proceduresSection 7 deals with procedures to beadopted while alongside, includingresponsibility, planning and generalguidance on cargo transfers. Followingthe completion of a cargo transfer,operational procedures are outlined andfinally, when taking on bunkers and/orstores, which is not recommendedduring an STS operation.

The next section deals withunmooring starting with preparationsand going on to procedures during anunmooring operation.

This book is well illustrated withpictures of actual STS operations,vessels coming together and diagramsof various procedures to be adopted.This is particularly true of themanoeuvring, mooring and unmooringsections.

Equipment is well covered, notably

the fenders to be used for different transferlocations. This includes a quick tabular guideto fender selection for a standard STS transferoperation. Cargo transfer hoses are examined,including standards, length, pressure ratingand flow velocities, handling, connection,inspection and testing, plus marking.

Also covered in this section is mooringequipment, personnel transfers at sea and inport, including the suitability of the liftingequipment on board ship and deck lighting.

Section 10 covers emergencies, includingcontingency planning and emergency responseprocedures. Examples of emergencies aregiven. For example, the guide says that thegreatest risk of pollution occurs during astandard cargo transfer, which maybeundertaken far from land out of range of portservices.

In this case, a contingency plan within theShipboard Oil Pollution Emergency Plan(SOPEP), Shipboard Marine PollutionEmergency Plan (SMPEP), or Vessel ResponsePlan (VRP) to cover such as risk should beavailable and activated, if necessary.

The vessel (s) should be at a state ofreadiness for an emergency and all transferoperations should cease as a precautionarymeasure if a hazardous situation develops.

These individual sections are followed by acomprehensive list of appendices, some ofwhich go deeper into the themes mentioned inthe main sections of the guide. The appendicesinclude operational and safety checklistsexamples, both for at sea and in port cargotransfers and for personnel transfer operations.

*Ship to Ship Transfer Guide for Petroleum,Chemicals and Liquefied Gases is availablefrom Witherby Publishing, ISBN9781856095945, price £225, seewww.witherbys.com

Tankers having the same length throw up their own set of problems.



STS clearancestandardisation

needed Clearance requests addressed to shipowners on nominated vessels is standard practice

from charterers when they plan ship-to-ship transfer (STS) operations.*

This practice ensures thatshipowners can decide on thesuitability of nominated vesselsand revert with their consent or

rejection. Such clearance requests need to bediligently treated by tanker operators, justifiedon facts and procedures, since this provides alevel of assurance on the compliance of thenominated vessel(s).

Verification of nominated vessels caninclude a wide range of criteria, such as themooring arrangement and general vesselcharacteristics; however, vessel suitability canalso be assessed through statutory status,classification records, insurance cover and pastthe past records of the tanker operator andcrew experience.

The level of due diligence that a tankeroperator has to exercise during clearance ofnominated vessels is subjective and has notbeen specified. It depends on expertise,established STS policies and the availability ofhis/her resources to do so.

Liability concerns, have unreasonably ledsome tanker operators to request numerousdocuments and/or certificates, in an attempt to‘screen’ nominated vessels.

This lack of consistency confuses charterers,since the different requirements from tankeroperators complicate the fixing of vessels. Theexistence of established ‘STS ClearancePolicies’, together with standardisation of the‘Operational STS Policies’ from tankeroperators, provides a solution towardsaccelerating the clearance process, which willreduce the work load of the staff ashore whileprotecting their interests and reputation.

The due diligence for each tanker operatoris subjective and depends on the practicablepossible standards that are determined byeither: � Statutory requirements1; � Terms of insurance covers;

� Industry andcommercial criteria; � Provisions ofcharterparty2.

The standards areexplicitly determined bythese requirements.However, each operator,or STS stakeholderdecides and implements alevel of compliance, asshown at Figure 1.

Such level ofcompliance reflects theanticipated statutory andcontractual conformity,risk exposure andreputation of theshipowner.

Tanker operators thatadopt prudent procedureson STS safety issues fortheir shipowners, such asthose described by theonlineSTS.net service ofDYNAMARINe3,provide a level ofassurance of undertaking in due diligence.

Fulfill requirementsThey fulfill the statutory and industryrequirements and furthermore, support theinterests of shipowners, charterers and cargoowners. Clients of onlineSTS.net service have a proof of their track record thatstrengthens their reputation and performance.

Figure 1 note - Resources, as shown at y-axis consist on experience, expertise andincurred costs, availability of information andshore personnel. The bars represent sets ofadopted actions (policies).

Tanker operators’ liability when providingclearance to their charterer rests with the factthat they have accepted the suitability of thenominated vessel(s) for STS transfer, on thebasis of presented documentary data.

According to most charterparty STS clauses,the final approval, prior to the undertaking ofan actual operation, rests with the Master whosupervises the operation and also bares fullresponsibility of compliance with safety.

Commercial complications can arise, shoulda Master decline a vessel for an STS transfer,once this had been previously cleared by thevessel’s operator. The Master will have topresent a strong case that is associated with

Figure 1: The level of due diligence exercised by tanker operators.



safety issues, which were not evident duringthe operator’s clearance inspection.

Safe conduct of STS operations requiresproper planning and prudent risk managementfrom the operators. The shipowner and hisMaster need to have confidence in thecompetence of the service provider that hasbeen assigned by the charterer, or the cargoowner.

The Achilles heel in STS operations is thefact that there is no direct contractualcommitment between the involved parties; ie,both vessels and the service provider.

As the contract is between the partiesinvolved and the charterer(s), the only toolthat provides assurance for safety is thejustified exercise of due diligence. In thisrespect the onlineSTS.net service ofDYNAMARINe provides such turnkeysolutions for all STS participants, it wasclaimed.

Contractual commitmentThe majority of STS transfers take placeaccording to the OCIMF/ICS/SIGTTOguidelines. This is a contractual commitmentbetween the charterer and shipowner, as wellas between the charterer and the serviceprovider. Thus, the charterer is the STSstakeholder that provides the assurance thatthe STS transfer will take place in accordancewith the current STS guidelines. Shipownersand service providers have to comply;however shipowners are the only ones thatprovide the assurance on the basis of safety.For this reason, the charterer has to exercisedue diligence to the best possible extenttowards the selection of the service provider.

STS transfer operations are in theforeground, with the new STS guidelinespublished late last year (see Page 35) byWitherby with help from the CDI, OCIMF,

ICS and SIGTTO. These new STS guidelinesare a consolidated edition and include oil,chemical and gas carriers involved in STSoperations and embody the regulations of newMARPOL chapter 8 of Annex 1 that wasimplemented on 1st April, 2012.

Practical differencesThere are practical, as well as other importantdifferences in the new guidelines and theyhave to be dealt with due care by tankeroperators. The existing STS plans, alreadyapproved by the flag administrations before1st April 2012, may not have to be amendedbut should be comprehensively reviewed inthe light of the new guidelines since almost allcharter party STS clauses5 make reference tothe ‘Latest STS industry guidelines’.

Although STS transfer operations haveproven to be safe operations, shipowners,tanker operators and other STS stakeholdersshould not rest only on the reputation level ofthe involved parties.

The number of STS operations hasincreased more than 1,000% since 2001 andthe probability of a serious accident withevident damages to the environment, the shipsand hence to the reputation of involvedparties, is high.

Tanker operators endeavour to adopt STSpolicies at a level, which is comprehensive totheir shore operators and simultaneouslyattractive to their commercial profile.

However, they should consider having theirprocedures in-line and above the best possiblepractical standards as determined by the up-to-date requirements, in order to support theirreputation and exposure.

Continuous, justified and prudent exerciseof due diligence from STS stakeholders is theonly key towards maintaining high standardlevels and onlineSTS.net service of

DYNAMARINe aims towards this, thecompany stressed.

Footnotes: 1. IMO Manual on oil Pollution, Section 1. 2.

Latest OCIMF/ICS/SIGTTO STS Guidelines.

3. www.onlinests.net 4. Regulation 42 of MARPOL Annex I

Chapter 8.5. Various charterparty STS clauses, such as

BPTIME3 or SHELL TIME 4, refer to the latest OCIMF/ICS STS edition.

*This article was written by theOnlineSTS.net team

Due diligence is required at all stages of anSTS operation.

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The second International Forum forSTS 2013 (IFSTS) included thefollowing topics-

� Due diligence actions during vessel nominations.

� Tanker operator liabilities. � Technical support and advice to Master. � Risk estimation and mitigation measures. � Good practices and case studies on STS

incidents. � Vetting and auditing Issues. � Assessment of STS operations. � Record keeping, evaluation of records and

KPIs. � The OSIS concept of OnlineSTS.net.

Lloyd’s Register’s Panayiotis Mitrou gave aninsight into the new STS Guide from a classand a recognised organisation point of view.

He said that the drivers behind the new STSguidelines development are numerous andhave mostly to do with a better clarification onnebulous issues from the previous guidelines.

New STS guidelines have been issued andunder this, an STS plan could refer to the oldguidelines. However, some charterparties referto the latest guidelines, thus amendments onthe STS plans should be considered.Discrepancies between statutory andcommercial requirements may be experienced.“Alignment of the STS plan with the newguidelines would seem prudent until thismatter is clarified,” he said.

The new guidelines key points are: Shipsshall be provided with arrangements,equipment and fittings of sufficient safeworking load to enable the safe conduct of alltowing and mooring operations associatedwith the normal operation of the ship.

There are new requirements for lifting

appliances/ personnel, cargo gear, or liftingequipment.

A thorough assessment needs to beconducted to confirm the suitability of ships.The ship compatibility criteria includesmooring arrangements, the qualified trainingof personnel and the adequate number ofassigned personnel for controlling the transferoperation, closed chocks, enough mooringlines, etc. Further, a mooring analysis isessential to support the risk assessment of atransfer location modelling the range of shipsizes that will be conducting the STSoperations.

Nicos Attos of the Greek Department ofMerchant Marine gave a summary of theproposed framework for safer STS operationsfrom a coastal state prospective.

He said that coastal states consider oilpollution as the major potential risk, whichmay severely damage the marine environment.

The most likely risks and major hazards thatpotentially lead to oil spill during STS aremother/daughter vessel collision, third partycollision, groundings, fire, or explosion, non-accidental structural failure and loss ofwatertight integrity.

Adopting an appropriate national regulatoryframework ascertains that ships and thirdparties involved in STS comply with therelevant safety and pollution preventionstandards and that the risks are managed in amore effective manner. By coastal states therehas to be a national oil spill preparedness andresponse capacity, designated STS areas,mandatory reporting of ship accidents duringSTS and associated incidents, shipboard oilspill preparedness and response capacity,evaluation and licensing of STS third partyservice providers, monitoring and control ofSTS involved ships, STS data and statistics.

During Port State Control inspections, theareas questioned involve the following: Propercertification, review and assessment of theSTS records, which have to be kept on board,STS operations plan and other relevantdocumentation (OCIMF/manuals).

Martin Haines of Clyde & Co addressedthe regulations and legal issues.

He reminded the delegates that the Ship toShip Transfer Guide recommended that thePOAC will be either one of the Masters of thevessels concerned in the oil transfer, or an STSsuperintendent, lightering co-ordinator, ormooring Master employed by an STS resourceprovider.

The Lloyd’s Register (LR) model STS planproposes that the cargo owners, or the tankers’operators should agree and designate/appointthe POAC for each and every transfer.

Regulation 41 requires that the POAC ‘shallbe qualified to perform all relevant duties,taking into account the qualificationscontained in the best practice guidelines forSTS operations identified by the organisation’- namely the OCIMF Guidelines 4th Edition.Regulation 41 appears to be absolute withrespect to the word ‘shall’ have the necessaryqualifications, or the regulation is breached, hewarned.

The STS risk can be minimised by clearcharterparty clauses stating responsibilitiesbetween the contractual parties, an agreementon the STS operator, an agreement that theSTS operation which will be in accordancewith ICS/OCIMF STS Transfer Guide andfinally an agreement on who should be thedesignated POAC.

Regarding the Falconera case and the courtdecision, the owners unreasonably withheldtheir approval of the two nominated VLCCsand were in breach of the charter, because

STS Piraeus forumdiscusses operational

problemsDYNAMARINe organised a one-day STS workshop in Piraeus on 3rd December last

year, following the success of the first forum held a year earlier – a third is planned for this year.



owners’ right of approval was limited tonominated vessel and NOT the STS operationitself. In another claim with the charterers dueto an STS collision, the owners lost the claimbecause they did not succeed to demonstrate asufficient lack of care in relation to theappointment.

Fendercare Marine’s Neil Wilson gave anoverview of his company’s practice.

He said that Fendercare follows OCIMFguidelines to safely conduct STS operations.Documentation produced for operations are inaccordance with the company’s STSOperations Manual, industry guidelines andcustomer requirements.

Information reviewed prior to acommencement of any STS operation is therelative size of vessels, freeboard information,provision of closed chocks for mooring,mooring ropes, wires and winches (mooringarrangements), chocks and bitts for securingfenders, manifold arrangements/reducers, hosehandling equipment and certification andinsurances.

Concerning the vessel compatibility, keypoints that are checked is the relative size ofvessels, freeboard information, provision ofclosed chocks for mooring and other technicalaspects.

The STS process in general is as follows: 1) Mooring Master arrives at the base. 2) Thoroughly checks condition of the STS

equipment. 3) Mooring Master organises the loading of

the equipment onto the support craft and proceeds to rendezvous location.

4) Mooring Master begins rigging of fenders to manoeuvring vessel and lands hoses.

5) Mooring Master boards the manoeuvring vessel via personnel basket, or rope ladder, depending on customer requirements and the pre-planning and bridge team meeting commences.

Ricardo Jimenez of Bernhard Schulte ShipManagement, Cyprus then gave a tankeroperator’s prospective.

STS is not a normal operation and thisdepends on many parameters, he said.

The fact that Master and crew do not alwayshave sufficient experience is an importantfactor. There is a limited availability ofsimulators for training on STS operations,there are limited resources available when inopen seas, there are coastal states’ limitationsand other commercial issues associated withthe lack of scrupulous and fair play, exposureand control by oil majors (vettings), PSC,class,, etc.

SIRE questions related to STS operationsare related the existence of an approved STSplan, whether there are sufficient closedfairleads and mooring bitts, whether the STStransfer check lists are completed and whetheroperations are conducted in accordance withthe recommendations of the OCIMF/ ICS STSTransfer guidelines.

Documentation such as HVPQ and Q88 canprovide a lot of data prior to commencing anySTS operation, but these are not alwaysaccurate. Other important documents are IOPPform B (for verification of an STS plan onboard), P&I entry certificate, class statussurvey and Equasis.

Vessel performanceSTS vessel performance is subjective and doesnot only depend on physical characteristics,such as the age of the vessel, or whether shehas a single hull. Vessel performance isimportant and can be retrieved with theassistance of the OSIS database.

As far as ship compatibility is concerned,this can only be checked through propersoftware. Regarding the POAC, there is notmuch control and technical operators are notusually consulted. Other issues, which are not

well defined to the technical operators, are thefender selection, the hosing qualifications andhow to deal with letters of Indemnity, whichare issued by service providers.

Finally DYNAMARINe’s Alex Glykas andStelios Perissakis addressed legislation andowners’ liabilities.

The principal concern in STS operations isthe third party performance and liability,policies and procedures, proactive examinationand record keeping.

The facts in STS operations are that theoperation is at the Master’s discretion andfinal approval, it has to take place according toOCIMF guidelines and should always beaccording to an approved STS plan. Some ofthe constraints are the commercial interests,environmental protection and safety and thatthere is a time constraint for the decisionmaking process.

Another major issue is that the partiesinvolved in the STS operations do not haveany contractual agreement among themselves.This adds more complexity to the wholeprocedure.

Regarding the issue of who should designatethe POAC, it is DYNAMARINe’s opinion thatthe POAC and service provider need to bedesignated by the organisation that has thecontractual commitment with the provider.

Furthermore, tanker operators need toestablish policies regarding the STS operationsand the clearance process, which can be basedon age hull, validation of certificates, PSCperformance, STS performance history, etc.

This clearance could be simply based on thefollowing documents - updated Q88, a recentclass status report, a P&I entry certificate andIOPP form B, or STS plan approval.

A proper due diligence during the clearingphase is very important in order to protectowners liabilities and reduce the risk duringany STS operations, they concluded. TO


TECHNOLOGY - COATINGS

With this in mind, PPG hasrecently launched SIGMAECOFLEET 690 coating, anantifouling product designed

to deliver excellent self-polishing antifoulingfor extremely hostile fouling conditions.Ideally suited to the economic challenges ofthe maintenance and repair market, the coatingprovides outstanding fouling control forservice periods of up to 60 months, thecompany claimed.

According to Sijmen Visser, globalmarketing Manager M&R, PPG Protective andMarine Coatings, the SIGMA ECOFLEET 690antifouling delivers proven, reliableperformance in highly aggressive conditionson a wide range of vessel types includingtankers and is also applicable for slowsteaming vessels.

Visser said: “Because it is easy to apply athigh-film builds, the SIGMA ECOFLEET 690antifouling increases productivity and along

with extended fouling control periods, reducesoverall maintenance costs. Pipe-laying vesselsin particular suffer from intense foulingpressures resulting from the operational profileat low speeds. Such vessels require specificantifouling formulations that can cope with themost destructive fouling levels.”

Allseas Group recently chose SIGMAECOFLEET 690 antifouling for its vesselAllseas Solitaire, which is the world’s largestpipe-laying vessel, capable of installinghundreds of kilometres of pipeline in a singleyear, achieving pipe-laying speeds in excess of9 km (5.6 miles) per day.

Visser said that the decision by Allseas wasbased on that fact that the product offers anumber of clear advantages over similarantifoulings in terms of its effectiveness as afaster polishing coating.

He said: “The SIGMA ECOFLEET 690coating produces constant, high-activityantifouling performance for vessels such as the

Solitaire and is both resilient and reliable andable to cope with the most intense foulingconditions.

“In the case of the Solitaire, the entireunderwater hull was coated with the SIGMAECOFLEET 690 product, which deliveredsuperb fouling-free performance with extendedfouling control periods, resulting in reducedmaintenance and greater profitability.

“Allseas can now be confident that theSolitaire has one of the market’s leadingsolutions for combating fouling species,wherever in the world it operates,” he said.

Indeed, such has been the success of PPG’snew product that it has become the antifoulingof choice for coastal- and low-activity vesselsand now sets the industry standard for high-film build with 70% volume solids, thecompany said.

Copper-free offeringIn addition, the company announced lastDecember that it had introduced the latestcoating in the copper-free SIGMA NEXEONantifouling range, which was designed toprovide superior fouling protection and meetfuture environmental standards.

PPG claimed to be the first coatingsmanufacturer to successfully develop andmarket a range of copper-free antifoulings forcommercial vessels to help customers stayahead of future regulation. The SIGMANEXEON range was developed based onextensive research and testing at PPG’s ownfacilities, as well as third party studies.

Visser explained; “At PPG, we areconstantly looking for ways to anticipate andevaluate the impact of future trends andlegislation. Regulations around the use ofcopper in antifoulings are the ones to watchand, as a result, we have decided to offer nowthe option to our customers to prepare for thisfuture scenario.”

In this range, SIGMA NEXEON 710 is theantifouling solution for operational vessels andcan be applied during construction and also atdrydockings. For newbuildings whereoutfitting takes longer than six months, a high

PPG launches newantifoulings

The marine industry faces a range of constantly changing commercial and environmental challenges.

Vessel coated with copper-free SIGMA NEXEON.



activity copper-free topcoat antifouling,SIGMA NEXEON 750 is specified.

Both products combine self-polishing zinc-acrylate binder technology with highperformance to help protect ships during the

newbuilding process and while in service.A benefit of this copper-free antifouling is

its property of ‘smoothness from start’.Thanks to the absence of copper, the levellingand smoothness right after application is

significantly improved, delivering better fuelefficiency from the start, the companyclaimed.

Third party testing with leading universitiesand test institutes in South Korea and Japanhas confirmed the properties and performanceof the antifouling series. From these studies,PPG classified SIGMA NEXEON as a ‘lowfriction antifouling’.

CosmeticAnother benefit claimed is the excellentcosmetic appearance - thanks to the absence ofcopper, there is no so called ‘whitening’ effect.

Visser said: “For prolonged outfittingperiods, common for newbuilding FPSOs, drillships and offshore structures and also forshorter outfitting periods of generalcommercial ships, there is an increasingdemand for vessels to look good at deliveryboth above and below the water line. SIGMANEXEON 710 and 750 are ideal as initial andfinishing coats to keep vessel hulls clean underwater while providing a brand new cosmeticfinish above the water line.”

Allseas Solitaire was coated with SIGMA ECOFLEET 690.

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With environmental regulationsand fuel economy dominatingthe shipping press headlines,any mention of efficiency and

hull coatings is normally reserved for eco-efficiency technology; improving in-transitoperational efficiencies, reducing fuelconsumption as well as associated emissions.

However, fully optimising real success insustainability and efficiency generation isbased on looking at every opportunity withinthe supply chain to improve performance.

For tanker companies, improvingefficiencies and simplifying the carriage ofliquid cargoes, be it innocuous materials, suchas vegetable oils, to more sensitive andpotentially harmful substances, such asethylene dichloride and caustic soda, can makea significant difference in optimising vesselearnings potential.

For example, deepsea parcel tankers spendabout one third of each voyage in port loadingand unloading cargoes. Being able to switcheasily from one cargo to the next with minimal

downtime and tank cleaning, is a prerequisitein driving competitive advantage, as well asreducing port time and calling costs.

Coatings for tanks can therefore make asignificant difference. However, cleaningstandards have become far tougher and morestringent and methanol washing, historicallythe most effective tank cleaning method, hasbeen largely banned.

The most commonly used type of coating onmild steel tanks is epoxy phenolic, whichprovides broad cargo carriage capability butcan absorb and retain certain cargoes. This cancreate a difficult cleaning challenge to removeany absorbed cargo and thus minimise the riskof contaminating subsequent cargoes. Arecovery period may also be required. All ofthis can incur expense for a ship operator interms of time and money.

The next most common type are zincsilicate coatings, which provide resistance tosolvents and pure chemicals but are limited intheir use due to an inability to resist acids andalkalis. The rough surface of zinc silicatecoatings can also be difficult to clean, againcosting time and money.

In addition, costs of on board cleaning aresignificant. For example, bunkers for hotwater could mean a tank cleaning operationalone could add over $100,000 to operatingexpenses for one full vessel clean - and thisdoesn’t take into account manpower, costs ofcleaning materials or downtime which caneasily be in excess of 10 days.

To meet this challenge and after muchinvestment in research and development,International Paint launched the patentedInterline 9001 in 2011, a new bimodal epoxycoating for chemical tankers’ cargo tanks.

Interline 9001 is a chemically resistant tankcoating based on a special combination of lowand high molecular weight polymers creating a

Optimising vesselearnings in tank

coatingsTanker company MH Simonsen demonstrated how advanced tank coatings can make a

significant difference in improving performance and profitability*.

MH Simonsen’s Oradana’s tanks were coated with IP’s Interline 9001.



loosely bound, but highly cross-linked flexiblenetwork chain on ambient curing. The postcure process then locks these network chainsfirmly together to provide a highly chemicalresistant paint film offering low absorptionproperties and easy clean while stillmaintaining flexibility to ensure crackresistance on welds when subjected to vesselflexing.

The new coating has been independentlyproven to reduce cleaning times by up to 70%,delivering greater efficiency and flexibility inthe operation of chemical tankers, making abig impact on the bottom line for owners andcharterers. It also has extended chemicalresistance, allowing companies to carryaggressive materials and remove recoveryperiods in addition to maintaining the cleaningbenefit of the system.

It can carry all of the cargoes standardepoxy phenolic technology can, plus a further25% of the large volume cargoes that itcannot. Moreover, it has over 60% fewercycling restrictions.

Aggressive cargoesThe technology also opens up new -previously restricted - cargo sequences for thecarriage of aggressive cargoes; for example,methanol to ethylene dichloride to fatty acidsback to back, with no coating recoveryrequired. Its low cargo absorption profilereduces the risk of contamination betweencargoes compared to standard epoxyphenolics, or zinc silicates. And with reducedcleaning requirements, comes a correspondingreduction in fuel and CO2 emissions. Inaddition, a low volatile organic content (VOC)and 80% volume solids helps to enhance thecustomer’s environmental profile andsustainability.

However, as with any efficiency generatingtechnology claims are one thing; it isproviding the in-service substance andvalidated proof that really counts.

In September 2011, MH Simonsen, aDanish, family-owned tanker company,operating predominantly in the NorthEuropean small tanker market, became thefirst company to apply Interline 9001 to all thetanks of its 1,639 gt, 2,174 cu m cargocapacity chemical tanker - Oradana.

Oradana transports a full range of liquids,including the extremely aggressive productcalcium lignosulphonate. Carried at 80 deg C,this cargo has long been a cause of failure fortraditional coatings like phenolic epoxies andzinc silicates, rapidly leading to steeldegradation.

Meeting this challenge, together with the

need for easy cleaning and transition betweendifficult to clean cargoes such as lecithin andfatty acids was critical for Simonsen and a keydeliverable for Interline 9001.

Commenting on the success of Interline9001, Allan Skovlund Nielsen, MHSimonsen’s technical manager, said: “Ourtrademark is top quality tanks for refiners andInterline 9001 has not let us down. As a resultof using this product, we are able to tradeaggressive chemicals and the time to clean tocargo surveyors’ satisfaction has beensignificantly reduced versus traditionalcoatings. Calcium lignosulphonate is a keycargo for us and we cannot carry this inphenolic, or zinc tanks. Lecithin and fattyacids historically caused us many cleaningheadaches but this process is made muchsimpler with the use of Interline 9001.”

In the many months of service, Interline9001 has also enabled the smooth transitionbetween other high temperature and difficultto clean cargoes on the Oradana. Thisincludes fish oils, molasses, vinasses, cruderapeseed oil, urea ammonium nitrate, palmolein and fertilisers.

Due to its bimodal epoxy technology, thecoating offers extended chemical resistanceover phenolic epoxy coatings, whilesignificantly reducing cleaning time and coststhrough low absorption of chemicals and aglossy, smooth surface.

*This article was written by AndyHopkinson, business development manager,International Paint.

TO



Wide range of vesselsgiven Ecoshield

protectionOver the last two to three months, the rudders of several types of vessels were given

Subsea Industries’ Ecoshield protective coating at yards in China, the US, Poland and the UK, among which was an oil tanker.

Most of the ships were owned bydifferent companies, but theyall experienced the sameproblems. Cavitation corrosion

damage had appeared on the rudders of theirships. Often a rudder is not given the properprotection against cavitation and the resultingerosion and corrosion damage. In those casesthe financial consequences can be extensivefor the owner.

Tests in a flow channel, carried out inGrenoble, have confirmed that Ecoshieldperforms extremely well under severecavitation. The coating will prevent corrosiondamage from reoccurring on an existing ship,or can protect the rudder(s) of a newbuildingagainst cavitation and corrosion damage fromthe very start of its life. It is the only knowncoating that can provide this type of fullprotection, claimed Subsea Industries.

Rudder protection is best begun at thenewbuilding stage. When a vessel entersdrydock, maintenance of its stern area,especially cavitation damage repair, can take along time. There are strict proceduresconcerning blasting, painting, welding andpropeller and stern tube seal work. Painting isassigned to the end of the schedule and as aconsequence, it may be rushed, or not get doneat all, or else prolongs the stay in drydock.

With an Ecoshield application, theseproblems can be avoided from day one, as theunderwater gear will not need to be repaintedduring future drydockings. Ecoshield willremain intact for the lifetime of the vessel andis guaranteed for 10 years. At the most, quickand easy touch-ups amounting to less than 1%of the surface area will be required. Planningthe maintenance of the vessel’s stern areatherefore becomes much easier.

The coating can also be used to protect

vessels that have been in service for some timeand are already facing cavitation and corrosiondamage, similar to the vessels coated over thefew last months.

FlexibilityEcoshield’s flexibility makes it easy to adaptthe application schedule to the rest of theactivities planned at the shipyard, or drydock,in a way which does not interfere with them.Overcoating time can be as short as threehours, which means that for smaller surfaces,such as rudders, or bow thrusters, the twocoats required can usually be applied in onesingle day, the company said.

The return on investment in a coatingsystem that offers full protection from day oneis claimed to be fast. This becomes very clearwhen the costs of the temporary underwaterrepairs is taken into account and the regularinspections required by a condition of class,not to mention the extra costs associated withrudder repair and recoating in drydock, thecompany said.

Another productSubsea Industries has also unveiled a newproduct for filling and building up a corrodedand pitted steel surface to its originalcondition, prior to recoating with Ecoshield.

Ecofix is claimed to be as tough as the steelitself, able to be machined and can be used torepair most pitting, or corrosion damage onrudders, stabiliser fins, thrusters and otherunderwater gear.

It is used in combination with Ecoshield.When a rudder, or another piece of underwaterships’ gear, has not been properly protected,the surface will become corroded.

Cavitation damage can cause severe pitting.The steel needs to be restored to its originalshape with a smooth surface, prior torecoating.

This is where Ecofix comes in, SubseaIndustries said. It is a tested and proven filler.Because it uses the same basic resin asEcoshield, the coating can be applied in onlyone hour after the filler. The company claimed

Before and after an Ecofix coating.

TECHNOLOGY – COATINGS


that this is the effective alternativeto metal facing, or very expensivealternative fillers. And because it ispart of the Ecospeed/Ecoshieldfamily, it is fully compatible withthe coating.

Underwater gearEcoshield and Ecofix are alsosuitable for stabiliser fins, thrusters,nozzles and other underwater ships’gear, which needs special protectionfrom corrosion. These items cannow also be repaired, prior torecoating where other, less effectivecoatings have permitted corrosionand cavitation damage to occur.

With the launch of the newproduct, Subsea Industries offers afull package; Ecofix restores thesurface of the rudder, or otherunderwater gear and Ecoshield willprotect the area from sufferingcorrosion and cavitation damage,the company concluded.

Ecoshield has been applied to the rudders of a number of vessels, including tankers.TO


TECHNOLOGY - TANK SERVICING

The US Coast Guard (USCG) hasissued a safety alert to remind itspersonnel and the maritimecommunity of potential dangersduring cargo tank samplings.

During a recent Port State Control (PSC)tanker inspection, a USCG member wasexposed to a dangerous concentration ofHydrogen Sulphide (H2S) gas and suffered aserious injury.

The exposure occurred during anexamination on board a tanker carrying GradeE sour crude.

A PSC team asked a ship’s crew member tocheck cargo tank oxygen levels using theship’s portable gas meter. The crew memberaccessed the cargo tank via a deck soundingvalve.

When the valve was opened, the pressurisedcargo tank atmosphere escaped releasing inertgas and H2S vapours.

During the incident, the personal gas metersof two individuals involved - a USCG officerand a crew member – warned of the presenceof H2S. The USCG officer, whose alarmsounded was standing 1–2 ft downwind fromthe sounding valve.

Within days the USCG officer developedsevere exposure symptoms consistent withH2S exposure. The other two USCG officersinvolved were standing upwind. Afterwards,one reported experiencing a minor headache.

The US Occupational Safety and Health

Administration (OSHA) notes that H2S is acolourless, flammable gas with a ‘rotten egg’smell that occurs naturally in crude oil.

Even at low concentrations, this heavier-than-air gas can irritate the eyes, nose, throatand respiratory system with effects delayed forhours, or days. At higher concentrations,nausea, vomiting, headaches, dizziness,unconsciousness, or death, may occur.

While the initial ‘rotten egg’ odour ispresent, an individual may lose the ability tosmell that gas after becoming exposed.Personal monitoring equipment is, therefore,vital to protect against exposure. An alarm onH2S constitutes an acute exposure and shouldtrigger immediate evacuation and initiation ofacute exposure procedures including medicalattention.

Prior to using portable gas monitoringequipment, personnel should familiarisethemselves with ISGOTT Section 11.8 andsafe work practices for conducting, orwitnessing these tests.

ISGOTT recommends when sampling tanks,personnel should stand perpendicular to thewind to avoid being downwind, or upwind andcreating eddies.

Diligence neededWhen monitoring cargo tank atmospheres, allpersonnel should exercise diligence and greatcare and in all cases, personnel shouldcompletely assess the risks, to include the

cargo type, tank pressure, ventingarrangements, wind direction/speed andcondition of the testing equipment, the USCGadvised.

When H2S is suspected to be present,ISGOTT Section 2.3.6.5 recommends that aself-contained breathing apparatus (SCBA) beworn if it is necessary to breach the integrityof the cargo system and if a vapour freeatmosphere cannot be guaranteed.

Reduced threshold The American Conference of GovernmentalIndustrial Hygienists recently reduced the H2Sdangerous Threshold Limit Value from 2 partsper million (ppm) to 1 ppm.

As a result the USCG said that it stronglyrecommends that those involved in cargo tanksampling, or atmosphere testing:� Be familiar with and adhere to ISGOTT

safe work practices.� Assess personnel risks.� Don appropriate personal protection

equipment, including gas monitoring detectors, respirator, or SCBA.

� If gas monitoring detectors are used ensure:� Detectors are maintained and properly

calibrated.� Alarm settings values are properly set.� Be aware and familiar with the hazards of

the cargos involved, as well as exposure indicators and emergency response procedures.

ClassNK has published new‘Guidelines on the Welding ofDuplex Stainless Steels’, whichcan be found free of charge on itswebsite.

These guidelines have been developed tohelp shipyards safely and effectively make useof new duplex steels that are increasinglybeing used in the construction of cargo tanksfor chemical carriers.

Duplex stainless steel has a two-phasemicrostructure containing grains of bothferritic and austenitic phase, giving it acombination of excellent corrosion resistanceand high strength with a lower nickel contentthan austenitic stainless steels, such asSUS304 and SUS316L, ClassNK explained.

The vast majority of the world’s chemicaltankers with stainless steel cargo tanks are

built at Japanese shipyards, which havetraditionally used austenitic steels for cargotank construction.

Alternative steelRecently, however, these shipyards areincreasingly using duplex stainless steels as analternative to austenitic stainless steels fortheir corrosion resistance and high strengthproperties.

Before shipyards, or builders can use duplexstainless steel in the construction of vessels,they must first obtain approval for the WeldingProcedure Specification (WPS) that will beused when welding duplex stainless steel.

It was in order to simplify this process andsupport the widespread use of these newmaterials at shipyards worldwide that ClassNKreleased the ‘Guidelines on the Welding of

Duplex Stainless Steels’ on 14th January,2014.

The new guidelines, which conform toClassNK rules, provide a comprehensivesummary of the requirements for weldingprocedure specification certification andwelding procedure qualification tests,including relevant precautionary measures forthe welding of duplex stainless steels.

Speaking on the release of the guidelines,ClassNK material and equipment departmentgeneral manager, Takeshi Imamura said: “Asthe world’s leading classification society forchemical tankers with stainless steel cargotanks, we hope that these new guidelines willhelp shipyards take advantage of these newmaterials in developing and building a newgeneration of safer and more efficientchemical tankers.”

USG warns of tank sampling dangers

Cargo tank duplex steel guidelines introduced

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