Gulf Coast Supplement

July 2017

Gulf Coast Headliner

Reporting on marine business in the U.S. GULF COAST

MCDERMOTT ADDS SUBSEA MUSCLE Pipelay and construction vessel Amazon

Q&A with Texas Secretary of State Rolando Pablos

Investing in Texas Ports

Metal Shark reels in a big one

Gulf Coast Headliner

Gateway to Success Texas Ports are critical to international trade and provide multiple economic opportunities

T

exas ports play a critical role in the state’s transportation system and are a key part of the state’s economy, according to the Texas Department of Transportation. And their reach goes beyond the state level. Texas ports supported a total of 5.1 million jobs nationwide in 2015 and created $1.2 trillion dollars of economic activity in the U.S., according to an economic impact study conducted b y Ma r t i n As s o c i a te s f o r t h e Te x a s Ports Association.

According to the state’s Port Authority Advisory Committee 1,561,870 jobs in the state are supported by port maritime activity; ports generate $368.7 billion of total economic value supported in the state (23% of the state GDP); they produce $92.2 billion in total personal income and local consumption; and create over $6.9 billion in state and local taxes.

That impact is expected to grow as the expansion of the Panama Canal will lead to larger ships entering Texas ports, the lifting of the ban on exporting crude oil will lead to more opportunities, and investments in LNG terminals/infrastructure across the state will produce in demand commodities.

With 11 deepwater ports and 16 seaports, Texas has the most U.S. ports of

entry in the country and is the nation’s top exporter with exports valued at over $248 billion in 2015. Among its stellar performers are the Port of Houston, Port of Brownsville, Port of Corpus Christi and the Port of Galveston.

The Port of Houston, the state’s largest port, touts itself as “The International Port of Texas” and with good reason. The 25-mile long complex is comprised of 150 plus private and public industrial terminals along the Houston Ship Channel. The port is also home to a multi-billion petrochemical complex—the largest in the U.S. and second largest in the world. It ranks first in foreign waterborne tonnage, import, export tonnage and break bulk. And handles about 70% of all containerized cargo in the U.S. The Port of Brownsville, otherwise known as “The Port That Works” is connected to the Gulf of Mexico via a 17-mile long ship channel and with 40,000 acres of property is the largest land-owning public port authority in the nation. The port is the nation’s leader is ship recycling, and its on premises shipyard offers construction and refurbishment services. The port is also Foreign Trade Zone No. 62 and consistently ranks in the top three U.S. FTZs for

exports. According to the Port of Brownsville, its FTZ is one of the largest in the U.S. and in 2015 exported commodities valued at $3.6 billion, and imported commodities valued at $3.2 billion.

Texas is oil country. According to the Port Authority, oil and gas development in the state has contributed to more than $300 million in the state’s economy. Recent key projects from private investors include the Golden Pass LNG Expansion; the Freeport LNG Expansion; the Cheniere LNG (Corpus Christi), Dow Chemical Expansion, Freeport; and ExxonMobil Expansion, Baytown.

The Port of Corpus Christi is smack dab in the middle of the oil and gas action. Calling itself the “Energy Port the Americas,” the port is the largest exporter of U.S. produced crude oil in the nation. Its also the nation’s 4th largest in total tonnage. Earlier this year the port’s Oxy Ingleside Energy Center (OIEC) export terminal accepted the arrival of Euronav’s VLCC Anne. The 1,093 ft very large crude carrier is the largest oil tanker to call on a Gulf of Mexico (GoM) port. The port also set a single vessel load record this past April when 930,000 barrels of crude oil was loaded to the Suezmax class Cap Romuald.

If there’s one market that’s currently hot everywhere it’s cruise shipping. The oldest port in the GoM, the Port of Galveston, is making a name for itself in the market, currently ranking as the 4th busiest cruise port in the U.S. In 2015, 1.76 million cruise passengers made their way through the port, and those numbers are expected to rise.

According to the Port Authority, Texas ports have, in the last few years, seen cruise traffic increase substantially—from 2013 to 2014 cruise passenger numbers have increased by nearly 14%, more than double the rate at which the state of Florida (number one in the nation in terms of cruise passengers served) is growing.

The Port of Galveston recently hosted a sneak peak of its renovated Cruise Terminal 2. The expansion, which is expected to help the port meet increased passenger demands, included an increase in space from 90,000 square feet to 150,000 square feet, seating from 500 to 2,000 and the addition of more check-in booths. Currently, Carnival Cruise Lines, Disney Cruise Line and Royal Caribbean call at the port.

July 2017 // Marine Log S3

Gulf Coast Headliner

The Theo T exports the first shipment of crude oil from the Port of Corpus Christi after the ban was lifted

Diversification and Market Development To remain among the top producers in the country, Texas ports will need to invest in infrastructure and improvements to ensure business continues to grow.

And as we’ll come to learn, even Texas ports aren’t immune to problems.

For instance, ports in the state are losing market share in waterborne trade at a higher rate than on the national level.

S4 Marine Log // July 2017

One source of the problem, according to the Port Authority, is the increase in domestic oil production—with production on the up and up, there’s less of a need to import foreign oil. Signs also point to a losing battle with other modes of trade—including rail and truck. As more manufacturing work is taking place in Mexico, goods can be imported via truck, rendering waterborne trade obsolete (at least in this scenario).

Mexico isn’t the only country changing

ports’ modus operandi. While several U.S. ports trade with China—the country’s largest trading partner—ports in Texas are unique in that they primarily trade with South American countries such as Venezuela and Brazil.

In fact, the two countries combined represent 50% of the waterborne trade in Texas according to the Port Authority Advisory Committee’s Texas Ports Strategic Mission Plan-85th Legislative Session.

However, a decline in trade with its South American trading partners will require Texas ports to diversify and increase its trade partnerships with China and Asian companies.

“To offset the decline in trade with South American countries such as Venezuela and Brazil, it should be a goal of Texas ports to increase trade with China and the Asian economies,” suggests the report.

A likely way of doing that is using the recent expansion of the Panama Canal to its advantage.

The $5.25 billion expansion project is expected to boost the economies of ports along the eastern seaboard of the U.S. as well as ports along the Gulf Coast.

But is Texas ready for an influx of

Neo-Panamax vessels? Not exactly. As they stand today, most Texas ports currently can’t take on the larger ships the expanded Canal was built to let through.

And although ports such as Houston, Brownsville, and Corpus Christi have received approval to dig deeper channels, the funding for projects is not in place to see expansion happen on a larger, broader scale across all Texas ports.

PORT OF EVERYTHING

FUNDING GROWTH

has it all. We can handle almost every type

In order to make way for larger ships, dredging, expansion in infrastructure, and investments in larger terminals must take place—and that is perhaps the greatest irony in Texas ports’ success story.

Texas is the only coastal state that doesn’t provide financial aid or funds to ports on the state level—and doesn’t have a program in place to address port infrastructure.

Port authorities and state agencies help by providing partial funding. And with ports in neighboring states such as Louisiana already improving infrastructure and increasing port depths, Texas runs a real risk of losing major business opportunities.

But there may be some relief on the way. Senate Bill 28 (SB 28), the Texas Port Expansion Act, was recently signed into law by Texas Governor Gregory Abbott.

The law, spearheaded by Senator Brandon Creighton (R-Conroe), would provide assistance with financing ports in Texas.

“Texas ports serve as gateways to the state economy—creating nearly 1.6 million jobs for Texans,” said Lt. Governor of Texas, Dan Patrick. “In order for Texas to remain the number one exporting state we must continue to enhance connectivity to ports and invest in port infrastructure. SB 28 will accomplish this goal by providing critical funding opportunities that ensure that our ports remain competitive.”

The law makes it so that Texas Mobility Funds will only be used for port access improvement projects—projects that construct or improve public roadways that enhance connectivity to the port. The Texas Port Expansion Act also establishes a Ship Channel Improvement Revolving Fund and a revolving loan program, which will be used to fund qualified projects, such as deepening or widening a ship channel.

Texas is the country’s greatest link to the world—its ports are an integral part of that. And to continue at the top of its game, the state will have to dig deep—in pockets and channels— to make way for improvements and investments, larger ships, and, an oncoming wave of success.

of ship, cargo and traffic, and offer all the

If you need a port with a convenient location and built-in efficiencies, the Port of Galveston

CONVENIENCE

support you need. Call today to learn more about our benefits.

• Just 30 minutes to open sea • Efficient labor and competitive rates • No port congestion • An efficient part of your supply chain • Terminals near the Interstate Highway System and the Gulf Intracoastal Waterway • Direct connection to BNSF and Union Pacific Railroads • Foreign Trade Zone No. 36

PortofGalveston.com

409.766.6112

Port of Galveston P.O. Box 328 Galveston, TX 77553

July 2017 // Marine Log S5

Gulf Coast Headliner

Q & A With

Texas Secretary of State, The Honorable

Rolando B. Pablos

By John R. Snyder, Publisher & Editor-in-Chief

T

exas “tea” ain’t the only thing brewing in the state. While oil always comes to mind when you think of Texas, the state actually has one of the largest and most dynamic and diverse economies in the world—boasting global leadership in renewable energy, medicine, agriculture, and manufacturing. Ports also play a central role in the state’s economy—more than $204 billion in international trade passed through Texas seaports in 2015. The newly opened Panama Canal expansion will benefit Texas seaports, as well as the export of Liquefied Natural Gas (LNG) from the U.S. So what does the future hold for the state? To find out, MARINE LOG

S6 Marine Log // July 2017

took the opportunity to chat with Texas Secretary of State Rolando Pablos, who has his finger on the pulse of the state’s economy.

ML: Mr. Secretary can you tell us about your background? What are your responsibilities as Secretary of State?

Secretary Rolando Pablos: I’m an economic developer with extensive experience fostering cross-border trade between Texas and Mexico. Before my current position, I served as the CEO of the Borderplex Alliance, based in El Paso, which worked to foster economic growth on both sides of the border. I’m deeply passionate about strengthening the State of

Texas, having grown up here and receiving all my education here, and I’m a living example of why Texas truly is the land of opportunity.

As Secretary of State, I wear a number of different hats: I’m the State’s Chief Elections Officer, the Chief International Protocol Officer, the Border Commerce Coordinator, I’m responsible for maintaining Texas’ strong commercial relationship with our largest trade partner, Mexico, and our agency maintains all the business and public filings documents in the State of Texas.

ML: Most people when they think of Texas, they think of oil and gas. In reality, Texas has one of the most diverse, complex and largest economies in the world. Can you talk about some of the important industries in the state?

RP: As the world’s 10th largest economy, Texas stands at center stage in the global arena. Texas is not only a global energy leader, but also a leader in technology, medicine, manufacturing and agriculture.

Recently, we added more than 22,000 private sector jobs in April. Our employment growth forecast is up from previous estimates, and Texas is expected to add nearly 290,000 jobs this year if we continue on our current path. Thanks to our access to global markets, world-class workforce, predictable and reasonable regulations, no state income tax, and outstanding quality of life, more and more employers from a variety of industries are looking at opportunities for expansion here in the Lone Star State.

ML: How has the downturn in oil impacted the state’s economy?

RP: Frankly, Texas has been through ups and downs in the oil market and we always come out stronger. Even in a down market during fiscal year 2016, the Texas oil and natural gas industry contributed an average of $26 million a day to state and local revenue. We learned valuable lessons during the 1980s and have since diversified our energy profile significantly so that we do not feel harsh effects from fluctuations in oil prices.

We still have a large economic stabilization fund—or “Rainy Day Fund” —of more than $9 billion and are well-prepared, in fiscal terms, to withstand the effects of possible future fluctuations. The rig count is up and we have added oil and gas jobs for the past six months, so I am very confident that our entire energy profile—including oil and gas operations—will remain on solid footing.

ML: Drilling has picked up in West Texas, but has lagged behind in the GoM. When do you see that picking up?

RP: The rig count in the Gulf of Mexico is remaining steady, and we do see future opportunities for expansion in offshore drilling. The main reason behind this optimism is the fact that offshore extraction is becoming progressively cheaper, thanks to innovative technology and techniques being employed by companies engaged in offshore drilling. I am confident that, even without a dramatic rise in oil prices, these technological advancements will help keep offshore drilling activities steady—and perhaps even spur a rise in activity—through the remainder of the year.

ML: Secretary Zinke recently signed two secretarial orders, one of which directs BOEM to develop a five-year plan for offshore oil and gas exploration. What impact do you see that having on Texas?

RP: We are very encouraged that the fiveyear plan will have the BOEM take a look at the potential in the Gulf of Mexico and examine ways that stakeholders— in both the private and public sectors—can influence offshore activities in the years to come.

It is still too early to say what actual impact this will have on the Texas economy as a whole, but I believe that by bringing regulators and industry leaders to the table to develop the report, we will have a clear picture of the opportunities for offshore drilling in the near and long term.

ML: What Trump Administration policies do you see having a positive impact on the state?

RP: Any policies that reduce burdens on businesses and open up new markets for American exports to be sold abroad are positive steps for the United States and for Texas.

We’ve just returned from China, where there is tremendous interest in importing LNG from Texas. We are encouraged by the recent announcement of the U.S.-China Comprehensive Economic Dialogue, which will hopefully result in the opening of a new export destination for Texas LNG. ML: Can you talk about Governor Abbott’s Rural Economic Development Initiative?

How does it work and what are its goals?

RP: Governor Abbott’s Rural Economic Development Initiative is a recognition that our rural communities have a tremendous amount of resources to offer for businesses seeking to invest and grow in Texas.

We began our Rural Economic Development tour with two summits in East Texas and plan to continue traveling to other regions of the state to host additional summits. During these summits, we bring together public officials, economic development organizations, and business leaders to identify regional assets and encourage

greater cooperation in order to bring larger projects to rural Texas. We are looking forward to hosting summits in the Rio Grande Valley, the Panhandle, West Texas, and North Texas in the near future.

ML: Texas has a strong renewable energy industry. Can you talk about its wind and solar production? What about equipment and components that are manufactured for the industries in the state?

As the world’s 10th largest economy, Texas stands at center stage in the global arena.

— The Honorable Rolando B. Pablos RP: While oil and gas is a key component of our economic strength, we understand and recognize the immense value of diversifying our energy portfolio. Today, if you visit West and South Texas, you will likely see that wind farms are extremely prominent in our state’s landscape—in some

cases even more prominent than oil wells.

In fact, Texas leads the nation in total installed wind capacity with 16,000 MW. We are number one in total energy production, biodiesel production capacity and solar energy potential.

The geography and natural resources in our state bode very well for future expansion in the renewable energy sector—our high plains and coastal wind are perfect for facilitating this growth. Additionally, Texas’ business climate encourages renewable technology innovation and commercialization, and our state is home to leading research institutions working in renewable energy industry areas.

ML: What other initiatives are underway in Texas that business investors should be aware of?

RP: Texas is always exploring new ways to foster an even more attractive environment for foreign direct investment. In addition to our incentive programs, we are actively organizing inbound and outbound trade delegations so that we can educate potential investors and industry stakeholders on the tremendous benefits of doing business in and with the State of Texas. It is crucial for business leaders across the globe to understand the qualities that make the Lone Star State an ideal environment for businesses’ CEOs, employees, and families.

In continuing to show the world what Texas has to offer, I am confident Texas will continue to lead the nation in Foreign Direct Investment.

July 2017 // Marine Log S7

Gulf Coast Headliner

Quiet Confidence McDermott International begins to upgrade its capabilities for an upturn in the market

By John R. Snyder, Publisher & Editor-in-Chief

T

here’s a renaissance underway at McDermott International, Inc. and the market and investors are taking notice. The publicly traded Houston-based multinational engineering, procurement, construction and installation (EPCI) company recently entered into a 5-year Amended and Restated Credit Agreement with $810 million of capacity for letters of credit and a $300 million revolving cash sublimit. Additionally, the agreement allows for current or new lenders to increase commitments up to a total of $1 billion.

“The increased limit of the facility, the $300 million revolving cash sublimit, as well as the extended maturity are a culmination of the financial transformation McDermott has made over the past few S8 Marine Log // July 2017

years,” says Stuart Spence, McDermott’s Executive Vice President and CFO. “The increased facility capacity underscores the confidence and support shown by our current and new lenders entering the facility and provides us with a simplified capital structure, increased balance sheet flexibility and positions us well for future growth.”

Investment research analysts Zacks agrees. Zacks says, “The increased credit limit of the facility emphasizes the belief that creditors have in McDermott. The company has made a major turnaround through its cost saving initiatives to shore up its financials over the years. The company has also been winning a number of contracts lately, adding to its robust backlog of around $4 billion. McDermott recently won the Angelin gas field development

contract from BP p.l.c, which will get reflected in the company’s second-quarter 2017 backlog. The company’s broad product portfolio and impressive geographical footprint make both the investors and the lenders confident of McDermott’s earnings and cash flows.”

Zacks says that McDermott International’s stock has risen 57% in the last year—a claim not many in the oil and gas sector can make.

A key part of McDermott International’s transformation has been the addition of key executive leadership. One of those executives is Alan Marriott, Vice President Fabrication and Marine Assets and Operations at McDermott International, Inc. Marriott started his career building Trident missile-carrying nuclear submarines

in the U.K. and later joined McDermott for the first time in 1991 as a Project Engineer on diving support vessels for the North Sea. After spending eight years with McDermott, he held various executive management positions at Technip North America, including COO Subsea BU, Senior Vice President of Assets, and Executive Projects Director.

Marriott rejoined McDermott about 18 months ago in the fall of 2015 to oversee the company’s worldwide operations of its fleet of 12 vessels and fabrication yards.

In an interview with Marine Log, Marriott points to a number of changes at McDermott International that have him bullish on the company’s future.

“From a McDermott perspective, we’ve always had a name out in the marketplace,” says Marriott. “In the late 90’s and early 2000’s, the DB 50 (Derrick Barge 50) almost exclusively worked for Shell. But we didn’t build on that momentum. We moved out of North Sea and West Africa and the company shrunk a bit.”

Continues Marriott, “Three years ago the company went through a very tough time just to survive. But what I’m seeing now is a renewed ambition for growth. We’ve built the foundations up. There’s transformational growth for the company. What’s happening in the Middle East gives us a really solid base. We’re building on that. We have that worldwide brand out there. We are really well known in this industry and it gives us a great stepping stone to build it back up to what it should be. It is going to take a lot of effort, but the team is onboard and we will start to see those opportunities come to fruition. There still a lot of work to be done, but I’m really optimistic for the company’s future.”

points over the charter term. Built in 2014

by Lloyd Werft, the 27,449 dwt, DP2 vessel has two 400 metric tonne active heave-compensated mast head cranes, one on the aft and the other amidship, including a 30 metric tonne heave-compensated knuckle boom crane.

“Apparently everyone says we stole it,” says Marriott. “Well, it was there for everyone to steal. I think you are constantly looking at distressed assets. Then you have

Every customer has something unique.

Our role is to figure out what they need... [and] show that commitment to them.

to look at whether they strategically fit with what you want to do in your space. Buying a ship just because it’s cheap won’t help your business. It has to fit your plans.”

Marriott points to the Ichthys LNG project about 220 km off the coast of Western Australia as an example of how the company can grow.

McDermott delivered an EPCI solution to what is one of the world’s largest subsea gas field developments. “We can manage a large scale project, but we had to use a partner. In that case, it was Heerema. Our goal is to do those projects ourselves. Part of my mission is to look at where we can identify those enabling assets and where we can acquire them at the competitive price.”

The acquisition of the Amazon upgrades the deepwater and SURF capabilities of the company. Marriott thinks her first work now will be in Australia or the Middle East.

Re-registered under the Malta flag, the Amazon will eventually undergo an upgrade at a shipyard in the second half of 2019.

Once upgraded, the Amazon will position the company to pursue emerging opportunities in 2020. “We’ll be able to go after those big EPCI projects,” he says.

McDermott is already looking to the future. Marriott says the company will continue to look for other distressed assets, but they will have to fit the company’s strategy and at the same time the company is also working on what specifications will be needed for its next generation of vessels.

“We will continue to focus on our customers and try to understand their needs. Every customer has something unique. Our role is to figure out what they need. Their needs are different. Show that commitment to them. If you are able to do that it evolves into something more than just a customer-supplier relationship. It becomes a partnership. You’ll get that customer back.”

A KEY PIECE One of the things that Marriott was charged with when he came back onboard was looking at key pieces that the company could add to implement the company’s long-term growth strategy and renew and upgrade its fleet.

One of the prizes McDermott was able to pluck from the market was the 653 ft x 106 ft deepwater pipelay and construction vessel Amazon from the U.K.’s Ceona. The acquisition cost, according to McDermott, was $52 million—some have priced the newbuild cost for the vessel at $350 million.

The acquisition was funded through a sale and leaseback arrangement. McDermott will obtain control of the vessel for 11 years in exchange for a daily charter hire rate with options to purchase the vessel at different July 2017 // Marine Log S9

Gulf Coast Headliner

First Jones Act Wind Turbine Installation Vessel A joint venture between marine engineering firm Zentech Inc. and energy development project specialist Renewables Resources International unveiled plans late last month to build the first Jones Act-compliant, offshore wind turbine installation vessel.

Houston-based Zentech, an expert in offshore rig design, says the installation vessel will be a self-propelled, DP2 Class jack-up with four truss legs with spud cans—a proven oil & gas design—integrated into a newly built hull.

When not operating as an installation vessel, the jack-up will be capable of being used for decommissioning platforms in 300-ft water depths.

Zentech President & CEO Ramesh Maini called the announcement “another defining moment in the evolution of Zentech as one of the world’s leading designers and turnkey providers of advanced offshore solutions.”

The Jones Act vessel is designed to navigate the New Bedford Hurricane Barrier and will carr y and install in this

S10 Marine Log // July 2017

configuration components for at least three complete 6-9 megawatt (MW) range wind turbines. The vessel’s jacking system will be rated at a capacity of 16,000 tons, extending the unit’s service life.

With evolving innovation, up to four 8MW range, fully assembled wind turbines can be installed using a patented cantilever package.

The installation mechanism will be able to align the fully assembled wind turbines to the smallest degree of required accuracy; whether that is a translational or a rotational requirement. Using its innovative concept, the vessel will have the mechanism to enhance its stability to carry fully assembled wind turbines for anticipated 10MW or higher capacity. “ Wi t h l a r g e r s c a l e o f f s h o r e w i n d projec ts fol low ing Block Island, the U.S. market requires forward looking m a r i n e l o g i s t i c s , s u c h a s Z e n t e c h’s comp etitive, Jones Ac t compliant jack-up installation vessel,” says Andy Geissbuehler, Managing Partner of Renewable Resources International.

“This vessel,” adds Geissbuehler, “is another example of the important role the U.S. oil & gas industry will play in accelerating the U.S. offshore wind industry.”

The deployment of a U.S.-flagged vessel is a positive sign and a step in the right direction for the offshore wind industry in the U.S.,” says Thomas Brostrøm, President of DONG Energy North America.

“This will help in the creation of a sustainable supply chain that includes several suppliers and we welcome initiatives such as this from serious market players in the industry.”

Zentech says discussions with U.S. shipyards indicate a delivery no later than fourth quarter of 2018.

The unit will be constructed utilizing U.S.-built components such as barge, legs, spud cans and propulsion.

In addition to enabling a competitive solution addressing the offshore wind industry’s Jones Act challenge, this U.S. built vessel will contribute to the revival of the nation’s shipbuilding industry and port infrastructure.

SeaOne Plans to Deliver Affordable Gas to Caribbean

This fall it is expected that Houston-headquartered SeaOne Caribbean, LLC a n d S o u t h Ko r e a n s h i p b u i l d e r Samsung Heavy Industries (SHI) will have a signing ceremony for the construction of a dozen of what will be the world’s largest and most powerful Articulated Tug/ Barge (ATB) units.

The impressive order is part of a new Caribbean and Central American transp o r t a t i o n n e t wo r k t h a t w i l l d e l ive r CGL (Compressed Gas Liquid) cargo to customers in suppor t of the SeaOne Caribbean Fuels Supply Project.

The 260-meter by 38-meter by 21.74meter ocean tank barges w ill feature SeaOne’s patented CGL technology and systems that includes the CGL containment system. Each ATB will have a displacement of 68,000 metric tonnes. The new service will be a real game-changer for the use of ATB technology, which will create a virtual pipeline at sea. The CGL Containment System is treated as an independent cargo and is not integral to the vessel design.

The ATB cargo holds will be kept at a temperature of minus 40º C while the containment system is full, resulting in no sloshing or boil off and no retention of a

gas blanket after offloading of the cargo.

The tugs in the ATBs will be large and powerful—measuring 50 meters long, 19.5 meters wide and 8 meters in depth, and fitted with IMO Tier III diesel engines to give the vessels a service speed of over 14 knots. Ten of the ATBs will be used for regular route service, while the other two will be used for shuttle service. The service is expected to be 10-days roundtrip, including port time.

At t h e t i m e o f t h e a n n o u n ce m e n t of a Letter of Intent to build with SHI, Dr. Bruce Hall, President and COO for SeaOne, said, “SeaOne has been working with SHI for a while now and we have found them to be a proactive company that listens to new ideas in the gas and liquids transportation business and provides constructive input into the design of the CGL transportation vessels. We are pleased to have SHI as part of the project.”

Daniel Cho, Vice President of Samsung Heavy Industries’ Rig & Industrial Ship Marketing said, “We are delighted to participate in SeaOne Caribbean’s Fuels Supply Project with the construction and supply of the articulated tug and barges, and hope to build a lasting relationship

with SeaOne hereafter.”

Classification society ABS has worked with SeaOne from the outset of the project to help ensure the vessels will comply with the highest standards of construction and safe operation.

The ATBs, designed by Ocean Tug & Barge Engineering Corp., Milford, MA, will fly the flag of the Republic of the Marshall Islands.

The signing of the LOI for the ATBs is seen as a major milestone in SeaOne’s extensive Caribbean Fuels Supply Project.

The project is being undertaken to develop an environmentally friendly, low cost, and safe means of transporting gas and gas liquids together as a single cargo.

SeaOne has signed a 40-year lease with the Port of Gulfport in Gulfport, MS, for 36 acres of land where it will construct, in multiple phases, a 1.6 Bcf/d CGL production and export facility. Completion is expected by 2020. At the Gulfport facility, SeaOne will transfer the produced CGL to ATBs to transport and deliver the customers’ product efficiently, safely and cost effectively to CGL receiving terminals in various Caribbean and Central American markets, including Puerto Rico.

July 2017 // Marine Log S11

Gulf Coast Headliner

Conrad Shipyard Mourns Passing of Founder Parker Conrad

The industry has lost a pioneer and Conrad Shipyard its leader. Earlier this month, Conrad Shipyard, Morgan City, LA, announced the passing of its founder, John Parker Conrad Sr. He died peacefully at his home on July 6 surrounded by family and friends. He was 101 years old.

A shipbuilding pioneer and a legend along the Gulf of Mexico coast and beyond, Parker founded Conrad Industries in 1948.

Conrad now has five shipyards along the Louisiana-Texas coast.

From age 12 to age 17, Parker trained as a Christian Brother, which formed in him a deeply rooted and lifelong commitment to others. He supported many charitable and community causes in South Louisiana, and received numerous awards for his accomplishments and philanthropy.

An avid hunter and outdoorsman, Parker was a conservationist with a profound respect for the environment.

Parker and his wife Shirley were happily married for 64 years, until her death in 2006. He is survived by his son and daughter, grandchildren and great grandchildren.

“Parker Conrad was a kind and gentle man, and with his wry smile, his charismatic personality and lively sense of humor, he will be sorely missed by the many thousands of lives he touched along the way,” said the company in a statement.

Now You Can Have it All. Introducing the all-in-one solution for any marine vessel.

We’ve added industry standard propellers, thrusters, and control systems to our full line of Cat® medium- and high-speed engines. Cat propulsion systems give you an optimized engine, generator, and propulsion package with every part covered and supported by Louisiana Cat.

Let a Louisiana Cat expert help you today.

866-843-7440 © 2017 Caterpillar. All Rights Reserved. CAT, CATERPILLAR, BUILT FOR IT, their respective logos, ”Caterpillar Yellow,” the ”Power Edge” trade dress as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission.

S12 Marine Log // July 2017

WWW.LOUISIANACAT.COM/PROPULSION

Bollinger delivers FRC 24 to USCG Bollinger Shipyards has delivered the USCGC Oliver Berry, the 24th Fast Response Cutter (FRC) to the U.S. Coast Guard. The vessel’s commissioning is scheduled for October 2017 in Honolulu.

“We are extremely pleased to announce the delivery of the latest FRC, the USCGC Oliver Berry,” said Bollinger President & CEO Ben Bordelon. “This FRC built by Bollinger Shipyards will be the first to be stationed at U.S. Coast Guard District 14 in Honolulu, Hawaii. Previous cutters have been stationed in Florida, San Juan, P.R., [and] Cape May, N.J.” Bordelon calls the FRC program “a model program for government acquisition” that has surpassed all historical quality benchmarks for vessels of this type and complexity.

“We are extremely proud that the Fast Response Cutters built by Louisiana craftsmen here at Bollinger Shipyards are having such a major impact on our nation’s security,” he said.

The 154 foot patrol craft USCGC Oliver Berry is the 24th vessel in the Coast Guard’s Sentinel-class FRC program, which is based on a proven, in-service parent craft design, the Damen Stan Patrol Boat 4708.

Each FRC is named for an enlisted Coast Guard hero who distinguished him or herself in the line of duty.

This vessel is named after Coast Guard Hero Oliver Berry.

Berry, a distinguished expert mechanic on CG aircraft, was lead instructor at the first U.S. military helicopter training unit established in 1946. He received a letter of commendation from the commandant, Adm. Joseph F. Farley for his contribution to a 1946 rescue of airliner crash victims in Newfoundland, which required the rapid dismantling, air transport and reassembly of Coast Guard helicopters.

Berry was commended for his meritorious service and the outstanding manner in which he performed his duties.

Austal Wins $584.2 Million LCS Contract

Austal reports that it has won a contract worth up to $584.2 million to build the Independence Class Littoral Combat Ship LCS 28 for the U.S. Navy.

In a stock exchange announcement, Austal said “the 127 meter frigate sized LCS 28 will be the 14th LCS constructed at Austal’s U.S. shipyard in Mobile, AL, and represents a continuing vote of confidence in Australia’s design and shipbuilding capability for large naval vessels.”

Austal CEO David Singleton said, “We

won this award following a direct competition with the Freedom Class LCS which says much for our cost efficiency on this program. Austal’s work on the LCS program at our advanced Module Manufacturing Facility (MMF) has seen efficiency gains of 20 percent with an ambitious target of 35 percent set for the end of the build cycle.”

Austal USA President Craig Perciavalle said, “We’re very proud to be awarded this contract in such a highly competitive environment. This demonstrates the Navy’s

confidence in Austal being a key component in building their 355-ship fleet, which is a testament to the hard work and dedication of our incredible employees.”

Austal continues to reduce cost and deliver on schedule having delivered two LCS ships in 2016 and set to deliver two more in 2017, all under the congressional cost cap.

This, along with the successful Expeditionary Fast Transport (EPF) program, positions Austal well with affordable solutions to rapidly and efficiently support the Navy’s desired fleet of 355 ships.

The Pentagon announcement of the award noted that the $584.2 million fixedprice-incentive firm target contract for the construction of an LCS “also includes options for the construction of additional LCS, class services, and post-delivery availability support. The Navy expects to release a competitive solicitation(s) for additional LCS class ships in future years, and therefore the specific contract award amount for these ships is considered source selection sensitive information.”

Serving Hawaii Is Our Business Pasha Hawaii’s dynamic shipping network and knowledgeable professionals are here to serve your supply chain needs. Pasha offers the broadest range of container and roll-on/roll-off services between Hawaii and the Mainland, with connections to comprehensive intermodal services nationwide.

Find out more at pashahawaii.com.

PHH-marinelog.5_horiz.indd 1

7/6/17 11:50 AM

July 2017 // Marine Log S13

Gulf Coast Headliner

Metal Shark Reels In A Big One Metal Shark’s hot streak continues. The Louisiana-based shipbuilder has announced that it has been selected by the U.S. Navy to build Near Coastal Pa t r o l Ve s s e l s ( N C P V s ) f o r Un i t e d S t a t e s p a r t n e r n a t i o n s t h ro u g h t h e Department of Defense Foreign Military Log 4.5 x 7.375 inch.pdf Sales (FMS)Marine program.

Metal Shark’s proposal 1

was selected by Naval Sea Systems Command from a field of six competing shipyards.

Under the terms of the contract—potentially worth up to $54 million—Metal Shark will build up to thirteen 85-ft Defiant Class welded aluminum cutters for the Dominican Republic, El Salvador, 5/29/17 2:36 PM Honduras, Costa Rica, Guatemala, and

Linking shores for your success OneBahri

S14 Marine Log // July 2017

www.bahri.sa

other U.S. partner nations.

In addition, Metal Shark will supply electro-optical infrared sensors, diagnostic equipment, in-country reactivation, crew familiarization, and test support to NCPV operators.

The vessels will be based on Damen’s Stan Patrol 2606 design, tailored by Metal Shark to suit the requirements of the NCPV mission. Missions for the NCPVs will include search and rescue, border patrol, police and customs duties, counter-narcotics operations and securing waters of economic importance.

“The NCPV award is the first result of a multi-year collaboration between Damen and Metal Shark,” said Metal Shark CEO Chris Allard. “The Damen team has consistently provided us with outstanding technical support, their designs are thoroughly proven in service across a range of markets, and their global service network has proven to be a very powerful selling feature. Metal Shark is eager to begin NCPV construction and showcase our capabilities as we quickly and efficiently build and deliver these state of the art patrol cutters.” “ Me t a l S h a r k h a s l o n g i m p r e s s e d us with their ambitious growth and their considerable eng ineer ing resources,” said Jan van Hogerwou, Damen Shipyards’ North American VP of New Construction. “Damen is proud to now become a part of the Metal Shark growth story as we work together to deliver this newest fleet of Stan Patrol vessels to military operators worldwide.”

The NCPV fleet will be built at Metal Shark’s Franklin, LA facility, which recently completed delivery of six high-speed passenger ferries for New York City’s NYC Ferry operated by Hornblower, and delivered the first six of 18 45-ft long patrol boats for the Vietnam Coast Guard.

ABS Founded in 1862, ABS sets the standard for safety and excellence as one of the world’s leading ship classification organizations. The ABS mission is to serve the public interest as well as the needs of its members and clients by promoting the security of life and property and preserving the natural environment. As classification continues to evolve, ABS assists owners and operators with tackling the most pressing technical, operational and regulatory challenges so the marine and offshore industries can operate with greater levels of safety, security and responsibility.

ABS ABS Plaza 16855 Northchase Drive Houston, TX 77060

T: (281) 877.6000 F: (281) 877.5976 www.eagle.org

Bahri Logistics One of the top 10 breakbulk carriers in the world, Bahri Logistics operates six (6) state-of-the-art multipurpose vessels; four (4) connecting the U.S., Saudi Arabia, Arabian Gulf, Indian subcontinent, Mediterranean and two (2) linking Northern Europe, Saudi Arabia, Arabian Gulf and the Mediterranean. Bahri is adding to its regular itinerary, a direct port call at Alexandria, Egypt to offer breakbulk and ro-ro service from North America into Alexandria and from Alexandria into the Middle East and India.

Bahri Logistics 400 East Pratt St.; Suite 400 Baltimore, MD 21202

T: (410) 625.7000 F: (410) 625.7050 www.bahri.sa

Louisiana Cat Louisiana Cat’s Power Systems Division is the authorized Caterpillar dealer for sales, service, parts, specialized engineering, manufacturing, and packaging for diesel and natural gas engines. They are conveniently located in Morgan City, Port Fourchon and Bossier City, with their Power Systems Headquarters in the Port of New Iberia. The New Iberia Facility is their engineering, manufacturing, and packaging center for Oil & Gas, Marine, and Electric Power Generation Solutions.

Louisiana Cat 3799 W Airline Highway Reserve, LA 70084

T: (985) 536.1121 F: (985) 536.4549 www.louisianacat.com

Metal Shark Established in 1986, Gravois Aluminum Boats LLC, and its government/commercial boat entity Metal Shark Boats are leading suppliers of custom boats for defense, law enforcement, and commercial entities. Key customers include the United States Coast Guard, Navy, Air Force, Army, foreign militaries, law enforcement agencies,

passenger vessel operators, pilot associations, fire departments, and other operators worldwide. Under the direction of its owner/operator Allard and Gravois families, Metal Shark has produced over 500 vessels in the past three years at its two fully self-contained South Louisiana production facilities. Metal Shark produces a wide range of custom monohull and catamaran vessels up to 250’.

Metal Shark 6814 E. Admiral Doyle Drive Jeanerette, LA 70544

T: (337) 364.0777 F: (337) 364.0337 www.metalsharkboats.com

THE PASHA GROUP Established in 1947, The Pasha Group is a family-owned, third-generation diversified global logistics and transportation company that provides ocean transportation for containers and rolling stock between the U.S. West Coast and Hawaii; port processing for finished and privately owned vehicles; stevedoring for vehicles, breakbulk and container cargos; auto hauling services throughout the contiguous U.S.; domestic and international relocation services; and international logistics management for general commodity and project cargoes.

The Pasha Group 4040 Civic Center Drive, Suite 350 San Rafael, CA 94903

T: (415) 927.6400 F: (415) 924.5672 www.pashagroup.com

Port of Galveston The Port of Galveston is one of Texas’ major seaports. As a selfsupported, enterprise funded Landlord Port with facilities and property approximating 850 acres on Galveston Island and adjacent Pelican Island, the Port facilitates the movement of a diverse mix of domestic and international cargoes and cruise passengers that deliver value to the region and the state. The Port serves the cargo, cruise and offshore oil and gas industries simultaneously.

Port of Galveston 123 Rosenberg Ave. Galveston, TX 77553

T: (409) 765.9321 F: (409) 766.6171 www.portofgalveston.com

W&O Founded in 1975, W&O is one of the world’s largest suppliers of pipe, valves, fittings as well as actuation and engineered solutions to the maritime and upstream oil & gas industries.

Serving a variety of customers, W&O operates a worldwide network of strategically located branches from its corporate headquarters in Jacksonville, Florida.

W&O 2677 Port Industrial Drive Jacksonville, FL 32226

T: (904) 354.3800 F: (904) 354.5321 www.wosupply.com July 2017 // Marine Log S15

Š marekuliasz/Shutterstock

LEADING THE WAY IN SUBCHAPTER M SOLUTIONS ABS provides fully integrated solutions to help owners and operators achieve and maintain Subchapter M compliance. As a USCG Recognized Organization and approved Third Party Organization, ABS offers auditing, surveys and USCG authorized plan review.

The ABS Nautical SystemsÂŽ software application NS Workboat supports all compliance options and comes pre-configured on a mobile tablet.

With more than 30 locations in the U.S. supported by a seasoned team of surveyors, auditors and engineers, ABS has the geographic coverage and experience to help industry meet Subchapter M requirements.

Contact us today to learn about or request ABS Subchapter M solutions: SubchapterM@eagle.org.

www.eagle.org

SAFETY | SERVICE | SOLUTIONS