BC Shipping News - May 2015 by McIvor Communications

INSIDE: PRINCE RUPERT’S FAIRVIEW TERMINAL EXPANSION

BC SHIPPING Commercial Marine News for Canada’s West Coast.

Volume 5 Issue 4

www.bcshippingnews.com

LNG in B.C. Under pressure

NEWS May 2015

Industry Insight Captain Mark Turner Senior Marine Advisor LNG Canada

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BC SHIPPING

Contents

NEWS

Cover Story 38

Coast Guard

Mercy Ships

Legal affairs

The historic foghorns of Vancouver Harbour By Lea Edgar

Tugs & barges

LNG industry

Tugs & barges

LNG as a marine fuel on the West Coast By Calum McClure

Tugs & barges

Cargo logistics

Marine surveyors

Ports

Cargo logistics

29 7 8 12

Editor’s note

By Jane McIvor

In brief

Industry traffic, letters and news briefs

Industry insight

Poised for success Senior Marine Advisor, LNG Canada The LNG export industry might be new to B.C.’s West Coast but it’s certainly not new to the rest of the world. Lucky for B.C., experienced professionals like Mark Turner are here to make sure proposed projects are implemented with the utmost care.

May 2015 Volume 5 Issue 4

History lesson

Under pressure LNG on Canada’s West Coast By K. Joseph Spears

LNG fuel

Fairview Terminal expansion project Success rests on collaboration of key players

Why Vancouver’s port is truly a ‘national treasure’ By Ray Dykes

Laurier crew honoured for role in finding Erebus By Marianne Scott Saying goodbye to Africa Mercy The Coman’s year with Mercy Ships comes to an end Norwegian Bunkers v. the Samatan et. al. The power of the maritime lien By Megan Nicholls Ledcor continues its maritime expansion Fuel-saving strategies for tug and barge operators By Peter S. Soles and William L. Moon III Robert Allan Ltd. continues to deliver around the world Surveyors’ diary A review of notable events By Tim Ellis and Captain Andrew Korek

The looming paradigm shift Canada’s Single Window Initiative By Colin Laughlan

On the cover: Teekay’s Madrid Spirit (courtesy Teekay); above: the Port of Prince Rupert with Fairview Terminal in the foreground (photo courtesy Prince Rupert Port Authority); right: the launch of Ledcor’s new tug, the Bill L Ledcor (photo: Dave Roels — www.daveroels.com); left: Mark Turner, Senior Marine Advisor, LNG Canada

May 2015 BC Shipping News 5

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EDITOR’S NOTE Photos by Dave Roels, www.daveroels.com

his month, we explore the world of LNG — both in terms of developing new export terminals here on the West Coast (see our interview with Mark Turner and Joe Spears’ analysis of B.C.’s chances in a global context) as well as LNG as a fuel for vessels (see Calum McClure’s article). It’s an exciting time for B.C. and I found myself getting almost lightheaded when thinking of the opportunities for growth both of these “new to B.C.” industries represent.

Fingers crossed

With 19 proposed projects on the table for LNG terminals, industry consensus is that three or four will get the nod to go ahead. Even at that number, the amount of supplies, services and jobs required will be more than enough to boost the fortunes of many within the industry. As with any new industry — especially one that comes with its own set of protesters — prudence dictates that extensive preparatory work and due diligence are carried out to ensure starting off on the right foot — from best safety

practices to a commitment to environmental stewardship and to ensuring all British Columbians get the opportunity to have a say. And based on what I’ve learned this month, it seems all parties are doing just that. While there are many steps to take before final investment decisions are made, I’ve got my fingers crossed that we’re witnessing the birth of a new industry on the West Coast. Like I said, it’s an exciting time. — Jane McIvor

May 2015 BC Shipping News 7

INDUSTRY TRAFFIC

Letter to the editor Good day, Jane I just wanted to let you know I greatly enjoyed the excellent article you wrote with Captain Denning concerning the BC Coast Pilots. I am privileged to do some small service on the sidelines helping those senior members of our marine industry to study for the rigourous entrance exams for the Pilot Apprenticeship Program. The commitment of time and energy to the challenge of being ready for the exams tests everyone’s resolve considerably. However, nothing could be clearer than the need for the highest of professional standards, and the candidates I work with are all more than ready to do what it takes. When they are successful, it

follows that they are ready in all respects for the next task — the training program — no small challenge in itself. It is no wonder that they are more than capable of safely handling all shipping in our waters and doing so with confidence. It never ceases to amaze me how often I meet people who live and work on our coast who have never heard of our pilots and who are ill-informed of this critically important service they provide. Your article does much to rectify this problem and I can only hope we can get a great many people to read it. Please accept my thanks for a great job well done. Regards. Jim Steele

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GVHA appoints new CEO

he Greater V ic t or i a H a r b o u r Authority Board of Directors is pleased to announce the appointment of Mr. Ian Robertson as GVHA’s Chief Executive Officer. Mr. Robertson is currently the CEO of the Tourism Industry Association of British Columbia (TIABC). He has over 30 years’ experience developing business solutions in companies ranging from Procter and Gamble through the Jim Pattison Group and Rocky Mountaineer. He has also held elected office for six years as Commissioner, Vancouver Board of Parks and Recreation, where he served as Chair. “We are delighted to appoint a CEO who brings great leadership experience to GVHA. He understands GVHA’s role as a steward of important harbour assets and he’s keen to engage the many stakeholders who share an interest in Victoria’s harbour,” said GVHA Board Chair Bill Wellburn. “This appointment follows an extensive search and a rigorous hiring process. Our search was aided by the input of our Member Agencies, GVHA’s Life Members, staff, and many of our key customers and stakeholders. We are grateful for their perspectives.” Mr. Robertson joins GVHA at a pivotal time. The Board and staff have been developing a new Strategic Plan that will guide GVHA’s activities over the next 10 years. A second round of consultations seeking additional input on the Strategic Plan with Member Agencies will be initiated in the weeks ahead, followed by public consultation involvement in late spring. Mr. Robertson will have the opportunity to put his mark on the Strategic Plan and then take charge of the development and implementation of the strategies and plans that follow. “I am thrilled to have been given this opportunity,” said Mr. Robertson. “I look forward to leading the GVHA team, and meeting with the many stakeholders who share an interest in Victoria’s spectacular harbour.” Mr. Roberson will take up his appointment effective April 27, 2015.

NEWS BRIEFS

UBC’s Heaver wins Onassis Prize for Shipping

revor Heaver, Professor Emeritus at UBC’s Sauder School of Business, has been awarded the Onassis Prize for Shipping as a joint recipient of the prestigious international award for lifetime contributions to the field. The $200,000 Onassis Prizes are given out once every three years to leading researchers of shipping, finance and international trade. Heaver is sharing the shipping award this year with globally renowned maritime economist Martin Stopford. Heaver’s win marks the first time the award has gone to an academic in Canada. Heaver introduced courses on international shipping and logistics to the University of British Columbia in the 1960s and has conducted extensive research on the railway industry and transport policy as well as shipping and logistics. He is widely recognized in the field of transport economics and logistics. He was a founding member of the World Conference on Transport Research and of

the International Association of Maritime Economists. Having represented UBC as chairman and president of the two bodies, he helped elevate the global stature of UBC and Vancouver in the field. He was elected a fellow of the Chartered Institute of Logistics and Transport, and although retired, he has undertaken teaching and research assignments in Australia, South Africa, and Europe. “I am particularly pleased to receive this award as an academic based at UBC,” says Heaver. “It reflects a belief that I and others have had since the 1970s that maritime economics is a global industry requiring a truly global community of researchers and academics. I am very glad to have helped bring this vision to reality.” “I have enjoyed the support of colleagues and enthusiastic students at UBC and of the maritime industry and federal government programs. This support was essential to establish Vancouver as an internationally recognized centre for maritime economics. The leadership of

former students in corporate management, and of broad economic rather than corporate interests, led to the policy changes enabling international shipping to be based in Vancouver. It was an innovation from which we still benefit,” he says. Heaver also notes that the recognition helps him to advocate for continued innovation and related supply chains in Canada. “I would like to see Canada step up its innovation in logistics and in collaboration among governments, industry and universities. It is my hope that the current review of the Canada Transportation Act, chaired by the Honourable David Emerson, will examine the leadership of government in transport and logistics innovation and find that targeted, collaborative research initiatives are warranted.”

EMPLOYMENT OPPORTUNITY — ASSOCIATION PRESIDENT

The Chamber of Shipping of British Columbia (COSBC), a non-profit maritime membership association, represents the full spectrum of international and domestic shipping related interests in Western Canada including, but not limited to, international and domestic ship owners, BC Ferries, vessel agency companies, cargo interests, terminal interests, cruise lines, port authorities, pilotage, maritime lawyers, classification societies, marine surveyors, and marine support and service companies. As such, the Chamber represents more than 80% of commercial marine traffic activity on Canada’s west coast. The association is seeking a new President on the intended retirement of the incumbent in early 2016. Our President, reporting to the Chairman and Board of Directors, must have vision, work well within a team environment, and be a progressive thinker. The successful candidate must demonstrate a facility and willingness to actively implement the

strategic vision of the Board, serve the Chamber members and at the same time build collaborative relationships with other organizations. An ability to interact with the relevant government agencies as partners in the wider marine community is equally essential. The role involves some travel, primarily within Canada. The candidate must demonstrate knowledge of and a passion for matters maritime, as well as a keen interest in following and actively contributing to political and legislative developments, with the aim of safeguarding the interests of all constituents. The continued success of COSBC is dependent on the close involvement of members through participation in several standing committees and ad-hoc working groups. The President is ultimately responsible for the administration of the secretariat, which in turn, provides the logistical support for COSBC and other maritime organizations.

Interested persons should send a detailed resume no later than May 29, 2015 in an envelope marked – “President – Confidential” To: The Chamber of Shipping of British Columbia c/o Bernard LLP (HPS) 1500 - 570-Granville Street Vancouver BC V6C 3P1

www.cosbc.ca May 2015 BC Shipping News 9

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See you there! BC Shipping News is proud to sponsor the following events. Be sure to visit the websites noted for more details: • NIBC: Maritime Energy Transport May 7-8, 2015, Victoria (www.nibcconference2015.com) • GreenTech 2015: Sustainability at Work in Marine Transportation May 27-29, 2015, Seattle (www.green-marine.org/greentech/) • Council of Marine Carriers 21st Towboat Industry Conference: Rising to new Coastal Challenges May 28-30, 2015, Victoria (www.comc.cc/conf/21Conf.html) • Clean Pacific Conference: Changing Landscape: Shifts in Rail, Pipeline and Vessel Transport June 16-18, 2015, Vancouver (www.cleanpacific.org) • Canadian Ferry Operators Association Conference: Cutting Edge: New Technologies in the Ferry Sector September 13-15, 2015, Vancouver (www.cfoa.ca/conference) • 40th Annual Interferry Conference October 3-7, 2015, Copenhagen, Denmark (www.interferry.com)

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NEWS BRIEFS

ClassNK retakes top position

lassNK (Chairman and President: Noboru Ueda) has just announced its official registration figures in addition to Clarkson’s data which reveals that it is once again the world’s largest classification society. The Society made the announcement at its annual Japanese press conference held in Tokyo on March 17, 2015. The latest figures show that over 366 million deadweight tons are now registered with the leading classification society, some 21 per cent of the world’s entire classed fleet, more than any other classification society in the world according to Clarkson’s. Despite a global decline in new orders, the number of newbuildings joining ClassNK continues to grow, with the Society welcoming newbuildings totalling over 16 million gross tons to its register in 2014, or more than 25 per cent of all newly built tonnage last year.

Speaking on the occasion, ClassNK Chairman and President, Mr. Noboru Ueda said: “At ClassNK, we believe that nationality is not relevant to our customers. Shipowners and operators around the world select their classification society on the basis of the services delivered. These figures represent not only the growth of our organization, but also the trust we have gained from the maritime industry through consistently providing quality services.” As ClassNK’s register grows increasingly international, so does its R&D activities. With significant contributions towards maritime R&D, ClassNK is working with industry partners throughout Asia, Europe, and the Americas on a wide variety of joint R&D projects focusing on the safety of ships at sea, protecting the marine environment, and developing technologies that enhance efficiency for the benefit of the entire maritime community.

“As an independent, nonprofit organization we are able to invest all of our profits back into improving our services and providing the mari- ClassNK Chairman and President time industry Mr. Noboru Ueda. with innovative solutions. We respond to our clients’ needs and when these needs change, our strategy is to adapt and invest to meet that change. We are always looking for ways to address new challenges, as well as enhance and expand our existing range of services and the maritime community has responded to this by continuing to choose ClassNK.”

May 2015 BC Shipping News 11

INDUSTRY INSIGHT

Poised for success Mark Turner, Senior Marine Advisor, LNG Canada

hile the LNG industry might be new to B.C.’s West Coast, it is certainly not new to the rest of the world. And lucky for B.C., experienced professionals, like Captain Mark Turner, Senior Marine Advisor for LNG Canada, are here to make sure proposed projects are implemented with the utmost care — keeping a keen eye on safety, protecting the environment and generating high-value jobs for local communities. Turner’s expertise in the development and operation of LNG terminals spans 15 years — coupled with the more than 50 years’ experience of Shell Canada — the advent of the LNG industry in British Columbia is in good hands and poised for success. BCSN: Could you give us the high level overview of LNG Canada and the proposed project for Kitimat? MT: LNG Canada is a joint venture partnership comprising Shell Canada (with 50 per cent ownership), PetroChina Company Ltd. (20 per cent), Korea Gas Corporation (15 per cent ownership), and Mitsubishi Corporation (15 per cent). The project consists of the design, construction and operation of natural gas treatment facilities, liquefaction and storage facilities, marine terminal facilities, and supporting infrastructure. The facility will begin with two trains (i.e., LNG processing units) with capacity to produce about 13 million tonnes per annum and the possibility for future expansion to a total of four 6.5-million-tonnes-per-annum trains with a combined production capacity of 26 million tonnes per annum. BCSN: Could you compare that to other terminals around the world to provide some context?

12 BC Shipping News May 2015

>>> We’ve received a lot of support from local communities, mostly due to the fact that we’ve been very transparent and engaging. MT: It is a large facility. Once the two phases are complete, and all four trains are built, it will be one of the largest plants in the world. To put it into context, the largest liquefaction plant is in Qatar and produces 42 million tonnes per year. On the other end of the scale, the Pluto LNG plant in Australia has a capacity of 4.3 million tonnes. But there are not many at the size of Qatar. BCSN: Before we get into the specifics of the project, could you outline your role and the experience you bring to the table? MT: I joined Shell in 2013 when I was hired as Senior Marine Advisor with LNG Canada. My role is to provide technical marine consultancy to LNG Canada with specific emphasis on port and terminal facility development, front-end engineering design (marine), terminal operations and due diligence, and also LNG cargo transfer management. Along with that, part of my role is to work with the rest of the team to promote LNG safety through advocacy initiatives with governments and external stakeholders including First Nations. We also conduct numerous simulations and studies in relation to risk and safety mitigations; we assist in all of the design criteria for the marine terminals; we engage constantly with Transport Canada, Canadian Coast Guard and Pacific Pilotage Authority/BC Coast Pilots Ltd. as

well as others in the local shipping industry; and we’re continuously engaged with the general public to promote our project and explain the safety features of the LNG industry. It’s a lot of work but we’ve got a very dedicated, experienced, and strong professional team that deals specifically with each area. We’ve received a lot of support from local communities, mostly due to the fact that we’ve been very transparent and engaging. While we’re promoting our project, we’re also providing education about the industry itself. BCSN: And your experience? MT: I have over 35 years of experience in oil and gas — both onshore and offshore energy projects, mostly in the marine department. I was the Chief Operating Officer for Newfoundland LNG for about 10 years and COO at North Atlantic Pipeline Partners for six years before that. Both roles involved numerous LNG projects on the East Coast, U.S. and overseas. I was a ship’s master in my early days and also went to law school and did my Masters in Admiralty Law. I’ve got a pretty diverse background with both international and domestic experience in all aspects related to the marine oil and gas and energy industries. I’ve done acquisitions, project management, site development, site selection programs, all in senior management positions.

INDUSTRY INSIGHT Photo: LNG Canada press release

BCSN: What kind of ships did you work on in your early days? MT: Since my early days at sea, I have worked on a large variety of vessels. During my later years, I worked on vessels mainly dedicated to the global oil and gas industry. BCSN: Back to the issue at hand. Could you describe the selection process and why Kitimat was chosen as the preferred site? MT: We started the site selection process in about 2011/2012 and looked at over 500 sites in B.C. It’s quite a timeconsuming process and involves a lot of investigation and analysis. We chose Kitimat for a number of reasons: It has very wide, deep channels that are icefree year round; the harbour is well protected from the elements, making it safer to operate; and it’s adjacent to our Asian markets where the cargoes are destined. In addition, Kitimat was an industrial port for about 30 years with Rio Tinto Alcan in that location so the community is familiar with this sort of vessel traffic. Another major factor is the reduction in the pipeline length. Our pipeline now will be about 650 kilometres. Under normal conditions, it would be twice that length. The terrain makes a big difference for the pipeline routing. BCSN: What’s the timeline for the Financial Investment Decision (FID)?

April 30, 2014: Premier Christy Clark and the Honourable Rich Coleman (Minister of Natural Gas Development, Minister Responsible for Housing and Deputy Premier) stand present to witness the signing of a joint venture agreement between Shell Canada Energy, PetroChina Corporation, Korea Gas Corporation, and Mitsubishi Corporation.

MT: There is a lot of work to be done. LNG Canada must ensure the project is economically viable, and meet several significant milestones related to gas supply, engineering and cost estimates, supply of labour and regulatory approval prior to making a Final Investment Decision

(FID). We have a large, diverse team here in B.C., in Calgary and in Yokohama and we deal with all of these challenges on a daily basis. We’re in constant communication with each other to be kept abreast of developments and identify areas that require more time or attention.

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The proposed site for LNG Canada’s terminal in Kitimat (map for illustrative purposes only).

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INDUSTRY INSIGHT that weather conditions and safety in navigation were better...and the route is also the shortest and most direct to Kitimat. BCSN: I understand your application for an Environmental Assessment Certificate was accepted by the B.C. Environmental Office late last year. Could you describe what that entailed? MT: Yes, that process marks the culmination of more than three years of environmental studies, design work and engagement with local communities and First Nations. The application details the proposed project’s economic and social benefits, environmental effects and mitigation measures to avoid or reduce those effects. It’s an ongoing process with constant feedback and supply of additional information to update the application and keep it current. BCSN: In terms of the regulatory process, what’s next? MT: We have, as of March 27, 2015 officially submitted our completed TERMPOL to Transport Canada. We now have to go through the full permitting process — make sure that the conditions of the permits are met. That includes environmental conditions, ranging from the water at sea to the beach — when I say the beach, I mean on land — trees, birds, emissions, mammals, etc.

Image courtesy LNG Canada

>>> We opted for the northern route noting

The proposed shipping route.

BCSN: Do you see any differences between the industry being developed here in B.C. and that on the East Coast? MT: Projects on the East Coast of Canada go through the same regulatory process. The U.S. LNG facilities used to be import plants but now they’re being re-engineered to become export

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14 BC Shipping News May 2015

terminals because of the increased shale gas potential. The East Coast is positioned better for the European market and demand from India, which is expected to rise as well. There are many global LNG opportunities on the horizon. BCSN: What about differences in the regulatory and consultation processes — are they as rigorous as here on the West Coast? MT: Definitely. There are a number of concerned stakeholders and fisheries all up and down the eastern seaboard and at my past companies we had to go through the same CEAA process, the same TERMPOL. Also, there’s a lot of oil activity on the East Coast which means increased activity and risks and therefore regulatory requirements sometimes become greater. BCSN: Could you describe the facility that is planned for Kitimat? What sort of infrastructure is required, especially on the marine side? MT: The facility will have a gas liquefaction plant — very large in its own right — composed of two trains in the first phase and two additional trains in the second. We will have a storage facility and associated infrastructure such as the pipe arrays, loading arms, etc. For the marine terminal infrastructure, it will be comprised of two jetties to accommodate two LNG carriers. We’ll have a materials offloading facility at the jetty where we can offload the modules coming from overseas during construction — the storage tank and equipment necessary for the liquefaction plant. BCSN: How many vessels will be visiting each year in Phase I? And further, how many in Phase II? MT: Phase I will consist of two trains at 13 million tonnes per annum and should require about 170 vessel visits per year, or one LNG carrier every other day. In Phase II, we’re looking at four trains for a total of 26 million tonnes per annum and that would require about 350 LNG carrier visits per year — almost one per day. BCSN: You mentioned working with Transport Canada, Canadian Coast Guard and BC Coast Pilots on safety and risk mitigation. Could you describe your efforts in this area, including the decision on routing? MT: We looked at various routes and narrowed it down to two — the northern and southern. We opted for the northern route noting that weather conditions and safety in navigation were better. Transport Canada and the PPA also approved this routing and the route

May 2015 BC Shipping News 15

Photo courtesy Teekay

INDUSTRY INSIGHT

This Teekay ship, the Melanj, is typical of the size of vessel that will be visiting B.C.’s coast, between 130,000 to 170,000 cubic metres.

16 BC Shipping News May 2015

is also the shortest and most direct to Kitimat. We’ll be transiting via Hecate Strait, through Principe Channel, the Otter Channel, Lewis Passage, Wright Sound and Douglas Channel into Kitimat Arm. Vessels will board two coastal pilots at or near Triple Island and an escort tug that will accompany the carrier all the way to Kitimat and return. In addition to the two pilots and the escort tug, we have an enhanced bridge team on board, including the ship’s master, ship’s watchkeeping officers, helmsmen and lookout personnel. The entire route from Triple Island will take approximately 16 hours. We’ve looked at best practices both within Canada as well as internationally to ensure the safest LNG shipping operations possible. We have pre-arrival and departure notifications that will be sent to the Canadian Coast Guard as well as emergency responders around the coast and also at the port. We will be constantly engaged with BCCP throughout the transits. We have identified speed profiles — we’re cognizant of the fact that during our transit to Kitimat, there are areas which are whale sensitive and

INDUSTRY INSIGHT reduce speeds will be able to accommodate that. We’re also aware of and recognize other users within the channel including traditional fisheries and recreational users. We will identify navigational safety areas around the LNG carriers and very rigid operating limits with regard to wind, sea conditions and visibility. We will have navigational protocols for all LNG carrier transits. We will have multipurpose tugs — both specialized escort tugs and docking tugs with emergency standby and firefighting capabilities. We currently completed our TERMPOL which is a safety sensitive review of our transits from Triple Island all the way to Kitimat — it involves everything you can imagine along with a risk assessment. We have also conducted numerous simulations and studies or technical simulations on issues such as wake, LNG carrier and tugs, the environment, and emissions. And we’re looking at the user interaction and risk mitigations that we have to employ prior to operation, for example, aids to navigation. We also have a very robust traffic management system and emergency response and planning. That’s only part of it. We will continue to conduct studies and simulations where necessary. Upon arrival at Kitimat, the vessel will utilize up to four tugs for positioning the LNG Carrier alongside the jetty (bow pointing out to sea to allow for an easier departure). And we have additional naviPublication gation systems employed at the jetty for BC Shipping News improved safety. The marine berths will have a number of safety features. There will be a robust Issue tendering system, quick release mooring Mayhooks, 2015and emergency shut-down systems. We also have met-ocean monitoring systems and a vessel-docking-assist system with the tugs which includes enhanced Size communications and navaids. There will Island (half page vertical) be quick-release and remote-release systems as well as emergency shut-down systems and integrated safety systems Deadline between ship and the terminal. April 8, the 2015 BCSN: How much work needs to be done in Douglas Channel regarding navaids? MT: We’ve been meeting with Features Transport Canada and the Canadian Coast International Shipping / Guard for two years now. They’ve placed Energy (LNG) new navaids from around Triple Island Bonus distribution: into Principe Channel and the Hartley Ÿ Nautical - BC this Bay area andInstitute more will be installed Branch Conference spring. They recognize that this is a new industry which will increase traffic and they’re working to ensure the safety of

the public and industry within the channels. So they want to advance the navaids there as well. BCSN: How long before we see the first ship? MT: If the project proceeds, we then move to construction which will take five to six years. I suspect we would then see our first cargo lift sometime around the turn of the decade. BCSN: Over your career, what sort of trends have you seen in vessel design, technology and best practices that have

g n i d Lea

allowed the industry to maintain a high safety standard? MT: LNG is one of the safest marine transportation industries in the world today. There have never been any significant incidents relating to the LNG cargo containment system. The LNG industry has been growing for a number of years — while it might be new to Canada’s West Coast, it’s not new to Shell. We’ve been at it since the early 1960s and continue to have a strong name and solid reputation that we want to enforce here in Canada as well.

n g i s e by D

RANGLer 3600 LNG-Fuelled Terminal Support Tug

May 2015 BC Shipping News 17

INDUSTRY INSIGHT We work very hard to ensure that we’re protecting people as well as the environment and we do this by complying — and in a lot of cases exceeding — regulatory requirements and marine industry best practices. There’s been such a robust regulatory regime around the LNG industry since its inception and it continues to grow. Every year, international regulations are becoming more enhanced, also, the national regulatory requirements have been strengthened. And every year there is new technology employed — double hull vessels, quick release systems, emergency shut-down valves, new designs for carriage of the cargoes, better trained and certified crews. We’ve yet to have an incident from a collision, grounding, fire or structural failure which resulted in cargo loss or a significant impact to human safety or the environment so it’s pretty impressive. I think that’s why I love the industry so much. BCSN: Could you describe the type of vessel that will be visiting the West Coast? I believe Teekay is involved. MT: Yes, that’s right. Teekay has been a very good partner with us. We speak very highly of them. We’re not in the business of vessel ownership so we charter them from very high-end companies like Teekay. We’ll charter them long-term and ship the cargoes under time charter agreements. The vessels that will visit Kitimat will have a cargo capacity in the range between 130,000 to 170,000 cubic-metres — although the terminals are designed for Q-Max vessels — the largest LNG carriers in the world with a capacity of 266,000 cubic metres. We can’t foretell the future so there may be an opportunity to have a big one come in, but generally, we’re planning for the 130 to 170,000 cubic-metre size. BCSN: It’s obvious that demand for LNG around the world is growing.

About LNG Canada

NG Canada is comprised of Shell Canada Energy (50 per cent), an affiliate of Royal Dutch Shell plc, and affiliates of PetroChina (20 per cent), Korea Gas Corporation (15 per cent) and Mitsubishi Corporation (15 per cent). The proposed LNG Canada project includes the design, construction and operation of a gas liquefaction plant and facilities for the storage and export of liquefied natural gas (LNG), including marine facilities in Kitimat, British Columbia. LNG Canada will initially consist of two LNG processing units referred to as “trains,” with an option to expand the project in the future to four trains. LNG Canada’s vision is to work collaboratively with First Nations, local community, and stakeholders, to deliver a project that is safe, reliable and reflective of community interests.

For more information, please visit: www.lngcanada.ca 18 BC Shipping News May 2015

MT: Absolutely. LNG is not a new industry but it’s new to Canada and demand will continue to grow over the next 50 years. There’s a tremendous opportunity for B.C. and Canada to get engaged in this industry and become a world-recognized player. It’s our job to get it to market. The Asian and European markets all want more LNG and this will only continue to grow. It’s a tremendous opportunity for growth — not just B.C. but for Canada as a whole. BCSN

About Mark Turner

ark Turner is a successful business management professional with a proven consistent track record of business start-ups, growth and P&L turnaround re-engineering of large and small corporations within the energy sector. After attending the Memorial University of Newfoundland, where he received his Masters in Nautical Science, Turner spent 15 years at sea as a ship’s master on a variety of vessels carrying a diverse range of cargoes. He also holds a teaching certification and management courses and taught Marine Law at the Marine Institute to Master Mariners and Engineering students. He went on to receive his Masters in Admiralty Law from Cardiff University in 1988 and from there, began his career focused on the oil and gas industry. Captain Turner has held senior management positions for a number of companies with strong focus on offshore and marine components of the oil and gas industry. He was Director, Offshore Safety and Survival Centre at the Memorial University of Newfoundland before moving on to the President & CEO position at Syndicated Management Services Ltd. where he led a professional solutions provider for marine and offshore oil and gas industries. He was also the Executive Vice President, Project Manager for Helideck Safety International where he managed the engineering, design, development and patenting of a full-motion simulator training and research and development facility. For the next 15 years, Captain Turner held Chief Operating Officer positions at North Atlantic Pipeline Partners and Newfoundland LNG Ltd. His roles included the oversight and management of the environmental assessment and EPC, engineering and design of an LNG transshipment and storage terminal in eastern Canada; as well as HSE, contract negotiation oversight, community relations, strategic direction for planning, development and implementation of Q-Max ship management policies and procedures to ensure efficient and effective delivery of ship management services in compliance with quality, security and safety standards and statutory requirements. Since 2013, Captain Turner has been Shell Canada’s Senior Marine Advisor, providing technical marine consultancy to LNG Canada with specific emphasis on port and terminal facilities development, front-end engineering design, terminal operations and due diligence, and also LNG cargo transfer management. Captain Turner currently lives in Vancouver, BC. with his wife, Sandra and stepson Jonathan.

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SAAM SMIT Canada Inc. 2285 Commissioner Street Vancouver, B.C. V5L 1A8 Canada T: 604-251-0202 www.smit.com May 2015 BC Shipping News 19

HISTORY LESSON Photo credit: Dave Roels (www.daveroels.com)

f you were asked to list some common sounds of a harbour, most likely a foghorn would be near the top of that list. Love them or hate them, they were a vital part of marine safety in Vancouver’s harbour. In fact, the horns we hear today are not from the shore at all, but rather from the vessels themselves. Our foursome of historic lighthouses — Point Atkinson, Prospect Point, Brockton Point and Capilano — housed these signals of unsavoury weather for many years until they were eventually decommissioned. Here is a bit of history of the various fog signals used in and around Vancouver.

Point Atkinson lighthouse

Point Atkinson lighthouse, located on the shores of West Vancouver, was built in 1874 but did not start operations until 1875. This lighthouse was the first visual reference point for entry into the First Narrows of Burrard Inlet. Before the foghorn was installed, it was common practice for ship captains to sound their horns in foggy conditions and for the lighthouse keepers to respond using a handheld foghorn such as the one shown below. The keeper would sound the horn at set

An example of a handheld foghorn, the 1901 Lothrop manual foghorn, from the VMM’s collection. Item number M972.301.1.

20 BC Shipping News May 2015

The historic foghorns of Vancouver Harbour By Lea Edgar

Librarian/Archivist, Vancouver Maritime Museum

>>> Old Wahoo’s doleful warning calls persisted for many years until 1974 when the government began to automate lighthouses across the province. intervals until the ship signalled for them to stop. By 1889, T. A. Fullerton, superintendent of Canadian Pacific Steamship Company, demanded that a fog alarm be built in the Narrows. This first horn was a Scotch Siren fog signal which was powered by a coal-generated steam plant that spun a rotating drum. This early English design worked similar to a kazoo. In 1912, “Old Wahoo”, a Canadian-designed type F diaphone foghorn, was installed in a new building west of the lighthouse when the original lighthouse was replaced. It made the classic low tones many associate with foghorns. Gordon Odlum, a past keeper at Point Atkinson, described how the sound was produced when he said, “When the piston moved forward you got the first big (groan) sound. The lower note sound, just like a grunt, was the result of the piston slowing down.” This was the sound many came to know and love. Old Wahoo’s doleful warning calls persisted for many years until 1974 when the government began to automate lighthouses across the province. At that time, the diaphone horn was replaced with air chimes. Because of community uproar at the decision, the air chimes were designed by Robert Swanson to closely match the original sound made by the diaphone. The new system used a videograph to sense when fog was present and activate the fog alarm. However, the keepers noted that the videograph was not completely reliable and would trigger with snowflakes or certain sunny conditions. In 1996, the air chimes were removed and replaced

with electric horns. However, they were found ineffective and removed just two years later.

Prospect Point lighthouse

The second lighthouse to mark the Narrows was Prospect Point. Although the area was long prone to accidents, it was the wrecking of the S.S. Beaver in July 1888 which initiated the building of a lighthouse at Prospect Point. The lighthouse was completed on October 1, 1888. The fog alarm was a mechanical bell that hung on the seaward face of the lighthouse and rang once every 20 seconds. The keeper, John Grove, had to wind up

Point Atkinson lighthouse with the fog alarm building and Old Wahoo visible. VMM neg. 4596.

VANCOUVER MARITIME MUSEUM the weights that drove the bell every 30 minutes. In 1926, the station was electrified and the operation of the light and fog alarm was transferred to the nearby signal station. The current lighthouse was built in 1948 at which time the bell was retired. The new light featured several small electric foghorns that operated into the 1960s. The Vancouver Maritime Museum preserves one of the original fog bells in its collection.

Brockton Point

Shortly after the Prospect Point lighthouse was constructed, another light was built at nearby Brockton Point. The first light, built in 1890, was quite simple. It consisted of a mast with red and white lanterns mounted on it. By 1902, the keeper, William D. Jones, built a new house and bell tower. The bells worked much in the same way as the Prospect Point bells with one stroke every 20 seconds. The present day lighthouse tower was built in 1914. In 1924, Jones spent his own money to electrify both the light and the fog bell. Eventually, as was the fate of many lighthouses in British Columbia, the station was de-staffed in 1956.

Capilano lighthouse

The Capilano lighthouse is the only one of the historic foursome that no longer stands. Mariners began insisting on another light to mark the Narrows, this time on the North Shore. Many vessels ran aground on the numerous shallows and sand bars with only the Prospect Point bell as a navigation aid. In 1908, a simple unmanned light and fog bell were installed. By 1915, a dwelling and tower were built with a diaphone foghorn. Purportedly, the people of West Vancouver called Point Atkinson “the old cow” and Capilano “the calf.” In 1925, Alfred and Annie Dickenson began as keepers of the Capilano light. Poor Alfred had quite the enemy in “Lizzie” the foghorn. She was constant trouble and Alfred and Annie kept having to use a handheld horn when she frequently broke down. Eventually, she stopped working altogether. The lighthouse had another backup foghorn called “Number 2” that was just as bad and worked just as seldom. Alfred said during the Christmas holiday in 1943 after Lizzie quit working and then overhauling Number 2, “Am just fed up with junk, in fact it is telling on my health…

what a life, always patching up.” The foghorn equipment at Capilano was poorly constructed and the Dickensons struggled with it for 24 years. Finally, in 1946, the National Harbours Board decided to electrify the light. The Lighthouse kept operating unmanned until it was replaced with a concrete beacon. Sadly, the lighthouse was destroyed by fire on February 26, 1969. By 2004, the Coast Guard started systematically decommissioning all the foghorns on the B.C. Coast. The justification for this decision was the widespread use of advanced GPS technology that most vessels have on board today. Many disagreed with this decision as one never knows when this technology will fail. There are also those who simply yearn for the nostalgic and comforting sound. Luckily, some bells and horns can still be viewed (and in some cases heard) at museums and historic sites around the world. So the next foggy night in Vancouver that the horns keep you awake, remember the true foghorns that used to line our shores. Lea Edgar began her position as Librarian/ Archivist for the Vancouver Maritime Museum in July 2013. She can be contacted at archives@vancouvermaritimemuseum.com.

Marine paintings, special commissions, talks, reproductions and books...

John M. Horton, Marine Artist A British expedition led by Captain Sir John Franklin departed England in 1845 to explore and chart the last unnavigated part of the North West Passage and were last seen in Victoria Strait. In 1848 the Admiralty launched a search for the two ships but nothing was found. Later searches found only graves and artifacts left by Franklin’s men. In 2014 HMS Erebus was finally found by a team made up of people from Parks Canada, the Canadian Coast Guard and other groups. Prime Minister Steven Harper was very pleased to make the announcement to the world.

Art is an investment. Call or email us to obtain that special painting. (604) 943-4399 john@johnhorton.ca www.johnhorton.ca

May 2015 BC Shipping News 21

LNG INDUSTRY Under pressure

LNG on Canada’s West Coast By K. Joseph Spears >>> With the U.S. successfully developing their own reserves

hat a difference two years can make. During the last provincial election, the Liberal Party, under Premier Christy Clark, announced that that the development of liquefied natural gas (LNG) would solidify a prosperous future for B.C. After the election, the B.C. government made it the cornerstone of their future economic development policy to encourage multiple LNG export projects. The plan is for abundant B.C. natural gas reserves to come on stream for export to global markets by 2020.

of shale gas to become a net energy exporter, coupled with the expansion of the LNG industry in Australia, competition for the lucrative Asian market has begun to heat up. The proposed LNG projects require billions of dollars in capital investment. It would potentially change the fabric of the province. The present reality is somewhat different. This article will examine some of the external global factors that impact the government’s vision of B. C.’s LNG future .

Supply and demand

At present, B.C.’s natural gas production, from the northeast corner of the province, is consumed by Canada and the U.S., our only international market. With the U.S. successfully developing their own reserves of shale gas to become a net energy exporter, coupled with the

Photo courtesy CanaportLNG

CanaportLNG is Canada’s only operating LNG import receiving and regasification facility. Completed in 2008, it is a joint partnership between Spain’s Repsol S.A. and Irving Oil. The facility has three storage tanks and can receive the largest LNG carriers in the world, Q-Flex (or Q-Max) vessels.

22 BC Shipping News May 2015

LNG INDUSTRY expansion of the LNG industry in Australia, competition for the lucrative Asian market has begun to heat up. There are currently 19 proposed LNG export projects being considered for Canada’s West Coast. B.C.’s natural gas supply is estimated at over 2,933 trillion cubic feet. To put it in perspective, each year, industry extracts about four trillion cubic feet of natural gas. Based on the amount of gas industry is able to recover, and with increased production, B.C. has over 150 years’ worth of natural gas supply at present consumption rates. New discoveries are being made continuously . Australia will be the source of most of the new LNG supply entering the Asian market over the next few years based on the four existing plants, six plants under construction, and more still under consideration in that country. However, the outlook for 2020 is much more uncertain as suppliers in the U.S., Canada, Russia and East Africa are all in competition for the same IndoPacific market and, in particular, China. B.C. has the gas but many factors will come into play as we search for new markets. LNG is a global market that is dynamic in nature. The price of LNG in Asia, based on existing long-term overseas supply contracts, is well in excess of what is being paid in the North American market, making investment into B.C.’s LNG industry a solid business decision, especially given its proximity to the Indo-Pacific basin. Crude oil prices have also had an effect on the current LNG pricing model. Just how long and how low those prices go will factor into any investment decision to develop BC LNG export industry. The market situation is further complicated by the fact that China is seen as a major potential market for B.C.’s natural gas,

EXAMINATION EXAMINATION FORFOR

APPRENTICE APPRENTICE MARINE MARINE PILOTS PILOTS – COASTAL – COASTAL Examinations Examinations for Apprentice for Apprentice MarineMarine Pilots will Pilots bewill conducted be conducted by the Pacific by the Pacific Pilotage Pilotage Authority, Authority, in February in February 2016, to 2016, establish to establish a list ofaapplicants list of applicants eligibleeligible to become to become Apprentice Apprentice Pilots in Pilots Areas in Areas 2, 3, 4 and 2, 3,54(COASTAL and 5 (COASTAL WATERS) WATERS) of the Pacific of the Pacific Pilotage Pilotage Region.Region. For information For information on Certification on Certification and Sea-time and Sea-time requirements requirements to to write the write exam, the please exam, please refer torefer the Pacific to the Pacific Pilotage Pilotage Regulations Regulations Sections Sections 4 and 45.and These 5. These regulations regulations can becan found be found on ouron our webpage: webpage: www.ppa.gc.ca www.ppa.gc.ca (under(under Corporate Corporate Information). Information). Each applicant Each applicant must be must a Canadian be a Canadian citizencitizen and beand willing be willing to to undergo undergo a medical a medical examination examination to determine to determine mentalmental and and physical physical fitnessfitness to perform to perform the duties the of duties a Pilot. of a Pilot. Applicants Applicants who believe who believe they are they qualified are qualified shouldshould submitsubmit a a writtenwritten requestrequest for an application for an application form prior form to prior 1530 tohrs 1530 onhrs on Friday,Friday, May 29 May 2015 29to: 2015 to:

Examination Examination Director Director of Marine of Marine Operations Operations PacificPacific Pilotage Pilotage Authority Authority 1000 -1000 1130- West 1130 Pender West Pender StreetStreet Vancouver, Vancouver, BC V6E BC4A4 V6E 4A4 An information An information session on session “BECOMING on “BECOMING A COASTAPILOT” COASTwill PILOT” be held willatbethe held of-at the offices of the fices Pacific of thePilotage Pacific Pilotage Authority Authority on Tuesday, on Tuesday, May 19, May 201519, at 2015 1000 at hrs. 1000 hrs. Anyone considering Anyone considering this exciting this vocation exciting vocation should attend shouldthis attend free this session freetosession get to get an understanding an understanding of the process. of the Please process. pre-register Please pre-register by emailing by emailing your name your andname and phone number phone to number infosession@ppa.gc.ca to infosession@ppa.gc.ca or callingor604-666-6771, calling 604-666-6771, extension extension 0. 0.

and China entered into a long-term natural gas supply contract with Russia in May 2014. The deal is worth approximately C$400 billion over 30 years and will see the construction of a pipeline that will ultimately carry natural gas from Russia’s ESA Bering gas fields to customers in China. In the U.S., the majority of existing LNG terminals are on the East Coast where most are being retooled from import to export. While there is currently one LNG export terminal in Kenai, Alaska, and a second proposed for the same area, as well as two proposed in Oregon, very few industry watchers are confident that these will be built due to the significant drop in crude oil pricing.

MARINE MARINE PILOT PILOT FAMILIARIZATION FAMILIARIZATION PROGRAM PROGRAM The Pacific The Pacific Pilotage Pilotage Authority Authority is accepting is accepting Expressions Expressions of Interest of Interest from from qualified qualified mariners mariners interested interested in in participating participating in a Marine in a Marine Pilot Familiarization Pilot Familiarization Program Program prior to prior examination to examination as apprentice as apprentice pilots.pilots. This program This program will run will from runAugust from August 2015 to 2015 August to August 2017. 2017. For information For information on Certification on Certification and Sea-time and Sea-time requirements requirements please please refer refer to theto Pacific the Pacific Pilotage Pilotage Regulations, Regulations, Sections Sections 4 and 45.and The5.regulations The regulations can becan be found found on ouron webpage: our webpage: www.ppa.gc.ca www.ppa.gc.ca under under Corporate Corporate Information. Information. Applicants Applicants must be must Canadian be Canadian citizens citizens and and willingwilling to undergo to undergo a medical a medical examination. examination. Qualified Qualified applicants applicants who are who interested are interested in thisin program this program shouldshould apply apply in writing in writing prior prior to 1530 to 1530 hourshours on on Friday, Friday, May 29, May 2015 29, to: 2015 to: Familiarization Familiarization Program Program Director, Director, Marine Marine Operations Operations PacificPacific Pilotage Pilotage Authority Authority 1000 -1000 1130- West 1130 Pender West Pender StreetStreet Vancouver, Vancouver, BC V6E BC4A4 V6E 4A4 Email:Email: famprogram@ppa.gc.ca famprogram@ppa.gc.ca

May 2015 BC Shipping News 23

Photo credit: Dave Roels (www.daveroels.com)

LNG INDUSTRY

Woodfibre LNG expects to be operational by 2017, making it a first for B.C.

There are some notable projects on the East Coast of the U.S. that could further impact on the global supply of LNG — the Freeport LNG project in Texas and Louisiana’s Cheniere Energy’s Sabine Pass LNG and Cameron LNG. The Sabine Pass project has the capacity to supply 80 per cent of the world’s LNG carrier fleet. It is predicted by the end of the decade that the United States could be exporting 50 million tons of LNG annually. These projects have the advantage of existing pipeline structures and upstream markets to provide natural gas feedstock for export to new emerging markets.

B.C.’s former continental outlook

In the past, Canada was “continental” in its focus. Its long-standing trade relationship with the U.S., coupled with the lack of infrastructure to move the product off-shore, meant that Canada was shielded from global factors — having both positive and negative impacts on the Canadian LNG price. While there was a certainty of demand, without competitive bidding, prices have remained low in relation to global rates. With the advent of projects that would open the global market up to Canadian LNG, a new dynamic has been brought to

the market — one where various factors, often seemingly unrelated, can have a major impact on future economic activity and investment decisions — geo-political events (for example, Russia’s current aggressive activity in the Ukraine and the potential for sanctions on its supply to Europe), discoveries of additional sources of natural gas, untapped markets like India, and the price of crude oil are just four that come to mind.

The marine component

Taking Canada’s LNG to the global market adds a new dimension for producers. Sophisticated LNG carriers (usually leased under long-term charter), terminal infrastructure, safe routing and navigational variables not only add costs but require expertise over and above a producer’s traditional pipeline capabilities. The marine component cannot be overstated when looking at global competitiveness and market positioning. Take, for example, the impact that an expanded Panama Canal will have on routing. In the past, size restrictions of the Panama Canal precluded the largest LNG carriers from using this pathway to the seas. The expanded canal, scheduled to open in January 2016, will allow some of the world’s largest LNG carriers to transit in both directions. It is estimated that there will be a 30 per cent increase in marine traffic through the canal and will be capable of accommodating 347 out of 392 LNG carriers that currently exist worldwide. At present, only six per cent of the world’s LNG fleet is able to use this route. As noted above, terminals on the East Coast of the U.S., would benefit greatly from the expansion in reaching markets in the Pacific. This is going to be a game changer in the evolution of global trade and, arguably, the LNG trade. The result will no doubt impact on B.C.’s competitive advantage of being favorably located to Asian markets however, lower cooling costs and access to supply are still factors that play heavily in B.C.’s favour.

Getting to yes

24 BC Shipping News May 2015

For B.C.’s dreams of becoming a major LNG exporter, many factors — both local and global — must be considered and addressed. Given the large expenditures of capital investment, joint venture partners who have proposed LNG terminals in B.C. must engage local stakeholders to gain social licence; they must engage First Nations, a requirement under Canadian law; and they must meet stringent environmental parameters and

LNG INDUSTRY

Photo courtesy Teekay

LNG terminals are well-suited to cold weather. The colder the temperature, the less energy required for cooling the natural gas. This is considered an advantage for B.C. locations.

adhere to government approval processes — all while ensuring costs remain at an attractive level. We cannot consider the feasibility of the development of an LNG industry without also taking into account global influences. LNG is a clean fuel source whose growth comes at a time when there is a call for less reliance on crude oil. We should also not lose sight of the potential of LNG as a very clean low-carbon emission bunker fuel.

The development of LNG on Canada’s West Coast is not unlike the creation of the Canadian National Railway that linked the country together in the early 20 th century. B.C.’s development of an LNG industry is under the pressure of international economic forces and will require a coming together of all interests if we are to successfully challenge global competitors. B.C.’s LNG dream can become a reality if we maintain a weather eye to a global view. Mariners

do this as a matter of course — it is a key part of navigating new waters and markets. Joe Spears is an ocean policy consultant and a principal of the Horseshoe Bay Marine Group and has worked in both public and private sector on energy and economic development. He is a frequent commentator on energy and Canada’s ocean policy. He holds a Masters in Economics from the London School of Economics. Joe can reached at kjs@oceanlawcanada.com

May 2015 BC Shipping News 25

LNG FUEL

LNG as a marine fuel on the West Coast By Calum McClure

Chief Executive Officer, Cryopeak

hipping is an extremely efficient mode of transportation and has the lowest emissions-per-unit cargo carried, however the industry is under significant pressure to reduce its emissions. Legislation will ensure reducing emissions remains a priority for ship owners, operators and charterers for the coming decades. For ship owners directly affected by new Emission Control Areas (ECAs), the challenges of compliance can be very demanding. In the future, this trend will continue with far reaching legislation starting to put pressure on the global fleet, for example, the global sulphur cap on fuels. In this new era of legislation, ship owners and operators need to make the right decisions around managing their compliance with legislation, and adopting new fuels and technologies. For vessels trading within ECAs and operating with heavy fuel oil (HFO), the challenge to comply with new legislation can be resolved with the following options: either take a relatively easy route, switch fuel and operate the vessel on low sulphur marine diesel oil (LSMDO); alternatively use exhaust gas scrubbing to achieve an equivalent level had LSMDO been used; or finally, move to a new fuel, such as natural gas. The options might be simple, however the decision as to the right approach is not, and making the transition isn’t either. Natural gas represents a compelling option for some vessel types. It is the cleanest burning fossil fuel with up to a 25-per-cent reduction in greenhouse gas emissions, a 100-per-cent reduction in SOX, and no particulate matter. The only way to realistically store sufficient quantities of natural gas is through Liquefied

26 BC Shipping News May 2015

>>> For the LNG marine fuelling industry, the expansion of FortisBC’s Tilbury LNG facility is a very important step in the LNG supply chain. Natural Gas (LNG) where the volume in liquid form is about 600 times smaller than in gaseous form. Therefore, for large vessels, the only option is to use LNG. The economics of LNG are a strong driver. Even with the current volatile crude market, LNG represents up to a 30 per cent savings based on LSMDO at $700 per tonne. Therefore, for LNG, there are not only the environmental benefits and compliance with legislation, but there is an economic benefit. Even with low crude and distillate prices, LNG still represents a significant value proposition and this demonstrates great promise for the longterm outlook of the fuel. However, there are significant challenges in the adoption of this fuel — the largest being that, up to recently, the LNG bunkering industry did not have a supply chain. If you compare this to the current mature marine fuels industry, the contrast is stark — there are multiple refiners, distributors, storage facilities, fuel availability, barge operators and other service companies. This does not exist today in the LNG bunkering industry although progress is being made. If one considers how quickly LNG has moved as a viable fuel, the advancement has been quite significant. In 2000, shale gas only accounted for about one per cent of U.S. natural production. This then increased to over 20 per cent by 2010. It was only after North America had retooled itself from an LNG importer

to an LNG exporter that natural gas as a transportation fuel was considered practical. Really, it wasn’t until the end of the 2000s when LNG was a feasible fuel for the North American ship owner to consider. Since then, there are currently over 100 confirmed LNG-fuelled vessel projects and the industry remains on track for 1,000 vessels by 2020 (source: DNV GL). On the West Coast, there is promising LNG potential from FortisBC’s facilities at Tilbury (Delta) and Mount Hayes (Vancouver Island). While these facilities have been operational for many years, they were only ever intended initially to keep residents in the Lower Mainland warm during cold winter days. For the LNG marine fuelling industry, the expansion of FortisBC’s Tilbury LNG facility is a very important step in the LNG supply chain. This expansion really enabled shipping companies to be sure that there would be a reliable supply of LNG — critical if the new fuel is to take root. The natural adopters to take advantage of this new fuel were local users such as BC Ferries and Seaspan Ferries. In other parts of Canada, there are similar expansions taking place to ensure that LNG is available as a fuel, and a similar approach can be seen. The pace of development with LNG supply infrastructure is increasing and instills confidence in ship owners that there will be a secure supply in the future.

LNG FUEL The next important link in the chain is the new technologies required to store and vaporize LNG onboard the vessel as well as LNG-fuelling technology covering transportation and storage from the liquefaction plant to the vessel. Without there being a proven total end-to-end solution, ship owners cannot move forward. Fortunately, there is a great track record from the LNG shipping industry which has been successfully moving LNG in vast quantities safely over the last 50 years. A considerable amount of this proven technology, design and operational best practice is being used for LNG-fuelled projects. Similar to shale gas revolutionizing energy dynamics, technology is being driven to keep pace as the industry moves to adopt LNG as a marine fuel. In addition, new delivery distribution and delivery equipment is being developed. The first LNG-bunkering barge has been ordered in the U.S. which is expected to be used in Tacoma for the Alaskan RORO vessels. Looking at developments in Europe, Brittany ferries have used GazTransport Technigaz (GTT) technology for the LNG

>>> Distribution of LNG is also a key part in the value chain and requires specialized companies that can safely and efficiently manage this part... fuel tanks for the cross-Channel ferries. This is a first for using this membrane technology for this specific application. GTT membrane technology has been used on the largest LNG carriers and demonstrates how technology can now be used in a different operational context. The advantage of this technology in certain applications is that it can efficiently integrate the fuel tank into the hull of the vessel where the typical cylindrical pressurized Type C tanks result in considerable wasted space. Distribution of LNG is also a key part in the value chain and requires specialized companies that can safely and efficiently manage this part for the marine industry. For smaller tanks, this can be achieved by truck, however as soon as the onboard tank capacities start exceeding 200 cubic metres, there will be a drive towards

either dedicated shore infrastructure or LNG-bunkering barges. It is important to have specialized service providers who can provide the necessary support and services to the shipping industry in adopting LNG. The most important challenge for a vessel operator is managing the change of this fuel within the operations of the fleet. Changing a fuel, even moving to dual-fuel, requires considerable support in the transition. While the fuel is safe if handled correctly with the right equipment and operational safeguards, there are new risks unique to LNG. This involves the cryogenic nature of the fuel and also the impact of any transfer spills. LNG has an excellent track record in the marine industry — over 50 years without a major incident. These operational best practices and processes have been built

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1-877-647-3784 May 2015 BC Shipping News 27

LNG FUEL Photos courtesy Cryopeak

Cryopeak regasification and distribution system — key to any successful transition to LNG-fuelled vessels, a reliable supply chain is essential.

up over many years and have excellent safety systems and approaches that work very effectively. These can be applied to the LNG-fuelling industry within the context of fuelling LNG rather than loading LNG as a cargo. For new projects, detailed assessments are required to determine specific risks considering the technical design of equipment and the proposed fuelling processes. The LNG shipping

industry has adopted high levels of integrity such as integrated ship-toshore emergency shut down systems. Given that there has now been many ship-to-ship transfers of LNG, there is good experience with the use of cryogenic hoses, and knowledge of the fatigue life based on a marine environment. The key thing now is to adopt these technologies — along with their reliable best practices and safety

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www.aarc-west.com/www.awcoatings.com 28 BC Shipping News May 2015

systems — from the large scale industry to the marine -fuelling industry. Another key stakeholder is the port and its ability to be proactive in being ready to accept LNG-fuelled ships. The vision is really to be ready with full guidance for LNG-fuelled ships within port limits. This would include assessing security and safety from any potential transfer spills and anticipating how this would be handled in practice. The uptake of demand is difficult to predict, however there are new developments each week within this new industry. A major step forward was the order of “LNG ready” container vessels of between 14,000 and 18,000 TEU by UASC. This marks the first order of vessels which do not return to base and demonstrates that the uptake in the global fleet is being seriously considered. As new legislation comes into effect and the LNG-fuelling infrastructure progresses, the uptake in LNG-fuelled vessels will be considerable. The prospects for LNG as a marine fuel are very strong and at Cryopeak, we see a bright future. Building on our existing shore-based projects in Canada, and our experience in the global LNG shipping industry, we are ready to support ship owners through this transition. Calum McClure is a professional Naval Architect and has worked in the marine industry for 20 years, and in the LNG shipping industry for over 15 years. Currently he is CEO of Cryopeak, a leading independent provider of LNG equipment and services to domestic industry and transportation industries. Prior to founding Cryopeak, Calum spent over 10 years with Vancouver’s Teekay Corporation, the second largest independently owned liquefied natural gas fleet globally. Calum can be reached at calum.mcclure@cryopeak.com.

TERMINALS Fairview Terminal expansion project

Success rests on collaboration of key players

“

>>> “Fairview’s success is a testament to the supply chain collaboration and innovation focus of CN, Maher and the Prince Rupert Port Authority...” from Asian ports such as Shanghai, Hong Kong and Busan. Shortly after announcing the expansion project, another significant announcement was made: DP World reached an agreement to purchase Maher Terminal’s Fairview Container

Terminal from Deutsche Bank for C$580 million (US$457 million). Completion of the deal is subject to Canadian regulatory approval which is expected to be granted in the second half of this year. DP World confirmed that it will proceed with a feasibility study for further

Photos courtesy Prince Rupert Port Authority

The development of a port, regardless of how well it may be blessed by nature, is utterly dependent on the enthusiastic support of the transportation organizations operating in its access corridor.” This quote, from Dr. William Hick’s Canada’s Pacific Gateways, is a fitting start to this article given CN’s reaction to the recent announcement by Maher Terminals of their expansion project for Fairview Container Terminal in Prince Rupert. Since opening in 2007, Fairview has seen annual growth in the range of 15 to 18 per cent, with 2014 numbers topping out at about 620,000 TEUs. At that rate, capacity will be over-subscribed within two to three years. The expansion project — to increase annual capacity from 850,000 TEUs to 1.3 million by mid-2017 — will be coming online just in time. But, to be truly successful, the rest of the supply chain must be ready to keep up. And to that end, CN is also making significant investments in its rail network and key hubs that feed into and out of Prince Rupert. “Fairview’s success is a testament to the supply chain collaboration and innovation focus of CN, Maher and the Prince Rupert Port Authority,” said Claude Mongeau, President and CEO of CN. “Together, we understand what it takes to foster continual improvements in portterminal-rail efficiencies that help our customers compete more effectively in their end markets.”

Background

Before becoming a modern containerized import/export terminal, Fairview Terminal was a break-bulk and general cargo facility. The $170 million conversion project was funded in partnership by the Government of Canada, Province of British Columbia, Maher Terminals of Canada, CN and the Prince Rupert Port Authority. As the shortest marine distance to major Asian markets, Fairview is a key export point for British Columbia’s forest sector products, particularly forest products from mills across northern B.C. Other containerized exports include agriculture and agri-food products, textiles, pulp and recycled materials. It also anchors import trade of high value goods

Before (top) and after (artist’s rendering of expansion) — the expansion at Prince Rupert’s Fairview Container Terminal will bring capacity up to 1.3 million TEUs by 2017.

May 2015 BC Shipping News 29

TERMINALS “We’re very pleased to see Maher Terminals continue delivering on the vision of fast, reliable container service — while creating new opportunities for the workers, communities, and nations who benefit from this trade gateway.” expansion to around 2.5m TEU. The concession period runs to 2034 with an extension to 2056 subject to completion of the expansion.

Phase II “A”

The expansion project — the first of a two-part plan that could eventually see capacity increasing to upwards of two to 2.5 million TEUs — will provide a second deep-water berth, four additional gantry cranes, and land reclamation to further expand the container yard. On-dock rail trackage will also be expanded through densification of the current track configuration, which will be supported by a rubber-tired gantry crane operation. Maher Terminals awarded the construction contract to FRPD-BEL Gateway Joint Venture as the prime contractor. “Intermodal customers have been capitalizing on the

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Untitled-1 1

2/7/2013 1:14:42 PM

advantages of Prince Rupert as part of their transpacific trade solution since Fairview’s first phase opened in 2007,” said Don Krusel, President and CEO of the Prince Rupert Port Authority. “We’re very pleased to see Maher Terminals continue delivering on the vision of fast, reliable container service — while creating new opportunities for the workers, communities, and nations who benefit from this trade gateway.” For its part, CN has already invested $17 million in doubling the track at Kaien Siding, leading to the terminal. “That has been in service for over a year now,” said JJ Ruest, Executive Vice President and Chief Marketing Officer. “It gives us more track space and more resiliency to run a third and, in the future, a fourth train in and out of the terminal.” Ruest further noted that CN is continually investing in improvements throughout the entire supply chain.

The future looks bright

“When you look out over the next one to three years, all of the major destination points that connect to Prince Rupert have plans to expand,” Ruest said. Announcements of expansions in the key destinations of Joliet and Harvey in Illinois as well as Detroit, Toronto, and Memphis, will be forthcoming as investment decisions are considered and finalized. Case in point, CN recently announced a new $250-million intermodal and logistics hub in Milton, Ontario. And further investments will come in the form of increasing the size of the rail fleet, adding more locomotives and, of course, more jobs. Ruest credits a large part of the success of both Prince Rupert and Vancouver ports to the fluidity and efficiency of moving goods into the U.S. “The Beyond the Border pilot project has certainly created efficiencies in clearing freight ahead of time. We also made a significant investment in Rainier, Minnesota, to create a mini-intermodal terminal which has greatly reduced delays from single container inspections by U.S. Customs.” When the train stops in Rainier for re-fuelling and staff changes, rather than the previous practice of pulling a whole car with as many as 10 containers when only one box was marked for secondary inspection, CN is now able to remove that single container, allowing the rest of the train to carry on its journey within an hour. “It’s now a very efficient process,” Ruest said. “We created a side track and use a re-stacker to pull off a single container. We’ve also put a building right there for use by U.S. Customs so they can open the box, take the freight out and put it back in; if they need to fumigate, that can also be done locally. Any single container that gets taken off, gets put back on the train the next day (assuming there are no issues with the freight).” While the import business from Prince Rupert is one side of the equation that stands to benefit from expansion plans, Ruest confirmed CN’s ongoing support of the Port of Prince Rupert by highlighting plans to generate more exports. “We have two specific locations — Saskatoon and Prince George – where we want to increase capacity. In the case of Saskatoon, we would like to see more specialty crops (for example, peas and lentils) from Saskatchewan using that line. And the terminal in Prince George is in a good position to see expansion of the lumber and pulp trades moving their goods out of Prince Rupert.” In summing up CN’s ability to meet the increased capacity for Prince Rupert, Ruest was quick to note that “these are the kinds of problems we like to have. That’s what CN is all about — organic growth and creating a supply chain to more and more businesses.” BCSN

May 2015 BC Shipping News 31

PORTS

Photo by Dave Roels, www.daveroels.com

Why Vancouver’s port is truly a ‘national treasure’ By Ray Dykes

hen I heard Port Metro Vancouver called a “national treasure” recently at a public meeting, I must admit it caught me by surprise. Sure, Port Metro is Canada’s busiest port, the busiest export port in all of North America, a major Asia-Pacific Gateway, and by my reckoning the busiest port overall on all of the West Coast of North America... sorry Los Angeles and Long Beach. That’s a lot of titles, but “national treasure?” Nope, I had never thought of it that way. Port Metro Vancouver President & CEO Robin Silvester does, and used the phrase at a meeting of interested shippers in March in Calgary as the port took to the road for what has become an annual journey to meet customers in Alberta and Saskatchewan. “We see ourselves as a national treasure and have a mandate to facilitate the nation’s trade; we work for the benefit of all Canadians,” he told the Calgary event

>>> It wasn’t until I did some research...that I realized how much British Columbia takes its port for granted. — the port calls them “customer connection” visits by the way. In the audience, I was intrigued as Silvester made his presentation. I had heard that PMV was Alberta’s port and Saskatchewan’s port for that matter. Previous CEO Gordon Houston had said that a few times.

How far?

It wasn’t until I did some research (with the help of PMV) that I realized how much British Columbia takes its port for granted. Shippers from as far away as Nunavut and even Nova Scotia export containers through Vancouver’s ‘national treasure’ which accounts for $1 out of every $5 of Canada’s trade. You can add all of the Maritime Provinces and the Northwest Territories

Coal is the largest commodity shipped out of Port Metro Vancouver (above, aerial of Westshore Terminals).

32 BC Shipping News May 2015

to that manifest when it comes to container imports. Now, I get to see the picture more clearly. No one would be surprised to see that in 2013 (the latest figures available) British Columbia was a clear leader for estimated foreign export tonnage at 41 million tonnes. But, look how wide the net draws for PMV. Alberta came in at 21.4 million tonnes, Saskatchewan at 14.1 mt, Manitoba at 1.1 mt, and all others at a combined 12.7 mt. Or, put another way, B.C. was responsible for 45 per cent of exports by origin and Alberta, Saskatchewan and the others 55 per cent. Wait a minute…that means over half of the export cargoes came from outside B.C., a staggering 48.3 million tonnes in fact. I wonder how many in the Lower

Photo credit: Dave Roels (www.daveroels.com)

PORTS Mainland appreciate that their port is Canada’s port… a ‘national treasure.’

>>> Wait a minute…that means over half of the export

Not surprisingly in B.C., coal is the largest commodity at 25 million tonnes followed by grain at 10.5 mt, break bulk at 2.5 mt, and wood chips at 1.5 mt. In Alberta, grain rules the roost at just over eight million tonnes, followed by petroleum products at 3.9 mt, coal at 3.7 mt, sulphur at 2.8 mt and a whole bunch of other stuff from wood chips to processed food products. Albertan exports make up 24 per cent of the PMV pie. Unfortunately, BC Shipping News can’t offer a prize for guessing that grain (7.1 million tonnes) and potash (6.6 mt) battle for supremacy from Saskatchewan, which is responsible for 16 per cent of exports by origin. The grain also comes in as No. 1 from Manitoba at almost 700,000 tonnes followed by exports of processed foods products as that province accounts for one per cent of the export. Among the others, which include the inland United States, coal leads the way at just under 10 million tonnes while containerized goods make up 3.2 mt. Enough of the statistics.

tonnes in fact.

Coal leads

cargoes came from outside B.C., a staggering 48.3 million its record total of 140 million tonnes handled in 2014, it would grow to almost 175 million tonnes throughput over the next four years to 2019. He forecast container growth would be a steady five per cent for this year and the next four in a row. Overall tonnage growth by the port would reach about 3.5 per cent in this year of troubled commodities; six per cent in 2016; and the same again in 2017, added Silvester. He told the Calgary briefing that the 140 million tonnes achieved in 2014 saw

record growth across the board for lumber — both containerized and breakbulk — pulp by box and breakbulk, grain, coal, potash, sulphur, ore and concentrates and even basic metals. Silvester said the future was all about creating gateway capacity and instanced the planned replacement of the George Massey Tunnel and the completed new Port Mann Bridge and South Fraser Perimeter Road — a handy $5 billion of upgrades between them. And there’s the much-debated Terminal 2 project

“Customer connection”

Silvester and his teams went from Calgary on to Winnipeg; will visit Edmonton in June for a similar “customer connection” and will also drop in on Regina and Saskatoon later this year looking for updates from customers on trends and for their views on the outlook of their industries, plus any concerns or feedback about the much-vaunted Asia-Pacific Gateway and Port Metro Vancouver in general. “We are striving to understand your needs and provide distinctive value through collaboration,” Silvester told the port customers. I didn’t notice any cowboy boots or hats in my Calgary audience, but the Prairie Provinces and their input are vital to the success of Canada’s top port. There was a sprinkling of freight forwarders from Kuehne Nagel (reportedly the world’s biggest); plus the big mover CP Rail; Canada’s leading coal export, Teck Coal Limited; plus Silvester’s team including Douglas Mills, Senior Account Representative Trade Development, and Robyn Crisanti, PMV’s Director, Public Affairs. Silvester gave an optimistic outlook on the port and predicted that, from

May 2015 BC Shipping News 33

Photo credit: BC Shipping News

PORTS

Alberta ships over eight million tonnes of grain through Vancouver (pictured above, Alliance Grain Terminal).

>>> ...the port [is] looking to the future working with a Gateway Transportation Collaboration Forum (GTCF) keen to “build on the success of past projects and initiatives.” gathering momentum at Roberts Bank and a host of other Gateway investments.

Much closer

And the port chief reminded his Prairie shippers that project cargo

moving through Port Metro Vancouver from Asia to Northern Alberta developments (once the sliding oil price corrects itself, no doubt) was 7,364 miles closer than the alternative of going through the Panama Canal to a Gulf Coast port

maritime and commercial law on canada’s west coast Nevin Fishman Mark W. Hilton Katherine A. Arnold James Vander Woude

W. Gary Wharton David K. Jones Connie Risi Joanna R. Dawson

Peter Swanson Catherine A. Hofmann David S. Jarrett Megan Nicholls

Thomas S. Hawkins Tom Beasley Russell Robertson

associate counsel: Lorna Pawluk tel: 604 . 6 8 1 . 1 7 0 0 fax: 604.681.1788 emergency response: 604.681.1700 address: 1500–570 Granville Street, Vancouver, BC, Canada, V6C 3P1 web: www.bernardllp.ca

34 BC Shipping News May 2015

and up north by rail. That equates to 19 days less travel time and one less border crossing, Silvester told his Alberta audience. A new pre-approved heavy load corridor capable of handling road hauls of 125 tonnes and 7.31 metres wide was in place and a Project Cargo Working Group under PMV’s wing was proposing a quick approval heavy load corridor capable of handling hauls of up to 300 tonnes at 7.31 metres wide. Silvester said the port was looking to the future working with a Gateway Transportation Collaboration Forum (GTCF) keen to “build on the success of past projects and initiatives.” The forum would access the national infrastructure component of the New Build Canada Fund and its $4 billion set aside to provide the cash for projects of “national significance.” So far, a GTCF Steering Committee and Working Groups have submitted 48 projects with 28 of them prioritized in a Phase 1 submission to Infrastructure Canada (INFC) in Ottawa for consideration.

Land concerns

As he has before in a speech to the Vancouver Board of Trade, Silvester also pointed out the need for preserving industrial land for future port use. He told the Prairie customers that the current inventory of market-ready industrial land “can last eight-15 years.” But, he warned that the Vancouver Gateway would need about 2,300 additional acres by 2025 to meet demand. And he called for an Industrial Land Reserve to protect what is left and to balance landuse decisions and help establish new lands as needed. And as for breaking news…Silvester said PMV was “on the cusp” of announcing a Clean Seas Centre for Responsible Shipping, but that’s a topic for another day. All in all, it was a pleasant, informative evening. There weren’t any curly or tricky questions for the PMV team — at least not in public — at the Calgary event, but there was no doubting the keen interest from the other side of the Rockies. After all, it’s their port, too, and I for one now understand this better.

Ray Dykes is a journalist who has worked his way around the world as a writer / photographer. Ray can be reached at prplus@shaw.ca.

CARGO LOGISTICS The looming paradigm shift

Canada’s Single Window Initiative By Colin Laughlan

Director of Communications, Logico Carbon Solutions Inc.

hile the Canadian Government readies to implement what could be this country’s most significant technical infrastructure development for international trade — the Single Window Initiative (SWI) — there is a general lack of awareness amongst Canadian trading businesses that a “paradigm shift” is about to take over their daily routines.

Background

How it works

Dydynsky described Canada’s Single Window for importers as consisting of “active and passive participants.” “Some particular government agency has to be active in the release request and clearance of the freight entering Canada. The passive departments physically exchange the data once the

Image courtesy The SWI Team

The Single Window concept, simply put, is a one-stop electronic submission point for all required import trade data and documentation. The core of the Canadian Single Window, a project led by Canada Border Services Agency (CBSA), is the new Integrated Import Declaration (IID), an electronic message that will cut out redundant, paper-based reporting to the nine other participating federal government departments and agencies (see Figure 1 for the complete list). As an international trade facilitation instrument, national and regional Single Windows have been vigorously promoted by the World Customs Organization following the World Trade Organization’s new Trade Facilitation Agreement in 2013. At the global level, Single Windows are conceived as handling trade data in both directions, so one country’s export data becomes the destination country’s import data. Within Canada, the initiative got underway as early as 1997 when CBSA started the inter-departmental government planning. While the project was formalized amongst participating federal government departments in 2006, the catalyst accelerating its development came in December 2011 when Canada and the U.S. announced their joint Perimeter and Economic Competitiveness Plan, part of the Beyond the Border partnership. Target dates for Canada’s Single Window implementation were missed in 2013, again in 2014, and most recently in March, 2015, though it is now expected soon. Under the U.S. partnership agreement, Canada’s Single Window data requirements are to be aligned “to the greatest extent possible” with those of U.S. Customs and Border Protection. The U.S. counterpart to Canada’s SWI — the International Trade Data System — is mandated for full implementation within the U.S. Automated Commercial Environment by December 2016. The ITDS will allow businesses to both “import and export through a Single Window concept.” CBSA’s Integrated Import Declaration is currently in a test environment within five of its nine Canadian government departments at the time of writing; a release date for importers to start using it is not yet known. However, according to one knowledgeable insider, Oryst Dydynsky, testing within Canada’s import industry is “now weeks away.”

Dydynsky, a Single Window expert with 30 years’ experience working for CBSA, consults widely to industry and also sits on the Board of Directors of the Association of International Customs and Border Agencies. He further explained that the missing export component of Canada’s Single Window depends of several factors. “Basically, [the export group] is re-doing the entire export system. It doesn’t fall under the IID but there are similarities,” Dydynsky told BCSN. They’re now developing a ‘Business Requirements Document’... from which they will pick a system and then build it or buy it, or a combination of both. The time frame for the exporter component “all depends on money and government priorities,” he said.

Figure 1: The Canada Border Services Agency is co-ordinating the Single Window Initiative with: Environment Canada; Fisheries & Oceans Canada; Natural Resources Canada; Transport Canada; the Canadian Food Inspection Agency; Health Canada; the Department of Foreign Affairs, Trade & Development; the Canadian Nuclear Safety Commission; and the Public Health Agency of Canada.

May 2015 BC Shipping News 35

CARGO LOGISTICS event has taken place,” he said. The purpose of the “passive” departments is to mine and analyze the data for risk assessments after importation — and arguably for its national commercial interests as well. Dydynsky outlined the basic steps for those importing businesses that may participate in Canada’s Single Window: The importer or customs broker: 1. gathers data for the IID; 2. identifies the data in the format prescribed in the Electronic Commerce Client Requirement Document for the relevant participating government agency; 3. attaches any certificates or permits as an image to the data; and 4. sends to Customs via a commercial software package or on the company’s internal proprietary system. Among Dydynsky’s clients is Waterloo, Ontario-based Descartes Systems Group, a leading third-party Single Window service provider. The Canadian company has the kind of global reach ideal for international Single Window developments in the future. Glenn Palanacki, Descartes’ North American Product Manager, described the service provider’s role: With the exception of imports falling under Natural Resources Canada’s regulations, Palanacki said, “CBSA will not have a portal for Single Window, so the onus is on the trade community — service providers like us and others — to either create new applications or upgrade existing applications with more functionality. The approach taken by Descartes, he said, was “to integrate the functionality of the Single Window with the already existing ‘Canadian Import Application’ used by both the importers and customs brokers.” For the NRCan exception, the department’s website states: “In the future (target date 2016) the CBSA eportal will be available for importers without brokers to submit the IID.”

Industry feedback

When the Single Window is implemented, its promised benefits include enhanced national security, faster cargo clearance by Customs, and a less burdensome reporting procedure for industry. “Better, faster, cheaper — at least that’s the pitch,” said Dydynsky. However, several industry stakeholders have their own interpretations. “It’s a paradigm shift,” said Joy Nott, President of the Canadian Importers and Exporters Association. “It’s more than a shift of the medium of paper to electronic — it’s bigger than that. It’s now the federal government getting more organized and coordinated, which fundamentally means there’s not going to be disjointed government silos. For the first time, you are going to have one repository that the Canadian federal government – notice I didn’t say Customs — will be able to go to, one location, to be able to pick up all kinds of information about a transaction,” Nott said, adding, “I’m really familiar with the dark and creepy little corners of it.” Part of Nott’s concern is that importers will be subject to more intense scrutiny for minor errors or infractions which will lead to more audits. “In the past, there’s been lots of potential non-compliance that’s gone unrealized by the federal government because you had all those silos. In order to catch non- compliance, it had to be really egregious, really offside to draw their attention,” said Nott. “I’m not saying it’s Big Brother,” she said. Knott applauds the Single Window Initiative for its “faster, more efficient processing,” as does Carol West, President of the Canadian Society of Customs Brokers, who has also been involved in Single Window

36 BC Shipping News May 2015

consultations for several years. But West, too, shares some of Nott’s concerns. “One of our concerns,” West told BCSN, “is that other government departments would be tempted to ask for more data than they were getting, and there may now be a couple of data elements…that are a little excessive.” As one example, she cited a request for the stages of clinical testing on a particular drug. These sorts of data “aren’t readily available necessarily in the commercial system,” said West. For Nott, there’s an urgent wake-up call needed to the more than 200,000 Canadian import companies in the medium-size range who she believes are woefully unaware of the impact the Single Window will have on them, and who typically outsource their reporting duties to customs brokers. “I’m worried that Canadian business isn’t sitting up and saying ‘we have to take this international trade thing more seriously’,” said Nott. “They need to be aware that customs brokers will be making attestations that today [importers] themselves make. That piece of paper they have always signed is going the way of the Dodo. In the future, the importer is going to give information to someone who is going to turn it into data elements. The broker has no liability for errors. The law is clear, the importer is responsible,” she said. “Importers need to have written Standard Operating Procedures (SOPs) in place with their broker and they should have somebody on staff responsible for understanding the regulatory environment in which they work. The CBSA used to refer to the importing community as their clients. They now refer to themselves as regulators,” said Nott. From a customs broker’s perspective, however, the Single Window is a most welcome technology development. Cherie Storms, Operations Manager at Surrey, B.C.-headquartered Pacific Customs Brokers Ltd. said: “We were seeing a 60 per cent failure rate in faxes going through [to government agencies] — their saving grace is Single Window. We look forward to it because it will allow us to stop faxing through that awful, awful system ... and so hopefully see less work done on our end.”

Increased security and costs

For the importer, the benefits are not so apparent. Questions arise over the Single Window’s trade facilitation goal and answers suggest that security functions are dominant. “Our release times are good today, and even if you look at the border wait times, our release times are good,” said CBSC’s West. “Canada has traditionally been very focused on imports; that’s the mandate for safety and security for protecting the border.” Storms further pointed out that the new system will likely result in more costs to importers. “Brokers are the ones taking on the burden — ensuring we have the right technology or redesigning our technology — it’s a big deal, it’s expensive, it’s testing systems, and then training and so on.” she said. Additional new security reporting requirements can also be expected within the Single Window in the future. These fit into CBSA’s existing Advance Commercial Information program which currently accepts pre-arrival information on cargo for ocean and air modes, and E-Manifest for truck transportation. Descartes’ Palanacki said: “There’s another initiative, a security filing that is required by the importer, something called Advanced Trade Data [ATD] — and in many cases it will be over and above what the broker would be declaring for them on the Single Window type of entry. This will be a specific importer piece coming down the pike, 2016 probably.”

CARGO LOGISTICS “Yes,” said Storms, “the broker can transmit the ATD on behalf of the importer — however that’s going to spark a conversation between parties: ‘This is an extra service — how much are you going to pay for that’?” The ATD will be in addition to CBSA’s existing Accelerated Commercial Release Operations Support System (ACROSS) which currently also enables cargo releases based on electronically transmitted pre-arrival data. According to West, “Over 90 per cent of release transactions are done before goods arrive in Canada with advance information through ACROSS. “That’s one of the issues with Single Window,” said West. “When we talk about Single Window, we talk about IID. Our position is that the IID should be the all-encompassing declaration. The IID includes the release for Customs, and also includes the data required for safety and security issues related to other government departments.”

Maritime traffic data

Cargo data are not the only pieces of information that can facilitate trade and security through a Single Window. The Facilitation Committee of the International Maritime Organization (IMO) is expected to approve a revision to the Convention on Facilitation of International Maritime Traffic in the Spring of 2016 which introduces mandatory electronic exchange of information on cargo, crew, and passengers. The Facilitation Committee further noted the IMO’s plan to design a prototype Maritime Single Window to support the implementation of the mandatory requirement. That should please Bonnie Gee, Vice President of the Chamber of Shipping of British Columbia, who has been involved in Canada’s Single Window discussions for nearly a decade. Gee expressed disappointment when CBSA’s current Single Window didn’t include a maritime traffic component. “I was pushing for something that has a complete picture of the Maritime Domain Awareness,” said Gee. “It won’t happen under the CBSA’s Single Window Initiative. From the perspective of who’s around the table, the importer piece is a priority,” Gee said.

>>> ...the IMO is expected to approve... mandatory electronic exchange of information on cargo, crew, and passengers. “I think that CBSA has done a very good job at breaking down some barriers and getting agencies talking to one another,” Gee said. However, she believes it may now be up to Transport Canada to move the project forward because “if it’s not CBSA that’s renewing its interest in the interdepartmental marine working group, then Transport Canada needs to take on that piece.” Gee said the maritime component could include information such as vessel response times, where the vessel has been in recent years, crew lists, and any hazardous materials aboard. “That doesn’t happen in Canada now,” said Gee. “It would certainly provide vessels with better information when they arrive and it may also provide some opportunities for land-side planning — for example, allow terminals to anticipate labour, or truck and rail requirements. It could impact the entire operations of the port,” Gee said.

Conclusion

While CBSA and the federal government continue their efforts to introduce the SWI to the Canadian trading community, how it will change the way these companies do business is just starting to sink in. For a trading nation like Canada, that can be of the utmost importance. In the June issue of BC Shipping News, we will continue this discussion as we look at the Single Window concept in its international trade context. Colin Laughlan is Director of Commun-ications for Logico Carbon Solutions Inc., a Delta B.C.-based company that develops technology solutions for optimizing freight transportation. Colin can be reached at colin.laughlan@gologico.com.

May 2015 BC Shipping News 37

COAST GUARD Laurier crew honoured for role in finding Erebus By Marianne Scott

n late March, Senator Nancy Greene Raine and Joseph Frey, a governor of the Royal Canadian Geographical Society, honoured the role of the Canadian Coast Guard in the historic discovery of Sir John Franklin’s ship HMS Erebus. The ship, whose fate had been unknown for more than a century-and-a-half, was discovered in the eastern waters of Queen Maud Gulf in September 2014. Senator Greene Raine, a gold and silver medallist in Alpine skiing in the 1968 Olympics, represents the Thompson/ Okanagan/Kootenay region, and Governor Joseph Frey presented the Royal Canadian Geographical Society’s Erebus Medal to 22 members of the Canadian Coast Guard. They served as crew on the icebreaker CCGS Sir Wilfrid Laurier and directly took part in the Victoria Strait Expedition during the summer of 2014. The icebreaker’s Captain Bill Noon received his medal at an earlier ceremony. “It’s an honour to present the crew with these commemorative medals to celebrate their role in helping solve this mystery,” Senator Raine said at the Institute of Ocean Sciences in Sidney, where the ceremony took place. “Like many Canadians, I’m eager to watch this mystery continue to unfold throughout this upcoming season.”

>>> “Finding Erebus is one of our most important

underwater discoveries. It’s an achievement that is rewriting the history books.”

“The Royal Canadian Geographical Society awards medals for events of significant historic importance,” added Governor Frey. “Finding Erebus is one of our most important underwater discoveries. It’s an achievement that is rewriting the history books.” Roger Girouard, Coast Guard Assistant Commissioner for the Western Region, spoke of the pride Canada gained in this mission. “This is a story of Canadian accomplishment, of Canadian mystery and tragedy,” he said. “It’s a sea story, a story of discovery showcasing Canadian technology. The people who served in this expedition fed Canadian history and science.” Each crew member was called by name and received his/her Erebus medal. In the sagas of seafaring, a few iconic ships continue to stir people’s imagination: Columbus’ Santa Maria, Nelson’s Victory, the Titanic and Germany’s Bismarck among them. But at least we know what happened to these ships.

Victory survives as a great historical artifact and museum. What seems to elicit even more public interest is when a ship — or ships — along with the crew, have mysteriously disappeared. This was the fate of HMS Erebus and HMS Terror, two former bomb vessels under the command of Sir John Franklin. They left Greenhithe, England on May 19, 1845. Franklin was a seasoned explorer: it was his third Arctic expedition. Like many seafarers before him, his goal was to navigate through the elusive Northwest Passage that would lead to the Orient without having to sail around Africa or South America. The expedition was well prepared: the hulls were plated at the bow with iron sheeting. They carried steam engines adapted from railway locomotives enabling the ships to make 7.4 km/h (4 kn). Amazingly, they carried a steam heating device for the comfort of the crew and the screw propellers and iron rudders could be withdrawn into iron wells to protect them from damage.

Photo courtesy Canadian Coast Guard

Senator Nancy Greene Raine, Royal Canadian Geographical Society Governor Joseph Frey, Coast Guard Assistant Commissioner Roger Girouard, Director of Fleet Joanne McNish, Captain Bill Noon and the Erebus medal recipients from CCGS Sir Wilfrid Laurier, celebrate the role of the Canadian Coast Guard during the 2014 Franklin expedition.

38 BC Shipping News May 2015

COAST GUARD >>> The mystery led the Government of Canada to declare the three-masted missing ships a “national historic site,” the only undiscovered artifacts ever so designated. Three years of food supplies were also aboard. Despite these precautions, Franklin and his crew did not return. Many expeditions were sent out clear up the mystery; Lady Jane Franklin, the explorer’s wife, continued to promote other voyages designed to find her husband and his ships. It wasn’t until 1859 that a note left in a cairn revealed both ships had become icebound and that, eventually, all crew had abandoned the ships. Three years after leaving Britain, all 134 crew members had died from exposure and starvation. No one knew what happened to the ships. Countless books have put forth theories on their demise. The mystery led the Government of Canada to declare the three-masted missing ships a “national historic site,” the only undiscovered artifacts ever so designated.

Since 2008, the Coast Guard, along with Parks Canada and other partners, have combined scientific research, archeological studies, technology testing and hydrographic charting in Canada’s Arctic. Searching for Franklin’s ships was also part of these annual summer missions. Many people were doubtful either of the ships would ever be found. The ice could have crushed the trapped ships; deep surface ice can scour the ocean floor destroying or burying anything lying on the bottom. Sir Wilfred Laurier’s Commanding Officer, Capt. Bill Noon, who received his Erebus earlier this year from Prime Minister Harper, explained the find was serendipitous. “Three of the scientists we had aboard flew a helicopter to a little, empty island near King William Island,” he said. “They found a davit that,

because of its size and weight, could only have come from a nearby ship. We then deployed a side-scan tow fish and found the wreck in about 30 feet of water. “Everyone aboard was totally elated. And the news electrified the world. More than 500 articles in 33 countries reported the discovery immediately and many more have been published since. There have been several dives on Erebus since its discovery and some items have been recovered, but the exact location continues to be secret to deter looters.” We are left to wonder when will her companion, HMS Terror, be found.

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May 2015 BC Shipping News 39

MERCY SHIPS

Saying goodbye to Africa Mercy The Comans’ year with Mercy Ships comes to an end

>>> While leading major change, George also responds to a continuing stream of service requests that he receives via the pager he carries 24/7. knowledge of the day crew working in my department. The information I pass on, coupled with the hands-on experience I guide them through, is a tangible way of supporting their own sustainable futures.” As the Hotel Engineer, George is responsible for mission critical systems that keep medical services operating. The job includes the equally challenging task of ensuring a safe and reliable environment for over 400 resident volunteers and 150 patients and caregivers. There are technical challenges, as George notes, “The Africa Mercy is an aging vessel and the resources needed for optimum equipment haven’t always been available. Being docked for months in tropical temperatures is a huge issue ventilation and air conditioning wise.” Unexpectedly, George has found his experience in small domestic vessels and fishing fleets of great help. “While

Photos courtesy Mercy Canada

eorge Coman, his wife Meagan and children Isabella and Andy, are almost finished their year-long service on board the world’s largest civilian hospital ship, Africa Mercy, operated by global humanitarian organization Mercy Ships. The Comans have spent the majority of their time in Tamatave, Madagascar. George and Meagan both have volunteer roles that draw upon from their respective career experience in Vancouver, Canada. Meagan, in addition to being the lead parent overseeing Isabella and Andy’s day-to-day activities, also contributes nursing expertise and public health experience in the Africa Mercy out-patient department. Meagan explains, “I am involved directly with patient care, plus I also help our local day crew, who work alongside me, to learn about wound care, dressing changes and practices that will speed healing while reducing the chance of infection.” George, as Africa Mercy Hotel Engineer feels a similar satisfaction in taking advantage of his teaching skills. He notes, “I am able to help expand the skills and

Left (in the water): Being a part of the dive team for the Africa Mercy is one of the activities George has enjoyed the most. Right (right of photo): Meaghan’s work in patient care has included sharing her expertise with co-workers.

40 BC Shipping News May 2015

I initially thought my large cruise ship experience was most important, my experience in low marine, which taught me trouble-shooting, being change adept, and innovating solutions, have been my most exercised competencies.” George feels especially grateful for spearheading an important change on board the Africa Mercy. He recounts with a smile, “hot water is now hot. It was the first major issue I faced when I started as Hotel Engineer but I was able to put together a swift solution. When the new piping system is installed this summer there will be even more improvement to cleaner and bacteria-free water.” While leading major change, George also responds to a continuing stream of service requests that he receives via the pager he carries 24/7. George’s conscientious nature means he is quick to respond, saying that, “if I walk by an air conditioning vent that needs attention, I don’t walk by, I fix it.” Being part of the diving team is one work activity that George especially enjoys. “It is great to get together with a team, dive under the ship and work in perfect synchronization: he explains. “Although exhausting, I feel so much satisfaction that cool water will keep flowing to the generators thanks to our efforts.” With spare time at a premium, George has had to forego the extra studies he hoped to complete during his Mercy Ships service. But one area that George and Meagan have contributed more time toward is family. “Because there is no commuting time for Meagan or I, and no meals to cook, we have been able to spend that time getting to know each other and bonding as a family,” he said. “We discovered the Canary Islands, Cape Town and now Madagascar together and we have also learned so much about other cultures.” George and Meagan both agree that Isabella and Andy have benefitted the most from the family’s Africa Mercy

MERCY SHIPS Photos courtesy Mercy Canada

experience. “The Academy, our children’s onboard school, is nothing short of amazing. The kids have also loved our many family-safe outings to restaurants, beaches and local attractions where they delight in getting to know local customs, people and of course, the lemurs.” The most important impact that George and Meaghan have witnessed in their children is their awareness that volunteering for Mercy Ships really helps to better the lives of people in desperate situations. “By seeing first-hand what people in Africa endure, they have developed their own heart for humanitarian service,” said Meaghan. “As parents, we couldn’t be more pleased or proud of this result of our Africa Mercy adventure.” In a few months, the Coman family will make their way back to Vancouver, the marine and health care sectors, and the many opportunities awaiting them. They will always remember and be grateful for what they learned during their time with Mercy Ships and that it was the experience they had hoped to give their children. Mercy Ships has accepted an invitation by the government of Madagascar to

The children of the Africa Mercy.

continue serving the people of the Island Nation with the services of Africa Mercy through the summer of 2016. Operations on board will take a short pause from mid-June through the end of

July 2015 while the ship undergoes yearly maintenance work in Durban, South Africa. The second field service for the ship is expected to begin again from early August through mid-2016.

May 2015 BC Shipping News 41

LEGAL AFFAIRS Norwegian Bunkers v. the Samatan et. al.

The power of the maritime lien By Megan Nicholls

Vancouver Lawyer with Bernard LLP

f interest to ship owners, charterers, and suppliers is the recent decision of Norwegian Bunkers v. the Samatan et al, 2014 FC 1200, in which the Federal Court determined that a Norwegian supplier of bunkers to a ship in Brazil was entitled to a maritime lien. At issue was whether Brazilian or Canadian law applied to the transaction: if Brazilian law applied, the suppliers were entitled to a maritime lien, but if Canadian law applied, the suppliers were not entitled to a Canadian maritime lien. This case illustrates the power of the maritime lien in maritime law. The facts of the case are briefly as follows. The plaintiffs, Norwegian Bunkers and Atlas Bunkering Services, supplied bunkers to the sub-charterer, Kristiania, for fuel for the vessel, the Samatan, while in port in Brazil. After the bunkers were delivered to the Samatan, the Samatan applied a “No Lien” stamp to the delivery receipt, consistent with the no-lien clause in its charter. Norwegian issued an invoice to the master or owner of the ship (Boone Star), care of Kristiania, for US $666,915. The invoice remained unpaid and litigation ensued. The Samatan was arrested in Vancouver to enforce the plaintiffs’ maritime lien. Since there was no express contract between the vessel owner and the bunker supplier in this case, the court had to determine which law applied by assessing which jurisdiction had the closest and most substantial connection to the transaction of supply. The plaintiffs argued that Brazilian law should apply, because the vessel operated in Brazil and was bunkered in Brazil by a Brazilian supplier.

42 BC Shipping News May 2015

>>> When a dispute arises involving a vessel, a claimant may be able to arrest the vessel in question or a sister ship. In B.C., proceedings to arrest a ship can be brought in both Federal and Supreme Court. The defendants argued that Norwegian law should apply, but because Norwegian law was not formally proven by evidence it was deemed the same as Canadian law. The court held that the factors in favour of Brazil, particularly the place where the necessaries were provided, outweighed the factors in favour of the other jurisdictions possibly linked to the transaction, as the core economic activity underscored by this transaction was at least partly performed in Brazil. The court further found that under Brazilian law, the plaintiffs had a valid and enforceable maritime lien against the Samatan, as marine fuel expenses incurred for a vessel’s preservation and continuation of its voyage gave rise to a maritime lien. Although given its ruling that Brazilian law applied and entitled the suppliers to a maritime lien, the court went on to discuss, if Canadian law had applied, whether a maritime lien would have arisen, or only a statutory right of arrest. To explain why the distinction between a maritime lien and a statutory right in rem is important, it is helpful to briefly address the difference between a simple right of arrest and a maritime lien.

The simple right of arrest

When a dispute arises involving a vessel, a claimant may be able to arrest the

vessel in question or a sister ship. In B.C., proceedings to arrest a ship can be brought in both Federal and Supreme Court. The Federal Court’s authority concerning the right to arrest is found in the Federal Courts Act, and in particular s. 22(1), which is the general grant of Admiralty jurisdiction to the Federal Court; s. 22(2), which sets out various maritime claims; and s. 43(3), which provides for ship arrest in certain circumstances.

Maritime liens versus statutory rights in rem

A maritime lien can be defined as follows: it is a privileged claim, which attaches to a maritime property, for service done to it or injury caused by it, arising from the moment when the claim attaches, travelling with the property unconditionally, and enforced by an action in rem. The property may be the vessel (including its equipment), the cargo, the freight, or even the proceeds of the sale. The types of claims that typically give rise to a maritime lien include collision, salvage, unpaid master’s and crew’s wages, and master’s disbursement claims. Whereas the maritime lien arises out of general maritime law and the inherent jurisdiction of the Admiralty Court, a statutory right in rem (in other words, a

LEGAL AFFAIRS right of arrest) is established by statutes conferring jurisdiction on this court. The statutory right in rem is the conferment by statute of a particular judicial course of action to enforce a debt, rather than the creation of a lien as security on the happening of an event. Statutory rights arise from all matters giving rise to Admiralty jurisdiction in rem, except for maritime liens, possessory liens, and mortgages. There are three main differences between the maritime lien and the statutory right in rem. First, the statutory right in rem accrues only from the day of the arrest and is subject to claims already subsisting against the vessel; second, normally, it is defeated by a transfer of title unless otherwise provided by statute; and third, the owner must be personally liable. In addition, unlike the holder of a statutory right in rem, the holder of a maritime lien outranks other creditors.

Suppliers of necessaries

Traditionally, necessary suppliers, such as bunker suppliers, are not entitled to a maritime lien. Rather, historically they were only entitled to a statutory right of arrest. In Canada however, like some other jurisdictions (e.g. the U.S. and Brazil), a maritime lien in favour of necessary suppliers was created by statute. In Canada, that was done by s. 139 of the Marine Liability Act, but in a limited way. Section 139(2) states that a person carrying on business in Canada has a

>>> Whereas the maritime lien arises out of general maritime law and the inherent jurisdiction of the Admiralty Court, a statutory right in rem (in other words, a right of arrest) is established by statutes conferring jurisdiction on this court. maritime lien against a foreign vessel for claims that arise (a) in respect of goods, materials or services wherever supplied to the foreign vessel for its operation or maintenance, including stevedoring and lighterage; or (b) out of a contract relating to the repair or equipping of the foreign vessel. It should also be noted that s. 139(2.1) states that with respect to stevedoring or lighterage, the services must have been provided at the request of the owner of the foreign vessel or a person acting on the owner’s behalf. The court noted that whether a Canadian maritime lien would flow from the purchase of bunkers by a charterer rather than by the owner is a question that remains to be decided. However, we are of the view that a maritime lien would arise in such a circumstance under s. 139, as long as the supplier carries on business in Canada and supplies the bunkers to a foreign vessel.

Conclusion

As mentioned above, the court went on to discuss, if Canadian law had applied,

whether a maritime lien would have arisen, or only a statutory right in rem. It held that the plaintiffs would not have been entitled to a maritime lien, as s. 139(2) only applies to Canadian suppliers of necessaries. To prove a statutory right in rem, the plaintiffs would have had to prove that the owners (1) were a party to the bunker supply contract; or (2) had authorized someone to contract on its behalf, since “liability as a result of some personal behavior and attitude on the part of the owner is required.” Since the owners’ behavior did not constitute the sort that would lead to liability on the part of the owner, the plaintiffs would not have had an in rem action under Canadian law and would not be able to look to the vessel to satisfy its claim. As demonstrated by the Norwegian, the distinction between a maritime lien and the simple right of arrest can make a big difference in satisfying maritime claims. Megan Nicholls is a lawyer with Bernard LLP and can be reached at nicholls@ bernardllp.ca.

Located at Vancouver Waterfront and Roberts Bank

www.flyingangel.ca May 2015 BC Shipping News 43

TUGS & BARGES Ledcor continues its maritime expansion Photos courtesy Ledcor (Dave Roels — www.daveroels.com)

he Ledcor Group of Companies welcomed the arrival of two new flat-deck heavy cargo barges and one 1,200 horsepower tug boat, with plans to nearly double its 2012 fleet size by 2016. BC MLA Naomi Yamamoto, and Jackie Jacob, Executive Director, British Columbia Institute of Technology (BCIT) Foundation were on-hand to christen the new vessels at a traditional marine ceremony held in North Vancouver with the Ledcor Group’s Chairman and Chief Executive Officer Dave Lede. The arrival of the new barges and tug signals continued rapid growth for Ledcor’s marine division, which will add three tugboats and eight barges to its current fleet of six tug boats and 15 barges, within the next year. The newly acquired 80-metre barges, equipped with a deck strength of over 3,000 lbs/sq.ft., will carry a wide variety of potential cargoes including bulk commodities, containers, equipment modules, and construction materials such as pipe. In the event that one or more LNG plants are constructed in the province, the barges will be used during the construction phase to provide a cost-effective solution for the transportation of the necessary equipment and materials. “The new tug and barge assets allow us to meet our current and future customers’ needs as Ledcor continues to expand its service offerings in British Columbia,” said Mark Houghton, Chief Operating Officer for Ledcor’s Marine division. “We are well positioned to seize new opportunities and ship diverse types of cargo with these two new barges.”

Since the launch of its marine division in 2012, Ledcor has witnessed tremendous growth in demand for its marine services in B.C. and has made significant investments in its fleet.

Ledcor’s new barge — L6001 on the left — carries the new Bill L Ledcor. Another Ledcor barge (the 1402) is on the right with a load of woodchips.

Mark Houghton (CEO, Ledcor Marine), Dave Lede (CEO, Ledcor Group), MLA Naomi Yamamoto (BC Minister of State for Small Business), Paul McElligot (President, Ledcor Transportation and Resources) and Reverend John Eason (Mission to Seafarers).

Amix Group assists in getting the Bill L Ledcor off the L6001 barge and into Vancouver Harbour following the ceremony.

44 BC Shipping News May 2015

TUGS & BARGES

Ledcor’s newest...The Bill L Ledcor, christened in March by BC MLA Naomi Yamamoto, ready to start work.

“Our expansion creates business diversification for Ledcor and brings new jobs and economic opportunities to the marine industry,” said Paul McElligott, President, Ledcor Transportation and Resources, the Marine division’s parent company. “We are uniquely positioned to provide customers with modern new equipment, competitive rates, and a dedication to customer service and will continue growing our business this way.” The flat-deck heavy cargo barges, named the L6001 & L6002, were designed by Capilano Maritime Design Ltd. of North Vancouver and built at Mingde Shipyards in Nantong, China. Meridian Marine supplied full-time supervision for their construction. Meridian continues their full-time supervision role for the building of the additional six barges that should be read for delivery this summer. The tug boat, named the Bill L Ledcor after the Ledcor Group’s founder, produces 1,200 horsepower and is able to successfully single or double tow Ledcor wood product and aggregate barges as well as the new 80-metre barges. To fulfill current capacity demands, the tugboat will be used for inland services, specifically trips along the Fraser River. The tug was built at Damen yards in China and transported on one of the barges that was towed from Shanghai to Vancouver via Hawaii. Following the launch ceremony, Amix Group assisted in lifting the tug off the L6001 barge and into the water.

Photo courtesy Ledcor (Dave Roels — www.daveroels.com)

May 2015 BC Shipping News 45

TUGS & BARGES

Fuel-saving strategies for tug and barge operators

egulatory requirements, lower operating expenses and increased environmental sensibilities are all factors that drive vessel operators to seek out ways to increase fuel efficiency. Many of these methods, however, aren’t well researched — or even significantly discussed — in terms of tug-and-barge operations. With fuel being one of the largest operating costs, exploring fuel-saving techniques makes a whole lot of sense. Marine consultant Peter S. Soles and ocean engineer William L. Moon III, PE, are with Glosten, a firm providing innovative marine solutions for more than 50 years. Moon and Soles will discuss fuel-saving methods for tug-and-barge operations in detail at GreenTech 2015, the annual conference being held by Green Marine in Seattle this May 27-29. Moon and Soles outline eight technologies and strategies in this guest column. There are fuel-saving approaches for tug-and-barge operations that are only applicable to new construction. Others can be retrofitted. Still others involve a change in operations. Combining several fuel-saving measures can result in outstanding fuel savings.

Static barge trim

The difference between the bow and stern draft marks at zero speed has a direct impact on towing resistance and thereby on the amount of fuel consumed by a tugboat. Obtaining a directional stable barge, while minimizing resistance, can be challenging and often is not in the hands of the tug master. Barges outfitted with ballast systems or where the tugboat crew can

Gravel barge with nearly zero trim.

46 BC Shipping News May 2015

Peter S. Soles and William L. Moon III

influence cargo loading can benefit by studying the resistance reduction as a function of trim. Assuming towed resistance is 85-per-cent barge and 15-per-cent tug, model tests have shown a three-per-cent-overall fuel saving is achievable. Propeller polishing Polishing can reduce propeller surface degradation caused by fouling from mollusks and other marine growth, as well as roughness arising from manufacturing defects, the in-service environment and/or the propeller material. The propeller

Photo courtesy Soles/Moon

TUGS & BARGES

Images courtesy Soles/Moon

Research vessel hull designed for a combination of low resistance and build cost. On the left: Hull optimized for low noise and resistance. Right: Hull optimized for build cost and resistance.

surface has a significant impact on vessel resistance and, therefore, fuel consumption because the propeller’s active function exposes its surface to large volumes of water. Roughness and fouling may contribute to greater than a 15-per-cent increase in fuel usage for large ships and up to10 per cent for smaller ships. A typical underwater polishing can result in a two- to five-per-cent reduction in fuel.

Fuel consumption monitoring

Fuel consumption monitoring (FCM) reduces fuel use by informing the crew how changes in throttle settings, weather conditions, barge configurations and any potential resistance affect consumption. Once an FCM system is installed, fuel data can be combined with data from a GPS, the engines, weather reports and other sources to create synergies that wouldn’t

otherwise be possible. This enables operators to test and analyze their operational strategies. FCM system owners have reported fuel savings of two to 10 per cent.

Hydralift skegs

Most of today’s barges feature raked sterns that are fitted with two large skegs on each side to help them track

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TUGS & BARGES entire operating speed range. The nozzles provide greater thrust with the same power, or the same thrust with lower power. Retrofits with high-efficiency nozzles have shown an increase in topend speed of 0.5 to one knot. A half-knot increase in speed from 12 to 12.5 knots corresponds to a 13-per-cent increase in resistance — or 26 per cent for a oneknot speed increase. Assuming that fuel consumption is proportional to resistance, the potential fuel savings can range between 13 per cent and upwards of 30 per cent, depending on operating speed. Photo courtesy Soles/Moon

Voyage planning

Nautican nozzles installed on the Glosten-designed Foss Arctic Class tug.

>>> A typical optimization process analyzes thousands of hull forms using computational fluid dynamics, resulting in hulls with significantly reduced resistance over the baseline hull. straight when they’re being towed. Conventional skegs work by providing lift and drag to keep the barge towing straight. Hydralift skegs work in the same way but improve efficiency by increasing the lift-to-drag ratio. Model tests have shown that conventional skegs typically add up to 30-per-cent resistance over the bare-hull drag, while Hydralift skegs add only 10 per cent or less. If a typical barge

constitutes 85 per cent of the total towing resistance, a 20-per-cent reduction in barge resistance generates fuel savings of roughly 15 per cent.

Hull optimization

Designing a hull using a hull optimization framework can produce the most efficient hull form within a vessel’s design requirements. Tugboat and barge hull forms must provide enough buoyancy to support the weight of the vessel and cargo, maintain sufficient stability and sea-keeping for all weather conditions, and have the least possible resistance. The latter requirement can be optimized for maximum fuel savings without detriment to other design considerations. A typical optimization process analyzes thousands of hull forms using computational fluid dynamics, resulting in hulls with significantly reduced resistance over the baseline hull. Typical fuel savings are 10 to 20 per cent.

High efficiency nozzles

48 BC Shipping News May 2015

Installing high-efficiency nozzles can significantly increase the zero-speed bollard pull and the available thrust over the

Voyage planning has evolved from drawing track lines on nautical charts to a comprehensive risk management process. Relative to fuel conservation, the aim is to find the most efficient route and operating strategy for a specific vessel within a given set of voyage constraints. Potential fuel savings are hard to generalize due to differences in vessel characteristics, the different markets involved, various routes, loading conditions and environmental factors. However, a recent IMO study affirms that “measures to improve ship routing and logistics can have impacts on fuel consumption and emissions.” The study lists a number of voyage planning strategies with anywhere from one per cent to upwards of 40 per cent in fuel savings.

Pushing ahead

Many barges are towed astern even when the waters are protected from ocean swell and offer favorable conditions for pushing ahead. The advantages of pushing ahead are numerous, including improved speed; reduced resistance and fuel consumption; positive barge control for steering, maneuvering, and stopping; the safer conditions for tug crews; and a number of operational efficiencies. Model testing has shown that the fuel savings are draft dependent with a typical 25-per-cent increase in propulsive efficiency translating into a 25-percent reduction in fuel use. Every presented strategy has the potential to provide significant fuel savings to tug and barge operators. Of course, not all of the technologies and strategies will be applicable to all operators. We encourage operators to experiment with their operations, to test ‘known’ assumptions, to be open to alternatives, and to share what they learn!

2015

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May 2015 BC Shipping News 49

TUGS & BARGES Robert Allan Ltd. continues to deliver around the world Robert Allan Ltd. continues to be the go-to design leader for the world’s tug and barge industry. Here are some of their latest projects and deliveries.

Yenicay 1: First RAscal 1800 for Sanmar in Turkey Photo courtesy Robert Allan Ltd.

he Yenicay 1 is the first of the new RAscal 1800 series of ASD tug designed by Robert Allan Ltd. and delivered by Sanmar to their own fleet in Turkey in January 2015. The RAscal 1800 is a big sister to the RAscal 1500 delivered by Sanmar in 2014 to Norwegian clients and shares a common hull form style, wheelhouse, and general layout. Both are built to extremely high standards, almost yacht finish, and are fitted with Caterpillar engines and Veth Z-drives. However, the RAscal 1800 has considerably more power, speed, and bollard pull. It is capable of ship assist work, line-handling, general harbour service, and coastal towing. Ship assist work is generally done over the bow whereas general towing can be done over the bow with the winch or over the stern with either the winch or a towing hook. On trials Yenicay 1 met or exceeded all performance expectations with a bollard pull of 31 tonnes and a free running speed of 12 knots. Noise levels were extremely low at 63 dbA in the wheelhouse, 60 dbA in the galley/mess, and 60 dbA in the crew cabins. These low noise levels were achieved by using the carefully engineered combination of resiliently mounted engines, light weight composite shafting, high attenuation silencers, resiliently mounted fans, visco-elastic floor treatment, and judicious use of sound insulation. The vessel has been outfitted to the highest standards for a normal operating crew of four. Two cabins are located in the foc’sle, along with a galley, mess, and WC with shower.

The Yenicay 1 — RAL’s RAscal 1800

The deck machinery comprises an electric powered DMT TW-E 100 kN ship assist hawser winch on the bow and a tow hook aft. The tug can tow over the bow as well as over the stern with the single hawser winch. A hawser duct runs under the wheelhouse to facilitate this, and both the bow and stern are fitted with large stainless steel fairleads for the towline. The wheelhouse is designed for maximum all-round visibility with the control station providing maximum visibility to both fore and aft deck working areas. Main propulsion is comprised of a pair of Caterpillar C32 diesel engines, each rated 970 kW at 1800 rpm, and each driving a Veth VZ-900 fixed pitch Z-drive unit in ASD configuration. Propellers are 5 bladed 1700 mm Kaplan type in nozzles. The electrical power is provided by two Caterpillar C4.4 diesel generators, each with an output of 86 ekW. Ship-handling fenders at the bow consist of a single 500 x 250 cylindrical fender at the main deck lever, with 300 mm W fenders between the main deck and the knuckle. A 300 x 300 hollow “D” fender provides protection at the main and foc’sle deck sheer lines and around the stern. A second RAscal 1800 is nearing completion at Sanmar in March 2015. Both tugs will operate in the Harbour Fleet of Sanmar for ship berthing operations in Petkim Port, Nemrut Bay, Turkey. Sanmar is also working on a high powered version of the same RAscal 1800 with bigger Caterpillar 3512 engines which will give an increased bollard pull of 40 tonnes.

Particulars of the Yenicay 1:

50 BC Shipping News May 2015

Length overall: 18.7 m Beam, moulded, extreme: 9.2 m Depth, moulded: 3.5 m Maximum draft: 3.7 m The tug was designed and constructed to ABS requirements with the notation: ABS A1, Towing Vessel, AMS, UWILD, BP (30) Major tank capacities are as follows: Fuel Oil: 33,500 litres Potable Water: 5,776 litres Foam: 1,618 litres

TUGS & BARGES RAL completes tug upgrade program for China’s Tianjin Port Photo courtesy Robert Allan Ltd.

n early 2012, as a part of its tug fleet upgrade program, Tianjin Port of China retained Robert Allan Ltd. to develop several new tug designs to suit its operational requirements. The program involved five tugs of three distinct designs. The recent delivery of the RAstar 3500 class tugs Jin Gang Lun 28 and Jin Gang Lun 29 marked the successful conclusion of this program. The two latest vessels were constructed by a local shipyard, CCCC Bomesc Marine Industry Co. Ltd. in Tianjin city. Compared to the earlier tugs, Jin Gang Lun 26 and Jin Gang Lun 27, which are of the RAmparts series, the Jin Gang Lun 28 and Jin Gang Lun 29 are designed with the unique hull form of the RAstar series. As a part of an internal R&D program at Robert Allan Ltd, an extensive set of CFD simulations was carried out in order to accurately quantify the differences in hull resistance in calm water and the motions in beam seas of the RAmparts 3500 and RAstar 3500 hull forms. The CFD simulations concluded that, with similar resistance performance at the design speed of 14 knots, roll angle and roll acceleration of the RAstar 3500 design is about 22 per cent and 12 per cent lower than that of the RAmparts 3500 design respectively in beam seas of irregular waves. The Jin Gang Lun 28 and Jin Gang Lun 29 were designed and built in accordance with Chinese Classification Society requirements for sea going vessels, with the following notation: CSAD, Tug, Coastal Service, Ice Class B and CSMD, BRC Each tug is fitted with a Fi-Fi system equivalent to Fire Fighting 1, although this feature is not included in the Class notations. Main propulsion for each tug consists of a pair of Niigata 8L28HX diesel engines; each rated 2206 kW at 750 rpm, and each driving a Kawasaki, KST-220ZC/B-2.7 controllable pitch Z-drive unit, in ASD configuration.

The Jin Gang Lun 28

LNG-fuelled tugs for Norway’s Østensjø Rederi

Particulars are as follows:

The Jin Gang Lun 28

Image courtesy Robert Allan Ltd.

Length O.A.: 35.00 m Beam, moulded, extreme: 12.40 m Depth, moulded (hull): 5.40 m Maximum Draft: 4.22 m Major tank capacities are as follows: Fuel Oil: 183 m³ Fresh Water: 30 m³ Foam: 20 m³

obert Allan’s design was selected for three LNG-fuelled escort tugs for Norway’s Østensjø Rederi for operation at Statoil’s Melkøya terminal. The tugs will be powered by 6-cylinder Wärtsilä 34DF dual-fuel engines integrated with a customized gas storage and supply system. With dimensions of 40 metres in length and a 16-metre beam, the tugs will have a bollard pull of 100 tons and an escort steering force of 155 tons. They will be built at Astilleros Gondan in Spain. Delivery is expected in the first half of 2017. (Information source: Marine Log)

Robert Allan Ltd.’s LNG-fuelled tug design.

May 2015 BC Shipping News 51

MARINE SURVEYORS

CARGO LOGISTICS

Surveyors’ diary

A review of notable events

C Shipping News continues it’s look into the many roles a marine surveyor plays in the shipping industry. This month’s submissions thanks to Drew Korek and Tim Ellis, members of the Association of Marine Surveyors of B.C.

Photos courtesy DNP Marine Surveyors

Report from Tim Ellis, DNP Marine Surveyors

he Cooper/T.Smith ‘AMERICA’ loading a POLSTEAM vessel with a cargo of Texas and Lousiana rice for Cuba, at Gonzales, Ascension Parish, Port of South Lousiana. Barges come from East Texas and Lake Charles, and are blended, sampled and loaded by the ‘AMERICA’. The surveyor is witnessing drafting, sampling and fumigation for the receivers.

52 BC Shipping News May 2015

ruit and other popular Chinese New Year delicacies destined for Vancouver’s burgeoning Chinese population are badly affected by the disruption to shipping on the West Coast of the United States. Numerous refrigerated container loads of chilled fruit and vegetables have been destroyed due to spoilation. The surveyor is a witness to the spoilation on behalf of the shipper — here, a consignment of wax apples (syzgium samarangense) has rotted to the point that it must be discarded.

ighly specialized ship frames of very high tensile steel are individually numbered and marked for assembly in specialist vessels. This picture shows damage to one plate. The surveyor is acting for the vending agency.

MARINE SURVEYORS

Marine warranty surveyor documents heavy lift

The MV Happy Star — owned by BigLift Shipping — is a unique vessel in that its crane pedestal has been raised by four metres and the jib is extended by six metres, providing 10 metres more outreach. At full capacity, the vessel’s cranes can lift up to 1,800 metric tonnes with two 900-metric-tonne cranes working in tandem. Key for this particular job, the Happy Star has the highest Finnish Ice class notation. Sandvik’s cargo was almost 3,000 metric tonnes in total. In addition to the two shiploaders coming in at just under 1,000

mt each, the project included two tripper cars, two tripper tails, 28 conveyor galleries and an additional 73 pieces of peripheral equipment. Andrew was very complimentary of the team that carried out the project — specifically mentioning the Happy Star crew and Big Lift Shippng for their intricate planning and hard work to apply all the lashing, and SPMT Vastwin and GSI Shipyard. The project caught the eye of the Discovery Channel’s Mighty Ships program and will be included in an upcoming episode in late summer.

Photos courtesy Phoenix Marine Services

aptain Andrew Korek, President of Phoenix Marine Services and Past President of the Association of Marine Surveyors of BC, took on the role of marine warranty surveyor for this heavy-lift project that saw two complete shiploaders shipped from Guangzhou, China to the Port of Sept Isles in Quebec. Hired on by Liberty Insurance Underwriters and Sandvik Mining & Construction, Andrew attended the loading operations at GSI Shipyard in Guangzhou and also monitored the discharge in Sept Iles (in sub-zero temperatures). Captain Korek spent the better part of December 2014 in China to ensure that loading operations were executed in a safe manner and according to industry standards. Activities Andrew oversaw were such things as lashing, rigging and cargo securing (all done in compliance with DNV GL’s rules). He was also on hand to see that generally accepted stevedoring practices were conducted.

May 2015 BC Shipping News 53

Photo: Dave Roels

ADVERTISERS

Your donation will help us “Save Lives at Sea” Email: info@canadianlifeboatinstitution.org

www. canadianlifeboatinstitution.org Registered Charity #88999 8977 RR0001

FOR SALE

MV Coastal Runner

Aluminum Passenger Ferry Listing # CV266 / $225,000 OBO Built in 2008 by Sylte Shipyard, Maple Ridge, B.C. • Seating capacity: 65 people plus 3 crew • LOA: 65 feet / Beam: 12 feet • Tonnage: 43 gross tons • Speed: 23 Knots approx. (reported) • Power: Daewoo Diesel – 480hp

Remarks: This vessel is reported in very good condition. This is an exclusive listing with Harlow Marine. For an immediate inspection please call our office at 604-530-2657. MOTIVATED SELLER.

54 BC Shipping News May 2015

AAL Shipping.................................. 16 Aarc West Mechanical Insulation / Aarc West Industrial Coatings.......... 28 ABS Americas.................................. 15 Adonis............................................... 8 AMIX Group..................................... 44 ATP Instone Marine Travel............... 13 Babcock Canada................................ 3 Bernard LLP..................................... 34 Bracewell Marine Group.................. 10 Canada’s Pacific Gateways (Prince Rupert Port Authority)........ 30 Canadian Lifeboat Insitution........... 54 Capilano Maritime Design Ltd......... 45 Chamber of Shipping of B.C. Executive Search............................... 9 Chamber of Shipping of British Columbia.............................. 24 ClassNK........................................... 11 CN Rail............................................ 31 Corix Water Products....................... 47 Council of Marine Carriers Conference..................................... IBC Dave Roels Photography................. 50 GreenTech 2015............................... 49 Greenwood Maritime Solutions......... 8 Harlow Marine International........... 54 IMS Marine Surveyors & Analytical Laboratories................... 52

International Sailors Society Canada................................ 43 Jastram Engineering Ltd................. 39 John Horton, Marine Artist.............. 21 King Bros. Limited............................. 8 Kongsberg Martime Simulation...... 25 Ledcor Group................................... 14 Lloyd’s Register................................. 7 Lonnie Wishart Photography........... 54 Mammoet.......................................IFC Mercy Ships..................................... 41 Meridian Marine Industries............. 45 Mission to Seafarers........................ 43 Nanaimo Port Authority.................. 37 Osborne Propellers.......................... 48 Pacific Pilotage Authority................ 23 Port Alberni Port Authority............. 10 Redden Net & Rope......................... 47 Robert Allan Ltd.............................. 17 Saam Smit Towage Canada............. 19 Tactical Marine Solutions Ltd.......... 23 Tervita............................................. 10 Troy Life & Fire Safety...................... 27 Vancouver Maritime Museum........... 4 Western Canada Marine Response Corporation..................... 33 Westshore Terminals....................... BC

Council of Marine Carriers The voice of Western Canadian tug and barge operators.

21ST CMC TOWBOAT INDUSTRY CONFERENCE

Rising to the new Coastal Challenges!

May 29 to 30, 2015 — Delta Victoria Ocean Pointe Resort & Spa

Photo by Dave Roels (www.daveroels.com)

Join us for our golf tournament! May 28, 2015 — Highland Pacific Golf Course

Visit www.comc.cc for details May 2015 BC Shipping News 55

Securing a bright future Westshore Terminals – North

America’s busiest coal export terminal – is amid a five-year, $270 million project to make it even better. As we work to secure a bright future over the next few years we will: a new office, workshop • Build and employee complex three of our four • Replace stacker-reclaimers which either stockpile or reclaim coal on our site our largest shiploader • Replace at Berth 1 additional dust • Install suppression systems For our customers it will mean they can plan for the future with confidence. We will have new equipment and increased coal stockpile capacity without increasing our site footprint. Every tonne of coal from train to vessel will be handled more efficiently and with improved environmental safeguards. The changes will not come without challenges as we are a busy terminal. However, the results will prove worthwhile for Westshore and its unitholders; to our customers; and to Canada in increasing coal export revenues, and productive jobs.

www.westshore.com

We’re taking time to do it right