June 2013 Marine Log Magazine

122nd Annual Yearbook & Maritime Review

arine oG M L Reporting on Marine Business & Technology since 1878

www.marinelog.com

JUNE 2013

Norway’s World View

Successful finance program supports maritime exports

The shipbuilding expertise of Fincantieri is unrivaled. With 21 shipyards on three different continents, nearly 20,000 employees, and a rich history of building more than 7,000 ships, Fincantieri ranks as the industry leader in technological innovation.

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contents

JUNE 2013 VOL. 118, NO. 6

departments 4 EDitOrial The secret of successful investing

7 WatErWayS cOlUMn Good things come to those who wait

8 UPDatE • Steaming West • Fire on Grandeur of the Seas could cost millions • Non-Tank Vessel Response Plans top the agenda 14 WaSHingtOn U.S. Coast Guard unveils Arctic strategy

44 nEWSMakErS W&O restructures leadership team 45 tEcH nEWS Shipbuilding robots from Hyundai

48 cOntractS

Leevac wins contract for MPSVs

25

Norwegian companies like family-owned Kleven Verft are bringing shipbuilding back to Norway

52 SHiPbUilDing HiStOry The Stone Boat Yard: Longevity

features 15 Financing

29 SHiPbUilDing

System of export credit guarantees bolster maritime clusters

Increasing offshore oil and gas production drives orders

How norway is succeeding where others have failed 17 OP-ED

Upholding the Jones act

Remaining vigilant against attempts to weaken the Jones Act

23 SHiPyarD SaFEty

Oil boom energizes shipbuilding 33 EnvirOnMEnt

looking for clarity on ballast water management

USCG, EPA move ahead with implementing BWM requirements

More OSHa rulemaking on the horizon

37 crUiSE SHiPPing

25 OFFSHOrE

43 it & SOFtWarE

U.S. shipyards are embracing a safety culture

norwegian yards gear up

Yards prepare for the rush of ship construction and repair capacity

2 MARINE LOG June 2013

visit us at MarineLoG.coM

raising the bar

Cruise lines enhance safety standards and fleet image

Enhancing the operator’s experience

Innovative software solutions can help advance safety and efficiency

On the cover: An aerial shot of Norway’s Kleven Verft shipyard

JHSV-1 SPEARHEAD The U.S. Navy’s next generation high-speed catamaran, multi-use platform.

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NOW HIRING :: Naval Architect :: Shock Engineer :: Weld Engineer :: Production Improvement Engineer :: Test Engineer :: Project Coordinator

For a listing of current openings and to apply, visit www.austaljobs.com.

WESTON HAWKINS Naval Architect

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Austal is an Equal Opportunity Employer

:: Aluminum Structural Welders :: Pipe Welders :: Production Managers - Pipe and Electrical :: Planners :: Accuracty Control Inspector

editorial

The secreT of successful invesTing You don’t stay in business very long by making foolish investments. The longevity and success of any company depends on the ability of the company’s leadership to react quickly to changing market conditions.

For McAllister Towing & Transportation that business plan has remained virtually unchanged for almost 150 years: Take care of customers, take care of your employees and reinvest resources back into the business. Presenting as the keynote speaker at our Tugs & Barges Conference last month in Stamford, CT, Buckley McAllister, President of McAllister Towing & Transportation, recounted his company’s humble beginnings, which started when his great, great grandfather James McAllister immigrated to the U.S. from Northern Ireland to work as a deepsea mariner. Today, McAllister Towing & Transportation operates tugs in 12 ports

on the U.S. East Coast, as well as the Bridgeport and Port Jefferson Steamboat Co., which runs a ferry service between Connecticut and Long Island, NY. Like other domestic tug operators in the U.S., McAllister Towing has invested in its business based on the economic rules set by the Jones Act. And as far as those who would like to see the Jones Act repealed, Mr. McAllister says, “Suggesting that international vessels should be allowed to work in the domestic trades creates a climate that is not very encouraging for further investment in a resilient domestic maritime industry.” Any kind of modification or weakening of the Jones Act would clearly change the investment strategy for domestic vessel operators.

McAllister plans to keep investing. At the conference it announced it was working with the Maine Port Authority on the design

John R. Snyder, Publisher & Editor jsnyder@sbpub.com

of a containerized Articulated Tug Barge that would move cargo from Portland, ME, to Brooklyn, NY. You can read more of Mr. McAllister’s comments in our Op-Ed this month, Upholding the Jones Act starting on page 17.

For our cover story this month, contributing editor Paul Bartlett uncovers the secret to the success of Norway’s marine and offshore cluster. Norway has been successful in keeping its ship operators, shipyards, designers and marine equipment suppliers busy and profitable despite a cost base that is higher than the European competition.

How? A key component of that prosperity is a financing mechanism of export credit guarantees from the Norwegian Guarantee Institute for Export Credits. Read more about it in How Norway is succeeding where others have failed on page 15.

MaritiMe trivia Trivia Question #3 In the old days, why were upside down hatch covers considered bad luck?

The first sailor or lubber who correctly answers the Maritime Trivia question will receive a color J. Clary collector print. Email your guess to: marineart@jclary.com

Captain Claude McKernan, Manager, Bald Head Island Transportation, Inc., was the winner of last month’s question, “Where is zero sea level officially registered in North American waters?” Answer: At the mouth of the St. Lawrence River at Rimouski, Quebec

4 MARINE LOG June 2013

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We own and operate USCG approved liquid vacuum trucks, a 10,000 bbl Tank barge for marine pollution (Marpol) waste, a 10,000 bbl tank barge for carrying industrial wastewater, a 10,500 bbl tank barge for carrying clean chemicals and a 1800 horsepower Tug for removal and transportation of various material.

Intergulf can accept the following materials • MARPOL Annex I and II Wastes • Category X Tank Washings • Engine Room Sludge • Tank Washings / Cargo Washings • Hazardous Products using preapproved disposal facilities • Used Oil • Oily Bilge Water / Oily Ballast Water • De-Bunkering • Off-Specification Products and Fuels • Gray and Black Water • Hazardous and Non-Hazardous Waste

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“Cost and Convenience Are Not Considerations When Addressing Safety”

(281) 474-4210 www.intergulfcorp.com • info@intergulfcorp.com

MarineLoG JUNE 2013 VOL. 118, NO. 6 iSSn 08970491 USPS 576-910

events

Digital library Stay up-to-date on the latest operational and technological trends in the inland and coastal tug and barge markets.

Access the presentations from the

Tugs & Barges Conference & Expo

PreSiDenT arthur J. Mcginnis, Jr. amcginnis@sbpub.com

inTernaTionaL SaLeS DireCTor Louise Cooper lcooper@sbpub.com

PUBLiSHer & eDiTor-in-CHieF John r. Snyder jsnyder@sbpub.com

naTionaL SaLeS DireCTor Jeff Sutley jsutley@sbpub.com

aSSoCiaTe eDiTor Shirley Del valle sdelvalle@sbpub.com

regionaL SaLeS Manager vanessa Di Stefano vdistefano@sbpub.com

ConTriBUTing eDiTor William B. ebersold wbeber@comcast.net

SaLeS rePreSenTaTive korea & CHina Young-Seoh Chinn jesmedia@unitel.co.kr

ConTriBUTing eDiTor Paul Bartlett pbmc@gotadsl.co.uk WeB eDiTor nicholas Blenkey nblenkey@sbpub.com CreaTive DireCTor Wendy Williams wwilliams@sbpub.com arT DireCTor Sarah vogwill svogwill@sbpub.com MarkeTing DireCTor erica Hayes ehayes@sbpub.com

CLaSSiFieD SaLeS Jeanine acquart jacquart@sbpub.com ConFerenCe DireCTor Jane Poterala jpoterala@sbpub.com ConFerenCe CoorDinaTor Michelle M. Zolkos mzolkos@sbpub.com CoLUMniSTS/ConTriBUTorS Buckley Mcallister, Mcallister Towing & Transportation ian Bennitt, SCa Hendrik Bruhns, Herbert-aBS Tim Colton

ProDUCTion DireCTor Mary Conyers mconyers@sbpub.com

Topics include:

– Financing your fleet – Environmental concerns – Hybrid propulsion – Leveraging LNG technology – Security and safety – ASD Tug construction – Articulated Tug Barges – Crew recruitment and retainment – Oil exports and the Jones Act market

Purchase available presentations for $250 Contact us at conferences@sbpub.com or 212-620-7208 to purchase access to these presentations and more

6 MARINE LOG June 2013

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inland waterways

good things come to those who wait Good things come to those who wait.

In this case “those” would be the nation, its shippers, its farmers, producers and consumers. The “wait” would be six years. And the “good things” would be the Senate passage, by a vote of 83-14 on May 15, of a Water Resources Development Act (WRDA), last reauthorized in 2007.

The wait has been long—as the nation’s critical inland waterways infrastructure continued to erode without efficient funding levels for completing construction of locks and dams, or for major rehabilitation of the aged system. But with collaborative, bi-partisan efforts which spanned months, the Senate should be applauded for passage of a strong WRDA bill. WCI expressed its gratitude to Senate Environment & Public Works Chairman Barbara Boxer (D-CA) and Ranking Member David Vitter (R-LA) for their work to draft, manage and pass this long-overdue water resources bill, S. 601. Among its many provisions, the WRDA bill contains a number of critically important elements related to the funding of inland waterways lock and dam infrastructure. Fifty-seven percent (57%) of the locks and dams on the nation’s inland waterways system have exceeded their

economic design life expectancy.

WCI underscored its appreciation for the inclusion in WRDA of several provisions of the RIVER (Reinvesting In Vital Economic Rivers and Waterways) Act—S. 407— introduced by Senator Bob Casey (D-PA), and co-sponsored by Sen. Mary Landrieu (D-LA), Sen. Amy Klobuchar (D-MN), Sen. Lamar Alexander (R-TN), Sen. Tom Harkin (D-IA), Sen. Al Franken (D-MN), and Sen. Pat Roberts (R-KS). They are: • Changing Inland Waterways Trust Fund (IWTF) cost-sharing for the overbudget Olmsted lock and dam project, with the remainder of the cost of the project to be paid 100% by general treasury revenue.

Removing Olmsted from the Trust Fund will free up around $750 million in the Fund to complete other critical priority navigation projects on the system.

• Increasing the threshold for major rehabilitation, from the current $14 million to $20 million, to bring additional relief to the Trust Fund. Only around 300 towboat operators pay a user fee of 20-cents-per-gallon into the Trust Fund that is matched by the U.S. Treasury General Funds to pay for half of the cost of new construction and major rehabilitation on the waterways system.

• Prioritizing navigation projects and reforming Corps of Engineers’ delivery of projects on time and within budget. Prioritization is based upon risk of failure and benefits to the nation with an emphasis on finishing projects already underway and assuring that funding is available to efficiently complete work. Ensuring that future Corps’ estimates for project costs have a confidence level of at least 80% is also included.

Passage of increased funding for inland port dredging to be released from the Harbor Maintenance Trust Fund was also welcomed by the industry in the final WRDA bill.

Not included in the Senate WRDA bill is the industry-supported provision to increase the diesel fuel user fee. The Constitution requires that revenue enhancement measures originate in the House of Representatives, therefore this provision must

Michael J. Toohey, President/CEO, Waterways Council, Inc.

originate in the House version of WRDA or be added to some other revenue measure.

While the industry awaits action in the House, it appears to be a priority there as well, under the leadership of new Transportation & Infrastructure Chairman Bill Shuster and Water Resources and Environment Subcommittee Chairman Bob Gibbs. Final passage of a WRDA bill will meaningfully modernize the nation’s inland waterways transportation system. It will also create an estimated 500,000 American jobs, according to Chairman Boxer, increase exports, keep our nation competitive, and inject billions of dollars into the U.S. economy as we continue to recover from recession.

The House companion bill to the RIVER Act is H.R. 1149, WAVE 4—Waterways are Vital for the Economy, Energy, Efficiency, and Environment Act of 2013.

Congressman Ed Whitfield (R-KY) introduced the bill on March 14, with lead Democratic co-sponsor Congressman Daniel Lipinski (D-IL). Other bi-partisan co-sponsors include Congressman Bill Cassidy (R-LA), Congressman Spencer Bachus (R-AL), Congressman Bill Foster (D-IL), Congressman Rodney Davis (R-IL), Congressman Pete Olson (R-TX), Congressman Jo Bonner (R-AL), Congressman William Enyart (D-IL), Congresswoman Terri Sewell (D-AL), Congressman Mike D. Rogers (R-AL), Congressman John M. Shimkus (R-IL), Congresswoman Betty McCollum (D-MN), Congressman Dave Loebsack (D-IA), Congressman Matthew Cartwright (D-PA), Congressman Ron Kind (D-WI), Congressman Bill Johnson (R-OH), Con g re s s wom a n Ta m my D u ck wor t h (D-IL), Congressman Robert Aderholt (R-AL), Congressman Sam Graves (R-MO), Congressman Randy Hultgren (R-IL), and Congressman Aaron Schock (R-IL).

It is good to see Washington coming together with consensus for our nation’s waterways infrastructure. Let’s keep pushing toward final passage of WRDA in the House and looking toward the future of our country’s waterways transportation with confidence, once again.

June 2013 MARINE LOG 7

UPDATE biz notes diamond offshore inks deal with hhi for udW semisubmersible

Steaming WeSt the american empress makes her way to the Pacific northwest The AmericAn Queen STeAmboAT Company is heading west. After the successful debut of the American Queen steamboat on the Mississippi River last year, the Memphis, TN-based operator has purchased the Empress of the North, a 360 ft diesel-powered sternwheeler, from the U.S. Maritime Administration (MARAD) for an undisclosed amount. The vessel, renamed the American Empress, will operate on the rivers of the Pacific Northwest beginning April 2014, and travel between its homeport in Portland, OR and Clarkston, WA. Originally built in 2002 by Nichols Brothers Boat Builders and operated up until 2008

by Majestic America Line, the American Empress will undergo an extensive refurbishment before it’s launched next April. At press time, there was no information available on what yard would perform the refurbishment.

Featuring five decks and accommodation for up to 223 guests, the American Empress is expected to follow the American Queen’s trail by bringing luxury and opulence to the Pacific Northwest. American Empress will serve as the largest overnight riverboat west of the Mississippi River. The vessel will sail nine-day journeys on the Columbia River and Snake River.

“The American Queen has ushered in a rebirth of U.S. river cruising, welcoming thousands to discover the heartland of the United States and its iconic port cities,” says Ted Sykes, President and COO of the American Queen Steamboat Company, a subsidiary of HMS Global Maritime. “Now the American Empress will continue that tradition as an ambassador to the Pacific Northwest, a region equally rich in American and natural history.”

Fire on Grandeur oF the SeaS could coSt millionS The mAy 27 fire AboArd the Grandeur of the Seas will result in a reduction in earnings per share of $0.10, net of insurance, according to Royal Caribbean Cruises Ltd. Based on its most recent quarterly filing, Royal Caribbean has about 219.41 million outstanding shares. That would mean the financial impact is in the neighborhood of $21.94 million.

The fire broke out in what the cruise line describes as “an industrial area on the aft of the ship.” Royal Caribbean will take the vessel out of service and expects that it will take about six weeks to complete the repair efforts.

“The extent of the financial impact was relatively high because the affected sailings were during the premium summer season,” said Jason Liberty, senior vice president and CFO. 8 MARINE LOG June 2013

Royal Caribbean is providing refunds along with travel expenses incurred for passengers who booked on the May 31 sailing.

The ship is expected to return to service for its July 12, 2013 sailing date.

“We are gratified that no one was hurt and that the safety and comfort systems performed exactly as designed,” said Adam Goldstein, President and Chief Executive Officer of Royal Caribbean International.

“I extend my appreciation to our crew who performed so well, as well as to our guests who have been cooperative, understanding and highly complimentary of the shipboard team throughout.”

At press time the Grandeur of the Seas was being moved to Grand Bahamas Shipyard where repairs will be carried out.

Houston-based Diamond Of f shore Drilling, Inc. inked a deal with Korea’s Hyundai Heavy Industries Co., Ltd. to build a new Moss CS60E design harsh environment semisubmersible drilling rig. The 10,000 f t dynamically positioned rig is expected to be delivered November 2015. Projected capital cost of the unit including spares, commissioning and shipyard super vision is approximately $755 million.

The drilling rig, measuring 123 m in length and 96 m in width, can operate in waters 3,000 m deep with a drilling range of 12.2 km from the sea’s surface.

Diamond Offshore also announced that a three-year drilling contract has been entered into with a subsidiary of BP plc to utilize the rig for initial operations off the coast of South Australia.

The initial operating dayrate under the drilling contract is $585,000 per day and is subject to upward adjustment for certain increased operating costs and equipment modifications. “ We are plea sed to have been selected by BP for this important work,” commented Larry Dickerson, Diamond Of fshore’s CEO. “Our company, and its predecessors, have been continuously active in Australia since 1982, drilling over 600 wells; far more than any other drilling contractor. We believe that this market-leading experience should enable Diamond Offshore to play a key role in our customer’s exploration efforts and we look forward to this opportunity.”

The new Moss CS60E rig will be delivered Nov. 2015

UPDATE

FirSt rollS-royce environShip iS delivered The firsT ship to be built to the RollsRoyce Environship NVC 401 LNG design has been delivered to Norway’s Eisdvaag AS. The 17.5 m Eidsvaag Pioner was built by Vard’s Akura, Norway shipyard.

Rolls-Royce says that Environship design, The Eidsvaag Pioner is the first ship to be built to the Rolls-Royce Environship NVC 401 LNG design

10 MARINE LOG June 2013

which is adaptable for different ship types, can reduce CO2 emissions by up to 40 percent, via a combination of cutting edge marine technology that includes a wavepiercing bow and an engine powered by Liquefied Natural Gas (LNG).

The vertical bow shape and hull form reduces resistance by up to eight percent and allows the ship to maintain its speed without burning additional fuel.

The Eidsvaag Pioner features the RollsRoyce Promas propulsion system that integrates the rudder and propeller to improve efficiency; a Rolls-Royce Bergen B-Series engine powered by LNG; and a hybrid shaft generator to optimize the use of electrical power and the hull design.

“The Environship has now moved from concept to reality with the successful delivery of the first ship,” says Neil Gilliver, President, Merchant, Rolls-Royce. “We firmly believe that the only way to make significant reduction in emissions and fuel costs is to combine a range of innovative technologies into one ship. Environship does just that, by bringing together complementary technologies as part of a highly efficient propulsion system.”

There are currently two larger cargo ships being built for the Rolls-Royce Environship range. Under construction in China, the ships will be delivered to Norway’s Nor Lines.

Inland • Coastal • offshore • deepsea

Non-Tank Vessel Response Plans Top the Agenda PrePArATionS Are underwAy for what promises to be the marine salvage event of the year. The 2013 National Maritime Salvage Conference & Expo, sponsored by the American Salvage Association (ASA) and MARINE LOG, will be held September 9-12, 2013 at the Key Bridge Marriott Hotel, Arlington,VA. One issue on the conference agenda will be the new regulations for Non-Tank Vessel Response Plans (VRPs). On March 9, 2013, the OPA 90 Vessel Response Plan regulatory package outlining requirements for non-tank vessels trading in U.S. waters was approved by the Office of Management and Budget (OMB), jumping the last hurdle before publication on or around June 9, 2013. The new regulations address the need to identify appropriate response resources, including diving, salvage, firefighting or lightering equipment and personnel, within VRPs. Questions on what this means for response to non-tank vessel casualties will be examined at the conference.

ASA PreSidenT Tim beAver commented, “This is an important event for the maritime salvage community, where issues of major concern to the industry will be discussed. Furthermore, with the advent of the Non-Tank Vessel Salvage and Marine Firefighting regulations to be published as early as June 9 and possibly implemented as early as this year end, the conference will hold particular value for non-tank vessel owners and operators.”

According to T&T Salvage, more than 16,000 ships currently operating in and out of U.S. waters will be required to update their Vessel Response Plans by contracting with a qualified salvor.

For the process, most vessel owners should carry out in-depth vetting and evaluation of potential salvors to include review of contract terms, equipment inspection to determine whether it is owned or rented, presence in the U.S., existing clients, personnel qualifications and experience with USCG, among other criteria. “oPA 90 regulATionS place strict liability on the shipowner himself and as such it is critical for them to diligently evaluate and select the best contractor, and not just go by third-party recommendations or fancy

websites,” said Mauricio Garrido of T&T Salvage. Garrido, the immediate Past President of the ASA, is serving as the Chairman for the conference. uScg regulATionS concentrate on the need for a credible salvage and marine firefighting response capability throughout U.S. waters. Whether the crisis is caused by human error, act of nature, or terrorist attack, the ability to deploy the proper equipment and personnel to a casualty is paramount not only to environmental protection and homeland security but also to mitigate potential liability exposure.

Salvage under OPA 90 is merely setting forth to plan for a casualty. Realistically, the manner in which salvage is executed will not change under the new rules; however, the manner in which shipowners and underwriters must plan for salvage has changed dramatically. congreSSmAn duncAn hunTer, Chairman of the House Subcommittee on the Coast Guard and Marine Transportation, is invited to deliver the opening keynote address for the conference. To see the complete program, including a list of speakers, and to register online visit www.marinelog.com/events

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June 2013 MARINE LOG 11

UPDATE mitSui o.S.K. lineS inKS lng tranSport deal Japan’s Mitsui O.S.K. Lines, Ltd. recently signed a 12-year contract to transport Liquefied Natural Gas (LNG) for Osaka Gas Co., Ltd. and Kyushu Electric Power Co., Ltd. As MOL has concluded the contract with Osaka Gas and Kyushu Electric Power, it will soon sign a contract with Japanese shipbuild-

Inland • Coastal • offshore • deepsea

er Mitsubishi Heavy Industries Co., Ltd. (MHI) for the construction of a 155,000 m 3 LNG carrier.

Under the long-term contract, which starts in 2020, MOL will transport 800,000 tons of LNG for Osaka Gas and 300,000 tons per year for Kyushu Electric Power.

The LNG carrier will be used to transport LNG purchased by Osaka Gas and Kyushu Electric Power from the Australia Ichthys

LNG project. This contract marks the first time that an LNG carrier wholly owned by a Japanese shipping company will serve on a joint transport service for electric power and gas companies in Japan.

LNG has drawn attention as an environmentally friendly energy resource. New largescale projects are being planned in North America and East Africa, setting the stage for increased demand for LNG transport.

StarS align For canadian fleet renewal cAnAdA’S greAT lAkeS fleeT is being rejuvenated with the addition of ships by three major carriers, Canada Steamship Lines (CSL), Algoma Central and Fednav.

According to CSL President Rod Jones, “in 2010 the stars aligned” for Canadian owners to start their newbuilding spree, with the removal of a 25 percent import duty on new ships, a rise in the value of the Canadian dollar and a collapse in world shipbuilding prices.

CSL’s newbuilding program includes four Trillium class self-unloading lakers and two laker bulkers. The first Trillium self-unloading laker, Baie St. Paul, has been operating in the Great Lakes since December 2012 while the second, Whitefish Bay, set sail from Chengxi Shipyard in Jiangyin, China, for Montreal on May 16.

Algoma Central Corporation is building a series of two Equinox class gearless bulk carriers and four self-unloading Equinox bulkers at the Nantong Mingde Heavy Industries shipyard in Nantong, China.

Another two Equinox gearless bulkers will be owned by the Canadian Wheat Board but will be operated and managed by Algoma. fednAv AddS AnoTher SiX Last month, privately held Fednav Limited, announced that it is adding six 34,000 dwt lakers to its newbuilding program in Japan.

Ordered with Sumitomo Corporation and Oshima Shipbuilding, the environmentally advanced vessels are adapted to the dimensions of the St. Lawrence Seaway and are specially equipped for navigating in ice.

The vessels will share the environmental characteristics of the previous six Lakers ordered at the Oshima shipyard: they will consume 28 percent less fuel and produce 28 percent less emissions than a previous series of vessels built by Oshima Shipyard for Fednav 10 years ago.

They will carry the DNV “Clean-Design” and will be delivered between May and November 2015.

12 MARINE LOG June 2013

inside washington

U.S. Coast Guard unveils Arctic Strategy With interest groWing in exploiting its abundant natural resources, as well as new navigation routes opening up, the Arctic is fast becoming what the moon was to the space race in the 1960s. The U.S., of course, would like to ensure its claims to the billions of barrels of oil, minerals and fisheries. The U.S. is the only Arctic nation that has not yet signed onto the United Nations Convention on Law of the Sea. Last month, the U.S. Coast Guard announced its Arctic Strategy at the Center for Strategic and International Studies, a bipartisan foreign policy think tank in Washington, DC. In remarks at the event, ADM Robert Papp, Commandant of the U.S. Coast Guard, outlined the reasons for the Coast Guard unveiling its strategy.

“The Arctic Ocean is rapidly changing,” said the Commandant, “from a solid expanse of inaccessible ice fields into a growing navigable sea, attracting increased human activity and unlocking access to vast economic potential and energy resources.”

The second objective concerning governance will require the strengthening of international legal regimes, safeguarding the environment, preserving living marine resources and protecting U.S. sovereignty rights.

The third objective is to promote the Coast Guard as an expert and experienced resource for partners, leverage domestic and international partnerships, and support national approach for Arctic planning.

For its mission, the Coast Guard will need more than just two operational icebreakers, the medium icebreaker Healy, and the powerful but aging Polar Star. It is only in the process of developing and analyzing the requirements for the next generation heavy icebreaker. Congress needs to fund it.

In closing the Admiral emphasized that there is a “national imperative in the Arctic, driven by an emerging maritime frontier and the promise of opportunity and prosperity…as well as risk. We all are called to action to meet that imperative.”

“The economic promise of oil and gas production in the Arctic is increasingly attractive as the supply of energy from traditional sources will struggle to meet demand. In the past four years, we’ve seen well over a 100 percent increase in traffic through the Bering Strait, and one million tons of cargo was shipped through the region last year. In addition, more than 50 percent of America’s fish stock comes from the Exclusive Economic Zone off the coast of Alaska.”

The Alaska Arctic has the potential to produce billions of barrels of oil. Right now, however, things are in a holding pattern until federal regulatory standards are straightened out.

The Coast Guard’s Arctic Strategy outlines three strategic objectives for the next 10 years in the region: Improving awareness; modernizing governance and broadening partnerships.

The first objective is to understand the operating environment, its challenges, and the impact from increased activity.

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FINANCING

Norway’s Kleven Verft has contracts to build more than 15 vessels valued at over $1.37 billion

HOW NORWAY IS SUCCEEDING WHERE OTHERS HAVE FAILED Export credit guarantees bolster maritime clusters

N

orway’s pragmatic application of cluster theory in the marine and offshore sectors is proving a remarkable success.

Despite a cost base that is hard to imagine, the Norwegians are succeeding where most other Europeans have failed. From innovative ship designers to busy shipyards, and from profitable ship and offshore operators to leading marine equipment suppliers, Norway’s marine and offshore clusters provide undeniable evidence that where there’s a will—and a pocketful of krone—there’s a way.

A key feature of the clusters is a strong financial component. Of course, northern Europe has its own heavyweight shipping banks including DNB Nor and Nordea, and at a time when many other ship finance institutions are shrinking their portfolios or selling out completely, it is still very much business as usual in Norway.

However, the country also has what is arguably the world’s most successful system of export credit guarantees which enable both foreign and Norwegian owners whose ships trade internationally to benefit indirectly from Norway’s “AAA” sovereign debt rating. This, in turn, keeps all parts of the clusters busy and ensures a steady stream of orders at Norway’s specialist offshore builders.

The Norwegian Guarantee Institute for Export Credits (GIEK) is more than 50 years old, but in recent years, a strategy of portfolio expansion has met with considerable success. The statistics speak for themselves. It does not actually lend any money but has issued

By Paul Bartlett, Contributing Editor

guarantees in support of NOK 22 billion ($3.8 billion) worth of shipbuilding contracts, more than half for the VARD group of yards, but also for Ulstein and Kleven.

Between 2004 and 2012, the value of its guarantees grew from NOK 13 billion ($2.2 billion) to no less than NOK 77.5 billion ($13.3 billion). Particularly strong growth has been achieved in the offshore sector and as of December 31, 2012, GIEK held mortgages on 173 vessels.

GIEK’s guarantee system, based on OECD terms and conditions, is similar to schemes operating in many other countries, but the fact that Norway still has thriving vessel design, construction, marine equipment and shipowning sectors means that the guarantees can be far more extensively used than elsewhere. The system works by the provision of guarantees, on behalf of the Norwegian Government, to foreign buyers, thereby enabling Norwegian companies to obtain competitively priced financing and thus secure export contracts.

The guarantees are available not only to support foreign buyers, but also for Norwegian ship and offshore operators whose vessels trade internationally. They are also available to support the financing of Norwegian designs built in overseas yards, and the supply of Norwegian equipment to such facilities.

The scheme is potentially interesting for U.S. owners, particularly the operators of high-end offshore vessels deployed outside June 2013 MARINE LOG 15

FINANCING can continue to stay one step ahead of their comof the Jones Act trades. As the quest for tomorpetition in Asia. row’s energy resources moves further offshore However, apart from the builders themselves, into deeper and more difficult conditions, more Norway has a thriving offshore ship design sector. sophisticated subsea construction, inspection, Many offshore vessels currently under construcmaintenance and repair (IMR) and light well tion in China and Vietnam, for example, are being intervention vessels will be required, experts point built to Norwegian designs. out—just the vessels in which Norway’s offshore Elsewhere, GIEK has recently made available yards specialize. a second $1billion facility for Petrobras after Recent examples of GIEK guarantees relatthe first one billion had been used up by the ing to international orders include $722 million state-owned energy major in the purchase of of Norwegian equipment supplied for three $575 Norwegian equipment. And there is certainly no million drillships ordered by John Frederiksen’s shortage of additional guarantee support, should Seadrill at Samsung; six seismic research vessels of it be required.

Ulstein design, built at Drydocks World Dubai for Wenche Nistad, GIEK CEO What is proving a constraint right now, NisOslo-listed Polarcus; and the Ocean Intervention tad points out, is the availability of capital which GIEK guarantees III, a high-end IMR vessel built by a joint venture between Edison support. Eksportkreditt Norge AS was set up by the Norwegian GovChouest and Island Offshore. Marathon Oil and Odebrecht Drilling ernment last year to provide loans for export financing in the form Services have also taken advantage of the export credit scheme.

Wenche Nistad, GIEK’s Chief Executive Officer is keen to empha- of state-subsidized OECD-term loans. But more funding sources are size the central role that GIEK plays within Norway’s marine and required. Nistad believes that access to new capital provided by life insurers, pension and securities funds would improve the terms on offshore clusters. And she stresses the importance of GIEK’s role in which exporters can access capital. the wake of the financial crisis. GIEK’s door stayed open just as many As the world’s ship construction industry moved inexorably eastfinancial institutions were closing theirs, she explains.

Offshore owners and operators within the region confirm the vital wards over recent decades, few would have been brave enough to predict that Norwegian designers and manufacturers would still role that GIEK has played in supporting the thriving marine and have a seat at shipbuilding’s top table. The strength of the country’s offshore businesses on Norway’s west coast. The result is a bunch of marine and offshore clusters is a key element in this success, and a specialist shipyards, mostly with healthy orderbooks, building some of the world’s most sophisticated offshore vessels and, in many cases, healthy mix of co-operation and competition should ensure their sound future. ■ investing in new technologies and new facilities to ensure that they

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op-ed

Upholding the Jones Act

By Buckley McAllister

Industry needs to be vIgIlant agaInst attempts to weaken, repeal law

M

cAllister Towing was founded in 1864 by my great great grandfather, James McAllister. Like so many other immigrants, he came to this country to flee a distressed homeland and find opportunity in America.

Working as a deep sea mariner, he was able to purchase his own small sail lighter. In the days before bridges and tunnels, hundreds of similar vessels moved barrels or bulk cargo around New York harbor.

Family lore is that James was a pretty tough guy and had a knack for overcoming setbacks. If someone tried to hustle him to get a cut of the cargo he was transporting, he would go straight to fisticuffs. That level of dedication to the customer certainly helped him win business.

Many of his first employees literally were family, brought over from County Antrim in Northern Ireland. Cargo would be passed from family member to family member. Before long, the McAllister family had earned a reputation for reliable maritime transportation.

Whatever money was made in the business went back into the business. By the end of his life in 1916, James McAllister had amassed a fleet of tugs, barges, derricks and passenger carrying sidewheelers.

The business plan has stayed pretty much the same ever since: Take care of your customers, take care of your employees, and reinvest resources back into the business. Today we operate tugs in 12 ports up and down the East Coast of the United States, we run the Bridgeport and Port Jefferson Steamboat Company, and our company boasts a number of second and third generation employees.

To be resilient, we need to be prepared and that costs money. Real resiliency means investment in vessels and infrastructure, workforce

development, and planning for how to deal with contingencies. Our long term customers expect us to be resilient, and we need to deliver a resilient service to them. We are investing heavily in technologies and vessels that will meet growing transportation needs. For us, that means investing in Jones Act equipment and Jones Act personnel.

But if we are going to get a return on investment in the U.S. merchant marine industry, we will need to be able to rely on the Jones Act setting the economic rules for that industry.

Just to step back for a moment, what I am calling the Jones Act relates back to the Merchant Marine Act of 1920. During World War One, it became clear that the U.S. needed to do something to assure that it would have domestic maritime transportation capacity available in times of crisis. In the interests of national security, the law put legal structures in place to strengthen the domestic maritime industry in order to support U.S. commerce and serve as a military auxiliary in time of war or national emergency. The Jones Act contained a balance of seafarers’ rights, workers’ compensation, and requirements that vessels in domestic trade be built and maintained in the United States, owned by Americans, and crewed by Americans.

The Jones Act sets the economic rules for the domestic maritime transportation marketplace. Ultimately, it is a law to assure the resiliency of our country’s merchant marine.

I have sympathy for businesses in the international trades, which are going through one of the worst business cycles in living memory.

Technological advancements combined with the global economic downturn have radically changed the international market. Ships June 2013 MARINE LOG 17

op-ed have gotten much bigger and capacity has grown faster than cargo volumes. Investments that looked smart five years ago have not turned out as expected. Shipyards are building vessels for which there is no gainful employment. Insolvencies are widespread.

Excess tonnage is trading at rates that are not sustainable. But I do not believe that this means foreign vessels should be allowed to conduct business in domestic U.S. markets, as some politicians and commentators are

saying. Suggesting that international vessels should be allowed to work in the domestic trades creates a climate that is not very encouraging for further investment in a resilient domestic maritime industry.

For instance, Senator John McCain sponsored a bill in 2010 to repeal the Jones Act, and hasn’t given up on the issue. As a former Naval officer, he should well appreciate the need for the domestic merchant marine.

But in September 2012, McCain was quoted

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Buckley McAllister, President, McAllister Towing & Transportation

by the Wall Street Journal saying that thousands of foreign ships put into American ports and don’t present a problem for our national security. Therefore, he claims that the Jones Act is just protectionism for the U.S.-flag shipping industry and unions.

As I understand his argument, any restraint on going with the lowest cost provider interferes with markets doing things as efficiently as possible and should be struck down. The same argument could be used to strike down a large number of laws including those on immigration, safety and the environment. Speaking as a Jones Act operator, it is difficult to make long term investments in high cost vessels and an American workforce if these may be replaced with cheaper alternatives at some point in the future.

Even if the Jones Act is not completely repealed, we need to be vigilant about situations where the Jones Act is bypassed or weakened. And these threats aren’t just a partisan issue.

Back in 2011, oil and gas prices increased to the point that they became a political issue. In an effort to stabilize the market, the Obama Administration released oil from the Strategic Petroleum Reserve. To the shock and dismay of the U.S. merchant marine industry, the Administration coupled this with a decision to grant a waiver of the Jones Act for delivery of the released oil.

While the initial waiver was scaled back, in the end, 46 individual waivers of the Jones Act were granted to allow foreign ships to transport this oil to American ports. When the New York Times looked into the waivers, the White House’s explanation was that the dozen or so oil companies and traders that bought the oil found it faster and more economical to move the oil on 500,000-barrel capacity foreign tankers rather than on American coastal barges.

It is pretty obvious that transportation would be cheaper on vessels that don’t pay U.S. taxes or comply with U.S. immigration and labor laws. It is true that the U.S. market does not support many large tankers, but waiving the Jones Act certainly won’t encourage their construction. While at least

op-ed one U.S. vessel was used in the transport, the jobs created by the oil release largely went to foreign flag operators. It is ironic that this release of oil was purportedly authorized to help our nation’s economy, but the law was waived to allow foreign companies to get the economic benefit of the transportation.

On Wall Street, the anti-Jones Act chatter continues. On CNBC this past February 25, Jim Cramer said on Mad Money that there is no economic reason for the Jones Act other than to protect a few domestic jobs. Well, as someone who invests money in training U.S. licensed crews and building U.S. flag vessels, let me tell you that there are very good economic reasons for the Jones Act: The Jones Act is there to make sure that the vessels following the rules for domestic trade are the ones that get domestic work. In the last decade, billions of dollars have been invested to build vessels and develop the American workforce needed to do the work of our domestic trade.

Billions more are being invested to keep this system as resilient as it can to be. If the Jones Act is not upheld, the gains we’ve made as an industry, and the benefits we provide to the nation, will be jeopardized.

Let me restate something I said earlier.

While I quoted to you the origins of the Jones Act, it is more than a law written in the 1920s. Companies like McAllister are the Jones Act. We are the domestic maritime industry. Today, the U.S -flag fleet includes over 40,000 vessels, supports 500,000 related American jobs, and provides a critically resilient aspect of our nation’s transportation infrastructure. These American jobs are an important contributor to the American economy, America’s industrial capacity, and American military security.

Despite the challenges I outlined facing the domestic maritime industry, our company’s business plan continues to be investing in the people and assets needed to provide resilient services in our market.

We believe that the Jones Act will continue to play an important role in supporting future development of this industry. But we cannot be silent and let others define us. This is an industry rich in tradition, and one that is absolutely vital to our country’s future economic growth. This is the story that members of the American Waterways Operators told Congress at AWO’s recent Barge-In on Capitol Hill. We need to spread the word about this industry and how critical the Jones Act is to our industry’s, and our nation’s, continued vitality.

Wi t h t h i s i n m i n d , I a m pro u d to announce that the Maine Port Authority has selected McAllister Towing as its partner for the design of a containerized articulated tug

barge for the New England Marine Highway Project. This project calls for market research and design of an ATB that would transit between Portland, Maine and Brooklyn, New York. The selection of McAllister Towing followed a competitive process that began in 2012 as part of an agreement with between the Maine Port Authority and the Maritime Administration under the auspices of the Marine Highway Program.

This project presents the further benefit

of alleviating traffic on the strained highway systems of the North East. This project is just another example of the way in which the U.S. Merchant Marine can provide our nation with great economic benefit and social value. ■ This an abridged version of a keynote address

by Mr. McAllister at the recent 2013 Marine Log Tugs & Barges Conference & Expo in Stamford, CT.

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SHIPYARD SAFETY

Total recordable illness and injury incident rates have dropped dramatically at U.S. shipyards over the last 10 years

MORE OSHA RULEMAKING ON THE HORIZON

Shipyards are embracing a safety culture

By Ian Bennitt, Manager, Government Affairs, Shipbuilders Council of America

F

or the past 15 years, total recordable injury and illness incident rates (TRIR) in the U.S. shipbuilding and repair industry have been on the decline. In fact rates in the past 10 years have dropped by over 60%, marking a dramatic increase in worker safety.

The key to this decline has been an industry-wide shift to embrace a culture of safety, as well as large investments in safety management and processes. The goal of every shipyard is to send their employees home safely, day in and day out.

Safety resources are available to shipyards more readily now than ever before. The Shipbuilders Council of America (SCA), the national trade association for U.S. shipbuilders and repairers, maintains an active safety and health committee that serves as a forum for sharing best practices, information and developing safety compliance and awareness tools and training products. Initiated in 2003, the SCA’s National Alliance with OSHA targets high hazard areas and develops safety resources to address them. It also maintains an open and constructive dialogue between OSHA and industry. So too does the Maritime Advisory Committee for Occupational Safety and Health (MACOSH). MACOSH is OSHA’s federal advisory committee for the maritime industry comprised of management, labor, safety and health professional organizations, government organizations and the public. The group has a designated shipbuilding subcommittee that

exists to develop safety resources and recommendations for OSHA to increase safety.

While the industry has been proactive and engaged in addressing safety awareness and increasing safety performance, it also has to be mindful of regulatory compliance, emerging rules and regulations, and OSHA enforcement priorities. In May 2011, OSHA promulgated a major revision to its shipyard general working conditions standard. This new standard was the most impactful rulemaking affecting the industry in agency history. Initiated in 1982, the rule clarified, added to, and consolidated 13 sections of 29 CFR 1915, including sanitation, lighting, medical devices, motor vehicle safety, and housekeeping among others. The largest change added Lockout/ Tagout, or control of hazardous energy, requirements to shipyard employment (29 CFR 1915).

As President Barack Obama settles into his second term, it is also important to consider the Department of Labor and OSHA priorities for the next four years. The President announced in mid-March that Tom Perez, currently Civil Rights Division Chief at the Department of Justice, was his choice to replace outgoing Labor Secretary Hilda Solis. During confirmation hearings in April, Perez noted his agenda would be heavy on training and workforce development. He also made clear he would focus on and continue the department’s June 2013 MARINE LOG 23

SHIPYARD SAFETY emphasis on whistleblower protection and support, a point that gave Republican Senators in particular pause and concern.

In a statement, Senate Health, Education, Labor and Pensions Committee Chair Tom Harkin (D-Iowa) said, “While I continue to believe there are no impediments to Mr. Perez’s confirmation, I am agreeing to postpone his Committee vote until May 8th, in order to allow those Senators who have asked the time to request additional information they

believe they need, and to evaluate his qualifications.” At press time, the vote had been further delayed.

While Perez’ formal confirmation is in limbo for the time being, all indication is that OSHA Administrator, David Michaels, will stay on to lead the agency. As a result, we expect continuity on OSHA’s main enforcement and regulatory policy and priorities. The past four years have witnessed aggressive enforcement activities, which we

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“We expect continuity on OSHA’s main enforcement and regulatory policy.” expect to continue. The agency has committed significant resources to its program.

On the rulemaking front, we similarly expect to see increased activity. While there was generally a slow down in regulatory activity in advance of the presidential election last year, we expect OSHA now to return to an active agenda advancing its major priorities. Some specific regulatory initiatives with serious potential impacts on the shipbuilding and repair industry include: Injury and Illness PreventIon Program (IIPP): OSHA’s IIPP rule is widely viewed as the agency’s most significant regulatory priority. Though in its early stages, this rulemaking would mandate an OSHA-designated and developed safety management system for all workplaces.

OSHA has indicated that it is ready to begin the Small Business Regulatory Enforcement Fairness Act (SBREFA) process, seeking input from affected small business entities.

CombustIble dust: OSHA is developing a rule addressing combustible dust hazards for general industry. The scope of the rule is expected to be broad, and will impact shipbuilding and repair.

C rys ta l l I n e s I l I C a : T h e l o n g expected regulation of crystalline silica is a particularly significant rulemaking considering it is a basic component of soil, sand, granite, and many other minerals found almost everywhere. In OSHA’s first draft in 2002, the Agency considered lowering the permissible exposure limit for the substance, implementing extensive housekeeping requirements, including prohibiting dry sweeping, requiring exposure monitoring and the establishment of regulated areas, and imposing medical surveillance obligations. strICter Injury and Illness rePortIng oblIgatIons: OSHA has proposed requiring employers report workplace amputations to the agency within 24 hours, and all in-patient hospitalizations within eight hours. Existing recordkeeping rules only require employers to report in-patient hospitalizations of three or more employees to OSHA within eight hours. ■

Ian Bennitt is Manager of Government Affairs at the Shipbuilders Council of America, where he focuses on commercial shipbuilding and repair markets, shipyard safety, environmental & energy, and labor issues.

OFFSHORE SPOTLIGHT

Propelled by orders for sophisticated offshore vessels, Kleven Maritime’s backlog has grown to $1.37 billion

NORWEGIAN YARDS GEAR UP

Shipyards are investing for surge in new construction and rig support

by Paul Bartlett, Contributing Editor

T

he prospect of the next lease of offshore life in the Norwegian sector of the North Sea is generating palpable excitement among the country’s thriving offshore community on its west coast. Sources are anticipating the arrival of as many as 40 rigs over the next 18 to 24 months and new drilling and well intervention technologies are extending the lives of many existing fields previously believed to be past their prime.

Statoil believes that new subsea technology could mean that some fields will last literally for decades longer than previously thought.

And the Coast Center Base in Bergen, the largest subsea service facility in the world, is now home to more than 100 specialist firms all focused on offshore and subsea technologies.

Each new rig that arrives in the Norwegian sector will require a small flotilla of support craft, including anchor handlers and platform supply vessels (PSV). This, say experts, will help to soak up the current surplus of PSVs which is holding day rates down.

However, one important development is the fact that both the size and sophistication of the offshore vessels required tomorrow is rising rapidly. Even the specs of relatively standard vessels are more

complex than before, and some of the latest subsea construction vessels are unimaginably sophisticated.

According to one Fosnavåg-based owner, PSVs and anchor handlers in the North Sea are currently enjoying utilization rates of around 90% and 80% respectively. Yet day rates do not reflect this relatively tight market. “Spot rates of NOK 250,000 ($42,750) a day should be NOK 1 million ($171,000),” he said. However, some believe this phenomenon may be short-lived: the arrival of new rigs will change the picture, they predict.

THE BRAZILIAN SYNDROME For now, some operators are blaming the Brazilian syndrome for holding market rates back. The might of Petrobras is such that the state energy firm can virtually dictate terms, according to some owners.

Eight years is the standard term, but at rates that usually don’t stack up.

As one Norwegian owner comments, “the heroes in Brazil are those companies which are building [a] large number(s) of vessels there. But they are not heroes with their banks,” he added, pointing to hefty premiums and long delivery times for Brazilian-built vessels.

June 2013 MARINE LOG 25

OFFSHORE SPOTLIGHT Meanwhile, the country’s requirements on issues including local build content, the employment of nationals and ship repair, are driving costs up to unsustainable levels. Daily operating costs for a 3,000 dwt offshore support vessel in 2004, for example, were around $5,500 a day, according to another operator. Today, they have escalated to about $18,000 a day.

The cost of dry docking a vessel there is a nightmare. Brazil, some say, is rapidly losing its lustre.

No surprise then that some Norwegians are turning their focus to other offshore regions, including the resurgence in the Norwegian sector of the North Sea itself. Centered in the Sunmøre region around Aalesund, and to a lesser extent in Bergen and Stavanger, the country’s offshore cluster is thriving.

Offshore operators are investing in rig support craft, big anchor handlers, high-end inspection, maintenance and repair (IMR) vessels and, increasingly, in a new generation of super-sophisticated subsea construction vessels designed to operate in deeper and more difficult water further from shore.

Unlike some other offshore sectors, analysts predict that demand for these hugely expensive multipurpose subsea units could soon outstrip supply. And this prospect is the catalyst for a new round of contracts that Norway’s leading firms have signed with specialist builders in the area.

Norwegian shipbuilders probably come second only to the U.S. in terms of overheads, and most undertake the steel construction of ships’ hulls at yards in Eastern Europe. Yet the country’s high-tech offshore builders on the west coast are buoyant. Several have embarked on significant capital investment programs to prepare for what they

anticipate will be a rush for ship construction and repair capacit y over the next few years.

Family-owned K l e ve n Ve r f t i s a case in point. Ståle Rasmussen, Chief Executive Officer, reveals that the company is “br ing ing Kleven’s CEO Stale Rasmussen shipbuilding back to Norway” and has spent several hundred million krone on a new robotic welding line at its Ulsteinvik facility and a refurbished floating dock for repairs and newbuilding at its Myklebust yard.

The new weldling line, Ramussen explains, should enable the company to undertake steel work on site, thereby building ships more economically in Norway, with more control and simpler logistics.

Build quality is likely to be higher and, for local owners, supervision will be more straightforward.

But Kleven is not short of work. The yard does not have its own design department but currently has an orderbook of 15 vessels worth NOK 8 billion ($1.37 billion). It includes three seismic research vessels, two for Sanco Shipping and one for GC Rieber, and one of the largest subsea construction vessels built so far, for Eidesvik. Rasmussen is far from complacent, however. He says more

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Nearby Ulstein has adopted a different strategy and has its own busy design department. Ulstein-design ships are under construction in many shipyards across the world. However, Chief Executive Gunvor Ulstein is well aware that new contracts need to be clinched soon at its Ulsteinvik facility.

The family-owned business has already built supply vessels for its own account, and would probably do so again if push came to shove.

But local sources suggest that the imminent arrival of rigs could generate a series of orders at local yards, including Ulstein.

Meanwhile, the Bergen Group’s Hanøytangen yard on Askøy Island, just outside Bergen, is being prepared for more rig work. The recent sale of the Rosenberg yard in Stavanger has freed up funds for the Hanøytangen upgrade which has already involved investment of some $35 million on new facilities and could see the same again over the next three years or so.

The yard’s drydock, originally built for construction of the Troll B platform two decades ago, is 410 feet square and, with a depth of more than 55 feet, is ideally suited for rig repair, surveys and upgrades. Meanwhile, there is also plenty of space alongside and deep-water moorings in more than 300 feet of water.

Like its shipbuilding compatriots, yard executives are preparing for a surge in offshore activity in the months ahead. No fewer than 15 five-year special surveys are due on North Sea rigs in 2014, not to mention newly built units arriving from Asia which have to be customized for the harsh conditions prevailing in the North Sea. Norwegian excitement on North Sea offshore prospects, it would seem, is well-placed. ■

Chinese yard to build jaCk ups based on ZenteCh design China State Shipbuilding Corporation’s Guangzhou Huangpu Shipbuilding will build two jackup drilling rigs based on a new design from Zentech, Inc., Houston, TX. The new R-550D jack up rig, which will be capable of drilling in water depths of 400 feet, is being constructed for Singapore’s Alliance Offshore Drilling Pte. Ltd. The contract contains options to build an additional two jack ups.

Guangzhou Huangpu Shipbuilding has joined with TSC Group Holdings, Ltd., a Cayman Islands company, and Zentech to form a new business model for the design of the basic rig, fully integrated drilling equipment and control package, and construction at the Huangpu Shipyard. The R-550D design was recently approved by the Technical Appraisal Committee, comprised of a blue-ribbon panel of offshore drilling experts, and has also been granted ABS Class approval.

Guangzhou Huangpu Shipbuilding recently built a 400-ton shallow-water heavy lift and pipe-laying vessel and an engineering survey vessel for 3,000 meter water depths.

TSC Group Holdings is a global product and service provider, serving both onshore and offshore drilling industries worldwide. TSC’s comprehensive product lines include drilling equipment, mechanical handling equipment, solids control equipment, power control and drives, drill cabins, deck cranes, tensioning and compensation systems.

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offshore spotlight Increased demand for offshore oIl and gas In deep water to grow rIg, osV fleets A new report by the UK-based maritime research firm Ocean Shipping Consultants is projecting that increased offshore oil and gas production in ultra deep waters will generate significant demand for more sophisticated mobile drilling rigs and complex offshore support vessels.

The 200-page report, “Offshore Support Vessels and Mobile Rigs: Global Prospects to 2025,” examines developments in the offshore mobile rig and support vessel sectors and evaluates their future prospects to 2025. According to the report, offshore oil production is forecast to increase by 55% from current production levels to reach over 36 million barrels per day (bbls/d) by 2025. Meanwhile, offshore gas production will grow by 22% to over 1,000 billion cubic meters per year (bcm/yr).

The report says increased oil and gas production is projected to grow the current fleet of mobile rigs by 41% compared to about 1,100 active rigs. This will mean that more Anchor Handling Tug/Supply (AHTS) vessels will be required to service the rigs. The fleet will grow by 41% to 3,900 vessels, while the Platform Supply Vessel (PSV) fleet is forecast to increase by some 40% over 3,200 vessels by the end of the study period.

MOBILE RIG, AHTS AND PSV DEMAND For mobile rigs, the average annual newbuilding levels are forecast to remain high throughout the study period at about 30 per year, with the mobile rig fleet forecast to increase by 30% by 2020, and again go up by 9% by 2025. Overall, the mobile

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rig fleet is forecast to increase by 41% above current levels. The report also projects the current fleet of 2,850 AHTS vessels will grow at about 2.5% annually. The fleet is forecast to increase by 10% by 2015, with another 15% increase by 2020 and then an increase of 12% by the end of 2025. The PSV fleet, currently at 2,350 vessels, is forecast to increase at a rate of approximately 3% per year. Overall, the fleet is expected to grow by 13% by 2015, followed by a further increase of 13% by 2020 and then a further 10% to over 3,200 vessels by 2025. Overall, the PSV fleet is forecast to increase by 40% over current fleet levels.

Shipbuilding

The M/V Kittitas is one of six Issaquah Class ferries that could be converted to burn LNG

OIL BOOM ENERGIZES SHIPBUILDING Increasing offshore oil and gas production drives orders for tankers, OSVs

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

A

few years ago a very wise if not somewhat curmudgeonly observer of the maritime industry stated that there would never be another product tanker built in the U.S. It seemed a fairly sensible prediction at the time given that the Articulated Tug Barge had emerged as the vessel of choice to move refined products because of advances in design, construction and operational costs and a dwindling U.S. shipbuilding base.

Now, driven by the changing U.S. energy picture, which will see America produce more oil than Saudi Arabia by 2017, Jones Act product tankers are once more in demand.

At a presentation at Marine Log’s 2013 Tugs & Barges Conference, last month, Charlie Papavizas, the Chair of the Maritime Group Practice at Winston & Strawn LLP, pointed to the production boom of “light, tight oil” in the U.S. While the oil is ideal for refining into gasoline, getting it to East Coast Refineries isn’t easy due to a lack of pipeline, rail, terminal and Jones Act tanker vessel capacity.

Papavizas said the capacity problem was expected to worsen as oil production rose to 9 million barrels of oil in 2020, up from the current 4.6 million barrels of oil per day. Refining capacity was expected to increase to only 8 million bbl/day by 2020. Some of that crude oil may wind up being exported, perhaps even to Canada under export licenses for refining and re-exporting back to the U.S. For now, however, the oil boom is having a positive impact on the Jones Act market, says Papavizas. He feels as many as 10 to 12 new product tankers will be needed to meet demand. Reinauer, Kirby, Crowley Maritime and Bouchard are also adding new ocean tank barges with building programs at Senesco Marine, Signal International and VT Halter Marine.

AMERICAN PETROLEUM TANKERS ORDERS FOUR As if on cue, one week after the conference, an affiliate of Jones Act operator American Petroleum Tankers inked a deal with General Dynamics NASSCO, San Diego, CA, for the design and construction of four 50,000 deadweight ton “LNG-conversion-ready” product carriers with a 330,000 barrel cargo capacity. The contract includes options to build four more ships.

NASSCO will start building the first tanker in the third quarter of 2014, delivering the ships from the fourth quarter of 2015 through 2016. The four-ship APT contract will add about 800 jobs at NASSCO during construction and more than 165 seafarer jobs when the ships go into operation.

The 610-foot-long tankers are a new “ECO” design from DSEC, a subsidiary of Korea’s Daewoo Shipbuilding & Marine Engineering. The ECO design offers improved fuel efficiency—it will have a slow-speed MAN ME G-type engine and optimized hull—and incorporates the latest environmental protection features, including a Ballast Water Treatment System. The tankers will have dual-fuelcapable auxiliary engines and the ability to accommodate future installation of an LNG fuel-gas system.

The contract with APT follows five months after NASSCO announced a groundbreaking order with TOTE Inc., to build two LNG-fuelled 3,100 TEU containerships for the Jones Act. NASSCO President Fred Harris, said, “By continuing to bring the most economical and environmentally sound technology to Jones Act operators, these ECO tankers show our continued commitment to be one of the most innovative shipyards in America.”

Clearly, more vessels powered by LNG are in the pipeline, which June 2013 MARINE LOG 29

Shipbuilding will require the development of LNG bunkering infrastructure, including small scale reliquefaction facilities, as well as LNG bunkering ships and barges.

That has attracted the attention of Crowley Maritime Corporation. Crowley is entering the LNG market by acquiring Carib Energy LLC. The acquisition of Carib Energy, which becomes a wholly owned subsidiary of Crowley Petroleum Services, now provides Crowley an immediate book of business for the supply, transportation, and distribution of LNG via 10,000 gallon ISO tanks. While Carib Energy has a pending DOE application to supply LNG transportation services into non-FTA countries, its current licensing allows it, and now Crowley, to supply cost-efficient, environmentally friendly LNG from the U.S. to both commercial and industrial customers within the Caribbean and Central and South America—all countries where LNG is an attractive commodity thanks to its low price point in the face of growing power supply costs.

Car ib Energ y is also cementing its involvement in future LNG fuel bunkering for ships transiting between the U.S. and Caribbean markets.

Besides the Caribbean, Central and South America, Crowley will also supply U.S. port-to-U.S. port transportation services, according to Crowley’s Matt Jackson, who will head up the company’s new LNG services group business. “Bunkering is also a service we are prepared to offer domestically,” Jackson told Marine Log. “As for vessels, the current plan is to transport LNG in ISO tanks, however specialized vessels, such as LNG tankers, are always a possibility, should customer demand support it.”

Crowley might also be in the business of building LNG-fuelled ships for its own fleet.

Competitor TOTE has already committed to building at least two LNG-fuelled boxships for its liner service to Puerto Rico. “Crowley developing LNG-powered vessels to Puerto Rico is a possibility that Crowley is currently exploring, though no formal plans have been released yet,” said Jackson. “Crowley’s naval architecture and marine engineering subsidiary Jensen Maritime (based in Seattle, with offices also in Jacksonville and New Orleans) is currently offering vessel retrofit services to convert a wide variety of vessels to LNG power, so this is not out of the realm of possibility in the future for some of Crowley’s existing vessels.”

Earlier this year, Aker Philadelphia Shipyard delivered the Florida, the second of two Veteran Class product tankers to Crowley Tankers LLC, a unit of Crowley Maritime 30 MARINE LOG June 2013

Vigor Industrial’s US Fab is building two 144-car ferries for Washington State Ferries, including the M/V Tokitae

Corporation. Aker Philly is also building two 46,000-dwt Aframax crude carriers for SeaRiver Maritime, ExxonMobil’s marine transport arm. Both vessels are scheduled for delivery in 2014. The tankers are intended to be used to transport Alaskan North Slope crude oil from Prince William Sound, Alaska to the U.S. West Coast.

SURGING DEMAND FOR OSVs The energy boom is also boosting demand for more sophisticated offshore support vessels. That has shipyards looking to boost capacity to meet the demand as slots fill up. Last month, for instance, TY Offshore announced a $9 million capital improvement plan after revamping its ownership structure and getting an equity investment from Littlejohn & Co., LLC, Greenwich, CT. TY Offshore and sister company Trinity Yachts formed the Gulf Coast Shipyard Group, which will own and operate the two Gulf Coast based shipyards and International Yacht Collection (IYC), a wholly owned yacht brokerage unit.

John Dane III, President and CEO, said a $9 million capital improvement program at the Gulfport, MS, yard will increase efficiency and annual output. “These improvements,” said Dane, “will also upgrade our Syncrolift to 4,300 tons in anticipation of building ice class vessels for Arctic operations.”

One operator betting heavily on the future of offshore oil is Harvey Gulf International Marine (HGIM), New Orleans, LA. This past spring, HGIM CEO Shane Guidry announced the execution of three agreements for vessels totaling $540 million, upping the company’s total capital expenditures since August 2008 to $1.7 billion.

Shipbuilding Under the first agreement, Eastern Shipbuilding Group will build two STX Marine-designed 340 ft x 73 ft x 29.5 ft heavy lift construction vessels for HGIM. To be named the Harvey Sub-Sea and the Harvey Blue-Sea, the vessels will each have a 250-metric ton active heave compensated crane,12,000 ft2 of usable deck space, accommodations for 120 and a heli-deck.

The two vessels are in addition to a STXCV 310 Light Construction Vessel, the Harvey Deep-Sea, set for delivery from Eastern Shipbuilding next month.

Under the second agreement, HGIM exercised an option with TY Offshore for the construction of the sixth dual fuel offshore vessel. This addition will enable Harvey Gulf to become the largest owner/operator of clean burning LNG OSVs in the world.

The last deal is for the purchase of 11 DPS-2 offshore supply and fast supply vessels from Gulf Offshore Logistics. With the latest addition, HGIM will own 46 deepwater, DPS-2 vessels with an average age of less than five years old.

HORNBECK, TIDEWATER INKED DEALS WITH LEEVAC Hornbeck Offshore Services (HOS), Covington, LA, signed a contract with Leevac Shipyards Jennings LLC, Jennings, LA, for the construction of two 302 ft x 76 ft x 26 ft, 12,070 bhp diesel electric-powered MPSVs based on an STX Marine SV 310 design.

Leevac President and CEO Christian Vaccari, says, the contract will extend the shipyard’s backlog into early 2016.

Leevac is currently building two Z-Tech 2400 Class Escort Tugs for G & H Towing Company, one MMC 879 PSV, two Leevac Design Services (LDS) 300 DE PSV’s for Tidewater Marine, and two LDS 270 DE PSV’s for Aries Marine.

The two 300 ft x 62 ft x 24 ft diesel electric platform supply vessels for Tidewater includes options for two additional vessels.

Vaccari said, “Activity in Gulf Coast shipyards has significantly increased and the availability for shipyard slots is starting to disappear.”

Last year, HOS signed a deal with Bollinger Shipyards, Lockport, LA, to stretch six 200 Class DP1 OSVs to 240 Class DP2 vessels. Other operators such as Gulfmark Offshore, have used a similar tack to enhance their fleets. Conrad Shipyards, Morgan City, LA, completed the third of three lengthenings for Gulfmark earlier this year, delivering a 230 Class vessel. Its the sixth such project Conrad has completed for Gulfmark.

The publicly traded operator is now set to lengthen 10 more vessels to 260 Class.

FERRY INVESTMENT Ferries have and will continue to be a vital part of the U.S. public transportation, particularly in major metropolitan regions such as New York and Seattle, which combined serve upwards of 55 million commuters and tourists on an annual basis.

New York has one of the largest publicprivate ferry networks in the U.S., with some 20 routes that carry 30 million passengers annually. The largest ferry by annual ridership is the Staten Island Ferry operated by the New York City Department of Transportation (NYCDOT). Like other vessel operators, the NYCDOT is under tremendous pressure to reduce operating costs, while meeting stricter environmental regulations on emissions. The solution to that conundrum is at the heart of a pilot project to convert an Alice Austen Class ferry to burn Liquefied Natural Gas (LNG). Converting the ferry to burn LNG as opposed to ultra-low sulfur diesel fuel could reduce fuel costs by as much as 40 percent, says Captain James C. DeSimone, COO, Staten Island Ferry. “CO2 is expected to be reduced by 20 to 30% and SOx and NOx close to zeroed out,” he says. The pilot project would validate these assumptions, as well as others such as expected fuel consumption, horsepower,

emissions and overall cost.

Officials from the FDNY accompanied DeSimone on a recent visit to Norway to assess gas-fuelled ferries and research operational issues such as bunkering. The trip was also intended to expose the FDNY to gas-fuelled vessels and allowed them to meet with the City of Bergen Fire Department to discuss their concerns about LNG. There is currently a moratorium on the transport and storage of LNG in New York City. The moratorium dates back to a 1973 accident when 37 workers were killed while repairing an empty LNG tank at a Staten Island site.

DeSimone says the FDNY is working with the NYDOT on fueling options for the LNG ferry. LNG fueling could possibly be performed via tanker truck on Staten Island.

Another option available, says DeSimone, would be to fuel the ferry in New Jersey.

The pilot project is funded by a $2.3 million grant and additional money from New York City and would be accomplished as part of a normal dry docking.

The success of the conversion of the 1 , 2 0 0 - p a s s e n g e r A l i c e Au s t e n C l a s s ferry—either the John Noble or the Alice Austen—to gas-only operation could have broader implications for the Staten Island Ferry fleet. The city wants to replace its

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Shipbuilding 30-year-old, 6,000-passenger Barberi Class ferries and a preliminary design investigation is already underway.

WSF READIES FOR LNG, TOO Just as Staten Island Ferry is exploring the possibility of burning LNG, so, too, is Washington State Ferries (WSF).

WSF has contracted DNV to complete a safety and security plan, risk assessment, and operational manual for converting to LNG. On May 22, the ferry operator met with the U.S. Coast Guard to examine the draft safety, security and operational assessment for LNG-fueled ferries. In 2011, WSF received conceptual approval from the USCG to retrofit the propulsion system with new engines on the six Issaquah Class ferries to burn LNG as fuel. WSF will receive initial comments from USCG Sector Seattle and a final assessment will be sent to USCG headquarters for review later this year.

WSF is currently evaluating responses to its Request for Proposals to retrofit the six ferries. Under the RFP, the shipyard would have to purchase and install the equipment and get the required approvals to allow the vessel to obtain a COI from the U.S. Coast Guard for operation with LNG as a fuel.

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Meanwhile, WSF is also assessing bids for the conversion of the Super Class ferry M/V Hyak to hybrid propulsion. Built 46 years ago, the Hyak is due for a midlife propulsion upgrade so that it can remain in service until 2031. The switch from diesel-electric to hybrid propulsion is expected to cut fuel usage by 20 percent, translating into a fuel savings of $21.5 million over the remaining life in the vessel.

Under the conversion, WSF would replace the four existing direct current (DC) diesel generators in the Hyak with four new alternating current (AC) diesel generators, as well as replacing the two main DC propulsion motors. Two new ship’s service generators and a new ship’s service switchboard will be installed. A power management system and battery bank will also be installed to enable the most efficient use of power.

And as if it doesn’t have enough going on, WSF is currently in the process of replacing its Evergreen Class ferries. WSF has a contract with Vigor Industrial’s US Fab facility to design and construct up to four 144-car Olympic Class ferries. Two ferries, the Samish and Tokitae, are currently under construction, with deliveries set for the spring of 2014 and early 2015, respectively.

Total cost for the two ferries is budgeted at $279.4 million. ■

environment Hyde Guardian is one of the systems named to the Coast Guard’s Alternate Management Systems list

Looking for cLarity

on ballast water management U.S. Coast Guard, EPA move ahead with implementing ballast water management requirements

S

hipowners now have more clarity than they did just a few weeks ago on what they will need to do comply with regulations requiring them to equip ships with Ballast Water Management (BWM) systems. There are two major imperatives driving this requirement. One is U.S. law, currently in effect. The other is the IMO sponsored Ballast Water Management Convention.

The BWM Convention requires all ships to manage their ballast water according to standard D-1 (exchange) or D-2 (treatment), following a phase-in schedule given in Regulation B-3.

The convention was adopted in February 2004 with entry into force coming 12 months after ratification by 30 States, representing 35 percent of world merchant shipping tonnage. As of last month, ratification was still short of the tonnage target by some 6 percent.

More countries could soon sign on, however, because IMO’s Marine Environmental Protection Committee (MEPC) last month took a number of actions that were in line with an INTERTANKO-led joint proposal made last year.

Among the actions was a rescheduling of the International Ballast Water Management Convention implementation dates that should provide a more realistic timeframe for ships installing ballast water management systems (BWMS), a trial period for port state control and new guidance on BWMS type approvals.

A draft resolution, which will now go to the IMO Assembly session

By Nick Blenkey

being held November 25 to December 4, 2013, recommends that ships constructed before the entry into force of the Convention not be required to comply with regulation D-2 until their first renewal survey following the date of entry into force of the Convention. The aim of the draft resolution is to clarify uncertainty in relation to the application of regulation B-3, through the application of a realistic timeline for enforcement of regulation D-1 (ballast water exchange standard) and regulation D-2 (ballast water performance standard), upon entry into force of the Convention.

U.S. REQUIREMENTS Meantime, all of this may be of small help to shipowners trading in or to U.S. waters. The U.S. has not ratified the BWM Convention and the U.S. Coast Guard and EPA are moving ahead on implementing the ballast water management requirements of the U.S. Nonindigenous Aquatic Nuisance Prevention and Control Act of 1990 (NANPCA), which is very much U.S. law and in effect.

The good news is that the U.S. requirements are not totally out of line with those of the Convention.

Regardless of whatever schedules are agreed under the Convention, and regardless of what flag they fly, most ships trading between international and U.S. waters will be required to fit a ballast water management system in accordance with the schedule shown in Table I. June 2013 MARINE LOG 33

environment Table I — Implementation Schedule for Approved Ballast Water Management Methods Vessel’s ballast water capacity

Date constructeD

Vessel’s compliance Date

All

On or after December 1, 2013

On delivery

Less than 1500 m3

Before December 1, 2013

First scheduled drydocking after January 1, 2016

1500-5000 m3

Before December 1, 2013

First scheduled drydocking after January 1, 2014

Greater than 5000 m3

Before December 1, 2013

First scheduled drydocking after January 1, 2016

new vessels existing vessels

And while the IMO Convention sets a standard for ballast water exchange, this is not provided for in the Coast Guard regulations, partly because of the structural risks it presents to the ship and partly because its effectiveness in removing invasive species from ballast water can be variable.

In order to comply with U.S. regulations, a ship must have a USCG Type Approved BWTS installed. If there are no systems with full USCG type approval (none currently available), then an owner would have the following options: (1) Install an Alternate Management Systems (AMS) approved system (currently 9 companies with AMS approval); (2) Do not deballast; (3) Get ballast water from a U.S. public water supply (not currently practical); (4) Discharge/ deballast to an approved reception facility (none available); or (5) Obtain an extension from the USCG one year prior to required installation date.

In practical terms, that means shipowners will have to fit one of the systems on the fairly short list of Alternate Management Systems (AMS) for Ballast Water Treatment published by the Coast Guard (see Table II).

It should be noted that while all these systems are IMO Type Approved (and therefore meet the needs of the Convention), the fact that other systems on the market have IMO Type Approval does not mean that they meet U.S. requirements.

If you fit an IMO Type Approved system that is not on the Coast Guard list, you won’t be allowed to discharge ballast in U.S. waters, end of story.

Moreover, the Coast Guard is ensuring that the testing of a BWM undertaken in order to gain the IMO approval has been done by a credible testing establishment. The reason, incidentally, that the BWM systems on the Coast Guard lists are called “Alternative” Management Systems is that they are alternatives to systems having U.S. Coast Guard Type Approval, none of which are currently available.

There are means of meeting the U.S. regulations without fitting a treatment system. These include getting your ballast water from a U.S. public water supply, discharging to an approved reception facility (as yet there are none), or being a U.S. Navy ship.

Shipowners can also apply to the Coast Guard to get an extension one year prior to the installation date.

Table II - Alternate Management Systems (AMS) for Ballast Water Treatment manufacturer

moDel name

moDel number(s)

acceptance Date

Alfa Laval Tumba AB

PureBallast

Models 250 to 2500

15 April 2013

Alfa Laval Tumba AB

PureBallast

Models 2.0 and 2.0Ex

15 April 2013

Ecochlor Inc.

Ecochlor

Series 75, 100, 150, 200, 250, and 300

15 April 2013

Hyde

Guardian

HG-60, -100, -150, -200, 250, -300, -400, -450, 500, -600, -700, -800, 900, -1000, -1250, -1350, 1400, -1488, -1600, -2000, -2500, -2975, -4000, 5000, and -6000

15 April 2013

NK Company, Ltd

BlueBallast

NK-O3-010, -015, -030, 040, -050, -075, -100, 150, -200, -250, -300, and -400

15 April 2013

Panasia Co., Ltd.

GloEn-Patrol

P-50, -150, -250, -300, 350, -500, -700, -750, 800, -900, -1000, -1200, 1500, -2000, -2500, -3000, -3500, -4000, -4500, 5000, -6000

29 April 2013

Qingdao Headway Technology Company, Ltd.

OceanGuard

OceanGuard

15 April 2013

RWO GmbH Marine Water Technology, Veolia Water Solutions and Technologies

CleanBallast

CleanBallast -150, -200, 250, -300, -350, -400, 450, -500, -500-1, -750, 1000, -1250, -1500, -1750, -2000, -2250, -2500, 2750, -3000, -3250, -3500, and -3750

15 April 2013

Severn Trent De Nora, LLC

BalPure

Models BP-500, -675, 1000, -2000, -2650, -3000, -4000, and -5000

15 April 2013

SunRui

BalClor

BC-300, -500, -1000, 1500, -2000, -2500, -3000, -3500, -4000, -5000, -6000, and -7000

01 May 2013 (updated)

34 MARINE LOG June 2013

environment Fitting the treatment system is just one part of the compliance burden under both the U.S. and IMO schemes. In addition to installing the equipment it will also have to be correctly maintained and operated. Both also include reporting and training requirements.

THE COST OF THE EQUIPMENT The reason shipowners have held back on installing equipment is primarily the cost. Addressing the opening of last month’s MEPC session, IMO Secretary General Koji Sekimizu cited a cost of around $1 million to $2 million per ship.

According to one manufacturer, Hyde Marine, the cost of a system really depends on the size/flow rate of the system and the complexity of installation. First to the equipment—low flow systems will cost between $100,000 and $350,000, medium sized systems can cost between $350,000 and $750,000, and the largest systems will cost from $750,000 to as much as $3,000,000. Engineering and installation cost will vary widely depending on size and complexity but should typically be about one half the cost of the equipment.

RETROFIT The other big issue can be summed up as ease of retrofit.

Japan’s Mitsubishi Heavy Industries, Ltd. (MHI) and Mitsui O.S.K. Lines, Ltd. (MOL) have received approval in concept from ClassNK for a ballast water treatment system (BWTS) enclosed in a standard-size freight container that can be contained in the hold of containerships. The new technology will significantly reduce BWTS retrofitting turnaround time in comparison to BWTS installation in the engine room.

The Hyde Guardian BWTS uses filters and UV technology to treat ballast water. The filter removes sediment and large organisms, then the UV light inactivates and kills any remaining organisms

The container-type BWTS houses most equipment necessary for ballast water treatment in a 40-ft high-cube container, approximately 12.2 m in length x 2.4 m in width x 2.9 m in height. The equipment is arranged within the container to maximize available space and facilitate maintenance.

Installing the BWTS in the hold simplifies preliminary surveys as the

June 2013 MARINE LOG 35

environment only major work needed is ballast water intake/discharge and power line connection. In most cases, work can be completed in approximately two weeks, about seven days less than installation in an engine room. The work does not require cutting of the ship’s side shell, and can be completed at pierside, eliminating the need to drydock. The container-type BWTS is claimed to be ideal for ships that do not have enough space in the engine room for related systems and piping.

Hyde Marine says that it already has experience with retrofit installations of its Hyde Guardian BWTS. The compact system has flexibility in module design and the ability to be skid mounted or installed as separate components. In particular, Hyde Marine was the first company to install ballast water treatment systems on cruise ships, and it continues to build compact, customizable, and modular systems to meet the specific needs of retrofit and newbuilds for cruise ships and ships of every class.

Hyde’s typical solution uses a component system with filters and UV reactors located in the vessel’s engine room near the ballast pumps. Power panels are installed in the ship’s engine room or machinery spaces, and a control panel is installed in the control room with additional remote panels either installed in the engine room or directly tied into the ship’s automation system to allow operation of the system from numerous locations convenient to the crew.

For space-constrained situations in larger vessels like tankers, a typical Hyde Marine solution uses ATEX-approved filters and UV reactors located in the vessel’s pump room or in a deck house above the main deck with power panels installed in the ship’s engine room or machinery spaces. The control panel can be installed in the cargo control room with additional remote panels either installed in the

engine room or directly tied into the ship’s automation system to allow operation of the system from numerous locations convenient to the crew.

Fred Loomis, Director of Technical Projects for W&O Supply, which was recently named as Hyde Marine’s exclusive distributor in the U.S. and Canada for the Hyde GUARDIAN Ballast Water Treatment System, sees a potential log jam ahead as the deadline for the regulations gets closer. As deadlines come into play, the number of qualified systems, experienced installers and just getting through the approval process will be tight. Companies should really spend time now planning ahead of the curve. Loomis advises that one of the main concerns customers should have in choosing a retrofit installer is their experience in the field of ballast water treatment.

CRUNCHING THE NUMBERS Probably the question of least practical interest to shipowners at this stage is how the various systems do the job. IMO Type Approval should provide a reasonable guarantee that the treated ballast will meet the required discharge standards. If a system is also on the U.S. Coast Guard list, shipowners have the added assurance of knowing that all the tests done to gain the IMO approval have been very closely scrutinized by the Coast Guard.

Whether the systems work by filtration, UV radiation or dosing with chlorine or some other “active substance,” it is only of interest to the extent that they affect maintenance costs and complexity of operation.

The remaining questions come down to “will it fit, what will the installed cost be, what will it cost to operate, and, finally, can I get one in time to meet the required installation date?” ■

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36 MARINE LOG June 2013

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Cruise shipping

Royal Caribbean’s new Quantum class of ships will feature two industry firsts— North Star and RipCord

Raising the baR Carnival Triumph fire prompts safety enhancements; cruise lines reimagine their fleets

C

ruise shipping safety has, for the better part of the last year and a half, been a hot topic of discussion among the mainstream media. Just months prior to the 100th anniversary of the sinking of the Titanic, Costa Cruises’ 952 ft Costa Concordia collided with a rock and ran aground off Isola de Giglio on the Tuscany coast. The accident had all the juicy elements that 24-hour news networks thrive on—tragedy, drama and scandal. More to the point, the deadly grounding served as a cruel reminder that, even 100 years after the Titanic, safety remains a constantly evolving process, particularly when taking into account training and human error.

By now the events of the Concordia accident are well known.

Francesco Schettino, the Captain on the Concordia on the night of January 13, allegedly took the ship off course bringing it far too close to the Giglio coast. The ship hit a rock, piercing its side and flooding five watertight compartments. Eventually the Concordia capsized and remains, until this day, half submerged—the subject of the world’s most expensive salvage operation. Before it was all over, 157 were injured, 32 souls perished, and the ship’s captain was deemed a coward for abandoning ship.

In the days that followed, speculation arose as to the root cause of the Concordia accident—was it a mechanical failure or was it human error?

In its recently released report on the safety technical investigation on the Costa Concordia accident, Italy’s Ministry of Infrastructures and Transports concluded that the human element was ultimately the cause of the casualty. The investigation found that the ship was

By Shirley Del Valle, Associate Editor

fully compliant with all the SOLAS applicable regulations and that the accident was the result of poor proficiency from key crew members, most notably the Master (Captain). According to the report the Master had difficulty reading the radar screen without his glasses; the application of systems navigation was inappropriate; the Master lacked knowledge of equipment location; the Master failed to give the abandon ship signal; and he was distracted.

Disorganization played a vital role in the chaos immediately following the vessel’s collision with the rock. Passengers interviewed for the investigation indicated that some of the crew seemed disorganized and unaware of how evacuations should be conducted, muster drills hadn’t been conducted (they were scheduled for the following day) and a chaotic evacuation quickly followed. However, the report states that “the crew, on the whole, gave an adequate performance in the core phase of the evacuation.”

Following the Concordia accident, cruise lines across all brands implemented new muster drill standards, which stated that all embarking passengers must participate in a muster drill before the ship leaves port. This would make passengers familiar with the ship’s safety procedures and emergency protocol.

Most recently, Schettino was ordered to stand trial and face charges of manslaughter, causing a shipwreck and abandoning ship.

The trial is set to begin July 9, 2013. Schettino will be the only one to stand trial. Five other defendants—four crewmembers and the Costa Cruise Crisis Coordinator—sought a plea deal. If he’s found guilty, Schettino could face up to 20 years in prison.

June 2013 MARINE LOG 37

Cruise shipping

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There is a common misconception that NFPA 70E Electrical Standards do not apply to the Maritime Industry, but OSHA 29 regulations are enforced within the Maritime Industry and Shipyard Employment Tool Bag Directive CPL 02-00-142 incorporates NFPA 70E into CFR 1915. So, do not risk injury to your workers or non-compliance. Be prepared and keep your people safe from the hazards of electricity.

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38 MARINE LOG June 2013

The Carnival Triumph fire prompted Carnival Corporation & plc to perform a fleet-wide operational review

Carnival’s not so fun trip Just as the world’s collective attention turned away from the Concordia, a fire on board the Carnival Triumph put the spotlight back on cruise industry safety standards. The fire broke out in the ship’s engine room on February 10, 2013 rendering the 893 ft ship powerless while in the Gulf of Mexico with over 3,000 passengers and 1,000 crew on board. Passengers contacted local news stations to detail their experiences on board.

The general consensus was, that while conditions weren’t the greatest, the crew was doing its best to keep everyone calm and in good spirits. Of course, praising a cruise line’s crew doesn’t get you prime time ratings, so the focal point of most of the news casts was the “third world conditions” passengers were forced to deal with, such as no air conditioning and malfunctioning toilets, over the course of five days it took for the ship to be towed to the Port of Mobile.

The incident immediately prompted Carnival Corporation & plc, the parent company of Carnival Cruise Lines, Costa Cruises and eight other cruise ship brands, to conduct a fleet-wide operational review across all of its brands. Following the review, Carnival Corporation & plc announced that it would implement a $600 million to $700 million enhancement program across all its brands and its 101-ship fleet. Of that, $300 million is earmarked for enhancements to Carnival Cruise Line’s 24-ship fleet.

During the initial phase of the enhancement program, each vessel will be fitted with an additional emergency generator, providing power to 100% of the staterooms and

public toilets, fresh water and elevators in the event of a loss of main power. Once that phase is complete, the cruise line will install a second permanent back-up power system on each ship, further expanding the areas where back up power will be supplied—this includes cooking facilities, cold food storage, internet and telephone communications.

While all its ships already have emergency back-up power in place that “enables the continuous operation of safety equipment and some hotel services,” the intent now, explains Gerry Cahill, President and CEO of Carnival Cruise Lines, is to “significantly bolster that back-up power to support the core hotel services.”

The enhancement program will also upgrade the existing water mist fire suppression systems with a new high-pressure water mist system that creates a larger, thicker blanket of water droplets. Once the droplets evaporate, the system rapidly cools down any hot areas, reducing the possibility of a fire restarting.

“The cruise industry is not waiting for any final reports. They’re being very proactive,” says David Boldt, Simultaor Center Manager, Resolve Maritime Academy, Fort Lauderdale, FL. A safety expert and a veteran of the cruise industry, Boldt served as Safety Superintendent, Navigation, for Royal Caribbean Cruise Lines before joining Resolve in 2012.

Boldt thinks the industry is on the right track. “You are never going to make a ship unsinkable, but you can mitigate risk through training.” He does think the maritime industry can learn from the aviation industry. “Pilots spend more time in simulators in one year than masters do in 20 years.

I think that’s why you don’t hear more about bird strikes, tail touches and near misses.

They are trained extensively to respond to emergency situations.”

Passenger Bill of Rights Following the Triumph accident, Senator Charles Schumer (D-NY) called for the adoption of a “Passenger Bill of Rights” that would guarantee: (1) passengers real time updates when a problem occurred; (2) each ship would be equipped with a back-up generator; (3) a full refund should technical emergencies occur. Weeks later, the Cruise Lines International Association (CLIA) approved the bill of rights, demonstrating that “the cruise industry is committed to continuing to deliver against the high standards we set for ourselves in all areas of shipboard operations,” said Christine Duffy, President and CEO of CLIA. CLIA is expected to submit the Passenger Bill of

Cruise shipping read the full text of the Passenger Bill of Rights on marinelog.com.

Revitalizing its image

The new racing themed water park on the Carnival Sunshine includes Carnival’s longest water slide

Rights to the International Maritime Organization (IMO). The goal is to have the bill formally recognized worldwide and make it applicable under IMO’s authority. You can

The success of the cruise shipping industry is ruled by public perception. With that in mind, cruise lines have made it their mission to not only regain customer trust by enhancing safety standards on board, but also seeking to entice passengers by promising luxurious, entertainment-filled experiences and exciting new features. To that end, several cruise lines are bringing the latest and greatest on board across entire fleets.

Aside from its safety enhancement program, Carnival is also in the midst of it Fun Ships 2.0 initiative. Launched in 2010, the $500 million Fun Ships 2.0 upgrade program transforms public spaces and adds additional staterooms and entertainment features on to existing members of Carnival Cruise Lines’ 24-ship fleet.

With it out of service due to the engine fire, the Carnival Triumph underwent its’ Fun Ships 2.0 renovation last month. The ship left BAE’s Mobile, AL shipyard in early May under its own power to Grand Bahama Shipyard, Freeport, Bahamas, where it was to

have final repairs and shipboard operating enhancements completed, says Carnival. The down time afforded Carnival the opportunity to add Fun Ships 2.0 features onto the ship.

“With the ship temporarily out of service for repairs, we decided to take the opportunity to add a host of new dining and bar venues that are part of our tremendously popular fleetwide Fun Ship 2.0 enhancement program,” says Cahill.

Another Carnival ship to undergo the Fun Ship transformation was the Carnival Sunshine. Previously named the Carnival Destiny, the ship was transformed into the Carnival Sunshine after a massive $155 million transformation in just 49 days at Italy’s Fincantieri shipyard.

The 3,006-passenger Carnival Sunshine includes an additional 182 staterooms, a reconfigured floor layout that made room for venue space and Fun Ship 2.0 dining, bar and entertainment features, such as The Shake Spot, where guest can enjoy hand-crafted milkshakes and floats; Guy’s Burger Joint, where those at poolside can enjoy free handcrafted burgers and fries; an Alchemy Bar, which Carnival describes as a vintage-themed cocktail “pharmacy.

(Cont. on pg 42)

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The OPA 90 Vessel Response Plan regulatory package outlining requirements for nontank vessels trading in U.S. waters was accepted for review by the Office of Management and Budget (OMB), the last hurdle in a process which started approximately 8 years ago. While the final rules for tankers were issued in December 2008, the nontank regulations have been slowly moving through regulatory review. The OMB typically completes such reviews within 90 days, at which point, the final rule could be published to the Federal Register sometime in 2013.

Approximately 15,000 nontank vessels will be subject to the new requirements which will undoubtedly present an administrative challenge to vessel operators, U.S. Coast Guard and resource providers alike.

“Our team is in place armed with the lessons learned from the tank vessel implentation and we are ready to assist our nontank clientele through the process”, says DeeAnn McMillen, Director, Vessel Services.

T&T Salvage, as a Primary Salvage and Marine Firefighting Resource Provider, is ready to support the nontank vessel response plan community with the goal of minimizing administrative burden while providing the highest level of emergency response in the industry. With a leading nationwide OPA 90 salvage salvage system, the largest inventory of salvage equipment in the U.S. and a proven team of professionals, T&T Salvage is commited to providing the most flexible and efficient service in the industry.

June 2013 MARINE LOG 39

American Salvage Association

ine in neLoG Marin

national maritime salvage conference & eXPo

WEATHERING THE STORM September 9–12, 2013 Key Bridge Marriott Hotel Arlington, VA

An intensive three-dAy event tailored for shipowners, regulators, insurers and salvage professionals on the ins-and-outs of salvage, wreck removal, firefighting and environmental response. don’t miss a unique interactive tabletop training exercise on the third day of the conference. CLe credits available.

September 9, 2013 Welcoming Cocktail Reception—Sponsorship Available | Expo Open

September 10, 2013 Continental Breakfast—Sponsorship Available | Expo Open Welcome RemaRks • John Snyder, Editor-In-Chief & Publisher, Marine Log • Mauricio Garrido, President, T&T Salvage LLC keynote addRess • Duncan D. Hunter, House of Representatives, U.S. Congress (invited) oPa 90 RegulatoRy uPdate Moderator: Paul Hankins, VP—Salvage Operations, Donjon Marine Co., Inc. • Patricia K. Adams, Policy Development & Industry Outreach, Vessel Response Plan Program, U.S. Coast Guard • Gerald A. Gallion, Esq., Corporate Counsel, Kirby Corporation • Capt. Anuj Chopra, President, Anglo-Eastern (Houston) LLC • Tom Wiker, Dir.—Compliance, Gallagher Marine Services • Deeann McMillen, Dir., Vessel Services, T&T Salvage LLC Coffee Break—Sponsorship Available | Expo Open Is theRe Room FoR envIRonmental salvage?

• John Witte, President / CEO, Donjon Marine Co., Inc. • Charles Anderson, Sr. VP, Skuld North America

Luncheon—Sponsorship Available | Expo Open luncheon addRess • Dr. Rob Grool, President, Seaspan Ship Management Ltd. lIabIlIty exPosuRe and ResPondeR ImmunIty • Jon Waldron, Esq., Partner, Blank Rome LLP oFac RestRIctIons on salvage ResPonse oPeRatIons • David Brummond, Sr. Sanctions Advisor—Insurance, U.S. Treasury Department, Office of Foreign Assets Control Energy Break—Sponsorship Available | Expo Open WReck Removal conventIon • Joseph A. Walsh II, Esq., Keesal, Young & Logan actIvatIng the vessel ResPonse Plan Moderator: Richard Fredricks, Executive Dir., The American Salvage Association • Matt Hahne, Dir., Regulatory Affairs, Resolve Marine Group • Michael Minogue, CEO/President, ECM Maritime Services, LLC • LT John Peterson, U.S. Coast Guard, Office of Commercial Vessel Compliance • Frank J. Gonynor, Esq., Sr. Claims Advisor, Gard Cocktail Reception—Sponsorship Available | Expo Open

Sponsorships / Exhibits available.

Jane Poterala, Conference Director T: (212) 620-7209 | E: jpoterala@sbpub.com Register: www.marinelog.com/events

September 11, 2013 Continental Breakfast—Sponsorship Available | Expo Open Opening RemaRks • John Snyder, Editor-In-Chief & Publisher, Marine Log • Mauricio Garrido, President, T&T Salvage LLC incident management duRing salvage OpeRatiOns Moderator: Jim Elliott, VP, T&T Marine Salvage, Inc. • Capt. Thomas W. Hudson, MNI, Operations Superintendent, Tankers, Mitsui O.S.K. Bulk Shipping (USA) Inc. • Adrian Goodger, Dir. & Sr. Partner, Samuel Stewart & Co. • CAPT Peter Gautier, Commanding Officer—Sector New Orleans, U.S. Coast Guard • Joe Hughes, President & CEO, American Club • Johan Henriksson, Sr. Mgr., Gard • Capt. Tom Neumann, President/Sr. Response Mgr., The Meredith Management Group, Inc. Coffee Break—Sponsorship Available | Expo Open tO say OR nOt tO say? effective cOmmunicatiOns • Jim Lawrence, President, MTI Network salvage & WReck RemOval cOntRacting • Jim Allsworth, Sr. Admiralty Consultant (UK), C-Solutions Ltd. caRgO – salvOR’s Best fRiend • Joanna Waterfall, Partner, Roose+Partners

the uscg BOa system • Ray Hayden, Chief of Contracting Office Services, U.S. Coast Guard (invited) salvORs RespOnding tO natuRal disasteRs • LCDR Brian Moore, U.S. Coast Guard update On the WReck Oil RemOval pROgRam • Lisa Symons, Damage Assessment & Resource Protection Coordinator, National Marine Sanctuary Program, NOAA Energy Break—Sponsorship Available | Expo Open challenges ahead: megaships, aRctic, peRsOnnel, RegulatiOns—Open fORum

Training Seminar - September 12, 2013 Continental Breakfast—Sponsorship Available managing expectatiOns duRing a salvage RespOnse OpeRatiOn A successful salvage operation hinges on the ability to successfully manage the expectations of multiple stakeholders. This session will deliver the views of leaders from the hull and P&I insurance sectors, shipowners, U.S. Coast Guard, and the salvage community. taBletOp exeRcise A provoking and highly interactive tabletop exercise will bring maritime industry experts into a spirited discussion on how to best manage a salvage response operation in U.S. waters.

Luncheon—Sponsorship Available | Expo Open

Coffee Break & Luncheon Included—Sponsorships Available

luncheOn addRess

Lanyards Sponsored by T&T Salvage

aRBitRatiOn - neW yORk vs. lOndOn Moderator: Jim Shirley, Esq., Principal Consultant, JTS Marine LLC • Thomas F. Fox, Maritime Consultant, SMA; President, Southold Maritime Services Corp.

• Lionel Persey QC, Arbitrators at 10 Fleet Street

Program subject to change

CONFERENCE UPDATES www.marinelog.com/events

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REGISTRATION Please register me for The National Maritime Salvage conference & expo September 9-12, 2013 in Arlington, VA. $1245: Conference & Expo September 10 & 11, plus September 12 Training Seminar.

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Send completed form to: Jane Poterala, Conference Dir., Simmons-Boardman Publishing 55 Broad Street, Flr. 26, New York, NY 10004 37.002.2950 T: (212) 620-7200 x7209 | conferences@sbpub.com

Marine Log Magazine Marine Log Daily News

CONFERENCE FEE: The registration fee for this event includes admission to all conference sessions and social functions, as well as conference documentation containing all available presentations (sent via email post-event). Registration confirmation and invoice will be emailed. CANCELLATION POLICY: Confirmed registrants canceling less than two weeks prior to the start of the event are subject to a $250 service charge. Registrants who fail to attend are liable for the entire fee unless they notify Simmons-Boardman in writing via email or fax prior to the event. HOTEL: The Key Bridge Marriott Hotel (1401 Lee Hwy., Arlington, VA 22209) has set aside a block of rooms at $264 single/double for conference attendees. These will be held until 30 days prior to the event. Please contact the hotel directly at (703) 524-6400 for room reservations (group code: “Marine Log”).

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CRUISE SHIPPING

(Cont. from pg 39)

Disney reimagines its magic The house of mouse, Disney, is also injecting new life into its original cruise ship, the Disney Magic. The “reimagineering” includes a floor-to-ceiling facelift for the Magic’s atrium, plus new spaces, including an Avengers Academy, the “After Hours” nightclub, larger staterooms and the addition of the AquaDunk thrill slide.

The ship w ill undergo dr ydocking between September and October of this year at the Navantia shipyard in Cadiz, Spain.

When the ship’s reimagineering is completed in October, it will emerge 20 ft longer, 1,000 tons heavier and, if Disney’s history repeats itself, brimming with magic.

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42 MARINE LOG June 2013

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Not one to be outdone, Royal Caribbean has its own revitalization program in place.

Following the introduction and subsequent success of its Oasis class, Royal Caribbean announced a fleet-wide revitalization program that would implement Oasis features on every one of its ships. The promise from Royal Caribbean: to leave no ship unturned, with the cruise line proclaiming that “every ship will be its best ship.” The 21- ship transformation began last year, with each ship undergoing slightly different amounts of revamping during drydock. Some of the enhancements include new dining venues, entertainment options and technology enhancements. Additionally, each ship will include wi-fi, electronic mustering, Digital Way Finding Systems, new staterooms and the Royal Babies & Tots nursery.

Further upping its WOW factor, Royal Caribbean has unveiled what it calls the next step in cruise shipping, its newest class of ships, the Quantum class.

Ships in the Quantum class will feature two industry firsts: the North Star, a jewellike capsule that will take passengers 300 ft above sea level and provide them with a 360 view as they hover above the ship; and RipCord by iFly—a sky diving wind tunnel that will simulate the feeling of skydiving.

Royal Caribbean has three of the 167,000 grt, 4,180-passenger ships on order at Meyer Werft. The ships, the largest to be built by the German yard, will measure 348 m x 41 m x 8.5 m, and will feature new transformational spaces that will serve various functions throughout the day and night including Two70, Music Hall and SeaPlex.

The first ship in the class, Quantum of the Seas, will enter into service fall 2014 and will sail out of New York Harbor from Cape Liberty. Anthem of the Seas will follow spring 2015. The third Quantum class ship is scheduled for delivery in mid-2016. ■

Software

EnhAnCInG ThE OPERATOR’S EXPERIEnCE Advancing safety and efficiency for the maritime industry through innovative software solutions By Hendrik Bruhns, President, Herbert-ABS Software Solutions LLC

B

ack in February 2011, a joint venture between naval architectural and marine engineering firm Herbert Engineering Corporation and classification society ABS was formed to enhance the development and delivery of critical software solutions for vessels operators. The joint venture, Herbert-ABS Software Solutions, LLC, leveraged the software capabilities of Herbert Software Solutions, a wholly owned subsidiary of HEC, and the decades of classification and ship design experience of ABS to develop unique, vital software tools for shipping. Herbert-ABS’ innovative software solutions fill an important role in safety efforts and energy efficiency for the industry by offering products that include CargoMax (shipboard trim, stability and loading), LMP-Offshore (offshore load management) and HECSALV (salvage engineering and design).

CargoMax, which is type approved by major classification societies and one of the world’s premier loading analysis instruments, is used on board tankers, bulkers, Ro-Ro’s, containerships, barges and other vessel types. It helps to maximize cargo utilization, increase container lashing efficiency, monitor margins of safety during cargo operations and improve safety by reducing human error. The newly released CargoMax 2.1 includes calculation enhancements for load discharge rate monitoring, advanced load/discharge/ballast water exchange sequencing and advanced bulk pile features. The trim optimization tool, which is fully integrated into CargoMax, is a powerful, easy to use solution that takes into account the regulatory aspects under which the vessel operates. Using vessel powering characteristics and proposed loading and ballast arrangements, the tool suggests changes to achieve a trim and draft as a way to enhance the fuel efficiency of a vessel as well as to help meet regulatory compliance.

LMP (Load Management Program) has been on the market for more than 10 years and meets the demanding needs of offshore installations, including stability, monitoring and weight management for a wide range of offshore platforms. The software tracks ongoing configuration changes to meet offshore stability and operational monitoring needs. It also provides weight management and the capability to evaluate operational limits of various situations.

The newly released LMP 2.1 includes calculation improvements focusing on robust multiple axis stability, application of wind, current & wave forces, 6-degree of freedom calculations and advanced tendon, riser, SCR and mooring calculations. Multiple axis stability allows the user to visualize the 360-degree righting curve of the asset,

CargoMax evaluates ship loading capabilities during any operation

not just the usual transverse righting curve. This can then be used in damage scenarios offshore to rapidly assess the stability of the damaged vessel and to suggest remedial action that might be used to save the asset. Program interface enhancements include unparalleled 3-D graphics, enhanced integrity monitoring features, alarms summary, fully customizable displays, units & conventions and improved communications with other on board systems.

HECSALV is Herbert-ABS’ industry leading casualty response software trusted by naval architects, salvors, navies and regulator societies around the world. HECSALV enables rapid evaluation of damaged conditions of a ship, including the analysis of intact conditions, freefloating damage cases, oil outflow prediction and various types of groundings. During a vessel emergency the most valuable assets are time and confidence. The software provides timely and accurate results when needed the most. Starting with the last known condition, it allows the user to quickly collect and process the available data, define the extreme bounds of the problem and evaluate multiple scenarios for remedial action. As more information comes in, the user can quickly and automatically update the entire analysis from beginning assumptions to latter stage pump allocations, producing a refined and carefully considered salvage plan to follow. HECSALV 8.1, is an upgraded version that features enhanced core calculations, a refined, more user-friendly interface, new 3D rendered graphics based on Hoops 3D, a variety of new modeling capabilities and is 100 percent compatible with CargoMax 2.x and LMP 2.x.

HECSALV for Offshore enables rapid evaluation of damaged conditions of an offshore asset, including the analysis of intact conditions, free-floating damage cases, oil outflow prediction, advanced loading capabilities for tendons, chains & risers, MODU Code stability evaluation, environmental loading (wind, current & wave), multiple-axis stability and various types of groundings. ■ June 2013 MARINE LOG 43

newsmakers

W&O restructures leadership team In an effort to pursue new opp or t unit ie s in t he domestic and inte r nat io nal mar in e markets, W&O Supply, Jack sonville, F L , ha s restructured its leadership team. Michael Page is now the Vice President, East and West Coast operations. He formerly served as W&O’s CFO, a role that will now be filled by greg lechwar. Meanwhile, Kurt gibson, formerly W&O’s Director of Sales, has been named Director of International Business Development and Marketing.

Finally, Fred looMis takes on the role of W&O’s Director of Technical Projects. Prior to the appointment, Loomis was W&O’s Director of Navy and Government Sales.

Cruise Lines International Association (CLIA) has named thoMas Fischetti CFO. His responsibilities will include financial management, accounting, contracting and internal controls, IT, human resources and oversight of the association’s facilities.

U.S. Maritime Administration’s david Matsuda is stepping down from the administrator position. Matsuda, who was often criticized in industry circles for his lack of engagement and advocacy for the maritime industry, will be replaced by Deputy Administrator chiP Jaenichen.

ST X Marine has named williaM lind Vice President of Operations, Houston, TX. Lind most recently held the position of Director of Technology and Business Development at ABS. greg buFFington has joined Crowley as Vice President of Carib Energy. Carib Energy was acquired by Crowley Maritime Corporation Petroleum Ser vice group.

Buffington’s duties include developing and expanding the company’s Caribbean and Central American opportunities for smallscale LNG applications.

thoMas allegretti, President and CEO of the American Waterways Operators, has been elected Chairman of the American Maritime Partnership. He succeeds James Henr y, Chairman and President of the Transportation Institute.

Huntington Ingalls Industries has named carolyn e. aPostolou Vice President for Legislative Af fairs (Senate); and has appointed vice adMir al John “Jay” donnelly (U.S. Nav y-Retired) as Vice President of Program Integration and Assessment.

Singapore-headquartered Epic Pantheon International Gas Shipping Ltd. has appointed lars vang christensen as Chief Executive Officer. Christensen is the former Chairman of the Danish Shipowner’s Association and Vice President of the International Chamber of Shipping.

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 44 MARINE LOG June 2013

Known in Asia as the “bible of shipbuilding” SNAME’s well-respected Journal of Ship Production has been expanded to include Ship Design. The newly redesigned Journal of Ship Production and Design includes papers on ship design, design for production, and other marine technology topics such as ship operations, shipping economics, and safety. There are also papers on the technical issues that readers have come to count on, such as the problems of shipyard techniques and the production of merchant and naval ships.

For more information and to subscribe to JSPD go to http://www.sname.org/SNAME/Pubs/Journals1/

techNews Fireboy-XinteX’s Fire detection system receives Abs ApprovAl

shipbuilding robots From hyundAi DiD you know that one of the world’s largest shipbuilders Hyundai Heavy Industries (HHI), Ulsan, South Korea, is also one of the largest manufacturers of industrial robots? Recently, the company, which has manufactured robots for manufacturing cars, announced that it has developed mini welding robots for building ships.

With its arm retracted, the compact welding machine measures 50 cm x 30 cm x 15 cm. The robot’s compact size make it ideal for areas that are inaccessible to human welders, and its six joints provide it with the flexibility to carry out almost all types for welding work at a speed similar to a human welder.

Installed software will enable the little automaton to perform operations such as steel cutting, blasting and painting. Hyundai Heavy says it plans to improve the robots to be used for building onshore/offshore facilities and construction equipment.

Hyundai Heavy will begin using the welding robots during the second half of 2013.

Beyond the shipbuilding robots, the company also manufactures 20 models of car assembly robots, 10 models of LCD handling robots, and is in the process of developing various types of surgical robots in association with Asan Medical Center.

Fireboy-XinteX inc., Grand Rapids, MI, now has ABS approval on its USCG Type Approved and IMO Solas Approved Elite RSM marine and offshore fire detection systems. Available for hosting up to 252 fire detection devices on commercial vessels, the Elite RSM Analog Addressable Fire Alarm Control Panels can be expanded and networked to become part of larger systems.

E l i te R S M ’s au tomate d s y s te m set-up makes installing easy and simple to understand. It also features highquality marine grade Apollo protocol smoke and heat detectors and two full SLC loops and leading edge microprocessor-based electronics.

www.fireboy-xintex.com

english.hhi.co.kr

project cyclops: coming soon to An oceAn neAr you Project cycloPs may sound like a title for a future film, but its really the next big step towards harnessing subsea opportunities—at least according OceanGate Inc. A provider of deep-sea manned submersible solutions, OceanGate Inc., Seattle, WA, has announced that it will collaborate with the University of Washington’s Applied Physics Lab (APL-UW) to develop “Project Cyclops.”

Under the $5 million contract, the university will supply a variety of forward-thinking designs, as well as engineering and prototyping services to OGI for the next two years.

Scheduled to debut in 2015, Cyclops is a new 3,000-meter manned submersible that is expected to increase access to the deep ocean.

Designed to be the most advanced and mobile deep-sea manned submersible in the world, the light weight Cyclops will enable scientists and explorers to travel up to 3,000 meters below the ocean’s surface to perform a variety of tasks, including scientific study and oil and gas exploration.

www.opentheoceans.com

jotAchAr jF750 to provide pFp coating For jet Fires For oFFshore assets requiring some degree of jet fire protection, and owners demanding PFP materials that can demonstrate jet fire capability to ISO 22899, Jotun has developed Jotachar JF750.

Unveiled at the OTC Show, Jotachar JF750 is Jotun’s next-generation passive fire protection (PFP) coating system that will help save time, lower costs and reduce risks. Jotachar JF750 is a mesh-free epoxy intumescent coating solution available to the market where jet fire protection is required for safety

critical steel structures, divisions and vessels.

Its formulation “incorporates an advanced fiber matrix system” that is combined with a “robust and temperature stable insulating char.” The combination “eliminates the need for additional mesh reinforcement, reducing complexity and making it significantly faster to apply,” explains Jotun’s Andy Czainski.

Extensively fire tested to all key industry standards, the system demonstrates structural fire protection for up to three hours.

www.jotun.com

June 2013 MARINE LOG 45

techNews

Caterpillar unveils new dual fuel marine engine

raaCi delivers full propulsion system to Gulfmark psvs robiChaux autoMation and Control, Incorporated (RAACI) has delivered on its contract with Thoma-Sea Marine Constructors to design and supply a complete Diesel Electric Propulsion system for two GulfMark Offshore 280 Class Deepwater DP-2 PSVs. The contract called for RAACI to provide: (1) Active Front End (AFE) Variable Frequency Drives (VFDs) and motors for the propulsion and thruster system; (2) Full Electrical Distribution System with Power Management; and (3) Alarm & Monitoring System (ABS ACCU & DP-2).

Additionally, RAACI was to provide three air-cooled 495kW FIFI motors.

The RAACI Power Management System coordinates and controls the interaction with RAACI’s propulsion system and electrical distribution system. ABS approved, the system enables full DP-2 operation with a closed or opened switchboard bus.

footprint as the M 32 C engine series.

The new engine will provide vessels operating in regulated areas with flexibility. “The M 34 DF was designed to provide operators with industry-leading thermal efficiency for lowest total cost of operation,” says Detlef Kirste, MaK Product Definition Manager.

“The engine offers optimized load response and load stability in addition to numerous support features, such as remote monitoring and engine system diagnostics, helping engine operators with their daily service and maintenance work. Our target was to keep the typical MaK marine engine attributes like reliability, safety and efficiency while striving for an engine design that is easy to service and maintain.”

The M 34 DF will undergo customer acceptance tests and classification approvals in Rostock, Germany and will be sold through Caterpillar’s MaK dealer network.

The first deliveries for the M 34 DF will take place October 2014. marine.cat.com

C at e r p i l l a r M a r i n e p o w e r Systems has developed a new marine dual fuel engine, M 34 DF, for the commercial marine market.

The dual fuel engine will be capable of burning natural gas as an alternative to marine diesel oil. Additionally, operators can avoid having to install large, complex scrubbers for Emission Control Area (ECA) operation beginning 2015.

With a power rating of 500 kW per cylinder at 720 and 750 rev/min in diesel and gas modes, the M 34 DF will share the same

www.raaci.com

Reputation • Service • Quality

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ANNIVERSARY

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985-384-3060

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ANNIVERSARY CONRAD Shipyard

46 MARINE LOG June 2013

2013

CONRAD CONRAD

1948

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1948

Anniversary

2013

1948 2013

CONRAD Shipyard

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1501 Front Street Morgan City, LA 70380 sales@conradindustries.com

FERRIES 2013 M L CONFERENCE & EXPO arine oG

November 4 & 5, 2013 Grand Hyatt Seattle Seattle, WA

CONFERENCE TOPICS • Saving money & increasing profits through proper maintenance • Show me the money: Financing your fleet • LNG for new and existing vessels • Does hybrid propulsion make sense?

• Focusing on safety & crew training

EXHIBIT AND SPONSORSHIP OPPORTUNITIES AVAILABLE For details, contact Jane Poterala, Conference Director, Marine Log. Email: jpoterala@sbpub.com Phone: (212) 620-7209 www.marinelog.com/events

contracts Shipyard ContraCtS While every care has been taken to present the most accurate information, our survey gathering system is far from perfect. We welcome your input. Please e-mail any changes to: marinelog@sbpub.com. Some contract values and contract completion dates are estimated. Information based on data as of about May 1, 2013. (*) Asterisk indicates first in series delivered. A “C” after a vessel type indicates a major conversion, overhaul or refit. Additional commercial and government contracts are listed on our website, www.marinelog.com.

Shipyard

Location

Qty

type

particuLarS

owner/operator

eSt. $ MiL $125.0

RECENT CONTRACTS

EST. DEl.

Chantier Davie Canada Leevac Shipyards Leevac Shipyards

Quebec City, CAN Jennings, LA Jennings, LA

2 2 2

RoPax ferries MPSVs PSVs

LNG, 92m 302 ft x 76 ft 300 ft x 62 ft

STQ Hornbeck Offshore Tidewater

DElIVERIES Austal USA Gladding Hearn Kvichak Marine VT Halter Marine

Mobile, AL Somerset, MA Seattle, WA Pascagoula, MS

1 1 15 1

JHSV pilot boat skimmers tank barge

103m, 43 knots 53 ft x 17 ft 30 ft 3 in x 9 ft 8 in 330,000 bbl, 600 ft

U.S. Navy Northeast Pilots U.S. Navy Crowley Maritime

Mobile, AL San Diego, CA

2 3 6

dump scows containerships car ferries OPCs OSVs double-end ferry PSVs Roll-On/Roll-Off PSVs subsea vessel PSVs

7,700 ft3 764 ft x 106 ft 1,200 PAX (Convert to LNG) Offshore Patrol Cutters stretch 70-car dual fuel, 302 ft x 64 ft 692 ft, 26,600 dwt 97.2m, DP2 108m x 22m, MT6022 300 ft x 62 ft

Great Lakes Dredge TOTE Washington State Ferries U.S. Coast Guard GulfMark Offshore VDOT Harvey Gulf Intl. Marine Pasha Hawaii Transport Hornbeck Offshore Otto Candies LLC Tidewater

MAY13 APR13 MAY13 MAY13

PENDING CONTRACTS BAE Systems Southeast GD-NASSCO TBD TBD TBD TBD TY Offshore VT Halter Marine VT Halter Marine Candies Shipbuilders Leevac Shipyards

3Q2015 2016 2015

NOTES

New Orleans, LA Pascagoula, MS Pascagoula, MS Houma, LA Jennings, LA

10 1 2 1 24 1 2

$27.0 $137.0 $1,080.0

Option Opts ex. 2013 RFP issued RFP/Phase I RFP RFP Options Option Options Option Options

Visit Marine Log’s home on the world wide web www.marinelog.com News updates

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KVICHAK WORK BOATS OVER 500 VESSELS BUILT TO LAST ...AND COUNTING

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48 MARINE LOG June 2013

www.kvichak.com

Index of AdvertIsers Company

page #

ABS Americas . . . . . . . . . . . . . . . . . . . . . . . .13 Austal USA . . . . . . . . . . . . . . . . . . . . . . . . . . 3 AVO Training Institute . . . . . . . . . . . . . . . . 38 Baier Marine Co . . . . . . . . . . . . . . . . . . . . . . 30 Baker Lyman & Co ., Inc . . . . . . . . . . . . . . . . . 11 Bollinger Shipyards . . . . . . . . . . . . . . . . . . 19 Burger Boats . . . . . . . . . . . . . . . . . . . . . . . . 32 Centa Corporation . . . . . . . . . . . . . . . . . . . 10 Coastal Marine Equipment . . . . . . . . . . . . 28 Conrad Shipyard . . . . . . . . . . . . . . . . . . . . . 46 Donjon Marine, Inc . . . . . . . . . . . . . . . . . . . 12 Eastern Shipbuilding Group . . . . . . . . . . . . 9 Elliott Bay Design Group . . . . . . . . . . . . . . 28 Ferries Conference . . . . . . . . . . . . . . . . . . . 47 Fincantieri Marine/Bay Shipbuilding Co . . C2 Global Greenship Conference . . . . . . . 20, 21 Great American Insurance Co . . . . . . . . . . 27 Hyde Marine . . . . . . . . . . . . . . . . . . . . . . . . 36 Interferry . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Intergulf Corporation . . . . . . . . . . . . . . . . . . 5 JMS Naval Architects . . . . . . . . . . . . . . . . . . 4

OFFSHORE

ENERGY CHALLENGE

Company

page #

KVH Industries, Inc . . . . . . . . . . . . . . . . . . . C3 Kvichak Marine . . . . . . . . . . . . . . . . . . . . . . 48 Lufkin Industries . . . . . . . . . . . . . . . . . . . . . 18 Marine Art of J . Clary . . . . . . . . . . . . . . . . . 35 Metal Shark Boats . . . . . . . . . . . . . . . . . . . .31 MMC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 NAMJet LLC . . . . . . . . . . . . . . . . . . . . . . . . . 46 National Maritime Salvage Conference 40,41 Offshore Energy Challenge . . . . . . . . . . . . 49 Scania USA, Inc . . . . . . . . . . . . . . . . . . . . . . . .1 Schuyler Rubber Company . . . . . . . . . . . . . 42 Sika Canada, Inc . . . . . . . . . . . . . . . . . . . . . 42 Smith Berger Marine . . . . . . . . . . . . . . . . . 44 SNAME . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 St . John’s Ship Building, Inc . . . . . . . . . . . . 35 T&T Salvage . . . . . . . . . . . . . . . . . . . . . . . . 39 Vigor Industrial . . . . . . . . . . . . . . . . . . . . . . 24 VT Halter Marine, Inc . . . . . . . . . . . . . . . . . . C4 W&O Supply . . . . . . . . . . . . . . . . . . . . . . . . .14 WQIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Zentech Incorporated . . . . . . . . . . . . . . . . . 26

December 3-4, 2013 Washington Marriott Washington, DC

CONFERENCE + EXPOSITION

The world energy picture is changing.

Are you changing with it?

Tabletops & Sponsorships Contact Jane Poterala at jpoterala@sbpub.com (212) 620-7209 www.marinelog.com/events

June 2013 MARINE LOG 49

marketplace

MARKETPLACE

pROduCTS & SERvICES

ENGINEERS & ARCHITECTS KEEL DESIGN CORPORATION naval architects & marine engineers Quality technical services 2021 Dauphine Street • New Orleans, LA 70116 (800) 823-1324 (504) 945-8917

SOFTWARE NAVAL ARCHITECTURE CONCEPTUAL DESIGNS MARINE ENGINEERING PRODUCTION ENGINEERING

BOKSA

Marine Design incorporated

LOFTING & NESTING • TOOLING DESIGN

BoksaMarineDesign.com 813.654.9800

6129 Churchside Drive Lithia, FL 33547

MARINELOG.COM 50 MARINE LOG June 2013

marketplace PROduCTS & SERvICES

Custom Replica Ship Models ANY Vessel – Any Scale www.SDModelMakers.com (760) 525-4341 Specializing In Barges • Single or Double Hull, Inland or Ocean-Going • Design, Construction & Modification • Chartering & Sales

503-228-8691 1-800-547-9259 3121 SW Moody Avenue, Portland, Oregon 97239

ENGINEERS & ARCHITECTS Marine

WATERFRONT LEASE Two Prime Waterfront Properties in Port of Mobile for Lease.* Contact William Harrison 251-232-3810 or visit www.harrisonbrothers.com/land *Subject to mutually agreed upon terms and conditions of a written lease. All Real Estate Brokers or Agents shall be considered agent of, and sole responsibility of, theTenant.

FOR SALE:

Industry

2 DRYDOCKS, SHIFT BOATS, CRANES,

M.A.C.E. Inc.

POLLUTION RECOVERY BARGE.

FT. LAUDERDALE - USA - WORLDWIDE

Contact William Harrison 251-232-3810

PHONE: (954) 563-7071 FAX (954) 493-9559

Thickness - hardness crack determination Ultrasonic flaw detection Vibration - noise structural/modal analysis Field balancing Torque - torsional vibration analysis Predictive Maintenance IR - thermography measurements

EMPLOYMENT

MARINELOG

MARINELOG

HARLEY MARINE SERVICES

Purchase online access to conference presentations

Open Positions:

ML ML

Port Captain – U.S. Gulf Coast Barge Operations Supervisor – U.S. Gulf Coast

stay up-to-date on trends build your reference library

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■ Offshore Alternatives

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■ National Maritime Salvage

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GILBERT ASSOCIATES, INC. Naval Architects and Marine Engineers

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■ And many more For availability and cost, contact: T: (212) 620-7200, x7208 conferences@sbpub.com

Website www.jwgainc.com

Telephone: 781 740-8193 Facsimile: 781 740-8197 E-mail address: inbox@jwgainc.com

Apply online at: www.harleymarine.com

Marketplace SaleS contact: Jeanine Acquart Phone: 212/620-7211 Fax: 212/633-1165 Email: jacquart@sbpub.com

All MAjor Credit CArds ACCepted June 2013 MARINE LOG 51

Shipbuilding hiStory

Between 1853 and 1970 three generations of the Stone family built more than 225 wooden boats at various locations on the shores of San Francisco Bay. The business was started by William I. Stone, who established a boatyard in the Hunter’s Point area of San Francisco. There he built schooners and other commercial boats as well as racing and recreational yachts. His son, Frank, took over in 1892

The Ryder Hanify was among the largest wooden-hulled steamers of its time

MarineLoG ISSN 08970491

USPS 576-910

A Simmons-Boardman Publication 55 Broad Street, 26th Floor New York, N.Y. 10004 Tel: (212) 620-7200 Fax: (212) 633-1165 www.marinelog.com

and moved the business to Beach Street in Tiburon. He moved again in 1899, to Harbor View, in San Francisco, where he operated in partnership with Edgar Van Bergen. In 1911, they were evicted from this location to make way for the Pan Pacific Exposition of 1915, and moved to the foot of Diesel Way, in Oakland, adjacent to the Union Diesel Engine Company.

Frank’s son, Lester, joined the business at this time and the name was changed to W. F. Stone & Son. Then, in 1923, Frank Stone died and Lester Stone became the sole proprietor. Following the entry of the United States into World War II and the subsequent expansion of Union Diesel, however, W. F. Stone & Son got evicted again and moved across the estuary to Alameda, to a location on Blanding Avenue. Lester Stone retired in 1970 and the yard was sold to John Whitset, but continued to do business as the Stone Boat Yard. It declared bankruptcy in 1986 and was sold again, to Bill and Grace Bodle, and then again in 2000 to David Olson. It closed for good in 2004.

Like most boatbuilders, the Stone Boat Yard built for the Government in both world wars. It built tugs for the U.S. Shipping Board during World War I and tugs, sub chasers and minesweepers for the U.S. Navy during World War II. In its early, pre-WWI years, it was best known for its oceangoing schooners, primarily designed for the Pacific Ocean trades, with Williams, Dimond & Co.; J. R. Hanify & Co.; and the Societé Commerciale de l’Oceanie among its regular customers. It also built a significant

number of tugs. Their single best customer in this sector was the up-and-coming firm of Crowley Launch & Tugboat Company.

During this period, they built the Ryder Hanify and the Robert C. Sudden—at 233 feet they were the largest wooden-hulled steamers on the Coast, each carrying 1,500,000 board-feet of lumber. The yard also built the schooner Martha for J. R. Hanify, which is still active today as a sail training ship.

In the years between the wars, Stone kept busy while others struggled, and even expanded into the construction of fishing vessels and yachts. Among the more notable projects were the sloops Westerner for Frank Drake, Senta for Ken Bechtel and Sonata for Gordon Strawbridge, which were all familiar in racing circles. Their reputation in this sector became so strong that they had no trouble returning to commercial work in the post-WWII years, when so many yards, both large and small, folded.

In those post-war years, Lester Stone collaborated with a remarkable shipbuilder called Jack Ehrhorn, who had served an apprenticeship in the yard in the early 30s and had been in charge of operations during the war. Together, they designed and built successful recreational and racing yachts. Stone used his design skills and his connections at the St. Francis Yacht Club to generate business while Ehrhorn turned out the boats. By 1970, however, when Lester Stone retired and sold the yard, the market was fading and the Stone Boat Yard’s remaining years were a period of struggle and decline.

Advertising Sales UNITED STATES New York Sales Office 55 Broad Street, 26th Fl New York, NY 10004 U.S. Gulf Coast, West Coast and Mexico Jeff Sutley National Sales Director Tel (212) 620-7233 Fax (212) 633-1165 E-mail: jsutley@sbpub.com U.S. East Coast, Midwest and Canada Vanessa Di Stefano Regional Sales Manager Tel (212) 620-7225 Fax (212) 633-1165 E-mail: vdistefano@sbpub.com

52 MARINE LOG June 2013

By Tim Colton

WORLDWIDE Marine Log (UK) Suite K5 & K6, The Priory Syresham Gardens Haywards Heath RH16 3LB UNITED KINGDOM International Louise Cooper International Sales Manager Tel: +44 1444 416368 Fax: +44 1444 458185 E-mail: lcooper@sbpub.com

China and Korea Young-Seoh Chinn JES Media International 2nd Fl. ANA Bldg.

257-1, Myungil Dong, Kangdong-Gu Seoul 134-070, Korea Tel: +822-481-3411 Fax: +822-481-3414 e-mail: jesmedia@unitel.co.kr CLASSIFIED SALES Jeanine Acquart Classified Advertising Sales 55 Broad Street, 26th Fl New York, NY 10004 Tel: (212) 620-7211 Fax: (212) 633-1165 E-mail: jacquart@sbpub.com

Courtesy Sherman Library & Gardens

The STone BoaT Yard: LongeviTY

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