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NOVEMBER/DECEMBER 2008 www.tankeroperator.com

Features:�� Innovative designs from Sweden�� Finnish suppliers expand�� Training should not be forgotten�� LRIT not all it seems�� Tank cleaning - be aware of coatings �� Bunker suppliers gain independence

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25 Training� Don't neglect training

programmes� Guidelines for Designated

Person31 Navigation

Potential problems with LRIT34 Tank cleaning

Coatings and cleaning go hand in hand

39 Vapour control Monitoring vital in preventing disasters

42 Bunkers � Independents have their say� How to manage the risk

Conference reportTanker safety discussed atAthens meeting

November/December 2008 ��TANKEROperator 01

Vol 8 No 2Tanker Operator

Magazine Ltd213 Marsh Wall

London E14 9FJ, UKwww.tankeroperator.com

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TANKEROperator ContentsMarketsWorldscale rate escalation

Focus on Sweden � Chemical and product tanker

owners dominate the local scene

� Innovative designs on the drawing board

Focus on Finland� Equipment suppliersdominate the local scene� Ice technology expanding

Technology24 Ship description

Stena unveils another MAX

04

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Front cover photo Furetank took delivery of the37,100 dwt Furevik earlier thisyear. The Donsö-based ownerpurchased the vessel fromBröström where it was called

Bro Erik since entering service in 2006. She joined five smaller chemical and producttankers in Furetank's fleet.

Printed by FISCHER Poligrafiaul. Dabrówki 1040-081 Katowice

Poland

51

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24

We are now seeing some action in the Gulf of Adenarea, both from the United Nations, the variousshipowner organisations and unions all aimed atlooking after seafarers.For example, the UK Warlike Operations Area Committee (WOAC) hasagreed that the 'high risk' zone declared in the Gulf of Aden shouldcontinue in force.

WOAC first agreed to issue a recommendation designating the Gulfof Aden between 45 deg E and 53 deg E and north of a straight lineconnecting Cape Guardafui and the western tip of the Island of Socotraa 'high risk' zone on 28th October, due to the activities of piratesoperating from Somalia.

All ships transiting the zone are recommended to remain withinthe Maritime Security Patrol Area defined by the Commander ofCTF150. Operators of ships not remaining within that area (otherthan for reasons purely related to safety of life at sea, weather,navigational safety or military instructions) should allow seafarersnot wishing to proceed to the area to leave the ship (or not to join it)at a preceding port.

It was further recommended that ship operators in the zone shouldmake special payments to all crew members of 100% of normal pay.The special payments should be payable in half-day increments, inrespect of each day or half-day during which the ship is in the zone, inrecognition of higher risks associated with transiting this area and thepayments should be in addition to all other remuneration earned.

However, where operators arrange military escorts for their ships, oron board security teams to provide continuous monitoring and protectionduring the transit of the high risk zone, they are deemed to havemitigated the risks such that the special payments need not be paid.

The recommendation will be reviewed by the WOAC not later than28th December.

In addition, following a meeting of the International BargainingForum (IBF) in Hong Kong on 21st November and subsequent

correspondence, it was agreed to extend the 'high risk area' to cover theentire Gulf of Aden*, backdated to 21st November at midnight.

The expansion has been agreed because of the number of attacks,which had occurred outside the previously agreed zone, including theVLCC Sirius Star which was hijacked off the coast of Kenya.

As a result, seafarers on ships covered by IBF agreements will receivea bonus equal to 100% of their basic wage while the vessel is in transit.Likewise the normal rates of death and disability compensation forseafarers will continue to be doubled during this period. The previouslyagreed terms adopted for Filipino seafarers by the POEA will alsocontinue to stand in the extended high risk area.

Despite the increase in piracy in the region, the effectiveness of thechannel through the Gulf provided by the designated, IMO-approved,Maritime Security Patrol Area was recognised by the IBF and theincrease in, armed naval forces in the region was welcomed.

Also acknowledging the continuing government resolutions andindustry organisations efforts to make the Gulf of Aden a safe sea lane,the IBF has agreed that seafarers on ships using this corridor shouldcontinue to serve on their vessels during transits. However, seafarersthat served on ships that chose not to use the Maritime Security PatrolArea should have the right to refuse to make the transit and to berepatriated at owners' expense, the IBF said.

*The new high risk area has been projected north and south of theexisting area, to the Yemeni coast in the north and to the existingwarlike operations area in the south, also encompassing the Island ofSocotra. The eastern and western boundaries of the area have beenadjusted to meet the mouth of the MSPA on each side. The westernborder of the high risk zone, therefore runs from the coastline at theborder of Djibouti and Somalia to position 12 15 N, 45 E; from 12 35N, 45 E to Mayyun Island in the Bab El Mandeb Straits. The easternborder runs from Rhiy di-Irisal on Socotra Island to position 14 35 N,53 E; from 14 45 North, 53 E to the coastline at the border betweenYemen and Oman.

COMMENT

Seafarers awarded bonuses for transiting pirate infested waters

TO

TANKEROperator � November/December 200802

Winner - Seatrade Middle East &Indian Subcontinent Awards 2007 -Ship Agent Of The Year.

Winner - Lloyd’s list, Middle East Awards 2008

for “Marine Agency”

The result of extended voyage times has adirect impact on the fleet's supply picture andconsequently on freight rates. Longer voyagesnormally absorb more tonnage and causevessel supply to shrink. Usually, when thatoccurs the owners see a window ofopportunity to increase the rates, thus firmingthe market.

As being reported, more and more ownersand operators are re-routeing their vessels viathe Cape. This is forecast to increase thetonne/miles and maybe even change thegloomy outlook for dirty tankers next year,McQuilling said.

For example, 2007 tanker demand figuresindicated that around 600,000 barrels per daywere transported from the MEG to Europe onVLCCs. It can be assumed that this volumewent via the Suez Canal and Sumed pipeline,which has a capacity of 2.5 mill barrels per day.

Calculations imply that 12 VLCCs wereemployed to ship this volume and if all thesecargoes were diverted via the Cape, the vesselrequirement would increase to 20 VLCCs,McQuilling said.

Two historical precedents stand out. These were the 1957 closure of the SuezCanal, which was only for a short period andthe 1967 closure, which lasted for eightyears. During both periods, tankers had tosail around the Cape, increasing demand andat the same time creating wealthyshipowners.

In 2008, the tanker supply and demandpicture has been roughly balanced as severalvessels left the fleet and deflated thenewbuilding boom. Therefore, despite today'sfalling markets, an increase in the number ofvessels using the Cape route might cause ratesto firm.

While the physical impact of such a movemight take some time to filter through, thepsychological affect might come to the surfacemuch sooner, McQuilling thought.

INDUSTRY - MARKETS


Worldscale rates for 2009have been set at an average

33% higher than 2008 levels.

WS100 suffersconsiderable mark

up for 2009Having analysed the new rates,

tanker consultants McQuillingServices said that this implies -all things being equal - that the

spot rate quoted on the 2009 basis should belower than that quoted on 2008 levels toproduce the equivalent TCE rates ineach case.

Market dynamics will influence the actualrates seen - in a stronger/rising market theobserved spot rate may not change with therate basis, while in a weakening/fallingmarket the rate will likely be lower than that implied by the change in the WS rate.

Taking a few 2009 WS rates at random, thehighest level is TD1, which is the long haulMEG/USG, 280,000 tonne cargo. For 2009,this route is showing WS100 at a spot cargoequivalent level of $43.37 per tonne, up from2008's $30.86 per tonne.

For Aframaxes, the TD5 (West Africa - USAtlantic coast) 130,000 tonne cargo isshowing $19.63 per tonne, up from $14.19 per tonne.

The highest Aframax level quoted is TC1(MEG-Japan) with a 75,000 tonne clean CPPcargo, which came in at $24.71 per tonneagainst $17.80 in 2008. For dirty cargoes,the highest level was the Asia-East coastAustralia route (TD14), which was quoted at$17.08 for 2009 against $12.65 per tonnefor 2008.

Again the clean Panamax cargoes werehigher than the dirty cargoes with MEG -Japan (TC5) 55,000 tonne CPP cargo quotedat $24.71 against $17.80 per tonne previously.The highest dirty cargo was TD12 (ARA toUS Gulf) with 55,000 tonnes, which wasquoted as $20.57 against $15.25 per tonnepreviously.

In the MR sector, the highest level wasContinent - US Atlantic coast (TC2) with a37,000 tonne CPP cargo, which came in at$13.78 per tonne compared with $10.20 in

2008 for WS100. Interestingly, the average bunker price used

was $328.75 per tonne in 2008 and $554.05per tonne for 2009. The Rotterdam averagestands at less than half that level at present,around $218 per tonne.

PiracyMcQuilling also had a look at the situationwith the Sirius Star hijacking in terms of theeconomic effects for large tankers.

At the time of the incident, the VLCCearned about $47,000 per day TCE. Ten daysof idleness would therefore cost $470,000 inTCE earnings. Given the ransom moneydemanded is around $25 mill, the consultantstook a conservative view that the negotiationswould start at around $15 mill. The lowerfigure still represented the equivalent of morethan 450 days revenue, based on today'smarket.

Therefore, it sent out a message that inaddition to the security threat andinterruption of trade, the VLCC's hijackingwould cause a substantial unplanned out ofpocket expense.

The actual value of the Sirius Star and itscargo plus bunkers was believed to be in theregion of $256 mill, which has led to thevarious precautionary measures beingdiscussed at all levels.

By re-routeing via the Cape of Good Hope,the voyage can be extended by as much as 20days to western destinations. In addition,vessels choosing to avoid the East Africancoast have to add an estimated two dayssteaming for the trip to the US Gulf regionvia Suez. TO

INDUSTRY - NEWS

November/December 2008 � TANKEROperator 05

InterManager and V Ships presidentRoberto Giorgi.

Giorgi urges owners to put training firstIncoming InterManager presidentRoberto Giorgi urged shipownersto place training at the top oftheir manning agendas.This is despite having to deal with the effectsof the credit crunch on the global shippingindustry, the V Ships head said. He wasspeaking on the day he was unanimouslyelected to succeed Ole Stene as head of theworld trade association for in-house and thirdparty managers.

Giorgi said the industry must not replicatethe mistakes of the downturn in the mid-1980swhen shipowners cut back on all cost areasincluding seafarer training.

"Seafarer training has to be a priority for theindustry, because the age profile of theaverage seafarer is increasing and the industryneeds to invest in a future that has as itsbackbone, adequate numbers of well trainedseafarers," he said.

While some in the industry believe thecrewing shortage could improve in themedium to long term because of thecancellation of ships on order and an increase

in the numbers of ships being scrapped, shipmanagers were expressing continued concernsover the lack of trained officers for theimmediate future.

Giorgi highlighted his initial key objectivesas InterManager president by pledging that heintends to: � Ensure he represents the views of both

owner-managers and third party managers throughout the global shipping industry.

� Protect the welfare and well-being of seafarers, particularly by addressing the issue of criminalisation and by encouraging consistently high standards for training within the industry.

� Uphold the values of the new InterManager KPI system to make sure they are adopted fully by the entire industry.

InterManager now has a membership of 73 -both full and associate members, representinga worldwide fleet of some 2,500 vessels andmore than 100,000 crew.

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INDUSTRY - NEWS


A revised and updated book fornavigators was recently published -the 10th edition of the UK's AdmiraltyManual of Navigation Vol 1*.Celebrating 100 years since its launch, theauthoritative work was brought up to date byauthor Lt Cdr Alan Peacock of the Royal Navywho detailed the use of satellites and electronicequipment such as ECDIS in the latest edition,published by The Nautical Institute (NI).

Without expertise in navigation, ships cannotbe kept safe, Admiral Sir Jonathon Band, FirstSea Lord and Chief of Naval Staff pointed outin the forward to the book. "As navaloperations, international container logistics andenergy supply systems become more globallyinterdependent, the consequences of anynavigational accidents become greater," he said.

"In demanding the highest standards fromits own officers and ratings, the Royal Navyfirst published the Admiralty Manual ofNavigation in 1908," he explained. Whileforming the basis of Royal Navy navigationaltraining, the books achieve more "by definingeffective practices for all mariners."

Lt Cdr Peacock added: "This new bookretains all the fundamental 'Principles of

Navigation' so that mariners who rely on thecomputer-powered equipment found on ship'sbridges today can turn to an authoritativesource for support. Without a resource like this,mariners are at the mercy of whatever softwarehappens to be fashionable at the moment."

He has also considered the format of thebook. "Finding information in manuals is notalways easy. So when writing this manual, Idivided the text into bite-size chunks. Everytechnical term has been italicised and includedin the index. This 'intelligent index' isimmensely powerful and lets readers extractthe information they want very quickly."

The 2008 edition provides clear definitions andpractical procedures and techniques fornavigating ships in the widest oceans to thenarrowest channels. Underpinning this is athorough mathematical explanation of the Earth'sgeodesy and its impact on charting, positioningand movement on this spheroidal planet.

This combination of the practical and thetheoretical will enable mariners to plan andexecute the safe navigation of ships day byday at sea, as well as to understand and assessthe validity of the ever more complexelectronic systems used to conduct that

navigation, the NI claimed. This point is crucially important for those

ashore making procurement decisions about ships'navigational equipment. Lt Cdr Peacock added:"The book is a manual in the true sense of theword. It is there to be used to solve operationalproblems. It provides both the underlyingprinciples and the modern ways to use equipmentand apply safe navigational techniques."

"In 2008 ships navigate primarily by satelliteand use electronic charts, but in 1908 allnavigation was done visually," Captain JamesRobinson, NI's senior vice-president said. In1908 bearings and sextant angles were the onlymeans of navigating.

"These skills will always be needed. GPS orradar may not be available. Local pilots may notbe available to act as guides. Radar silence maybe necessary in hostile waters, and, sadly, hostilewaters are not unknown to today's mariner asmerchant shipping is preyed on in certain partsof the globe," Capt Robinson added.

*The Admiralty Manual of Navigation Vol 1,10th Edition, 690 pp, ISBN 1 870077 90 3 isavailable from The Nautical Institute, price £90plus postage and packing. Discounts areavailable for NI members and bulk purchases.

TO

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As Sweden prepares to take thechair of the European Unionduring the middle of next year,the Shipowners' Association has

bemoaned the fact that it is one of the onlymaritime member states without a tonnage taxregime to prop up the domestic flag.

One of the problems is that, despite nottaking the EU chair until July 2009, Swedenhas been asked to take on the maritime mantleon 1st January next year.

A tonnage tax plan is currently with theSwedish Government for perusal and theAssociation pointed out that even Finlandwould probably get the go ahead to introducea tonnage tax early next year. According toAssociation managing director Hakan Friberg,the department of infrastructure and transportwas in favour of the proposal, but the financedepartment was against the plan.

There is close co-operation betweenNorway, Sweden, Denmark and Finlandregarding maritime matters and Swedenrecently embarked upon what the Associationcalled a '10-year vision'. The aim of the study

was to find answers to the question - whatkind of people will we need for both seafarersand shoreside personnel?

Both commercial and technical universitiesare involved with the Shipowners' Associationto try to boost the number of qualifiedseafarers available to Swedish owners andoperators. For example, the Kalmar andGothenburg-based Chalmers universitiesconcentrate on officer training, but have founda distinct lack of technical students comingthrough the ranks as engineers.

Around 350 officers are coming out of theuniversities each year, the majority of whichare in the nautical category. "We would like tosee more technical cadets," Friberg said."More people needed to be placed in theeducation system," he continued. Somewhatsurprisingly, he also revealed that several exSwedish seafarers were returning to the seawhen around 50 years of age.

He also attacked the latest IMO ruling onemissions saying that he could not understandwhy the 0.5% SOx emissions wouldeventually fall to just 0.1%. He believed that

both China and India were not supportive ofthe IMO's efforts in emissions control.

Tanker interestsIn the tanker sector, long gone are the dayswhen Swedish shipowners and shipbuildersruled the waves with huge VLCC and ULCCfleets, much of which was built in domesticyards.

Notwithstanding the demise of the largetanker owners, today, Sweden still remainsstrong in the chemical and product trades,with the exception of Stena Bulk with its fleetof crude oil tankers, as well aschemical/product tankers.

A major Gothenburg-based concern isBröström, which at the time of writing iswaiting for Brussel's permission to joinMaersk. It was believed that once the buyoutwas rubber stamped, possibly by the end ofthis year, a significant part of the Bröströmoperation would remain in Gothenburg.Bröström head Lennart Simonsen toldTANKEROperator that consolidation wouldcontinue in the chemical/product carrier arena.


INDUSTRY - SWEDISH REPORT

Local owners crying out for a tonnage tax scheme to stay competitive in the wake of investment in chemical/product tankers.

Chemical/producttankers mainstay ofSwedish tanker fleet

Chemical/producttankers mainstay ofSwedish tanker fleet

Bröström is involved in several pools,charters and joint ventures with other Swedishowners, including some of the Donsöcontingent. It was not thought that theseagreements would be affected by the takeoveras Maersk would include most of Brostrom'soperated vessels, as well as the owned andmanaged tankers.

The major player in the city is Stena Bulk.This concern operates 75 vessels totalling over7 mill dwt. In 2001, the company introducedits now famous MAX concept with two V-

MAX types. Since then the P-MAX and C-MAX designs have come to fruition. Notstopping there, Stena Bulk is confident thatorders would be placed soon for the new B-MAX and E-MAX designs.

Stena Bulk head Ulf Ryder said that the firstcontracts for the long awaited B-MAX shallowdraught VLCC designed for Baltic trading - ajoint venture with Sovcomflot - would probablybe placed next year and would involve fourfirm orders, plus two options.

All of the MAX designs feature fullredundancy, for example twin engines,propellers, shafts, steering gear and rudders.The engine rooms are divided by a fire andwatertight bulkhead, all the control systemsare independent and thus also redundant andthere are separate fuel supply systems foreach engine.

As for the E-MAX, this is still at the designstage and is a dual fuel - LNG and MDO -powered product tanker intended to shipmainly CPP cargoes (see page 24).

The company still has six newbuildings tocome through 2010, four of which are of theP-MAX product tanker types from Brodosplitin Croatia. Ryder said that one P-MAX has

around 30% more carrying capacity than astandard MR on a draught of only 11.3 m, asit has been designed with a post panamaxbeam for extra lifting capacity. Four out of thesix P-MAX types in service thus far have beentaken on long term charter by Total.

Shipmanagement interestStena Bulk is part of the giant Stena Groupconglomerate, which has several offshoots,including shipmanagement concern NorthernMarine Management based in Glasgow. It also



Stena Bulk’s president and ceo Ulf Ryder.

NOT A GIANT,BUT A LEADER

FURETANK REDERI AB

B-MAX was designed for Baltic operations.



works in close co-operation with Stockholm-based Concordia Maritime.

Northern Marine offers third partyshipmanagement, in addition to looking afterStena Bulk's interests. The company currentlymanages around 120 vessels of 10 mill dwtand has 14 external clients on its books. Thecompany also runs its own training school inAberdeen, primarily looking after the offshoreside of the business in which Stena Bulk isalso very active. Around 100 officers per yeargraduate through the Scottish training school.

Including officers and crew, NorthernMarine employs around 7,000 people and hasrecently switched to recruiting more Russianseafarers. The company operates an in-housecadet programme. Ryder said that thecompanies were up against significantincrease in vessel operating costs, mostnotably a 20% increase in seafarer wagesduring the past 20 months or so.

As well as having operations in StPetersburg, Northern Marine has a presence inAberdeen, Mumbai, Hamburg, Houston,Manila and Singapore.

Some 40 Russian cadets currently serve onboard Stena Bulk's tankers all of which areproducts of the Stena sponsored AdmiralMakarov State Maritime Academy in StPetersburg. At any one time, this facility has3,000 students and Ryder said that the trickwas to educate them to speak a reasonablelevel of English. The Russian training facilityis approved by the Swedish authorities.

Ice class vessels feature heavily in Stena'soperations. Including the four newbuilding P-MAX types, Stena will operate 17 ice classtankers by 2010. The highest is the AframaxStena Arctica at 1A Super, followed byanother two Aframaxes, two Panamaxes andtwo newbuilding P-MAXES each with a 1Anotation. Finally, two Sovcomflot Aframaxesoperated by Stena and eight P-MAXES eachhave a 1B class notation.

Stena Bulk believes in the joint venture typearrangement with its customers. An exampleof this style of operation was the poolingarrangement with Angolan shipping companySonangol. This includes both Suezmax andPanamax tankers.

The recent 35% equity ownership stake inParadise Tankers Holding gives Stena Bulkthe full commercial operation of a furtherthree epoxy coated 75,000 dwt Panamaxtankers. The trio will join the Stena SonangolPanamax Pool. Stena and Sonangol have alsobeen operating a 15-strong Suezmax pool forfive years.

In addition, a nautical school has beenfounded in Angola, which currently hasaround 250-300 students.

Another example was the joint ventureentered into with Finnish oil major Neste,which involves four tankers with more tocome, Ryder said. Long term charters with aprofit sharing partnership have also beennegotiated with Total involving four of the P-MAXES in what Stena Bulk called a joint

venture deal. Also involved in the Stena Sonangol Pool is

COSCO. Here a joint venture has been set upto train personnel and to provide technicalassistance with vetting and other services.Further joint ventures are being negotiatedwith the Chinese.

An in-house consultancy - Stena Teknik -takes care of the group's technical maritimebusinesses, including the newbuilding andconversion projects, general technical servicesand procurement.

As for the relationship with ConcordiaMaritime, Stena owns 49% of the company,but controls 74%. Concordia is quoted on theOMX Nordic Exchange in Stockholm and wasa vehicle primarily set up to invest in vesselsfor long term timecharters.

In another move, earlier this year, ConcordiaMaritime and Total jointly took a decision toinstall MAN Diesel turbochargers with thecompany's new VTA variable turbine areatechnology on board a newbuilding P-MAX.

The turbochargers fitted with the VTAtechnology will be installed with MANB&W's twin low speed engines on boardStena Progress, which will be delivered inJune 2009. On the basis of earlier trials, theyare expected to reduce fuel consumption byaround 2-3% with parallel reductions inexhaust emissions.

"We are always interested in new energysaving technologies," noted Hans Norén,president, Concordia Maritime at the time ofthe announcement. "When approached byMAN Diesel about employing VTA we decidedright away that this was something we wantedto participate in. It has been tested on board ourship Stena President with very positive resultsand, as a consequence, we and our customerTotal have decided to install VTA turbochargerson board the Stena Progress."

Upon her delivery in June 2009, the tanker

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Stena Bulk’soperated fleet

2 x VLCCs (V-MAX)14 x Suezmaxes6 x Shuttle tankers11 x Aframaxes (inc twonewbuildings)9 x Panamaxes (inc threetankers from ParadiseTankers)29 x MRs (inc four newbuildingP-MAX)2 x C-MAX (Caribbean coastal)2 x Panamax bulkers.

will be chartered to Total for five years. MANDiesel type TCA55V turbochargers - the 'V'suffix denotes the inclusion of variable turbinearea technology - will be used on the two MANB&W 6S46MC-C low speed main engines onboard the Stena Progress and other P-MAXs.

As stated, field testing was carried out onboard the Stena President and MAN Dieselreported that the results of the trials haveexceeded expectations, resulting in ConcordiaMaritime making the decision to equip theengines of other P-MAXs with VTAturbochargers. All the parties involved withthe operation of the ships - owner ConcordiaMaritime, commercial manager Stena Bulkand Total on the charterer's side - haveexpressed their enthusiasm for both thereduced fuel consumption and reducedemissions of the ships with VTAturbocharging.

"These tankers' routes include Arctic waters,which means varying ice conditions and thushighly variable load profiles," said JacobNorrby, naval architect Stena Teknik.

"By allowing charge air delivery to beoptimised at all engine loads, the TCA55Vturbochargers give the engines better responseto load changes, improved emissions at partload and, most importantly, the 2 to 3%reduction in fuel consumption. So as well aslow noxious emissions, we are also reducingemissions of greenhouse gases to theatmosphere," Norrby said.

Last LR1 deliveredAt the time of writing, another major player inthe city - Marinvest - was due to takedelivery of the last in the series of LR1s builtat Brodosplit in Croatia. The Marinor will goon long term charter to Shell once delivered.This will give Marinvest nine tankers ofwhich five will be on long term charters andfour will operate on the spot market (seeTANKEROperator, June, page 37).

The LR1 product tankers of which threeoperate in the TORM pool, experienced a firmmarket this autumn following a stable summerperiod, Marinvest’s technical director RogerKarlsson told TANKEROperator. However, hedid concede that the future could becomemore troublesome in the MR sector as moreships are delivered.

The six newbuildings were planned foroperation in ice-covered waters, such as theBaltic and the St Lawrence River and as aresult, they have been built to DNV’s IceClass 1A notation.

As for Marinvest's innovative 'Help MeHome' PTI system (see TANKEROperator,June, page 43), Karlsson said that thecompany would start to market it to thirdparty interests as soon as it received approval.It would probably be given a DNV classnotation - Emergency Propulsion - oncecertified. The company was already talkingwith engine manufacturers, shipyards andsome shipowners about the concept.

DNV Consultants was called in to carry outa failure effect mode analysis, a sort of 'WhatIf' scenario on the system within the contextof a full design assessment. By installing anapproved PTI system, a tanker powered by a2-stroke slow speed engine could leave an oilterminal in an emergency, even with the mainengine immobilised. At present, the mainengine has to be kept in running ordermeaning that little or no maintenance can beundertaken while a tanker is alongside.

At present most terminals allow the use ofPTOs, which are normally fitted to vesselswith 4-stroke medium speed engines. In thefuture, Karlsson hoped that terminals wouldaccept the PTI system as an emergencyalternative to the main engine while alongside.

Another innovation being considered iswaste heat recovery. To heat an LR1s productcargo, around eight tonnes of fuel per day isneeded. Karlsson said that this heat couldprobably be recovered from on board wasteheat sources.



left to right - DomagojKlaric, managing directorof Brodosplit Shipyard;Archievald Camba, chiefofficer; Alfredo Ibarbia,master; Louise Mohn,Marinor’s Godmother; RuelOropesa, chief engineer;Ben Bugtong, 2nd engineerand Lars Mossberg,Marinvest ceo seen at theMarinor’s namingceremony.



Close island communityPerhaps one of the most bizarre shipowningscenarios in Sweden is the concentration ofshipping people on the small island of Donsö.With a population of just 1,500, this islandlocated just outside Gothenburg plays host to12 shipowners, who between them account for49 vessels - 48 of which are chemical/producttankers. The odd one out is a bulk carrier.Many of the companies domiciled on theisland are family owned with severalgenerations still involved.

In total, the shipowners employ 700Swedish seafarers, 100 officers and another300 Philippinos. Their joint turnover is around

SEK2.3 bill, of which 75% is accrued in USdollars. The insured value of the total fleet,most of which is modern, is $1.1 bill. TheDonsö owners account for around half of allthe tanker calls at Gothenburg's oil terminals.

TANKEROperator was told that they onlytended to work together on technical issuesand some have joint supply agreements. Atechnical meeting is held roughly four timesper year. However, most of the owners'tankers are of different designs. The majorplayers are involved in the chemical tradeswith a mixture of long term charters, coas andplaying the spot market, trading in the Baltic,northern Europe and the Mediterranean.

Several of the owners recently completedtheir newbuilding programmes, which startedat the beginning of this millennium. Nearly 20orders were placed at the Shanghai EdwardShipbuilding yard. This Shanghai shipyardrecently closed as it was due to be moved to anew site in the Yangtse River.

Most of the Donsö owners have a reputationfor design innovation, illustrated by Tärntank,which was the first tanker owner to order adouble skin vessel way back in 1983.

Celebrating its 50th anniversary on Donsöthis year, Tärntank is the only island residentto have its own in-house charteringdepartment and currently has nine owned

Donsö is home to 12 shipowners, including Tärntank, whose 14,804 dwt Tarnvag was seen on the Thames recently.



vessels of between 8,250 dwt and 15,000 dwt- four of which are long term chartered toMaersk, operating in the Swift Tankers pool,one to Neste and four more on the spotmarket. In addition, Tärntank operates anothertwo third party-owned chemical tankers,which are also on the spot market.

One of the relative newcomers is SiriusRederi, which was founded with the help ofMarinvest, which owns 50%, in 1994. Todaythe company owns nine, technically manages 10and commercially operates 11 tankers. One ofthe vessels, the technically managed 2,500 dwtAngon, was recently chartered for a three yearterm to lift bunker fuel between Brofjorden andGothenburg. She is currently under repair atDonsö prior to taking up her new role.

Sirius also operates the 4,514 dwt Lotus,which is one of the largest vessels that canreach the inland Lake Venern port of Karlstad- an eight hour trip by river, canal and lake,which involves negotiating several locks.

In 2005, Gothenburg based shipbrokinghouse and agency Vald Andersons Shipbrokerswas taken over by Sirius and is now asubsidiary company. The shipbroking armconcentrates mainly on European and Baltictanker chartering, specialising in tonnage of upto 30,000 dwt. The agency side of the businessmainly serves Gothenburg's oil harbour.

In May of this year, Furetank Rederi tookdelivery of the 37,100 dwt product/chemicalcarrier Bro Erik, which was renamed Furevik.She joined the other five vessels in the fleet,which range from 11,400-16,000 dwt.

Furetank works in close co-operation withBröström and uses the latter's subsidiary,Bröström Tankers, Denmark, formerlyNordtank Shipping, for its commercialoperations.

Also using Bröström for commercialoperations is Rederi AB Donsötank. Thiscompany was registered in 1953 and today has

five tankers of between 16,000 dwt to 20,000 dwt, plus the 21,400 dwt drybulkcarrier Credo.

Last April, Donsötank took delivery of theIce Class 19,999 dwt IMO II chemical tankerExcello, which was built to a double actingtanker (DAT) design fitted with twin ABBAzipods powered by an diesel-electricconfiguration using a Wartsila 9,720 kWmain engine.

Other well known tanker concernsheadquartered on Donsö include Alvtank,Veritas Tankers, Omega Rederi, EktankRederi and a few smaller bunker tanker owners.

RepairsShiprepair has and still forms an integral partof Gothenburg's maritime scene. Götaverken,now part of the Damen group, has also takingadvantage of the local tanker owners. DuringTANKEROperator's visit, Ek Tankers - EkRiver - was alongside the repair wharf.Donsö’s tanker owners regularly put asignificant number of vessels through the yardas do local owners - Bröström and Stena Bulk.

The local tanker owners tend to put theirvessels through intermediate surveys every 30months and full surveys every five years,

TANKEROperator was told. Also to be seen during the visit was

Theodora Tanker's asphalt carrier, StellaOrion, which was in the smaller of the twofloating docks. Her consort - Stella Virgo -was due to dock in the near future,TANKEROperator was told. Dutch concernTheodora is closely allied to Tarbit Shippingof Skarhamn.

New Götaverken managing director BjarneKoitrand said that the yard was benefitingfrom the weakening SEK against the USdollar. Turnover this year would be in theregion of SEK325 mill, or $35 mill, yielding a5%-7% profit, he forecast. At the time ofTANKEROperator's visit, the price of steelwas around Eur7 per kilo, a slight drop on therecent highs seen, which also helped the yardto be more competitive.

Of course, the local ferry traffic accountedfor much of the turnover and the 85% dockutilisation rate claimed. However, during thefirst six months, the yard handled MR typetankers and the locally owned smallerchemical and product tankers.

In 2007, Götaverken claimed record levelsof employment, turnover and profit with 85vessels docked. Again tankers and ro-ro/ferries were the dominant ship types. Theyard claimed to have had a busy first half of2008, again including work on MR types andthe locally owned smaller chemical andproduct tankers.

At present, like heavy industry almostworldwide, Götaverken is suffering from thelack of qualified engineers, especially welders,Koitrand said.

The yard has around 130 permanentemployees, but the many sub-contractorssignificantly add to this total. For example,Wärtsilä has a facility on site by way ofpurchasing Ciserv a few years ago. Thisfacility mainly concentrates on boiler repairs.

In emergencies, the yard is able to work24/7, but grit blasting at night is banned, due

Work underway onStella Orion’spropeller in thesmaller of the twofloating docks.

Furetank’s latestacquisition, the37,000 dwtFurevik is seenon the River Elbe.

to the yard being very close to ChalmersUniversity and residential areas, much ofwhich was constructed on the site of the old shipyards.

The larger of the two floating docks isPanamax dimensioned, but is too narrow tohandle Stena's P-MAX types. However, lastyear, Gotaverken docked the Panamax beam47,170 dwt oil and chemical tanker StenaContest for 11 days.

InsuranceAs well as the Swedish Club, another hullinsurance entity is to be found in Gothenburg.

Codan claimed to be more 'hands on' thanunderwriters operating on the London market.This style of operation was more endemic tothe Nordic region, Codan's Joakim Rabensaid.

The insurer also owns a local concern -Survey Association (SAC), which wasclaimed to be a totally separate organisation toCodan's day to day business of underwritingand claims handling. SAC handles all types ofsurveys and represents the Barbados andBahamas flag states in the area.

Similar to its counterparts worldwide,Codan had noticed more collisions andgroundings occurring recently. Navigatortiredness was one of the reasons cited for theincrease in casualties. The insurer said it wasalso mindful that claims inflation could nowreturn on the back of the financial crisis.

A warning was also given about theemergence of ECDIS. The system's softwaresuppliers are now announcing that differentlayers of information can easily beincorporated on an ECDIS. Codan said that ifthe navigator was not careful, then he or shecould literally loose the plot.

Another cause for concern was the rise inthe level of piracy in the Gulf ofAden/Somalia area this. Some 30,000 vesselspass through the area annually and onesolution the underwriters would like to seeadopted is an escorted convoy system throughthe region.

In the short term owners and operatorscould call for extra surveillance when passingthrough and for tankers, one defence could bethe use of foam guns on deck, although withthe recent hi-jacking of a VLCC, it looks to beincreasingly difficult to counter armed pirates.

Other hot spots included Sri Lanka and thePhilippines where piracy was increasing,while in Nigeria local belligerents werebecoming even more aggressive, especiallyagainst oil installations, both onshore and offshore.

As for the Swedish Club, new managingdirector Lars Rhodin, told the club's board inOctober that the 'hull action plan' wasbeginning to bite as real progress had beenmade in setting hull & machinery (H&M)premiums commensurate with risk exposure.

He thought that the hull market hadsignificantly underestimated claims inflationlevels as most players had been content to relyon an inflation level of 5%, but in reality theactual figure was much higher. This wascaused by the protracted shipping boom, highsteel prices, limited yard capacity, currencyfluctuations and many other factors.

He explained; "If necessary, we will accepta loss of H&M tonnage in order to maintainbest practice and sound underwriting. Weexpect some of our hull members to makechanges, to take advantage of unrealistic ratesstill available in some sectors of the market."

Rhodin thought that these markets could not



Ek Tankers’ 17,300 dwt Ek-River alongside one of Götaverken’s repair wharves.

offer the same level of service. He said thatH&M rates would continue to harden and nowis the time for shipowners to take action toenhance their risk management approach.

Rhodin took over from the retiring FransMalmros in July and at the October meeting,revealed his new management team. HenricGard moved from insurance broker Willis tohead up marketing and business developmentas director. In addition, Lars Malm wasappointed director risk and operation. Otherdirectors include Jan Rydenfelt - IT andreinsurance and Helena Wallerius Dahlsten ashead of human resources and legaldepartments.

Oil terminalsThe Port of Gothenburg has developed intoboth an oil and product import and exporthub. Some 19.8 mill tonnes of crude andproduct were handled last year and the 2008total is forecast to top 22 mill tonnes at thethree terminals within the confines of the port.Around 2,500 vessels are handled each year atthe 20 oil jetties.

Sweden is a country that has long been atthe forefront of environmental issues and hasinstalled vapour recovery systems andoperates what it calls a 'Green Bunkering'philosophy, which involves both theequipment used and the training of personnelto use it.

Gothenburg is a major bunkering port. Fueloil is not only available within the port andthe River Gota, but also outside in theSkagen/Skaw areas between the Skagerrakand Kattegat and even as far as Copenhagen.A fleet of modern bunker tankers operate outof Gothenburg, which also supply thesurrounding towns and islands with fuel oil.

Crude oil is imported mainly from theNorth Sea and discharged at two jetties at theentrance to the harbour. The depth of waterhere is around 19 m, meaning that tankers ofup to VLCC size can be handled with partcargoes. However, the jetties mainly cater forSuezmaxes, Aframaxes and North Sea shuttletankers. The two crude oil handling jettiesreceive around 150-160 calls per year in total.

Crude is discharged for the Preem, Shelland Nynas refineries in the area and fromthese three refineries and other storage areas,product, such as gasoline, diesel oil, fuel oiland bitumen, plus other refined cargoes areused locally, or shipped out. This movementof product accounts for 50% of Gothenburg'soil shipments. The product handling jetties cantake tankers of up to 12.5 m draught.

Gothenburg has a massive storage capacityashore totalling 3 mill cu m operated by theport and three independent storage concerns.This is currently being increased as Vopak isbuilding a 60,000 cu m capacity tank storagefarm, of which 24,000 cu m will be forgasoline storage.

By the end of next year, Russian crude oilwill be stored in underground caverns fortranshipment purposes. The transfers will behandled at the oil jetties by ship-to-shiptransfers. During the middle of this year, theport was granted an environmental permit bythe local authorities, following a three yearstudy. This allows for the additional handlingof 8 mill tonnes of crude per year - a doublingof the present total.

As already stated, the larger jetties canhandle tankers of up to 19 m draught, whileexports from the Russian Baltic are restrictedto tankers of up to 15 m draught. Russiancrude will be discharged and stored in one of



The 4,000 dwt producttanker Fox Luna wasrecently handed over toBRP Shipping ofGothenburg.

four caverns completed in the 1970s adjacentto the port area. Each of the four caverns has ahandling capacity of 800,000 cu m.

The shipments will be handled byScandinavian Tank Storage (STS) and beforethe operation commences, the jetty will needupgrading with a vapour recovery unit fitted,as well as a new pipeline and control room.

Innovative designsAs befits a country with a large presence inthe chemical and product tanker market,Sweden also has strong ship design interests.A leading ship design consultancy isUddevalla and Gothenburg-based FKAB,which handles around 250-300 projectsannually. These vary in content and can lastanything from just eight hours to a full blowndesign contract of 50,000 hours, JohanAlgell, head of the project and marketingdepartment said.

One of the latest design contracts involvestwo bitumen carriers of 4,700 dwt to be builtby Wuhan Nanhua Huanggang JiangbeiShipyard for Nynas. Called the I12 type, thespecialist tankers have been designed tohandle cargoes having a temperature of up to+250 deg C. Both vessels will be delivered in2010 and could be followed by a third.

The design called for a compromise to beworked out between the deadweight neededand the ability to call at certain ports. To reachthe required deadweight, the vessels havebeen designed to take advantage of a full hullbody with a lot of emphasis placed on theinternal design of the cargo, engine andaccommodation space on board.

Due to the high temperature variations,special design considerations were requiredmainly to take into account the high thermal


expansion of both the tanks and piping onboard. The I12 will have two sets of fourtanks. Each of the four tank sets are onlyattached amidships thus allowing alongitudinal movement depending on thetemperature inside the tanks, while the two byfour tank sets have an independent pumproom and all of the eight tanks are isolated.Each of the eight tanks will be built withcorrugated sides.

Wilhelmsen Marine Engineering, throughits subsidiary Wilhelmsen Callenberg, itselfpart of the Wilhelmsen Marine Servicesgroup, will supply the complete electricalpackage for the bitumen carriers in a contractworth Eur3.8 mill. The equipment to besupplied in a turnkey type operation andincludes the automation, navigation,switchboards and safety systems. Wilhelmsen

will also be responsible for the completedesign and installation of the systems.

Since 2006, FKAB has been involved in atleast four chemical and product carrierdesigns. Two years ago, the companyundertook the concept and basic design of two9,200 dwt T16 type tankers, one of which- the9,200 dwt Olympus - was delivered by RMKMarine to Donsö-based Sirius Rederi.

Last year, at least of one of four T18 typesof 8,130 dwt was delivered by YangzhouKejin Shipyard for Singaporean interests.During the same year, another four T19 typesof 10,000 dwt came from the same yard forthe same interests. Next year, two T20 typesof 10,000 dwt will be delivered from XinshunShipyard.

Algell said that there was potential inSingapore for bunker tankers of up to 20,000dwt, which will be needed to operate in andaround the Malacca and Singapore Straits.

The company has also worked on severalconversion projects, including a drybulkcarrier into a molten sulphur carrier, but thetanker to bulk carrier conversions seenrecently have all but dried up, due to theparlous state of the drybulk market.

Equipment supplierAs for Uddevalla-based Wilhelmsen MarineEngineering, this concern focuses on electro,automation and HVAC system fornewbuildings and also on existing vesselsthrough retrofits. The company is alsoinvolved in the offshore industry.

A strategy plan was developed, whichessentially focuses on the development of thesix relatively independent companies formingthe marine engineering group into a singleengineering entity. Integration and co-operation with other members of theWilhelmsen group of companies is anothergoal to globalise the engineering side of thebusiness as is the expansion in terms of themainstream business segments and worldwidecoverage.

Also on the agenda is new environmentalproduct development and concepts, such as'cold ironing' and energy optimisation.

Apart from winning the contract to installcomplete electrical packages on the twoNynas bitumen carriers, Wilhelmsen MarineEngineering has also won a similar contract tosupply two 7,000 dwt product tankers buildingat Penglai Zhonghai Jinglu Ship Industri forVisby Tankers.

Subsidiary Wilhelmsen Callenberg works inclose collaboration with designer FKAB andthe group markets the brand names Flakt andMarinfloc among others. TO

Principal ParticularsFKAB I12 BitumencarriersClass - BV 1 +HULL +MACH, OilTanker-ESP/Asphalt Carrier,Max Temp 250 deg C,Unrestricted Navigation,Finnish-Swedish Ice Class 1A,+AUT-IMS, SYS-NEQ,+VeriSTAR-Hull, MON-SHAFTVeriSTAR-Machinery.

Length, overall 99.9 mLength, bp 96 mBreadth, moulded 15.86 mDepth, moulded 9 mDraught, design 6 mDraught, scantling 6.5 mDeadweight at design draught

4,700 tCargo capacity 4,300 cu mHeavy fuel capacity 350 cu mDiesel oil capacity 75 cu mFresh water capacity 60 cu mWater ballast capacity

2,000 cu mMain engine output 4,000 kWAuxiliaries 3 x 590 kWShaft generator 900 kWBow thruster 700 kWCargo pumps 4 x 350 cu mBallast pumps 2 x 400 cu mAccommodation 16 personsService speed at 85% mcr

14 knots


Even its dwindling shipbuildingindustry could be the subject of asignificant change soon, now thatAker has become part of South

Korea's STX group. Indeed, Aker was recentlyrenamed STX Europe, although some parts ofthe group have retained their individualidentities.

One of the most famous names in Finnishmarine equipment manufacturing isundoubtedly Wärtsilä. Today, the company ismore of an international service and supplyconglomerate than just a designer and supplierof marine engines.

For example, during the past couple ofyears, Wärtsilä has bought three ship designcompanies to offer owners and operators anextra element by way of a complete designpackage before a vessel is ordered.

As a result, Wärtsilä Ship Design was bornand is now part of Wärtsilä Ship Powerdivision under group vice president JaakkoEskola. The Ship Design division started in2004 when a conceptual design unit wasformed. Two years later German ship designconcern Schiffko was purchased. This yearsaw further expansion with the addition ofVik-Sandvik and Conan Wu & Associates intothe fold.

Being targeted are shipyards having a lowdesign capacity where Wärtsilä canconcentrate on the design aspects and theshipyard on the manufacturing side ofshipbuilding. Complete ship automationsystems and their various components, willalso be offered, as turnkey type projects.

Efficiency the watchwordWith the various regulations due to come induring the next 10-20 years, especiallyregarding emissions, there is a need forgreater economy in shipboard operationscoupled with increased efficiency - the lessfuel consumed, the less emissions areproduced.

There is a lot of research and development

work currently underway, in which Wärtsilä isheavily involved. Despite the currentslowdown there will still be a need forincreasing global transportation in the futureand in the tanker markets in particular on theback of increasing energy consumptionworldwide.

Fuel costs have and will increase again onthe back of increasing power demand, whilethere is a need to design machinery to copewith longer overhaul periods and evertightening environmental regulations.

As for Wärtsilä s original core business -marine diesel engines, the company's vicepresident global research and developmentKlaus Helm said that the trends were forhigher power outputs; electronically controlledengines; reduced lifecycle costs, which wouldinvolve investment, fuel oil, lubes andmaintenance; increased periods betweenoverhauls and emission reduction technologiesto comply with both present and futureregulations.

Wärtsilä is a partner in the EU sponsoredHERCULES project together with rival MANDiesel. The project stakeholders are splitbetween 60% industrial partners, 19%universities, 12% research organisations and9% users, such as vessel operators.

The primary objective is the design andupgrade of propulsion machinery to complywith the IMO Tier 1, Tier II and Tier III NOxreductions formula to the year 2016 and wellbeyond. "We need to comply with theregulations with the best solution," Helm said.

As part of this research project, a four-yearprogramme of work packages started lastSeptember under the title of HERCULESBeta. It has been funded by the EC to the tuneof Eur15 mill. The work packages include - � Advanced combustion research.� NOx reduction using wet technologies.� Exhaust gas after treatment.� Particulate emissions.� Intelligent turbocharging.� Combined cycle process.

� Extreme design parameters.� Advanced materials.For CO2 reduction, Wärtsilä has developed awaste heat recovery system (WHR), whichfor example involves an Aalborg exhaust gaseconomiser, a Brotherhood steam turbineturbogenerator, an ABB/MHI turbochargerpower turbine, a Siemens shaft generatorsystem, all connected to a Wärtsilä mainengine.

In total, 10 Wärtsilä RT-flex96C dieselengines are in service with a WHR system.The first installation was on a 12-cylinderversion in June 2005. Since then, Wärtsiläclaimed that some 8,000 kW had beenrecovered, a gain of 11.5% in efficiency.

Another ongoing research project has seen a20 kW methanol fuelled solid oxide fuel cellsystem installed on board a Wallenius Marinecar carrier. Involved in the trials areWallenius, Wärtsilä DNV, GL, plus others.The trials started last year and are due to endin 2009.

The dual fuel engine is another area thatWärtsilä is focusing upon. Projects for enginesto burn HFO/MDO and LNG are underway,including main engines either already installedor due to be fitted on board LNGCs and alsofor Stena Bulk's E-MAX project (see page 24).

For example, both the 50 and the 32 typeengines can be converted to dual fuel, or fittedas new as the technology already exists.Wärtsilä has already had experience with the50DF type engines as the first units - four12V50DF engines - were installed in a dualfuel diesel-electric configuration on board Gazde France's LNGC Gaz de France Energy,which entered service in 2006.

She was followed by the larger LNGCsProvalys and Gaselys, which were each fittedwith two similar engines, plus twin 6L50DFunits. Last year, BP Shipping's LNGC BritishEmerald entered service with two 12V50DFengines, plus two 9L50DF engines.

By the end of September, Wärtsilä hadinstalled or had orders for 62 dual fuel diesel


INDUSTRY - FINNISH REPORT

Unlike Norway, Denmark and Sweden, Finland is not blessed withmany major shipowners, but is better known as an innovator

in the design and supply of marine equipment.

Finnish innovation isalive and well



engines for LNGCs at seven yards, contractedby 14 shipowners.

Today China is an obvious market for large2-stroke diesel engines. Wärtsilä has beenheavily involved in the country for severalyears and recently signed another licenseagreement with Chinese CSSC-MES Diesel(CMD) for the manufacture and sale of low-speed diesel engines.

This agreement grants CMD the right tomanufacture all sizes of Wärtsilä RTA and RT-flex low-speed engine types at its factory inShanghai. However, CMD will focus onengines of 60 cm cylinder bore and larger.

It also reinforces the partnership betweenWärtsilä and CSSC (China State ShipbuildingCorporation) through Wärtsilä's existinglicensees Hudong Heavy Machinery andZhenjiang CME, which are both members ofthe CSSC group.

Support for the manufacture of the low-speed engines by CMD will be provided bythe Swiss arm of the group, which houses thegroup's centre of excellence for the design,development, research, marketing, licensing,servicing and support of low-speed engines.

Wärtsilä currently has 17 licensees relatedto the production of low-speed engines locatedin Asia, South America, and Europe.

Environmental technologyAs can be seen from the above, environmentalconcerns are becoming paramount in theshipping industry. To focus on these and othersimilar issues, Wärtsilä has created anotherdivision.

Called Delivery Centre Ecotech (DCEcotech), the unit will concentrate ondeveloping and delivering environmentaltechnologies, as well as products for emissionsreduction and efficiency improvement.

DC Ecotech will be a global unit withinWärtsilä and it is to be headed by JuhaKytölä, president of Wärtsilä Finland, andcurrently also vice president, Delivery CentreVaasa, Finland. The new unit is expected to befully operational from January 2009.

In explaining the reasoning behind thisinitiative, Kytölä said: "Wärtsilä has manyyears of experience in delivering emissionsreducing equipment for the exhaust stream ofits engines, both in land based power plantsand ship installations. Common to all thesedeliveries is the fact that they are tailor madefor each specific installation. DC Ecotech willfocus on both the further development of thesetechnologies, as well as a portfolio of productsthat can be produced in volume."

DC Ecotech will act as Wärtsilä's centre forproactively developing environmental

technologies. Furthermore, in promoting andproviding legislation knowhow, the unit willhelp customers to comply with environmentalrules and regulations as they becomeincreasingly stringent.

Tighter emissions legislation is impactingboth the shipping and power plant sectors. Forexample, the IMO's Tier II requirementsstipulate a 20% reduction in nitrogen oxide(NOx) emissions from current levels, whilethe Tier III requirements, which come intoforce in 2016, ask for an 80% reduction fromtoday's levels in selected areas.

Sulphur oxide (SOx) emissions are also tobe significantly reduced. Similarly, legislationrequirements for power plants with similaremissions components are becomingincreasingly stringent. There is also anincreasing global focus on lowering CO2emissions, and discussions regardinglimitations in this area have already started.

In tackling these environmental challenges,Wärtsilä's DC Ecotech unit will continue andexpand the company's ongoing new productresearch. This includes work on thedevelopment of a new selective catalyticreactor (SCR) unit system for gas engines aswell as the validation and design optimisationof the recently launched NOR (NitrogenOxides Reducers) SCR unit. Developmentalwork also continues on a combined marinescrubber and exhaust gas module, a waste heatrecovery concept and carbon dioxide captureand storage technology.

In another move, Wärtsilä's Senitec sludgeand bilge water treatment system has receivedUS Coast Guard (USCG) Type Approval.Tests have confirmed the system's ability toremove oil in water levels to well below thoserequired by the IMO, Wärtsilä said.

Rigorous testing carried out by the USCG-approved SGS Institute Fresenius in Germany,one of Europe's leading providers of non-medical laboratory analysis, confirmedeffluent discharges of less than 1 ppm againstthe IMO's current requirement of 15 ppm.

While Wärtsilä received the Bureau VeritasType Approval last year and intends soon toapply for ABS certification, a USCGcertificate, means the US market is now fullyopen for Wärtsilä to promote the Senitecsystem, the company said.

Double hull weldingFinnish welding automation concernPemamek has enhanced its Pema range ofautomated systems to include vertical weldingmachines for double hull construction. Theuse of automatic and robotic weldingmachines are claimed to improve a shipyard's



productivity significantly.At a shipyard, one person can operate the

machine thus significantly improvingproductivity. One of the major problems,especially in Europe, is the lack of qualifiedwelders, thus automation is the key toincreasing a shipyard's productivity, thecompany said.

Ideally, Pemamek said that a double bottomproduction line system should consist of -� Stiffener and web-mounted gantry, manual

assembly and tack welding (SSMP).� Vertical welding gantry, automated welding

and vertical seams (VWS).� Robotised welding gantry, robotised

welding of vertical/horizontal seams (RWP).

� Service gantry, support of semi-automatic welding equipment (SP).

� Transportation trains, transport featuring integrated lifting of sections - load-out (TS).

European shipbuilding yards, such as those inFinland, Spain, Italy and Croatia, arePemamek's main customers. New orders wererecently received from Italy, Spain andTurkey, while two Chinese yards have alsoinvested in a system. India and Russia areother shipbuilding areas being targeted.

To cope with the influx of orders, the 8,500sq m Finnish manufacturing site located atLoimaa is being extended by a further 4,000sq m, which will be completed by the middleof next year. The company is also recruitingextra personnel. All of the systems are built

and tested on site and then knocked downready to be shipped to the shipyard.

Tankers to get a liftThis year, elevator designer and supplier -Kone - formed a cargo division, whichincludes marketing to tanker owners andoperators. The company already has anextensive worldwide network of offices andservice stations, many of which were built upon the burgeoning cruise ship market.

Kone's Marten Barlund said that thecompany sees an opportunity to enter thecommercial shipping sector at a time whereseafarer recruitment and retention has becomea problem, resulting in many shippingcompanies investing in on board facilities.

The elevator design for commercial vesselsis less complex than that for cruise vessels inthat the machinery is included in the trunk andnot fitted on the top of the shaft as is the normon buildings, thus saving a considerableamount of space.

Ideally, space for an elevator should beaccounted for in the accommodation at thedesign stage and a maintenance packageagreed at the same time as the installation forpart or full replacements. The lifts can beslotted in whole, or in sections, depending onthe accommodation's design and can beprefabricated in the factory.

Ice expertsAker Arctic Technology (AARC), the iceresearch specialists, moved to new premises

adjacent to the new Vuosaari port outsideHelsinki in February 2006.

Since 1st January 2005, AARC has been anindependent concern and as such is believedto be the only independent company offeringan ice test basin. Its current shareholders areSTX Europe, ABB and Aker Solutions.

In line with the move to a purpose-built icemodel testing facility, AARC has increased itsstaff to 35, from the original 12. Enhancingthe new test basin is a corridor runningunderneath the tank where visual observationsof model behaviour in ice can be observedthrough a transparent glass ceiling.

Aker Arctic is involved with the researchand testing of icebreakers, commercialvessels, offshore structures and floating/fixedterminals in ice conditions. In addition, thecompany offers consulting, design andengineering services, field expeditions,training and other services associated with ice,or extreme cold conditions.

Field expeditions take into account iceconditions, ice properties, route selection,while tank tests include those on ships,structures, offloading operations, rescueoperations plus buoys and tower models.

The test tank is frozen overnight to therequired ice formation. The advantage of theunderneath viewing area is that it gives theresearch team scope to see the ice reactionwith different hull designs, enabling possiblerudder and propeller damage to be estimated,as well as examining the entirehydrodynamics of the structure. For example,

Aker Arctic’s icetesting tank isnormally frozenovernight to therequired depth. Ithas been fittedwith a viewinggallery underneathwith a glass roof.



the ice movement can be observedunderneath the hull while the model is underway.

Impact on propeller blades and the gearingof a hull transiting through ice powered by amedium speed engine coupled to the shaft linecan also be calculated, as can the ice forcesacting against a hull structure in a closed or anopen channel situation. Tests can be conductedwith Azipull or Azipod propulsors and themany other propulsion systems currentlyavailable. Ice collisions are another areaunder that can be investigated.

A portfolio of ship designs under the bannerof Aker ARC 101 to 107 is also offered toowners and yards, as the design function wasborn in the Helsinki shipyard.

Current work includes new concepts forArctic drillships and FPSOs, LNG carriers andvarious multipurpose icebreakers. Co-operation and license agreements have beenconcluded with South Korean, Japaneseinterests and most recently with Wadan Yards.

As for tankers, Aker Arctic designed boththe St Petersburg and Samsung-built BarentsSea shuttle tankers. The first Russian-builttanker Mikhail Ulyanov was launched on 31stOctober, while the first of three Samsungvessels, Vasily Dinkov, was delivered last year.

Interestingly, the third vessel in the SouthKorean built series will be fitted with iceimpact sensors along the hull.

AARC head Miko Niini said that as Lukoiland ConocoPhillips were in negotiations overthe licensing of the Titov Field, this could leadto the design and construction of more Arcticshuttle tankers.

As well as tankers, conceptual design work

has been carried out for the past two years ona DAT type 206,000 cu m LNGC, whichcould be built to lift Russian gas from Yamalto the US. Extensive tests were carried out inthe ice basin in simulated ice of 170 cm thickat 4.9 knots and of 150 cm thick at 5.4 knots.It was found that ice impacted less on thecargo than heavy seas, thus reducing the threatof sloshing.

One of the research projects ongoing withpartner ABB is to develop an Azipod toproduce more than 30 MW. "There are a fewchallenges still to be overcome," Niini said.

He explained that the need for independenticebreaking vessels was partly driven by thehigh daily costs of hiring purpose-builticebreakers. The cost of fitting icebreakingsystems, such as DAT Azipods was found tobe viable, following several years of operationwith Neste's Aframaxes Mastera and Tempera,also designed by Aker Arctic.

Aker Arctic claimed to be the first to beinvolved with an ABB Azipod design, thedouble acting tanker (DAT) design, an obliquetype vessel, an air bubbling icebreakingsystem, stainless steel icebelts, Polaricebreakers and quadruple screw icebreakers.

To help ensure the research facility's future,students are taken in about two or three daysper week in the hope of converting them tofuture qualified naval architects or engineers.

Fire fighterLeading fire fighting concern Marioff hasfitted around 30-40 LNGCs building in SouthKorean yards with local applications in themachinery spaces. These are a water-basedtotal flooding system and Hi-Fog, which is

produces a blanket water mist, rather thandeluge the area with large water droplets.

The problem with a CO2 system is that thearea to be covered must be evacuated and thenclosed off.

The advantage, according to Marioff'sStefan Gordin, is that there is no waterdamage with Hi-Fog and it cleans itself. It isalso easy to retrofit as the small pipesnecessary for the water flow can be installedmanually.

Each system is laboratory fire tested atMarioff's own facility and between 10 and 15different tests must be undertaken before asystem is type approved. Flag states primarilyuse class for their approvals.

FPSO workHelsinki-based ship designer Deltamarin hasrecently been involved in FPSO conversions,one for Bluewater - Aoka Mizu - and theRagnhild Knutsen for PetroServ, both ofwhich were converted at Sembawang. Thelatter was rebuilt into an FPDSO, meaningthat there was a drilling rig fitted.

The Bluewater conversion involved powergeneration, flare technology, heli-deck designand the interface between the hull and thetopsides. The Ragnhild Knutsen conversioninvolved engineering work on the hull andaccommodation. She has re-emerged as theDynamic Producer operated by PetroServ andhas been fitted with a DP3 system instead ofher original DP2 system, which was in usewhen trading as a shuttle tanker.

Deltamarin has worked with Neste on a25,000 dwt ice class design tanker built atJinling and a 14,000 dwt design at Viana doCastelo. For the Jinling-built vessels, trainingpackages were organised for harsh winterconditions in a joint venture, which includedice navigation simulations.

The company has also designed all types oftankers from small methanol carriers,asphalt/bitumen tankers through to VLCCs.Other specific designs included a diesel-electric shuttle tanker, a diesel- electric safetytanker concept with ABB, Cegelec andWärtsilä Diesel and the development of theAquamaster safety tanker concept.

In addition, the company is involved inAstrakhan with the Caspian Sea oil and gasindustry and has opened an office in Gdynia.Deltamarin said it made the decision to start anew company in Poland as capacity wasavailable, engineering education was of a highstandard and engineers were also highlyqualified.

Initially, the Polish office is operating withthree engineers and naval architects, but the

Aker Arctic moved to a purpose-built site at Vuosaari in 2006.



intention is to employ 15-20 people in the near future, the company said.

Azipod successLast year, ABB Marine embarked on an extensive developmentproject with the objective of developing the next generation of Azipodpropulsion units.

One of the advantages claimed by the Azipod system is that it wasdesigned to improve operational efficiency, which should reduce thetotal life cycle costs of the system. With new features added, thereliability and availability of the system will be improved, forexample, by extending drydocking intervals.

Critical parts status and condition can be monitored by extendedcondition monitoring features that would significantly improve shipoperation predictability.

ABB said that there were four areas that had been identified forimprovement. These were -� A new modified hull design, which would allow the maintenance

of most of the vital components without the need for drydocking the vessel.

� Electric steering. The electric motors are controlled by variable speed drives. Advantages would include higher efficiency, easier maintenance due to the lack of hydraulics.

� New assembly block, which would be designed to focus on reliability and maintenance and also ease of integration with a vessel's hull.

� Intelligent and operation-adaptive propulsion control interface, which is aimed at providing better communications with and

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understanding by the operator of the overall system status.

Maintenance is one of the keys to the system'soperation and ABB offers life cycle serviceagreements and will also train the vessel'screw in its operation.

For LNGCs, ABB is marketing a contra-rotating propeller Azipod system andelectronic propulsion shaft line systems. Thusfar, ABB has fitted systems for diesel electricpropulsion on board 26 LNGCs with anotherfour newbuildings to come.

Some 22 ice going vessels have been fittedwith Azipods while the overall total nowstands at 167 Azipods in 74 vessels fitted inmore than 20 shipyards. ABB claimed amarket share in this type of propulsion systemof 75%. Next year sees the opening of twofurther service centres to be located in Russiaand Brazil.

ABB Marine's tanker reference includes theretrofitting of Neste's Lunni and Uikku with11.4 MW power systems; Neste's AframaxesMastera and Tempera, which were the firstDATs to be built; Sovcomflot's two designs ofshuttle tankers building at Sumitomo (threeVasily Dinkov class) and at AdmiraltyShipyards (two Mikhail Ulyanov types).

In addition, earlier this year Donsötank tookdelivery of the ice class chemical tankerExcello from the Shanghai Edward Shipyardin Shanghai, which was fitted with twinAzipods developing 3.2 MW each.

Software expertiseSince releasing Onboard-NAPA primarily forthe cruise ship sector in 1992, Finnishsoftware concern Napa has installed loadingand damage stability programs on some 950vessels. Of these, the largest number of vesseltypes with the software installed in percentageterms is the chemical and product tankersector with 31%. Crude oil carriers amount to11% and gas carriers a further 5%.

Software has also been developed to allowthose ashore to obtain operational informationfrom the ship, including optimisation of routeplanning, fuel management, electroniclogbook, plus other information and controlfunctions to build up a fully integrated datamanagement system.

One of the latest is the smart electronicnotebook and reporting system, which thecompany claimed had engendered a lot ofinterest from tanker owners and operators,especially from the Middle East and amongthe oil majors.

NAPA Log is a system aimed at replacingthe traditional logbooks, which can also beused as a reporting platform as it contains both

a shipboard and an office module. Theadvantage claimed for the office is that a fleetdatabase can be constructed with a minimumamount of working hours, no manual inputs arenecessary from the shoreside, all the loggedfleet data is available for further analysis, awide range of reports can be created, fleetcontrol is increased and performancebenchmarking can be undertaken at any level.

In effect, the office module acts as a fleetsupervisor. If other products are used inconjunction with the logbook data, such asNAPA Power, a powerful performance tool forfuel economy optimisation and analysis isavailable, the company claimed.

In October, Napa announced that NAPALog had received approval from flag states,such as Bahamas, Panama, Sweden,Netherlands, Denmark, Norway, Malta andMarshall Islands. Other approvals wereunderway, the company said.

Until a management buyout was put inplace in 1989, Napa was part of Helsinki'sWartsila Shipyard having started in 1976 as aship design tool created by in-house navalarchitects and engineers. By 1982, the shipdesign software was being produced.

Since then, Onboard-NAPA based on thesame technology was introduced in 1992,which was followed by a number of newsystems. To ensure worldwide coverage, NapaJapan was formed in Kobe, Napa SoftwareServices India in Bangalore and NapaRomania in Galatz. Representative officeswere also set up in Shanghai and Pusan.

Tank managementEmerson Process Management is currentlyworking on enhancing its Marine TankManagement System division (MTM). Thesystem is claimed to be a complete, integratedsolution for the monitoring and control of allvessel tank related functions.

During the last few years, Emerson has

taken several companies under its wing, whilestill retaining the leading brand names. Theynow form Emerson's MTM division.

There are four distinct equipment rangesmaking up the package. These include -� Damcos actuators and remote control

systems.� Rosemount TankRadar STaR marine radar

tank gauging, alarm handling and cargo control system.

� SF-Control LevelDatic electro-pneumatic tank level gauging systems.

� MAS2600 electronic tank gauging systems.Specifically for LNGCs, also offered is theRosemount TankRadar CTS - a custodytransfer system - and the RosemountTankRadar OFC - a radar-based overflowcontrol system.

LevelDatic offers tank level, water ingressand draft monitoring functions and thecompany claimed that there had been just 300failures out of a total of 40,000 installations infive years. A system can be retrofitted in twoweeks and it is claimed to be virtuallymaintenance free.

Recent tank radar innovations include theintroduction of three layers - a conventionalradar, a high level radar and what is termed a'high high' level radar. The company claimedto have 60% of the tank radar market. Someof the latest installations included the tanks ofSovcomflot's Arctic shuttle tankers andsystems have also been fitted on LPG carriersand retrofitted on FPSO conversions.

Hose handling During 2008, MacGREGOR has deliveredabout 75 hose handling and provisions cranesfor 20 vessels, mainly tankers for Arcticoperations.

The current order book stands at 464 hose handling and provision cranes most ofwhich are to be fitted on board for tankersthrough 2011. TO

MacGregor has a forward orderbook of 464 hose handling and provision cranes through 2011.


TECHNOLOGY - SHIP DESCRIPTION

The E-MAX unveiledAnother MAX comes off the Stena Bulk conveyor belt

produce 25% less CO2 emissions, 90% lessNOx and 100% less SOx. In addition, therewould be 99% less particulate matter emitted.

Therefore, there would be no need to fit acatalytic converter and it could be possible totrade emission rights, he claimed. Therewould also be no sludge left, fuel oil heatingwould not be necessary and less maintenancewould be needed on the main engines andauxiliaries.

Fuel supplyOf course, one problem to be overcome is thesupply of LNG. With a full tank of LNG, an E-MAX will have at least 22 days before itwould need refuelling. The use of MDO as asecondary source of fuel would allow thevessel the 'take me home' option.

In the Baltic area, Stena said that LNGcould be bunkered at Gothenburg, or be storedin tanks at other strategic locations ashore.

Gothenburg port has held talks with the EUfunded MAGALOG project about becomingan LNG bunker hub. Today, Gasnor is thelargest supplier of LNG for bunkers, mainlyon the west coast of Norway. These bunkeringstations are supplied by sea by small feederLNGCs, such as the Pioneer Knutsen.

E-MAX was designed in-house by StenaTeknik and talks are currently ongoing withpotential charterers and shipyards, StenaBulk's commercial operations managerLindbom said.

The tanker would be fitted with 14 cargotanks, each coated with phenolic epoxy paint.Sixteen fixed nozzle tank cleaning machines- 14 for the cargo tanks, one for the slop tankand the other for the drainage tank - wouldbe fitted as would a NO2 and LNG flue gastank inerting system. Cargo tank levelgauging would be accomplished using aradar type system.

The E-MAX willneed to berefuelled atdesignated bunkerstations.

The twin tanksseen on deckhouse the LNG.

Stena Bulk's latest design, the E-MAX, is an innovative dual fuel14,300 dwt (design)product/chemical IMO II tanker,

intended to ship CPP cargoes in northernEurope and the Baltic regions.

The company has opted for a diesel-electricpropulsion system coupled with a combinationof marine diesel oil and LNG for both themain engines and the auxiliaries.

Twin Wartsila 6L50DF engines wereselected, each developing 5.7 MW at 500rev/min for the main engines and twinWartsila 6L34DFs for the auxiliaries, eachdeveloping 2.7 MW at 720 rev/min. Twosteam boilers are also to be fitted.

Although admitting the vessels would costaround 25% more to build than conventionalproduct tankers of the same size, a 10%saving in fuel costs is achievable byoptimising the twin-skeg hull design, StenaBulk's Markus Lindbom explained and bykeeping the service speed down to 13.5 knots.Two fixed pitch propellers and a bow thrusterwould aid the design's manoeuvrability.

Lindbom claimed that the daily fuelconsumption of an E-MAX would be 17.5tonnes using LNG as a fuel, or 19.5-20.5tonnes on MDO, compared with a standardproduct tanker's consumption of 22 tonnes perday. On the basis of LNG fuelled propulsion,CO2 emissions from an E-MAX design wouldbe in the region of 35-40% lower than astandard intermediate tanker.

The drive for LNG powered vessels ismainly on environmental grounds. Lindbomsaid that compared with a vessel burningMDO, an LNG powered tanker would TO

Enter the E-MAX.

At a recent conference,International MaritimeEmployers' Committee (IMEC)secretary general, David Dearsley

argued that although the present worldeconomic crisis is far worse than at thebeginning of previous recessions, it would notsignificantly impact on shipping's manpowershortage.

Expectations based on the results ofprevious economic recessions would tend toindicate that the shortage of qualified officersis so bad that a significant decline in thenumber of ships in the world fleet through thescrapping of existing ships, lay-ups and thecancellation of proposed newbuildings, wouldsimply reduce the shortage to moremanageable numbers. "Frankly, I doubt this,"Dearsley said.

Dearsley explained that unemployedqualified seafarers have alreadydemonstrated in past recessions that they canassimilate back into the shore-basedpopulation relatively easily because theirtechnical and professional skills aretransferable. Many shore-based industries,such as in engineering, ports and harbours,and offshore installations value theflexibility and hands-on skills of seafarers.

"Young people all over the world lookingfor careers as they leave university, use theinternet to source information in a way that

did not exist even 10 years ago," he said."Any company or industry that shuts itsdoors to the recruitment and training of itsnext generation of skilled workers will senda clear and long-lasting message that it is interminal decline. We run the very real risk ofsending out this message again today, notjust in the UK or Europe but globally, unlesswe maintain a long-term and far sightedtraining programme to deal with the crew crisis."

Many owners facing pressure on marginsare bound to reduce so called 'discretionaryspending', which includes the trainingprogramme. If the recession produces areduction in the scale of the officer shortages


TECHNOLOGY - TRAINING

A farsightedapproach to thecrewing crisis

Take advantage of industry funds to continue cadet training programmes in the face of a recession, advised a leading employers representative.

David Dearsley warned owners not to cut back on training.

“Any company or industry that shuts itsdoors to the recruitment and training of its

next generation of skilled workers will send a clear and long-lasting message that

it is in terminal decline.”David Dearsley, secretary general,

International Maritime Employers’ Committee (IMEC)

“

”

and reduces the pressure on officer wagerates, it will be even more difficult to resistdemands to reduce the number of cadetsbeing trained.

The only way forward to making sure thatthe errors of the past are not repeated is tomaintain recruitment and trainingprogrammes. Dearsley explained: "This does not mean that they should bemaintained precisely as they are today;indeed this would not be sustainable. Itmeans maintaining our intake of cadets but targeting our resources better in order to reduce wastage and improve the quality of the output and where possible spreadingthe costs with other like-minded companies."

Long term decisionIMEC took a long term strategic decisionlast year in respect of cadet training.Dearsley said: "When considering the officershortage we concluded that simply throwingmore cadets into the system would notnecessarily prove to be the answer in some

of our major labour supply countries. TheWorking Group we established to considerthe officer shortage was particularly struckby the fact that some 10% of our Filipinoratings held valid officer licenses. They werealso struck by the fact that each year some18,000 young Filipinos commenced trainingprogrammes designed to deliver officerwatchkeeping certificates after the four-yearperiod, but only some 4,000 officers wereactually produced. The balance obtainedwork ashore or became ratings.

"Clearly, recruiting yet more cadets intothis system would not produce the desiredeffect of producing enough officers toovercome the shortage. So we decided tofollow the lead already initiated by theNorwegian Shipowners' Association and tryto change the system. Starting from scratchthis year we decided to select cadets toeducational, aptitude and medical standardsthat we set, to train them to standards we set,in particular in respect of reduced class sizesand the provision of educational materialsand equipment, and to ensure that the

lecturers were fully competent and selectedby IMEC.

"The programme is fully sponsoredthrough International Maritime TrainingTrust (IMTT) and the cadets receive a fullscholarship covering tuition fees,accommodation and food, uniforms andtraining materials. The cadets are assured ofthe 12 months sea time training with anIMEC member during the third trainingyear and will return to that company oncethey have obtained their officer license," he said.

IMEC firmly believes that the cadettraining programme is a long-term,farsighted way to produce the number ofqualified seafarers that the industry requiresand of a standard of competence in excess ofcurrent standards. Dearsley said: "Ofparticular importance given the currenteconomic crisis, the manner in which theprogramme is financed through an industryfund should minimise cost during a timewhen training budgets will inevitably comeunder severe pressure."



TO



Training guidelinesfor designated

personsLate 2008 is a challenging

time for Designated Persons(DP) in most shippingcompanies, says Capt

Pradeep Chawla*.

Crew shortages, officers holdingcertificates but not beingcompetent, quick promotions,high wages, low retention rates,

and a 'I don't care' attitude related to the jobmarket supply and demand situation, may notbe the only problems that a DP faces today intrying to build a safety culture in a company.

We now have falling freight rates, financialdifficulties, cancelled charters, lack of cargoavailability and of course piracy to add to thewoes of the DP and other managers. Safety ofship operations is under attack once again andinsurers are starting to talk again of increase inaccidents. Wasn't the ISM code supposed tosolve these problems that we have seen before?

Perhaps it is an ideal time to discuss onceagain the role of 'the' Designated Persons orthe popular Mr DP under the ISM code.

It also seems to me that the originalintentions of the ISM code, in creating theposition of DP seem to have got a bit confusedover the decade of ISM implementation. TheISM code has a very small paragraph aboutthe 'Designated Persons'.

It always helps to re-read the carefullycrafted language of regulations.

The code requirements are:1. To ensure safe operation of each ship.2. To provide a link between the company

and those on board. Every Company should designate a personhaving direct access to the highest level ofmanagement.

Responsibility and authority should include:� Monitoring the safety and pollution

prevention aspects.� Ensuring that adequate resources and

shore-based support are applied.To my mind the critical parts are :

(1) Having direct access to the highest level of management and,

(2) Ensuring adequate resources.Doesn't it sound like the authors of the codewere looking for a senior manager with some'real power' in the company?

A checklist prepared by the West ofEngland P and I Club in the mid-ninetiesasked:

'Do company written procedures make itclear that the Designated Person(s) isresponsible only for SMS verification andcontrol, and not for SMS implementation?'

The IACS guidelines, to Auditors, initiallydid not get it fully right but the later versionsstated:

IACS RECOMMENDATION NO 41, ISMCODE Para 4 (Page 14) Rev 4, 2005 -"Essential to the Designated Person's abilityto satisfy the requirements of this paragraphis the direct access he or she must have to thehighest levels of the Company's management.The auditor must be satisfied not only thatsuch access exists, but also that the DP isable to use it effectively in ensuring thatadequate resources and shore-based supportare applied."

It was obvious that the P & I Club andIACS were looking for the monitoring ofsafety and environment protection systems byan experienced manager.

As recently as MEPC 56 in April 2007, theUK submission stated:

"A key role, as identified by the ISM Code,in the development and implementation of amaritime safety culture is that of theDesignated Person. This is the individualbased ashore whose influence andresponsibilities should significantly affect theattitudes and behaviours of those workingashore to support the ship operations, and whosupports and influences a positive attitude tosafety and environmental protection by thoseworking on ships being managed."

"A key element of Document ofCompliance audits for the Company should bea determination of the extent to which theDesignated Person has the necessaryindependence and authority to ensure thepromotion of attitudes and behaviours relatedto safety and environmental protectionthroughout the organisation."

It is a well-known fact that in practically allindustries, it is expected that safety andenvironment protection should be discussed inthe board-room and not only in the cafeteria.

We started off correctly, basing the ISMcode on ISO and other quality standards. Infact the requirements for DPs were betterworded than the requirements of aManagement Representative (MR) in ISOstandards. The authors of ISM code wanted toraise monitoring of safety and environmentprotection to the highest level of management!

IMO did miss out recognising the existenceof the shipmanagement industry completelyand while the young industry ofshipmanagement did not get discussed in anydetail during the drafting of the ISM code, itdid leave a grey area for the shipmanagers.

While the 'company' by the definition inISM code is the shipmanager, it is debatablewhether the real 'highest management' is theceo of the shipmanagement company or the

It is a well-known fact that in practically all industries, it is expected that safety and

environment protection should be discussed inthe board-room and not only in the cafeteria.

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shipowner (or his 'controller' of the shipmanager).The various 'guidelines' and instructions by the implementers,

over the years, though has started to confuse the role of the DP in many ways.

In the early days, it was common for auditors to expect that the DPwas the single point of contact for everything to do with the ISM code.

In fact IACS, in it's guideline to auditors recognises this and states: IACS (Page 15)"It is commonly believed that the DP must be made responsible for the

entire administration of the management system documentation, for theplanning and conduct of internal audits, and must act as the soleconduit for all contacts between the ships' staff and the organisationashore. This is not the case."

"It is better to think of the DP as the person responsible for ensuringthat such processes are in place and operating as required, a role thatis more likely to be effective when separated from the practicalimplementation."

Here are some examples of the guidelines from the authoritiesimplementing the monitoring of the ISM code, which can beconsidered as being prescriptive and open to debate whether the role ofDP is to carry out these tasks.

Flag 1: The DP must actively ensure that the ships are properly andresponsibly operated and to this end should maintain close contact withmaster and officers. They should visit ships at regular intervals. Theyshould monitor internal audits, corrective actions, safety, accident andcasualty reports and the general efficiency of the SMS.

Flag 2: With regard to location of additional immersion suits, thisflag requires-

"The ISM designated person ashore, in consultation with the master,



of the vessel is responsible for identifying anddeclaring such locations to the relevantrecognised organisation which issues theSOLAS convention certificate."

Does not look like the job of the shipsuperintendent?

Major Classification SocietyAs part of the monitoring activities the DPAmay review a number of documents -� Ship safety meetings.� Ship safety inspections.� Ship/shore drills records.� Safety /pollution equipment maintenance.� Superintendents' inspection reports.� Charterers' / insurer's inspection reports.� Defect /damage /incident reports.� Non-compliance /accident /near miss

reports.� New legislation and industrial guidelines.Having reviewed these documents the DPAshould ensure that appropriate actions havebeen carried out in each case. These actionsmay include -� Acknowledgement of receipt of records.� Verification of corrective actions, where

suitable etc etc.Flag 3: This flag has added 'security' to the

DP responsibilities.Does it not seem like the role of a DP is

being reduced from a 'monitor/leader', highranking person to a person more responsiblefor the day to day operations of the vessels?

IMO has of course tried to improve ISMimplementation by issuing guidelines for thetraining requirements of DP's. Is that going tohelp or is it going to cause more confusion?Will accidents reduce with better trained DP's?

The requirements of MSC-MEPC circularare widely circulated and do not need to berepeated here. Like all regulations, theseguidelines are the 'consensus' solution thatcould be achieved in the halls of IMO.

The effort to improve ISM implementationare indeed deserving the full support of theindustry, but one has to really wonder whetherwe could have achieved a different pathforward if we had made the requirementsstricter.

Changing anything that has once beenwritten and issued by IMO is a lengthyprocess and may not be worth the effort, butthe implementers-flag states, recognisedorganisations and the companies can takesteps to ensure that the interpretation of thecircular is such that genuine improvement isachieved with these new guidelines fromIMO.

Consider the following suggestions:(a) Make some minimum sea service

requirements mandatory to be a DP, as the DP is supposed to be the link between the shipboard staff and ashore.It would certainly help if the DP could understand the 'root cause' if the garbage log book was not signed or if the weekly boat drill was not held for two consecutive weeks while the ship's staff was struggling to prepare the vessel for the next cargo while crossing the North Atlantic in gale force winds!

(b) Make it a requirement that the DP should have reached the position of master or chief engineer on board.Perhaps it would help to command the respect of the master who has spent 25 years in command through good and bad freight rates and 'seen' the fluctuations of the commitment of the industry to train, mentor and nurture the future officers.One of the flag states does prescribe this in a circular called 'Who should be the DPA of the company?'.

(c) Appointing a DP with the requirements of para 'c' of the guidelines is possible but it has to be a well thought of decision.

In enforcing the training guidelines for DP'swe must guard against the 'implementers'encouraging the lowering of the DP positionfrom a high position in the company hierarchyto the level of the 'doers'.

We must guard against long theoreticalcourses designed to train DP's who have beenthrust into these positions with no knowledgeor understanding of the profession.

I am in favour of training the DP but theresponsibilities of this job function require apragmatic approach and a thoroughunderstanding of the profession.

Knowing regulations, being thorough withthe SMS or even having a law degree does notteach the DP the skills that are required tobuild and encourage a 'safety culture' in thecompany, which I think is the ultimate goal ofthe ISM Code.

In my opinion the actions that are needed tobring about a better implementation of theISM Code, through the DP are:1. DOC audits should aim to measure the

commitment from the top management and their involvement to keep safety and environment protection as the foundations of the company culture.

2. Move the DP function to the boardroom.3. Look at the commitment to the training of

seafarers and shore staff.4. Instill safety culture in the shore offices

and make all the shore-staff responsible for ISM. Not just the DP!

5. Raise the level of requirements to be a DPA!

*This is an extract from a recentpaper presented by Capt PradeepChawla, director, qualityassurance & training, Anglo-Eastern Ship Management.

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Alack of human interface not onlyweakens the effectiveness ofLong Range Tracking (LRIT)regulations, which officially enter

into force on 31st December 2008, but alsoplaces vessels and ports at risk warned globalmaritime security services provider,Securewest International.

On the back of the recent findings by theGAO regarding the alarming gaps in securityat ports around the globe, the failure by some

registries and contracting governments toutilise a 24/7 manned monitoring service forLRIT potentially leaves further holes in the'domain awareness ' security cover that it wasspecifically designed to enhance.

It is a simple fact that the harshenvironment at sea means vessels come inand out of tolerance, usually because ofsimple problems associated with hardware,such as terminal corrosion and antennaproblems. In other words, there is noguarantee that every SOLAS vessel over 300gt will be reporting its position as requiredfour times a day.

According to Securewest, this is not a smallscale issue and could be the case for up to


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30% of shipping at any one point."We are being approached by an

increasing number of registries, governmentauthorities and vessels owners who haveexpressed some concern with the currentsystems regarding the points when vesselscome in and out of tolerance", said StuartFlynn, Securewest's vice president ofbusiness development.

"Without a 24 hour 365 day mannedmanagement and monitoring service there ispotential for holes in the 'domain awareness'security cover that LRIT was specificallydesigned to enhance. This lack of humaninterface and management could not onlyweaken the effectiveness of LRIT but, in aworse case scenario, render the system all butuseless," Flynn continued.

SOLAS V/19-1 Long-Range Identificationand Tracking (LRIT) regulations come intoforce at the end of this year with phasedcompliance for various vessels of 300 grt orabove, by sea areas and build date, after 31stDecember 2008. This means that, barringsome exclusions, all commercial vesselsover that tonnage should be capable oftransmitting the minimum report information

relating to the ships identity, the position ofthe ship and the date/time details of thatposition four times a day and for thefrequency of such positional reports tobe modified.

This will represent a fundamental change tothe way shipping has been regulated. Intheory, it will be possible for contractinggovernments to identify every vessel up to1,000 nautical miles off their coasts.

But any lack of direct daily management

and human interface with vessels risksleaving a registry's ships 'hanging', for theships themselves will not know whethertheir position is still being reported. Whowill be there to inform them if they do goout of tolerance, or to mark up on the systemthat the vessel has reported a fault to itsLRIT terminal that needs to be repaired at itsnext port of call, possibly several dayssailing away?

"With perhaps as much as 20-30% ofshipping affected at any one time, the wholeethos behind LRIT is undermined becausethere will no longer be total visibility of all(SOLAS V/19-1) vessels. Add to that all theproblems associated with vessels flagging inand out and those powered down while in theyard and it can be seen that there is a hugeissue of daily management to ensure thesystem operates, as it should, on a globalscale," Flynn said.

Financial issues will also arise from non-reporting vessels. Even though theregulations do not currently stipulate finesfor out of tolerance vessels, experiencedictates that coastal authorities andcontracting governments could quitelegitimately hold offshore any vessel thathas not reported its position recently. Theassociated costs of such action wouldoutweigh any potential fines.

"To have a secure human interfacemonitoring and managing LRIT rather thanleaving it purely in the hands of machinesmust be the way ahead for LRIT. AtSecurewest International we have alreadyjoined forces with the SARS Corporation toaddress such problems by offering a unique360 deg LRIT solution to administrationsand registries, which offers an alreadyestablished, permanently manned, securemanagement centre; secure web-basedtracking facility; exception reporting for outof tolerance vessels including follow up call-

Stuart Flynn

“Without a 24 hour 365 day mannedmanagement and monitoring service there ispotential for holes in the ‘domain awareness’

security cover that LRIT was specificallydesigned to enhance.”

Stuart Flynn, vice president of business development, Securewest

“

”

ups with vessels; notification tagging forissues or problems; and all the mandatoryelements of SOLAS V/19-1," Flynnexplained.

Concern has also previously been voicedabout the secure nature of tracking technologyeven when screens are being monitored.

"Very real issues over the visibility ofvessel position reports are regularly raisedwhen we speak to shipowners," noted Flynn."Already anxious about the freely availableproliferation of AIS data they quite rightlywant to know who is going to see their vesselposition reports and how they can be sure thatinformation is not being passed tocompetitors?"

There are a large number of personnelinvolved in the management of LRIT andreassurances need to be provided. It is for thisvery important reason that all Securewestpersonnel are vetted and screened, and thecompany runs an already successful, secure,24/7 management tool through its uniqueMaritime Assistance Centre.

"LRIT offers a real opportunity for the

maritime sector to greatly improve security'domain awareness' but this chance could belost if the issues from both the administrationsand shipowners perspective are notaddressed," Flynn continued.

"Administrations need to be sure they havea robust, fully managed, scaleable, yetflexible data centre service to deliver LRITby the due date. Shipowners need thereassurance that the system will function asdescribed, that they will not have to bear anysubstantial costs but above all, that theinformation about their vessels is in safehands," he concluded.

New Singapore office"With over 20 years experience in the securityfield, Securewest now monitors over 16 milltonnes of shipping worldwide," said JohnGregory, Securewest's business developmentmanager SE Asia. "

The new Singapore office will support thecompany's wide range of existing clientservices in the region, from asset tracking,vessel alert monitoring, security auditing and

assessment services, manned guarding andcompliance consultancy".

"Together with our strategic partner SecureAsset Reporting Services (SARS), we are alsonow able to offer clients bespoke technicalsolutions in areas such as Ship Security AlertsSystems, AIS, and Long Range Identificationand Tracking (LRIT), " he claimed.

Securewest's permanently manned MaritimeAssistance Centre can also act as thedesignated authority in the event of a SSASalert, establishing immediate contact with thevessel, conducting verification procedures andnotifying relevant flag state administrations of the alert status within any determined time frame.

Already approved by the UK's MaritimeCoastguard Agency (MCA) and other flagstates, the centre provides immediate adviceon security matters (ISPS/MTSA regulations),up-to-date port or route threat assessments tonavigate through troubled waters, piracywarnings and alerts, e-news and immediateaccess to a vast wealth of additional resources24/7 throughout the year.



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TANKEROperatorKEYKEY PLAPLAYERS IN THEYERS IN THETTANKER INDUSTRANKER INDUSTRYYwill be profiled giving theirwill be profiled giving theirviews on current legislation,views on current legislation,recommendations andrecommendations andtrends, etc. These willtrends, etc. These willinclude chief executivesinclude chief executivesfrom all sectors of thefrom all sectors of theindustry from equipmentindustry from equipmentmanufacturers to the topmanufacturers to the topshipownersshipowners

INFORMAINFORMATION about TION about meeting oil majormeeting oil majorrequirementrequirements s (TMSA(TMSA / vetting)/ vetting)

DEVELOPMENTS inDEVELOPMENTS inmanagement/safety/management/safety/environmentenvironmental best al best practicepractice

NEW TECHNOLOGIES NEW TECHNOLOGIES and commercial and commercial industry developmentindustry developments.s.

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These are limited to tanker companyexecutives and are distributed at the publisher’sdiscretion.

Objective of tankcleaning is the

next cargoThe relationship between cargo tank coatings and tank cleaning is inextricably entwined.

Failure to understand the impact of either, can lead to prolonged and inefficient tank cleaning or in the worst case, cargo contamination claims*.

What should also be consideredis that the primary role of thecoating is to prevent corrosionof the steel structure of the

vessels. The paint manufacturers strive toproduce coatings with the best all-roundcorrosion protection and chemical resistancethat are effective for the trading patterns inwhich the vessels are trading in.

When the vessels move out of these tradingpatterns, for whatever reason; operational orcommercial, the largest impacts are felt. Thisis the time when the greatest understanding ofthe relationship between cargo tank coatingand tank cleaning is required.

It should be noted at this time that thisdiscussion does not look at stainless steel,Teflon, or rubber coatings.

Cargo tank coatingsIt is fair to say that all cargo tank coatings areto some extent, a compromise; the 'perfect'coating does not really exist.

Increasing the pigment volumeconcentration (PVC) in organic coatings canimprove the apparent chemical resistance, butnot for every cargo. Increasing PVC will alsogenerally increase the permeability of thecoating, which allows for a freer movement ofcargoes 'in and out' of the coating. Thisreduction in residency time tends to reduce thecontamination potential for volatile cargoes.However, the increase in permeability mayalso make the coating more sensitive to water,which could be quite disastrous.

One should also consider cross link density,which has a significant impact on both thechemical resistance and the flexibility oforganic coatings. In general, the higher thecross link density, the better the chemicalresistance, but the lower the flexibility.

There appears to be a trend emerginglinking chemical resistance and flexibility andperhaps one characteristic will suffer - or becompromised - at the expense of the other?

When one considers that the chemical

resistance may have to be compromised inorder to produce a durable coating that doesnot crack as soon as the vessel starts tooperate, the specific resistance of chemicaland oil products to the coating becomesextremely important.

This is also the most logical reason whymany coating manufacturers supply a range ofdifferent coatings that can be almost tailoredto meet the exacting requirements of anyspecific trade pattern.

Organic coatingsThere are two types of organic coating incommon use today, phenolic epoxy andstraight (amine cured) epoxy, which areprimarily different in their chemicalresistance; with phenolic epoxies providing amuch higher level of chemical resistancecompared to straight epoxies.

Phenolic epoxies are more expensive thanstraight epoxies because chemical resistancecomes at a premium. As such, phenolic


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epoxies tend to be utilised far more widely inthe chemical trade as opposed to straightepoxies which tend to be utilised in thevegetable oil, easy chemicals and CPP (AnnexI) trades.

MarineLine is something of an enigmabecause while it is considered as an organiccoating, this is not strictly correct, because ofits make-up; however, for the sake of thisdiscussion, it will be considered as an organicat this time.

MarineLine is neither a phenolic nor astraight epoxy and its chemical resistance issaid to be derived from a very high cross linkdensity, balanced with unique characteristics,which allow flexing of the product after it hasbeen applied and post cured.

Inorganic coatingsIn two words - zinc silicate. This coating typeis quite different from organic coatingsbecause the chemical resistance comes fromthe fact that the fully cured coating isinorganic and the vast majority of liquidcargoes shipped are organic. In other words,the coating and the cargo being carried arechemically opposite and this fact is extremelyimportant.

Again one should also consider thepermeability of the coating, because thisproperty does change during the life of zincsilicate coatings. New zinc silicate isextremely porous, and there are some who sayit would be a better coating if it stayed likethis, based on the free movement of cargoes inand out of the coating and little or no retentionof those cargo residues.

However this is not the case. Zinc silicate isquite reactive, which also restricts the type ofproducts that can be carried and uponexposure to water, cargoes and theatmosphere, there is a steady build up of zincsalts, which reduces the permeability of thecoating, at the same time increasing theresistance to organic cargoes.

Zinc salts can cause other problems andthere is tendency to try and remove them byscrubbing or using cleaning materials thatactually dissolve the salts, but as long as thereis sufficient 'free' zinc available in the coating,the salts will return and it is perhaps better todeal with the coating including the salts thanto try and change the characteristics of the coating.

Looking briefly at MarineLine again, itshould be noted that this coating is actuallybased on silicon chemistry, which arguablyputs MarineLine into the inorganic coatingscategory. Bearing this in mind, it should beconsidered that the high level of chemical

resistance that the manufacturers claim fortheir coating is based not only on the highlevel of cross linking, but also on the fact thatthe coating and the cargoes being carried, asnoted for zinc silicate, are chemicallyopposite.

Coatings and cargoesThe nature and chemical resistance of thedifferent coating types determines whichcargoes can or cannot be carried in thosecoatings.

As discussed the vast majority of bulkliquid cargoes are organic in composition andas such it is fair to assume that there is anatural affinity between these cargoes and theorganic coatings. If one then looks at thepermeability of organic coatings it can bequickly understood that aggressive andpenetrating organic solvents are not ideallysuited to organic coatings.

Many phenolic epoxies can actually be usedto carry such cargoes, but there arerestrictions, particularly after the cargoes aredischarged and it is actually noted that somecoating manufacturers are now prohibiting thecarriage of such organic solvents even in thephenolic epoxies.

Straight epoxies can be almost immediatelydestroyed in such solvents and are thusconsidered unsuitable.

But apart from the carriage of aggressiveorganic solvents, most epoxy coatings arequite versatile and suitable for the carriage ofa wide range of cargoes; non aggressiveorganic solvents and derivatives, clean anddirty petroleum products, acidic and alkalinebased products, vegetable oils, waxes.

In terms of tank cleaning, most epoxycoatings are very smooth, which generallyrestricts the amount of clingage of previouscargoes and as such surface tank cleaning

MarineLine is treated as an organic coating.

materials tend to very effective at removingprevious cargo residues. It is also found thatepoxy coatings are quite resistant to extremesof pH, so there are less risks using alkaline oracid based tank cleaning materials certainlycompared with zinc silicate, which is alsoimportant to consider.

The absorption of certain previous cargoresidues into organic coatings is of mostconcern when formulating tank cleaningplans, because removing these residues is noteasy. Unsaturated and aromatic based cargoesare particularly challenging because once theyhave been absorbed into the coating, theseresidues can stay there for a long time, if thecoating is not exposed to conditions thatactively desorb these residues.

It is a popular misconception that if anorganic coated vessel is loaded withintermediate or buffer cargoes after thecarriage of an absorbing cargo, the residues ofthe absorbing cargo will be removed and willno longer pose a threat to a cargo that isparticularly sensitive to these residues. This isnot strictly correct, as it depends completelyupon the chemical nature of the intermediatecargo and has resulted in cargo claims inthe past.

There are really only two ways of removingresidues absorbed into an organic coating.

The first is to raise the temperature of thesteel inside the cargo tank to a level where theresidues are evaporated from the coating. Thisis feasible for low boiling residues, but notpractical for residues with a boiling point inexcess of around +75 deg C.

The second is to load the cargo tank with acargo, usually solvent based, that will extractthe residues without itself becomingcontaminated with the residues.

The tendency is to over-clean organiccoatings because of their noted resistance tomost cleaning materials and this is anotherarea where problems can occur, particularly ifthe vessel is cleaning to a wall wash standard.As the washing temperature increases, thecoatings will start to open and absorbedresidues will be liberated, however it has to beconsidered that the residues may have beenaccumulating for many voyages and while themost volatile residues will be liberated first,the heavier residues, azeotropes and/orreaction products of the previous cargoes, maystay behind in the coating, even afterprolonged hot washing.

Solvents may also be used to clean thecoating, because they can actively penetrateinside the coating and remove the moststubborn residues that remain after cleaningwith water/detergents. It should always be

considered that not all of the residues will beremoved in one go and wall wash samplesmay fail, even after cleaning with a solvent.

What should also be noted after cleaningorganic coatings at high temperature or with asolvent is that the coating will be softened fora period of time after the cleaning has beencompleted. During this time the coating willcool down and harden and it is very commonto see wall wash results improve over a periodof time, without any additional cleaning.

The most important consideration whencleaning an organic coating is the quality ofthe next nominated cargo and theunderstanding of the nature of the residuesthat may be absorbed in the coating fromprevious voyages. If the next nominated cargois particularly sensitive to aromatic residuesand the previous cargo was a medium boilingpoint aromatic solvent, it is unlikely that anyamount of tank cleaning will removesufficient of the previous cargo to preventcontamination of the next cargo.

This challenge has been made more difficultby the ever increasing demands on the qualityspecification of shipped cargoes - not justchemical but also fuel based - and also theanalytical capabilities of the laboratories whoanalyse and certify the quality of thesecargoes. In the past, parts per million levels ofcontamination were considered to be quitestrict, but now many contaminants aremeasured in parts per billion levels and assuch, it is now far more common for cargoesto be rejected, even though vessels arecleaning longer and harder than they ever didin the past.

In order to put this into perspective; � One part per million is equal to one second

in 11½ days.� One part per billion is equal to one second

in 31½ years.This is not strictly a reflection on the qualityof the crews on board the vessels, it is purelythe fact that the receivers are able to analysethe cargoes to far more stringent levels and infact, one of the most successful tank cleaningoperations today prior to the carriage of themost sensitive cargoes, does not involve anytank cleaning at all, it is more preventativemanagement and involves loading

intermediate lower grade cargoes that removeresidues known to be a threat to the highergrade cargoes.

In complete contrast, zinc silicate is totallydifferent.

First, the number of cargoes that areacceptable for loading in zinc silicate isconsiderably smaller, primarily because of thenature of the zinc, which reacts with productsthat have anything but an almost neutral pH.

A pH range of 5 - 9 is normal for most zincsilicates so this immediately rules out allalkaline and acid based products and alsovegetable oils that have a significant fatty acid content.

It is found that most fuels are neutral pH, soclean and dirty petroleum products do notpose any problems, but where zinc silicatereally comes into its own is in the carriage ofaggressive organic solvents, because the zincsilicate is chemically opposite and thuscompletely unreactive to any neutral organicproduct, solvent or otherwise.

Tank cleaning zinc silicate is alsocompletely different to cleaning organiccoatings because while zinc silicate absorbsorganic solvents, it does not retain them.Perhaps more significantly though, unlike thesurface of organic coatings the surface of zincsilicate is far from smooth; in fact in manycases it is extremely rough to the touch.

The latter point creates very challengingtank cleaning issues because it is found thatnon volatile cargo residues are readilyadsorbed on to the surface of the coating andalso absorbed into the matrix of the coating.

So when cleaning from oils it is extremely commontobefacedwithagreasysurfacethatis potentially very difficult to clean. Thisproblem is made more challenging for tworeasons:1) Surface active cleaning materials

(detergents) are exactly that; surface cleaners; and it is known that previous cargo residues are trapped within the coating matrix.

2) The most effective solutions for cleaning oil based residues usually employ ingredients containing caustic or meta-silicate, which have a pH in the region of 12 or 13 and are thus prohibited for use on zinc silicate.



It is fair to say that all cargo tank coatings are to some extent, a compromise;

the ‘perfect’ coating does not really exist.

“”

With the introduction of thesecond version of TMSA earlierthis year, Videotel, has added toits range of training titles with'Tank Cleaning Practice'.The programme describes different types of

tank cleaning, from a quick wash betweencompatible products, to the complex washingprocedures required between incompatibleproducts. It also looks at how decisions aremade about which type of cleaning process touse.

Captain Milind Karkhanis, vice president,Videotel Training Services, said: "Tankcleaning is one of the most important aspectsof cargo transportation. Our programmeoutlines the key processes and procedures thatare prerequisites for safe and effective tankcleaning, emphasising the importance of crewfamiliarisation and training."

In making these programmes, Videotel hasbeen working with INTERTANKO and otherleading training establishments and operatorsto guarantee that these products support theINTERTANKO TOTS (Tanker OfficerTraining Standards) scheme. TOTS providesthe tanker industry with a standard thatensures tanker officer competence throughtraining, both on board and onshore.

Videotel's tanker training programmes areavailable on video and DVD and are suitablefor use in training sessions on board ship andare accompanied by detailed support booklets.Computer-based training (CBT) interactiveversions are also produced for independentstudy, wherever the trainee may be.



One other point to note at this time is theeffect of fuel generated inert gas in zincsilicate coated cargo tanks, prior to loadingand during the discharge of flammable cleanpetroleum products. In short, inert gas isacidic and with prolonged contact to thecoating it is quite common to observeyellow/brown dust on the surface of the cargotanks, which is most likely a reaction productof the zinc silicate and the acidic inert gas.

This powder massively increases the surfacearea of the coating and significantly increasesthe potential of previous cargoes becomingadsorbed to the surface and trapped justunderneath the surface layer. The only way toremove this problem is manual scrubbing,which is time consuming and limited in itseffectiveness.

The last coating type is MarineLineTheoretically, this coating utilises the

benefits of organic coatings and zinc silicatecoatings in one system.

In the first case, the coating is very smoothand as a consequence the majority of cargoeswill run off the surface without causing aretention problem. High melting orparticularly viscous products will of coursecling to the surface, but temperature alone isgenerally sufficient to tackle this issue.

The next consideration is the chemicalcomposition of MarineLine. It is accepted thatthe product is treated as an organic coating,

because during application, the product ismixed with various organic solvents in orderto expedite application. However, as noted,once these solvents are removed during dryingand post curing, the backbone of theMarineLine coating is silicon; not carbon.

If MarineLine is then considered to be aninorganic coating, it would be expected to beparticularly resistant to organic solvents; andindeed this is found.

Without the pH limitations of zinc silicate,it would also be expected that the number ofproducts suitable for carriage in MarineLine ismuch higher compared to zinc silicate andagain this is true. The manufacturers state thatthe product is actually suitable for acidcarriage, which is a bold statement, when oneconsiders that acid transportation has been thealmost exclusive domain of stainless steel formany years.

The potential of a smooth surfaced coatingwith good resistance to penetrating organicsolvents and not restricted by pH isimmediately obvious in several trade patternsand the author is currently investigating thispotential further.

In summary Understanding how cargoes behave and/orreact with the various coating types - alwaysbearing in mind that any cargo absorbed intoor adsorbed onto the surface of that coating

will behave differently when it reacts with adifferent cargo - is essential if an efficient andeconomical tank cleaning procedure is to becarried out.

How the previous cargo residues areexpected to be presented - absorbed,adsorbed, retained in a surface profile - iscritical to the correct choice of tank cleaningchemical and the duration of each cleaningcycle. And of course the resistance of thecargo tank coating to the cleaning chemical isalso extremely important, not only toeffectively remove the previous cargoresidues, but also to prevent short and longterm damage to the coated surface.

Finally the quality of the next loaded cargoshould never be overlooked, particularly if itis known that a coated surface is contaminatedwith a previous cargo residue. The objectiveof any tank cleaning procedure is to clean to acondition where the next cargo can be loadedwithout risk of contamination. By carefulunderstanding and appropriate monitoring ofeach tank cleaning step, this objective isreadily attainable.

*This article is the second in aseries written by Guy Johnson,BSc (Hons) MRSC CChem CSci,director L&I Maritime (UK).

TO

NAVADAN’s head Frank R. Tschicaja

Videotel adds Tank Cleaning to its titles

Effective 1st December CaptThomas Marvig Rasmussen hasbeen appointed as salesmanager for NAVADAN APS.With his background as master andoperations manager in companies such as Norient Product Pool and Weco-Shipping/Dannebrog Rederi in Denmark, he has gained substantial knowhow of themarkets' requirements for chemicals andthe chemical tank cleaning solutions that are offered on a worldwide basis by the company.

NAVADAN appoints sales manager


TECHNOLOGY - VAPOUR CONTROL

Monitoring is necessary for anyover or under pressurisationthat may occur as a result of the pumping on/off of

cargo, or for an oxygen level approaching8% volume. This is in compliance withUSCG legislation - USCG 46 CFR Ch 139.40-3.

The legislation states that a vessel musthave an oxygen analyser with a sensor orsampling connection fitted within 3 m (9.74ft) of the vessel vapour connection which: � Activates an audible and visible alarm at a

location on the service vessel where cargo transfer is controlled when the oxygen content in the vapour collection system exceeds 8% by volume.

� Has an oxygen concentration indicator located on the service vessel where the cargo transfer is controlled.

� Has a connection for injecting a span gas of known concentration for calibration and testing of the oxygen analyser.

To monitor oxygen and pressure, MartekMarine, offers the Vecsafe® specifically forvapour emissions control systems (VECS).

Vecsafe® is claimed to comply fully withthis legislation and ensures that the high levelof safety required on board is nevercompromised during this hazardous process. Ifa problem arose and the crew were notalerted, several potentially catastrophicoutcomes could occur.

For example, if the pressure was too high inthe cargo tank, it could cause a massiveexplosion or at least severely rupture the wallsof the tank leaving the walls significantlyweakened and open to leakage. Similarly, ifthe pressure inside the tank was too low, therewould be the potential for the tank to implode,or again rupture under such a dramaticfluctuation in pressure.

Explosion possibilityAlso, if the oxygen level in the vapour linewas found to be too high (above 8% volume)this would automatically present thepossibility of an explosion due to the oxygenreaching its combustible level.

It is understandable therefore that any ofthese circumstances would be totallyunacceptable and it is in the best interest of

any vessel owner to install preventativemeasures against such situations.

The system comprises of a deck-mountedenclosure containing an intrinsically safeoxygen sensor and pressure sensor. Air isextracted from each manifold, when requiredand pumped along individual pipes back to theanalysing cabinet where the air is thenanalysed for the presence of oxygen. Signalsare sent from the analysing cabinet to theMM2000® control panel, which is located inthe cargo control room.

Should the concentration of oxygen exceeda specified limit a signal is generated causingan alarm to be triggered on the MM2000®panel alerting the crew to the problem. Thesystem also offers the option of a deckmounted siren and beacon to provide alarmson deck.

Recent orders Martek said that the Vecsafe® system hadreceived widespread acknowledgement as areliable and effective solution to comply withthe USCG regulations. Recent orders havebeen received for newbuild vessels in both the

It is a requirement for each vapour line to be monitored during loading operations toprevent catastrophic explosions/implosions occurring.

Oxygen & pressuremonitoring vital for

vapour control



Martek’s Vecsafe® monitors oxygen and pressure.

Turkish and Chinese shipbuilding markets and the company claimedthat there was a large amount of interest in these markets and othernewbuilding areas worldwide.

Emissions controlMartek is also involved in the field of emissions control and recentlyfinalised a deal, which will involve Greek tanker and bulker companyMetrostar Management commissioning seven more MariNOxemissions control systems for its fleet.

Metrostar had previously bought four MariNOx units from the UK-based safety and environmental technology company and with thelatest orders, its investment in this technology now tops $2 mill.

First to market with the MariNOx, Martek claimed to have capturedover 90% of the global emissions monitoring market with the system.In total, over 100 MariNOx units have been installed to date, helpingshipping companies to achieve compliance with MARPOL Annex VI,'The NOx Technical Code' and MEPC.103 (49).

As well as monitoring N0x, C02 and S0x, the system helps toreduce fuel consumption by as much as 4%, Martek claimed.

Martek managing director Paul Luen said: "This deal underlines ourexcellent and continuing relationship with Metrostar which recognisesthe economic, environmental and compliance advantages of fitting theMariNOx to their ships.

"Since the IMO agreed on new amendments to MARPOL Annex VIthis year, significantly lowering emissions limits over time, morecompanies are realising that fitting MariNOx means meeting currentand future regulations on emissions doesn't have to cost the earth andcan actually save money in fuel bills."

Metrostar first fitted MariNOx on its 318,695 dwt VLCC Crudestarin 2006, achieving fuel savings of 2.45% during a five day trial in theMiddle East Gulf. This has been followed by trials on the VLCCCrude Progress that have delivered fuel savings ranging from 2% upto 3%.

The MariNOx system increases fuel efficiency by allowingoperators to re-tune engines away from the IMO's 'low NOx' modeback to the 'economy mode' while remaining within emissions limits.

Each system includes specially designed DATAlink software thatallows the emissions for a single ship, or an entire fleet, to be viewedremotely via an interface with the Purplefinder Intelligent GPS device.

closed gauging

The HERMetic UTImeter Gtex is a portable electronic level gauge for closed gas tight operation resulting in increased

safety and efficiency.

The unit is used for custody transfer, inventory control measurement and free water detection on marine vessels. Connected to a HERMetic vapour con-trol valve, the UTImeter Gtex avoids any gas release during operation and enables 3, optionally 4 measurements in one single operation, Ullage, Temperature, Oil-water interface level and Innage. By increasing safety and efficiency, Honeywell Enraf Tanksystem helps customers improve business performance.

For more information visit our website www.tanksystem.com or call +41 26 919 15 00

© 2008 Honeywell International, Inc. All rights reserved

MariNOx is Type Approved by Lloyd'sRegister.

Gas recovery contractsThe major Swedish port of Gothenburg is setto order at least one more vapour recoveryunit next year to add to the three already inoperation.

New unit(s) will be needed to be installed ona jetty to be used to tranship Russian crude oil.Gothenburg has been granted an environmentalcertificate to go ahead with the storage andtranshipment of Russian oil, which shouldcommence by the end of next year.

Both crude oil and product will be shippedthrough the Baltic from the Russian loadingports to be stored in Gothenburg and re-loadedon board larger tankers. Ship-to-ship transferscan also be undertaken at the large jetty,which has a water depth of just over 19 m.

However, the jetty will have to be upgradedwith a gas recycling facility fitted along withnew pipework and a control room.

Sweden is a country that has long been atthe forefront of environmental issues and in2001, the port installed three Cool Sorptionvapour recovery systems to operate whilevessels are being loaded. The port claimedthat emissions linked to the loading of tankers

had been reduced to just 25 tonnes per yearfrom 300 tonnes previously.

The three vapour recovery systems have acapacity of 1,500, 2,000 and 2,400 cu m perhour respectively. The total cost of theinstallations was SEK65 mill, which includedthe price of new and adapted connections tothe vessels. They are owned by the Port ofGothenburg, but two are leased to localrefiners Preem and Shell.

The port claimed that the total cost equatesto around SEK30 per kilo of reducedemissions.

Each user has access to its 'own' facility andfour jetties are served by the recovery units. Inconsultation with the various authorities, itwas decided that the emission levels for thesystems would be set at 10g/Nm3. Withoutextraction the gas could contain up to 1,000g/Nm3.

Vapour is condensed and turned back intoproduct. By using this method, more than 90%of the carbon emissions can be captured. Forexample, 95% vapour recovery while loadinggasoline accounts for 400 tonnes per year.

Today, Cool Sorption is part of AkerSolutions and trades under the name of AkerCool Sorption.

Vapour recovery can be traced back to 1994

when Kvaerner Process Systems, now AkerProcess Systems, started to develop a vapourrecovery process for shuttle tankers based ona single-stage pressurised absorption in closeco-operation with Statoil. This led to theinstallation on board five shuttle tankers.

Over the next two years, Cool Sorptiondeveloped and installed the world's first majorcrude oil vapour recovery system for the Stureonshore export terminal at the time operatedby Norsk Hydro.

Technology modifiedBetween 2000 and 2005, Aker Cool Sorptionmodified its standard carbon vacuumregenerated adsorption technology (gasolinevapour) to handle crude oil. Using an existinggasoline plant in Denmark for testing crudeoil vapours, the concept was accepted.

The first carbon vacuum regeneratedadsorption VOC plant was installed on theNorth Sea shuttle tanker Navion Europa. Inaddition, Statoil's FSO Asgard C was alsofitted in the late summer of 2004.

Following these installations, Teekay also ordered two units to be fitted on boardthe shuttle tankers Randgrid and NavionNorvegia, both operating from the Heidrun field.



For further info visit www.linerscan.comor email [email protected]

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TO


TECHNOLOGY - BUNKERS

The advantagedelivered byindependents

Realising the competitive business value of providers who can drive progression*

The shipping industry has seen theglobal supplier landscape evolvesubstantially in the last fewdecades, and the roles of

'independent bunkering companies' and 'oilmajors' have changed significantly. Operatorswho understand this evolution and the reasonsbehind this will realise which suppliers havethe ability and drive to meet theirrequirements and lead the way forward.

Independent marine fuel suppliers havecome a long way in 30 years, fromundercapitalised upstarts viewed as a 'risky'supply option to becoming dependable globalsuppliers of quality products to the marineindustry. Independents have become asfamiliar to shipowners as oil majors or state-run companies, delivering some 46% [1] ofworldwide marine fuels and representing aviable and growing alternative. They are nowkey industry players that help drive marketliquidity and set benchmarks for excellence.

As new market challenges re-shape theindustry, it is timely for ship operators toconsider how marine fuel suppliers shouldmeet their growing requirements of qualitysupplies of high sulphur heavy fuels, cleanerlow sulphur fuels, risk management tools, spotsales, term contracts, and reliable and honestservice deliveries. Add new port projects andmodernised infrastructure to theserequirements and a spiralling increase in

working capital requirements for a large-volume, low-margin business, shipownersnow face a different magnitude of challengeahead.

Overlay on top of this, a global economythat has undergone significant stress in 2008and the challenge is compounded. Theshipping industry fundamentally runs as acredit business and the effect of diminishingbanking credit and derivative counterpartiesaround the world is spilling over into shippingand needs to be resolved quickly. Liquiditylies at the centre of both the global economicsituation and risk management in the bunkerbusiness. For tanker operators, it is essentialthat suppliers have enough credit to be able tomeet demand and continue to extract thebenefits of economies of scale that should stillbe passed on to them.

Simultaneously, while managing soaringcost pressures, the industry faces one of itsbiggest challenges to date - sustaining growthwhile protecting the environment.

Meeting new legislationAlthough shipping cargo by sea is still themost environmentally-efficient mode oftransporting goods and reports in the media'exposing' the polluting nature of vessels havebeen sensationalised, the industry still needsto do its part to improve environmentalperformance. The IMO timeline to reduce

sulphur emissions has set the wheels inmotion for seriously addressing this issue.Finding viable solutions to meet oncominglegislation in a commercially andenvironmentally sound way is proving to bethe biggest conundrum for the marineindustry.

While we can all work towards a zeroemissions world, the reality is that heavy fueloil is a by-product; it is not a productrefineries like to produce, but what is left overafter all the desired products are extracted. Aslong as there are residual bi-products, there iscurrently no better alternative than using themin marine & industrial fuels.

It is clear that regulators and our industrymust focus on the full spectrum of solutions tobest reduce emissions and not just mandatetighter fuel specifications. For example,understanding and investing in supportingtechnologies available now, such as scrubbersthat enable heavier, cheaper fuels to be used,while still achieving environmentalcompliance, is important and could be acorner stone of any long-term solution.

Ultimately, what it boils down to is choice.It seems clear that one critical role of today'smarine fuel supplier, whether independent ormajor, is to provide ship operators with a fullrange of products and services that empowersthem to achieve compliance in their own way.

Evolving rolesAnother significant area of change is theevolving roles of both the marine fuel supplydivisions of the oil majors and the largerindependent suppliers. For example,independents were traditionally localised,niche players while majors had the globalmuscle. With a ready supply of residualproduct from refineries and strong brandrecognition, majors had a seeminglyunbeatable business model. They had presenceand financial leverage at all the world's key

The shipping industry fundamentally runs as acredit business and the effect of diminishingbanking credit and derivative counterparties

around the world is spilling over into shippingand needs to be resolved quickly.

“

”



ports, while the independents were morelocalised. Today, after ramping up capitalinvestment and strength, independents arenow global players that compete on equalfooting.

For majors, marine fuel was and still is, anon-core business. Their core business isfinding crude oil, refining and distributinggasoline and diesel fuel. High-volume, low-margin, non-core businesses within major oilcompanies are challenged every day to justifytheir existence and compete for financing andhuman talent within the greater system. Addto that the environmental concerns of movinglarge volumes of persistent oil on tankers andyou will understand the weakness of aseemingly 'unbeatable' business model.

As a consequence of this, majors are slowlymoving away from global trading of fuel oilcargoes and focusing marine businessesaround core refining bases - convenient andperhaps smart for them, but what about theimplications to their customers? Operators,now more than ever, need providers who canoffer greater global reach and specialisedservice.

Who then has the advantage to lead themarket in the future? Ship operators need toconsider this: which suppliers are makingcapital investment to better serve customers?

Here is the answer from Chemoil. Wecompleted our Helios Terminal in Singaporethis year, purchased a new terminal inBatangas in the Philippines and are alsoconstructing a new 600,000 cu m capacityterminal with our partner GPS in Fujairah. Wehave taken delivery of two new double-hulledbunker barges for Fujairah and announced ournew Indian joint venture, Chemoil-Adani, toservice our customers in India. Chemoil isinvesting hundreds of millions of dollars toensure that we are the marine fuel supplier ofchoice in the future.

Core businessChemoil is a dedicated independent marinefuel supply business. This is our core businessand all our resources and energy are placed init. It is this passion and dedication thatindependent suppliers can provide. Today, thistype of capability and business mindset can befound in some of the large independent marinefuel suppliers, because marine fuels are thecore business of independents. We are able togive it undivided attention and focusedinvestment.

However, just being 'independent' does notguarantee success, particularly in today'sglobal market. It also requires internationalfocus, significant scale and financial strength.

Successful independents must be able toarbitrage, procure, blend and transport marinefuel products and components from anywherein the world to anywhere in the world. Theymust have a willingness to invest inoperations, have top-quality employees andambitious future projects and also have thetools in place to effectively manage risk.

On the other hand, shipowners have theright to expect their marine suppliers to focussolely on providing them with improvedproducts, services, and supply infrastructure.

For those reasons, the days of anindependent marine fuel supplier with only$20-50 mill capitalisation are numbered. Assuch, the large independents have made aconscious decision to either go public or seeklarge fund investors to increase capitalavailable for future developments. This is abold move and again illustrates that the largerindependents are committed to stay.

To summarise, there are a host of challengesin the current market. These are turbulenttimes all around. And in such circumstances,there is the inevitable period of consolidation -the corporate world's form of naturalselection. The independent bunker supplierswill not be immune from this.

Even with the best of strategic intentions,some smaller independents without financialbacking will get acquired or fold up. Thecapital brawn of majors will help them survivethese turbulent times but long-term strategicgrowth and dominance of the marine fuels

market may be far more elusive. The truth is, there is room for all of us in

this market. While the relative roles andpositions will change, majors will remainforces in the markets that they choose tocompete in and will exit those they choose toleave. As for independents, pushing furtherinto all these markets will be critical to growand excel. After all, this is our core and onlybusiness!

For those companies that have the ability,strategic creativity and passion to grow, thereare still many opportunities to be seized. Trulydedicated companies with the necessary mixof capabilities will have a bright future despitethe global stormy outlook. However, across afull spectrum of marine fuel suppliers, justwhich ones will emerge strongest from theshakeout remains to be seen.

*This article is an extract of thekeynote speech presented byChemoil’s chairman and ceoMichael Bandy at the SingaporeInternational BunkeringConference (SIBCON) 2008.

Clyde Michael Bandy, chairman & ceo, Chemoil

TO

[1] Source: Robin Meech, Marine & Energy Consulting Ltd, 2007 Into-Ship Revenues

Refuel in the Faroes,sheltered from the open sea

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heavy fuel before entering the Norwegian Sea—and the last stop for

low-sulphur fuel before entering the North Sea SECA. OW Icebunker has the

different grades and quantities of marine fuels you need, all backed by our

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Managing risk inuncertain times

As the global credit crunch impacts on the world’s economies, fuel oil and crude oil prices continue to rise to new highs,

spurred on by the weak dollar and relentless geopolitical turmoil*.

With a universal focus ondriving further costs out of thesupply chain, shipowners areunder increasing pressure to

effectively manage costs. And with bunkersaccounting for up to 50% of a shippingcompany's expenditure, the importance ofcontrolling these costs has never been moreimportant. Hedging is the buzzword formanaging this risk, and for savvy shipownersit is becoming an integral part of their day-to-day business process and long-term strategyfor success.

Hedging is a way for shipowners to managetheir cost control; locking in their fuel costs,so that they can focus on their core business.It allows them to maximise their cash flow,which is known in advance, enabling them toforecast and financially plan more effectively.It is also an opportunity for shipowners tolock in a profit for contracts agreed withclients.

Many shipowners believe that hedging andspeculation is one in the same. However, thisis far from the truth. Hedging is a way ofreducing risk and uncertainty and minimisingexposure, allowing an organisation thefreedom to focus on its core business.Speculating does not take an opposite positionas a means of offsetting, but is a 'guess' as towhere the market is heading; it can actuallyincrease a company's risk, particularly intimes of such uncertainty and volatility.

If the success of a shipowner's business isaffected by bunker prices, a number of stepsshould be taken in relation to developing ahedging strategy. These include:1. Understand the risk exposure

If continuous cash flow is important, and if bunkers are a major part of a company's operating costs, then it has a high-risk profile. And if a company's revenues are affected by fluctuating oil prices, then hedging is a strategy worth considering to minimise this risk.

2. Understand the motives for hedgingThere are a number of reasons for hedging; to lock down costs, or lock in profits; to stabilise cash flow; or to ensure supplies at times of high demand. Naturally, the main motive is to match a company's exposure with hedging activity. It is also vital to hedge at the right time and over the right period. For example, spot business is traditionally short-term, contracted freight business, medium-term, and container and cruise line, long-term.

3. Understand the level of risk a company is prepared to take. There are a number of methodologies that can be utilised to ascertain this. OW Risk Management for example uses three different risk profiles for hedging. If only 0% to 20% of the exposure is covered, where a shipowner is exposed to both basis and time risk, it is considered to be a speculative risk profile. If 20% to 50% of the exposure is covered, this is viewed as trading activities, where opportunities are still missed in the market. However, if 50% to 100% of the exposure is covered, it is viewed as hedging, because there is a high coverage of bunker fuel oil exposure, minimising risk and uncertainty.

4. Choose the right strategy. A number of factors need to be considered prior to choosing the right strategy; an appropriate time horizon, which reflects the exposure

period. For example, if a five-year contract is agreed upon, the same amount of time should be hedged. A relevant pricing index also needs to be found, which should correspond with the exposure ports a shipowner is facing. For example, Rotterdam Barges FOB 3.5 %, Singapore 380 CsT, or even Gibraltar Bunkerwire.

A hedging instrument then needs to be chosenfor the hedging strategy, of which a numberare available; the most common being abunker fuel oil swap, which fixes the futurebunker fuel oil price. However, the mostimportant point is to keep it simple. Swaps forbunker fuel oil can be used for hedging inmost ports worldwide.

There are some major risks that need to beconsidered when hedging swaps. Basis risk,relates to the product chosen for hedging.While shipowners are exposed to bunker fueloil in ports such as Rotterdam, Singapore andHouston; it is not uncommon to see themhedge their exposure in crude oil swaps. Thecorrelation between fuel oil products andcrude oil are of course high, but the shipowneris still left with risk and uncertainty. Bychoosing the relevant product(s) specificallyto shipowners, they can reduce this. Evenwhen hedging in fuel oil swaps, the basic riskcan be significant.

Time risk can also be a factor; this relates toshipowners that know that one or more ships

Hedging is a way for shipowners to manage their cost control;

locking in their fuel costs, so that they can focus on their core business.

“

”


TECHNOLOGY – BUNKERS

will arrive in a port twice in one month,therefore exposing them to specific dates andnot average of the months. However, bothproblems for time and basic risk can beresolved by a physical fixed price, whereswaps cannot easily solve this.

A physical fixed price is a simple way oflocking in your bunker fuel oil price in aparticular port where you know you will bebuying bunker fuel oil, although it isimportant to understand that there is a riskbetween physical and swap prices, as thespread can change. A shipowner can alsopurchase a cap option, which determines themaximum bunker fuel oil price he or she canpay for the bunker fuel oil in a particular port.The benefits of a cap option are that itprovides protection against a rising market,but still benefits from a falling market.

The shipowner could also benefit fromchoosing trigger-levels, which determines themarket price the hedging strategy should bestarted at. The trigger-levels could be put astaking profit, or stop-loss. This can consist ofmultiple trigger-levels and thereby increasinghedging coverage as the market goes up.Bunker fuel oil products are very pricevolatile, so a profit/loss level also needs to beagreed upon.

Once these steps for the hedging processhave been established, the shipowner is nowready to proceed with the hedging strategy.

When dealing with hedging, there are a

number of pitfalls, which the shipowner needsto be aware of. As well as basis and time risk,volume risk is an issue where manyshipowners are surprised by the large amountof bunker fuel oil volume they have. Anothercrucial pitfall is known as 'floating-target',where shipowners adjust their target priceaccordingly to market prices.

This is not recommended, as their targetshould be fixed in accordance to theirexposure, such as contract prices. A number ofcases have been seen where shipowners havereduced their floating-target as bunker fuel oilprices go down. However, suddenly themarket momentum shifts to an upward trendand their floating-target is not reached. In thiscase, shipowners end up with a hedging pricemuch greater than the original target, whichhas a significant impact on their cost controland cash flow, as well as revenue.

The conventional wisdom advises choosinga fixed target and hedging at this price level,enabling the company to secure its levels ofprofitability, as well as focusing on deliveringthe core business strategy.

Many shipowners operate with a bunkeradjustment clause, however, we are currentlyseeing a shift in the market, where clients donot want to be exposed to this. OW RiskManagement actually believes it is beneficialfor shipowners to provide clients with a fixedprice and manage the exposure towardsbunker fuel oil prices themselves. Shipowners

can therefore hedge the exposure themselvesand reduce their own risk and uncertainty.

Finally, evaluation is critical, where anassessment is completed to analyse thesuccesses and learnings from the hedgingstrategy; what went well and where futureimprovements can be made. It is alsoimportant to evaluate whether the strategycovered both basis and time risk, as well ashow much overall time was spent on thehedging strategy.

Many shipowners do not believe they havethe resource for bunker fuel oil hedging. Butthe question is, 'can they afford not to do it'?Only a small amount of time needs to be spentin order to make it an effective tool formanaging and maximising cash flow. Inaddition, a shipowner can choose to use theirown knowledge and in-house resource as wellas partnering with a risk management expert,which frees up even more time to focus ontheir core business. In the majority of cases,shipowners use a combination of both.

It is impossible to predict where the marketsare going or what lies in store for the world'seconomies over the coming months and years;we live in a climate of uncertainty that hastranscended every global market. Duringthese tough times, success is often based onmaintaining ambition but managing andreducing risk as much as possible. Anappropriate hedging strategy does just that. Itprovides an element of comfort andpredictability that reduces exposure whileallowing shipowners to focus on what isultimately their most important objective.

* This article was written byRasmus Hyldgaard Hansen,assistant risk manager, OW RiskManagement.

TO

Many shipowners do not believe they havethe resource for bunker fuel oil hedging.

But the question is, ‘can they afford not to do it’?

“

”

The International Bunker IndustryAssociation (IBIA) has started toput in place a strategy designedto reposition it as the focal pointof leadership, influence andrepresentation for the marinefuels industry.At its annual convention in Cape Town lastmonth, IBIA secured the unanimousagreement of its members to implement a newconstitution by approving a revisedMemorandum and Articles of Association.And it has confirmed that its executivestructure is now to be headed by a board ofdirectors, rather than by the council ofmanagement, which has been in place sinceIBIA was formed in 1993. Instead of 25council members plus a secretary-general anda small executive, IBIA is to have a board of12 directors, including a chief executive.

It is intended that the board will consist offour officers - chairman, vice-chairman,treasurer and immediate past-chairman. Theremaining directors will be drawn, wherepossible, from different sectors and regions ofthe industry and, where practical, it is theintention that each sector/region will berepresented on the board. It is felt that such aboard of directors, fully representing themembership base, will mean that IBIA can bemore dynamic in terms of responding to the

changing commercial environment withinwhich it operates. Board members will focuson strategy and governance of IBIA, leavingthe chief executive accountable forperformance against agreed objectives.

Under changes agreed to the Articles ofAssociation, the 2008/9 chairman and vice-chairman (Fritz Fredriksen and Chris Fisher)will automatically be elected to the roles ofimmediate past-chairman and chairmanrespectively of the 2009/10 board of directors.This was agreed to allow for continuity and asmooth hand-over from the council to theboard of directors.

NominationsAn interim Board Development Committeewill receive nominations, open to allmembers, for the board of directors, andconduct an assessment of the candidates. Thecommittee's recommended list of candidateswill be subject to approval by the members of IBIA.

Current IBIA secretary-general Ian Adamssaid, "Sixteen nominations for directorshiphave so far been received, and elections willtake place in the early part of 2009, possiblyin February. It is expected that theappointments will carry varying lengths oftenure. This is an exciting development, andone which represents an advance on the old

system of management by council which, insome respects, could be unwieldy and lesseffective than it should have been.

"Our members have told us what they want,both at the annual convention and in a surveyconducted in late 2006. It is important tomove with the times and to embrace changewhere necessary and appropriate. IBIA haslistened to its members, and what we areseeing now is the start of a process which willposition IBIA as the undisputed representativebody of choice for all suppliers and consumersof marine fuels who put quality and bestpractice at the heart of their operationalethos," he concluded.


Leading independent bunkersupplier Aegean MarinePetroleum Network has takendelivery of its sixth newbuildingbunker tanker.The Paros is a 4,645 dwt double-hullbunkering tanker built at Fujian SoutheastShipyard in China. She will be deployed tothe company's Singapore area market.

Including Paros, Aegean now has a currentbunkering fleet of 31 tankers and barges, ofwhich 26 are double hull. The companyexpects to take delivery of 21 remaining

double-hull tanker newbuildings over the nexttwo years, which will increase its totalbunkering fleet to 52.

E Nikolas Tavlarios, Aegean Marinepresident, commented, "With the delivery ofour ninth newbuild from Fujian SoutheastShipyard, Aegean has further grown itsdouble-hull fleet and increased its competitiveposition. The fleet growth has also positionedthe company to take advantage of the strongdemand for marine fuel and growth in globalseaborne trade despite a temporary slowdownin certain shipping sectors.

"Including the Paros, we have takendelivery of six double-hull newbuildings todate this year and 10 since our IPO inDecember 2006, which has enabled Aegean tosignificantly grow sales volumes during thistime. Our considerable financial strengthpositions management to continue to expandAegean's delivery capacity and increase thecompany's earnings potential," he concluded.

Aegean Marine Petroleum has servicecentres in Greece, Gibraltar, Singapore,Jamaica, the UAE, Northern Europe, WestAfrica, the UK and North America.

IBIA secretary-general Ian Adams.


IBIA looks to the future

TO

Aegean expands fleet

“ It is important to move with the times and to embrace change where necessary

and appropriate.”

Ian Adams, secretary-general, IBIA

“”


TECHNOLOGY - NEWS

Wärtsilä has introduced what itcalls an ‘Upgrade Kit’ for slowsteaming RTA and RT-flex low-speed engines.The intention is to enable shipowners andoperators to make major savings in fuel costswhile slow steaming their vessels. Wärtsiläsaid that the kit allows low-speed marineengines to be operated continuously at anypower in the range of 20% to 100%, meaningthat vessels can sail continuously at sea speedsdown to some 60% full speed.

There is considerable interest in slowsteaming yet without modification with anUpgrade Kit, there is increased risk of enginefouling and excessive component temperatureswhen operating continuously below 50%engine load.

The kit is claimed to overcome theseproblems, enabling the engines to operatecontinuously at powers down to 20% of theirfull installed power. The modified engine isnot permanently de-rated but can operate atany time up to its full installed power. Owingto the characteristic power versus speed

relationship of ship propellers, this extendedoperational power range enables ships to besailed at sea speeds down to some 60% of full speed.

First ordersThe first Upgrade Kits were ordered inNovember this year by the German ownerKoepping for two container vessels, each witha single 8-cylinder Wärtsilä RTA62U engine.The two ships have a maximum speed ofabout 22 knots at design draft with the mainengines delivering 15,000 kW at 107 rev/min.

It is available for all RTA and RT-flexengines with multiple turbochargers. For shipsthat must comply with the IMO NOXemissions regulations, the restrictions imposedby the emissions limits will be evaluated ineach case and a customised turnkey packagemay be offered. RTA and RT-flex engines canbe safely operated continuously at loads above50% of the contracted maximum continuousrated (CMCR) power without anymodifications.

The concept cuts out a turbocharger when

the engine is to be operated at low load. Thisincreases the scavenge air delivery at low loadfor better combustion and more optimumtemperatures of engine components. The cut-out point depends upon the engineconfiguration.

It involves fitting shut-off valves in theexhaust duct before the turbocharger turbineand in the scavenge air duct after thecompressor, together with a bypass line tokeep the turbocharger rotor spinning at apreset constant speed. The valves are remotelyoperated and the Kit includes fitting a controlsystem to operate the valves.

The Upgrade Kit is delivered by Wärtsiläon a turnkey basis and includes engineperformance analysis, cabling and installation,all materials and their transport, serviceengineers to undertake the whole installationand commissioning, and emissionmeasurement and certification. Theinstallation and commissioning can becompleted during normal commercialoperation of the ship and during normalport calls.

An LNG carrier and a car carrier,under completion in South Korea,will be the first ships to featureSmartSafe, claimed to be theshipping industry's first workingautomatic 'plug and play' bilgeoverboard security system.Delivered by UK-based oil in watermonitoring specialist Rivertrace Engineering,SmartSafe is aimed at the detection, recordingand prevention of illegal overboarddischarges.

The UN joint group of experts on thescientific aspects of marine environmentalprotection estimated that an avoidable 68% ofpollution from ships is attributable todeliberate oil discharge.

Port state control organisations, Paris MOU,Tokyo MOU, and the US Coast Guard arerunning continuing campaigns targeting magicpipes - equipment used to bypass ships' oilywater separators, flouting MARPOL73/78Annex I rules to prevent marine pollutionfrom ships. Already, these MARPOLregulations have or are being incorporated intoregional and national laws that go as far ascriminalising accidental oil discharges.

Even shipowners that take pride insophisticated and expensive oily water

separator systems, and well-trained crews, arevulnerable to system failures and incorrectoperation or even by-pass. Again, as crewturnover soars, blue chip owners have beenexposed to total negligence in OWS operation.In some cases, fines have run into tens ofmillions of dollars.

Rivertrace said that SmartSafe isspecifically designed to ensure that the bilgeOWS cannot be bypassed. The PLC-basedsystem uses in-house written software tomonitor the separator system's diverter valveand flow rate and cumulative flow through thedischarge pipe, detecting any attempt totamper. Available for newbuildings and forretrofit, SmartSafe is compatible with anytype of separator and separately controls itsown overboard diverter valve.

The system can be connected to a ship'sLAN for monitoring on the bridge, so that thenavigation officer can intervene in controllingor stopping discharges. Tracked over the webvia Purplefinder, SmartSafe is capable ofremote monitoring and control. Shipownerscan track the GPS position of their vessels atany time and ascertain whether a discharge istaking place. They can even stipulate thatvalves remain closed when a ship passesthrough a Particularly Sensitive Sea Area.

Should anyone try to tamper withSmartSafe, or shut it down, a spring loadedvalve is tripped, forcing the diverter to close.Tamper attempts also result in an alarm beingtripped in the owner's office.

Rivertrace’s SmartSafe system.

Wärtsilä introduces engine ‘Upgrade Kit’

‘Magic pipe’ blocker breakthrough

EXHIBITIONFeaturing over 350 exhibitors. Showcase ofAsian and international brands as well as newtechnologies and products. Visitors expectedfrom over 45 countries.

CONFERENCEMaritime thought-leaders being lined up todebate pressing issues in a volatile industryamidst global economic turbulence.

ASMI,The Baltic Exchange,BIMCO, IBIA, IAPH, INTERCARGO, INTERTANKO,MPA,RINA,SECB,SSA, SIGTTO,SNAMES,SCLG

Principal sponsors:

Supported by:

Sponsors:

Tel: +44 1206 545121 Fax: +44 1206 [email protected]

Organised by:

CONFERENCETOPICSTuesday 21 April 2009The Asian Voice inWorld Shipping: Container Shipping & LogisticsThe Asian Voice inWorld Shipping:The Major Bulk Trades

Wednesday 22 April 2009The Asian Voice inWorld Shipping:Offshore MarketsFinance for Asian ShippingPLUS Technical Day (a one-day parallel conference focusing on technical issues)

Thursday 23 April 2009Charterers’ ForumThe Crewing ChallengeThe Power of CommunicationLNG ShippingMarine Insurance

CONFERENCE EARLY BIRD RATES end 28 February 2009!Sign up now andmark your diaries!

www.sea-asia.com

21-23 April 2009, Suntec Singapore

One of the largest gatherings of maritime leaders,decision-makers and brands!

Intellectual discourse,new business generationand social networking under one roof!

THE ASIANVOICE INWORLD SHIPPING:CLEARER & STRONGER

“ The Asian Voice inWorldShipping: Container Shipping& Logistics”will be chaired bySS TEO,Managing Directorof Pacific International Lines

“The Asian Voice inWorldShipping:The Major BulkTrades”will be chaired byANDREAS SOHMEN-PAO,Managing Director ofBW Shipping

New ideas fortanker safety

At the Digital Ship Athens conference on 18-19th November, speakers from Hellespont Steamship, Capital Ship Management, Exmar and K C Lyrintzis Group

provided some new ideas about how to ensure tankers are as a safe as possible and how to get the oil companies on your side.


CONFERENCE REPORT

“The best way to keep an oilcompany satisfied is tohave an organisation withno spills," said Dr

Michael Kennedy, managing director ofHellespont Steamship Company. "But in thereal world there will be spills and accidents."

"If you can't avoid spills, goodcommunication is probably the next best thing."

The Hellespont Group operates 16 crude,product and chemical tankers, and itstechnical arm, Hellespont Steamship Companyis currently building six platform supplyvessels and eight chemical tankers.

"For an oil company, transparency meansthe paper system is equal to reality," he said."In the past faking it with paper was morepossible, but not now."

Good key performance indicators for atanker company include the level of crewretention, the number of shipboard visits byoffice staff, and results from SIRE, CDI andport state control inspections, he said.

When you have an oil company / SIREinspection, "first impressions are veryimportant," he said. "Many SIRE inspectorssay, I knew your company was OK in thewalk up the gangway."

"If he sees a uniform, no T-shirts or flipflops, the inspection will go much faster."

When undergoing a TMSA audit, Kennedyrecommends being completely honest. "OurHamburg office was audited - we got a scoreof 2.8. That was also the same score we gaveourselves," he said.

"The auditors said, your score of 2.8 meansmore than a 'stretched 3' to us," he said."Honesty was the best policy."

Some tanker companies have been temptedto try to 'game' the system - for example, byadding many easy maintenance tasks to thesystem so that the percentage of outstandingmaintenance tasks can be reduced. Kennedywarned against this.

Platform support vesselsHellespont is currently building six platformsupport vessels, which provide deliveries andother services to offshore oil platforms.

"I have never seen more complex ships," hesaid. "The engine rooms are very small andfull of machinery."

"They are in constant communications withthe rig, the customer," he said.

Oil companies see oil and gas production asthe most important activity they are involvedin, and they see offshore platforms and rigs asthe most visible and critical.

"Our vessels are supporting this multibilliondollar activity. They don't want problems,"he said.

Kennedy has observed that, in TMSA, oilcompanies are trying to push the same style ofsafety management which they have developedfor the offshore industry, onto tankers.

For example, before doing any job, acompany should complete a detailed 'job riskand analysis' statement, showing exactly whateach person's role is, how to stop the job if anychanges occur, and how to adjust people's workafter any on-the-spot changes have been made.

Kennedy emphasised the importance of ahealthy working atmosphere - on ship, onshore, and in communications between the two.

"The communications link has to be morethan a few emails going in and out," he said.

"Office staff must go onboard ships frequently.

Alternatively you can bring shipboard staffashore - but that is kind of the same thing."

If you don't have healthy relationshipsbetween ship and shore, "you'll probably havea more incidents and you'll never quite knowwhy," he said.

"Part of the problem is that the crew don'tquite trust the office, so you'll never quite getthe full story."

If you don't have a healthy shipboardatmosphere, "crew will leave problems fortheir replacements," he said. "You need thatfeeling that they are part of a team and theycan't just schlep it off to the next person."

Trend analysisStylianos Siafakas, safety and qualitymanagement representative of Capital ShipManagement, said that his company hasimplemented extensive trend analysis systems,so it can see how well it is doing, and where itis improving.

"We know our position in the industry," hesaid. "We have the current situation, we getour target, and we identify the needs forchange and establish an action plan for two,three and five years, with target dates."

Capital Ship Management operates 29tankers of between 30,000 and 160,000 dwtand two 35,000 dwt bulkers.

Three stepsSiafakas said that there are three steps in asafety performance system - the engineering(the equipment), the procedures and systemsand the behaviour of the people using it. Tominimise accidents you need good equipment,good procedures and good behaviour.

Siafakas had observed that risk on boardincreases if you have people from more thantwo different countries. "This is very difficultto achieve," he said.

"One of the most important problems is thedifferent languages and different habits wehave on the ship," he said. "You have tocombine all this in one crew."

The company has a dedicated 'riskDr Michael Kennedy.

assessment team', which is responsible foridentifying risks and sharing informationabout them. The knowledge is shared at aFriday risk assessment meeting, he explained.

Capital Ship Management starteddeveloping a tool across the company twoyears ago, and got the software running sixmonths ago (May 2008), he said.

It uses Seagull Training Administrator tomanage the shipboard training. "It is a simpleand powerful training tool," he said. "Theships report training progress to us monthly.

"These training records are assessed everytime we have an oil major in the office."

People and machinesNikos P Frydas, director of studies, with theKC Lyrintzis Group (KCL Group), a maritimetraining and quality management company,talked about the challenges of training as shipsbecome increasingly automated.

Accidents are often caused by a disharmonybetween procedures, equipment, theenvironment and people, he said. This gives riseto the most common causes of accidents, whichare lack of technical skills and a disrespect for,or misinterpretation of, regulations.

People and machines are good at differentthings, they do not compete and machines existto assist people, who must be in control.

The introduction of new technologies createsrisks, which must be addressed carefully.Common measures to reduce these risks includesuccessful management of change and training.Training objectives must include: increase inskills & competency, change of behaviour,positive effect in attitude & culture, reaching thetrainee at his/her level and making the most outof seafarers' time and company's money.

"We show the horror of accidents and explainthat many regulations have blood behind them,

because they are the indirect result of a disaster"Dr Frydas said introducing ‘Safety Culture’, oneof KCL Group's schools aiming at convincingseafarers to respect regulations.

Change managementWhen implementing new processes, 20% ofpeople are usually leaders, 50% are followersand 30% of people will actively resist change,he said. The trick is to make sure you haveenough leaders.

"The more people we are and the more strengthwe have, the quicker we will move," he said."70% of attempts to introduce something newhave failed because it was not done properly."

"A quick way to identify resistance is to ask- where will change create pain or loss?" hesaid. "We have to allow for peoples' feeling."

Change is best achieved gradually, he said."Radical change is very painful. You often endup with something that doesn't work."

Intertanko’s TOTSKalliope Lyrintzis, KCL's managing directorsaid she sees TOTS (Tanker Officer TrainingStandards), a new scheme introduced byIntertanko, as very complementary to ISMregulatory requirements and TMSA guidelinesas perceived under the self-assessment scheme.

In this concept, "TOTS is more structuredin terms of standards," she said.

"TOTS is more specific," she said. Forexample, "TOTS says, minimum requiredstandards for all officer ranks with detailedcomputer-based assessment tools, whileTMSA gives more strategic guidance byrequesting the establishment of KPIs and theidentification of training gaps for ensuringofficer's competence."

On board coachingRené Jungbluth, technical director withExmar Shipmanagement, talked about howhis company is providing on board coachingto its crew.

Exmar operates three LNG carriers, four LNGregasification vessels, four very large gascarriers, eight mid range gas carriers, two semi-pressurised gas carriers, one FPSO, oneaccommodation barge and two chemical tankers.

The company aims to keep teams of seafarersworking together all the time, so they get toknow each other better. "Accidents are oftencaused by misunderstanding in teams," he said.

The coaches watch the seafarers doing theirnormal work, for example on the bridge oroverhauling the engine; they do not provideon board classes.

Exmar also provides its crews with remotecoaching over the internet and telephone, he said.

The company is also finding voyage datarecorders very helpful in analysing any issues,which occur after the event and to check crewwas doing everything properly.

Correcting your bossOne shipping company delegate talked aboutthe challenges he faces encouraging juniorstaff to correct senior officer.

"We have cases when junior ABs did notchallenge their superior officers on somethingthey knew was going wrong," he said.

The different nationalities and cultures onboard can cause particular problems, he said."We have to remove the barriers between thenationalities," he said.

Lyrintzis said that it comes down to trainingsenior officers how to encourage commentsfrom their juniors.

Considering that a LNG vessel captain is incharge of a $300 mill vessel with a $200 millcargo, it does not make sense to cut corners ontraining, she said.

Exmar's Jungbluth said that the solution wasto encourage senior officers to make juniorstaff feel involved in what is going on. "We asksenior managers - do you involve ABs in yoursafety tours? Do you let your junior officersfollow ABs? Do you involve ABs in safetymeetings so they see you take it seriously?"

"That's the only way you'll get the teamgoing," he said. "Not by writing procedures.Leadership on board should have an eye forall these soft sciences."

Exmar regularly makes sure that itsPilippino crew understand and support theregulations, he said.

"We asked them about hygiene in thekitchen and in the cabins, to find out if theyunderstood work permits. We found that theydid. They know what the box (on the permit)was for," he confirmed.

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René Jungbluth.


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