BW GROUP

BW GROUP THE GREEN SHIPS

Jim Shaw examines the history of Hamilton, Bermudaheadquartered BW Group, a modern conglomerate formed out of two of the world’s largest shipping companies.

The transportation of gases in liquefied form by ship is becoming very big business, and one of the leading operators of this type of tonnage is Bermuda-based BW Group, known for its ‘green’ ships. The initials in the company’s name hint at a historic past: ‘B’ stands for Bergesen, once Norway’s biggest shipping company and operator of the world’s largest bulk carriers, and the ‘W’ for World-Wide Shipping, at one time the largest independent shipping company in the world. The latter firm, founded by Hong Kong’s Yue-Kong Pao, had more deadweight tonnage capacity in the mid1970s than the US and Soviet merchant fleets combined, and Pao appeared on the front cover of Newsweek magazine in 1976 as ‘King of the Sea’. Today, the BW Group is a world leader in the petroleum, gas and offshore sectors, with nearly 400 vessels in operation.

While gas carriers and floating storage and regasification units (FSRUs) make up the most valuable portion of the fleet, a merger with Copenhagenbased Hafnia Tankers last year saw product tankers become the largest single type of ship operated. At the same time,

 Launch of the 10,403gt tanker Berge Bergesen, which was completed by Norway’s Rosenberg Mechanical Components A/S in 1951. THE ALEXANDER TURNBULL LIBRARY

 Built by Barclay, Curle in 1927, the 5,101gt City of Hereford became the first vessel of Y.K. Pao’s World-Wide fleet when she was purchased as Inchona from Willamson & Co in 1956 and renamed Golden Alpha. CMRT

BW elected to drop out of the chemical tanker business by selling its final two stainless steel tankers, the 1997-built Bright World and 1998-built Bold World, for scrap. Of the two historic companies consolidated in 2003 to form BW Group, the oldest was Bergesen d.y. ASA, formed by 42-year-old Sigval Bergesen as Sig. Bergesen d.y. & Co in 1935. Bergesen built up a fleet of three tankers just before World War II, but one, the 15,540dwt Charles Racine, was lost to Italian torpedoes in 1942. After the war, orders were placed for new ships, several of which were completed by the Rosenberg shipyard at Stavanger, which Bergesen had acquired from the Central Bank of Norway in the late 1940s.

By 1955 the Bergesen fleet stood at seven tankers, the largest of 34,000dwt, and in 1967 the dry sector was entered when Sig. Bergense took over his son’s fleet. This included several large ore-oil

 The tanker Berge Bergesen was one of Sig. Bergesen d.y. & Company’s

first post-war-built ships. THE ALEXANDER TURNBULL LIBRARY

(OO) carriers, such as the 86,244dwt Shigeo Nagano, which were under long-term contract with New Yorkheadquartered Hugo Neu Corporation to transport ore from East Africa to Japan.

Sigval Bergesen went on to order several of the world’s largest ore-bulk-oil (OBO) carriers for his own fl eet, two of which, the 227,550dwt Berge Istra and 227,912dwt Berge Vanga, were lost in 1976 and 1979 with all their crews. When Bibby Line’s Derbyshire, another OBO, was lost a year later, also with her entire crew, interest in this type of ship faded.

Although Sigval Bergesen started in the petroleum tanker sector, he moved into gas carriers during the late1970s, when Fearnley & Eger began experiencing fi nancial diffi culties. The 109-year-old

The pressurised LPG carrier Epic St Thomas is one of 44 ships

operated by BW Group’s Singapore-based Epic Gas Ltd, which traces its history back to the founding of Jardine Matheson’s Indo-China Steam Navigation in 1891. EPIC GAS   As the world’s largest transporter of Liquid Petroleum Gas (LPG) BW

LPG operates 49 ships, including the 48,502gt BW Lord (2008). BW GROUP

 One of the final ships to be added to the World-Wide fleet before its amalgamation with Bergesen was the 1999-built World Romance, a 74,047dwt bulk carrier sold in 2005. JIM SHAW

fi rm had ordered a series of six LPG carriers of 75,000m 3 capacity in Asia but was unable

to take delivery. Bergesen then stepped in to purchase the ships, taking one from another buyer. After acquiring more vessels in the dry, gas and liquid

sectors, and eventually building up Norway’s largest shipping company, Sigval Bergesen retired in the late 1970s and his two grandsons, Morten Sigval Bergesen and Petter C. G. Sundt, took over the company. The various holdings of the Bergesen group were then consolidated as Bergesen dy A/S and the reconstructed company listed on the Oslo Stock Exchange in 1986. By this time, additional investment had been made in the LPG sector, and by the end of the 1980s Bergesen had become a major operator of such ships. In 1996 it took over another leading LPG carrier, Havtor ASA, which brought the

 Born in Stavanger, Norway in 1893, Sigval Bergesen d.y. built up a cargo fleet totalling more than seven million tonnes deadweight before retiring in 1976 and passing away in 1980.

Although BW Group expanded rapidly into the chemical tanker sector by acquiring the fleet of Stream Tankers in 2014 it moved out of the trade last year by selling off the ships, including the 19,989dwt BW Boron, which now trades as Indigo Ray.

 Born in Ningbo, China in 1918, Yue-Kong Pao built up a fleet of over 20 million tonnes deadweight, the world’s largest, before retiring in 1986 and passing away in 1991.

Bergesen fl eet to more than 100 vessels trading in the petroleum, gas and dry bulk trades.

THE MOVE INTO LNG In 1999, following a volatile decade in the petroleum transportation industry, the Bergesen Group revised its strategy to focus on gas tankers and offshore services. This led to the ordering of several LNG carriers in 2000 that were subsequently chartered to Suez Energy International and Sonatrach. At the same time, Bergesen acquired Scantank Offshore, moving more strongly into the FPSO (fl oating production, storage and offl oading vessel) market. This rapid growth established Bergesen as Norway’s most progressive shipping company and an attractive takeover target. In April 2003 Hong Kong’s World-Wide Shipping, then led by Dr Helmut Sohmen, purchased control of Bergesen and delisted it from the Oslo Stock Exchange.

Bergesen Worldwide Ltd was then established as a holding company for the Bergesen and World-Wide shipping groups, a name later shortened to BW Group. During this period Bergesen sold its remaining petroleum tankers to World-

 One of a series of Medium Range (MR) product tankers completed by South Korea’s SPP Shipbuilding in 2014, the 29,768gt BW Egret now sails

under the Hafnia banner. ALL PHOTOS BY BW GROUP UNLESS STATED

 Completed in China in 2010, the 76,578dwt BW Zambesi trades under the banner of Copenhagen-based Hafnia, which was acquired by BW Group last year and is ranked as the world’s largest product tanker operator.

Wide while retaining its gas carriers, dry bulk carriers and FPSO business, all later to become stand-alone operations under the BW banner.

The ability of Hong Kong’s World-Wide Shipping to suddenly purchase Norway’s largest shipping company can be traced to the astute business tactics of its founder, Yue-Kong (Y.K.) Pao, who was born in Ningbo, China in 1918 and moved to Hong Kong in 1949. Although with a background in banking, Pao soon entered the shipping business and purchased his first vessel, the elderly coalburner Inchona, from another Hong Kong firm, Willamson & Company, in 1956.

He optimistically renamed his purchase Golden Alpha in the expectation that it would be the first in what would

CURRENT OPERATIONS

BW DRY BULK In 2016 BW Group re-entered the dry bulks trade, which was once the foundation of Y. K. Pao’s fleet, by establishing BW Dry Cargo under the direction of Christian Bonfils, who had earlier founded Nordic Bulk Carriers.

Although expected to trade in the Handymax to Kamsarmax size range, BW Dry Cargo has been operating ships in the Supramax to Capesize sector, including the 179,993dwt Berge Nyangani (ex-Tenshu Maru), purchased from Japan’s Kambara Kisen two years ago, and the 171,995dwt Berge Weisshorn (ex-Pacific Fortune), acquired a year earlier.

This year BW Dry Bulk will take delivery of new 81,600dwt and 61,800dwt bulk carriers from the Tsuneishi shipyard in the Philippines and Japan’s Oshima to bring its fleet to 20 vessels. At the same time, several older ships, including the 61,491dwt BW Durum and 82,589dwt BW Acorn, have ben sold. become a very large fleet. Pao’s business plan was to first obtain a guaranteed charter for a vessel before buying it. Most of his early charters were with Japanese trading houses as these firms began to enjoy a post-war boom. Pao’s business grew accordingly. Although the ancient Golden Alpha survived for a few years, she was quickly replaced by several more secondhand vessels, and by 1961 Pao was able to take delivery of his first newbuilds, all working under long-term carriage contracts and most listed under single-ship companies.

MOVE TO PETROLEUM Pao eventually purchased a second-hand tanker with a British Petroleum charter attached. This led to his involvement in the petroleum trade just as the 1967 closure of the Suez Canal drove rates sky high for these types of ships. With a firm credit foundation established in Hong Kong, and good shipbuilding connections in Japan, Pao quickly placed orders for tankers and, by 1969, was taking delivery of his first VLCC, the Japanesebuilt World Chief. This 219,259dwt ship was followed by 40 additional crude carriers between 1970 and 1974.

Within another five years Pao had built up a fleet of more than 200 vessels of a combined 20.5 million dwt in both the dry and liquid trades. Such was his meteoritic rise through the ranks of world shipowners, during which he passed by such famous Greeks as Onassis and Niarchos, that he was knighted by Queen Elizabeth II in 1978.

Two years later, at his peak, he purchased control of the Hong Kong & Kowloon Wharf & Godown Co, which included ownership of Hong Kong Tramway and Star Ferries, thus cementing his status as Hong Kong’s leading businessman and one of the world’s richest men with worth an estimated $1.3 billion. After buying ships through the 1960s and early 1970s, Pao was forced to begin selling them in the late 1970s as a world shipping recession began to take hold. Over the next five years 140 were disposed of, most as they came off charter. This reduced World-Wide’s overall carrying capacity, but allowed it to pay off debts and build up cash reserves.

In 1986 Pao retired and the leadership of World-Wide was taken over by his first sonin-law, Dr Helmut Sohmen, who had married Pao’s oldest daughter, Anna, in 1967. Under Sohmen’s direction, and as the shipping recession began to ease, six VLCCs were ordered in South Korea, the first vessel aptly named World Phoenix to symbolise a new beginning for the company. The big crude carriers entered service just as the First Gulf War in the Middle East flared, again pushing freight rates up. Using its new profits, World-Wide acquired Sweden’s

Built in 2001, and acquired by BW Group in 2006, the 299,450dwt BW Utik was moved over to DHT Holdings as DHT Utik in 2017 but was sold last year to become the Marshall Islands-registered Ridgebury Utik.

BW LNG N&T Argonaut in 1999, adding 24 large tankers to its fleet, and began looking around for other potential acquisitions. Japan’s Iino Kaiun Kaisha, a leading operator of dry and liquid tonnage, was considered, but it was Bergesen’s Morten Bergesen and Petter C. G. Sundt who were more receptive to World-Wide’s offer. This led to World-Wide taking over Bergesen under the Bergesen Worldwide banner in 2003, the name becoming BW Group in 2007.

BW GROUP HOLDINGS Since amalgamation of the Hong Kong and Norwegian fleets, BW Group has become the holding company for a number of undertakings, each with its own management and field of specialisation.

Of the two large gas carrier operations, BW LPG owns 37

ships, with two more under construction, while another

eight are chartered in.

Most of these vessels have

capacities ranging from 78,000m 3 to 84,000m 3 , with

the two smallest ships, the 2003-built BW Nantes and BW Nice, being sold last year. Since becoming the largest shareholder in Singaporebased Epic Gas, now operating as a BW company, BW LPG is ranked as the world’s largest owner and operator of LPG tonnage, both in terms of ship numbers and carrying capacity.

BW TANKERS In the product tanker sector, BW Tankers (formerly BW

BW LNG BW LNG, a sister to BW LPG,

operates 18 vessels, four of which are used as floating storage and

regasification units (FSRUs). The latter vessels are employed for the

receiving, storage and offloading

of LNG in various locations around

the world, and the 170,212m 3 . BW

Singapore is serving in this role in

Egypt. Over the past two years, BW

LNG has taken delivery of several

new 173,400m 3 vessels from Daewoo

and has another six on order.

BW CHEMICAL In the petroleum and chemical tanker sectors, BW Group has made significant changes over the past several years by expanding its chemical tanker fleet under BW Chemicals through the purchase of ten ships from Stream Tankers AS, then selling 13 ships to Ace Tankers last year. Several months later it exited the trade entirely by selling its last two chemical carriers, the 24-year-old twins Bright World and Bold World, both for scrap.

Pacific) completed a merger with Denmark-based Hafnia Tankers in 2019 to create the world’s largest product tanker fleet, which now trades under the Hafnia name. The combined company operates over 100 ships in the LR2, LR1, MR and SR sectors, and is currently taking delivery of six 75,000dwt LR1 newbuilds from China’s CSSC shipyard. These vessels will be operated by a new joint venture formed between Hafnia and CSSC: Vista Shipping. In the crude carrier sector, BW has sold its

 BW Offshore’s latest and

most sophisticated FPSO, the 127,448dwt BW Catcher, is

currently working in the North Sea under a lease contract signed

with Premier Oil. BW GROUP fleet of 11 VLCCs to Bermudabased DHT Holdings in exchange for 33.5 per cent ownership of the company, which now trades 27 tankers.

BW OFFSHORE One of the most highly valued and technologically proficient of the BW Group companies is BW Offshore, which traces its inception to the installation of the FPSO Berge Sisar off Angola by Bergesen 38 years ago. Since then BW Offshore has pioneered a number of FPSO and FSO (floating storage and offloading) installations, including the first and only Arctic FSO and the first FPSO in the Gulf of Mexico, where a record moorage depth of over 8,500ft was required.

Today, BW Offshore operates 15 owned FPSOs, working in areas such as West Africa, Brazil, Indonesia and the North Sea. Its latest and most advanced is the 790ft by 164ft BW Catcher, completed in Singapore in 2017 and working in the North Sea for London-based Premier Oil. The FPSO has an oil storage capacity of 650,000 barrels and a processing capacity of 60,000 barrels a day.

BW Offshore is also developing a smaller 584ft by 118ft FPSO which will be able to produce oil from marginal fields while meeting requirements for operation on the Norwegian continental shelf. This vessel is expected to have a storage capacity of 325,000 barrels and a processing capacity of 40,000 barrels a day.

MOSAIC

Orkney Ferries, owned by Orkney Islands Council, operates nine dedicated inter-island ferries between Orkney’s mainland and thirteen island destinations, with the three largest vessels working out of Kirkwall on lifeline services to the North Isles.

 The 1988-built Varagan (928gt), approaching Kirkwall, was built by Cochrane Shipbuilders for Orkney Ferries to work on a Gills BayBurwick route, but when this proved unsuccessful she was taken over by Orkney Islands Shipping Company in 1991 and subsequently placed on the North Isles service.

 The 1994-built Hoy Head approaching the Houton terminal on Orkney Mainland. Built by Appledore Shipbuilders to replace Thorsvoe on the South Isles service, she was lengthened by 14m in 2012-13 at Cammell Laird Shiprepairers and operates the Lyness (Hoy) to Houton route, carrying up to 125 passengers.

The 1990-built Earl Thorfinn approaching Kirkwall while operating the North Isles service to Sanday, Stronsay, Papa Westray and North Ronaldsay. She was built by McTay Marine at Bromborough and can carry up to 190 passengers and 26 vehicles.

 The 1989-built Shapinsay was built by Yorkshire Drydock Ltd, Hull for service from Kirkwall to Shapinsay, and was lengthened by 6m in April 2011.

 The 104gt Eynhallow was built in 1987 by David Abel Boat Builders, Bristol to inaugurate a ro-ro service from Tingwall to Rousay, Egilsay and Wyre. (Graham Campbell)

Earl Sigurd and Thorsvoe passing in the Bay of Kirkwall, respectively heading away from and towards the Orkney capital. Since 1994, the 1991-built Thorsvoe has been the main reserve vessel. (Graham Campbell)