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TANKEROperator 

MARCH 2007 

Features: 

• Cyprus – In better shape 

• Reaping the benefits of US listings 

• Seafar 

arers s needed: Apply y here 

• Making the navig 

vigator comfor 

ortable 

• Deepwell ell pumps essential 

• Ship-to-ship transf 

ansfer milestone 

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TANKEROperator 

Vol 6 No 2 

Digital Ship Limited 

213 Marsh Wall 

London E14 9FJ 

UK 

www.tankeroperator.com 

PUBLISHER 

Stuart Fryer 

EDITOR 

Ian Cochran 

Tel: +44 (0)20 7510 4933 

cochran@tankeroperator.com 

ADVERTISING 

David Jeffries 

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djeffries@tankeroperator.com 

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(Greece-Italy-Cyprus) 

Tel: +44 (0)20 7510 4938 

ria@tankeroperator.com 

MARKETING 

Rebecca Gee 

Tel: +44 (0)20 7510 4946 

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PRODUCTION 

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Tel: +44 (0)20 8995 5540 

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Printed by The Manson Group 

Reynolds House, 8 Porters' Wood 

Valley Road Industrial Estate 

St Albans, Herts AL3 6PZ 

Contents 

03 

08 

10 

12 

16 

26 

Industry news 

Markets 

08 Low sulphur fuel will 

cause problems worldwide 

09 Tanker rates to tumble? 

Profile 

Epic sets its stall out for the 

future 

Focus on Cyprus 

Still bullish following EU entry; 

Registry puts its house in order 

Focus on the US 

Stock quoted tanker companies 

doing well; major events take 

place in March 

Ship Management 

The next generation of 

shipboard and shore staff - 

where will they come from? 

30 

Technology 

30 Cargo Monitoring - Military 

sensor provider makes it in 

the commercial world 

31 Navaids aids - Striving for 

an ergonomically designed 

IBS; where we are with 

ECDIS/ENCs 

36 Cargo pumps - Deepwell 

pumps making their mark in 

ice class tankers 

39 Ship-to-ship transfers – 

Leading expert expands into 

Europe and oversees first 

LNGC STS 

40 Fibre replaces wire mooring 

and towing lines 

Front cover photo - Superstructure of the aframax 

Yuri Senkevitch, an Ice Class 1A tanker. She trades 

to Sakhalin hence the fully enclosed bridge design 

developed for harsh weather conditions. The tanker is 

operated by Sovcomflot and managed out of Limassol 

by Unicom. Photo credit - Unicom. 

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March 2007 • TANKEROperator 01

COMMENT 

How do you fund massive upgrades? 

I was interested to read 

the knee-jerk reaction to 

the Panama Canal 

authorities' transiting 

fee hike announced a 

couple of weeks ago. 

This falls hard on the heels of the 

Suez Canal Authority's 

announcement of a transit price 

rise, which is due to kick in 

this April. 

As both have announced huge 

upgrading plans, why did this 

come as such a surprise? Perhaps 

it was the severity of the rises 

that caught most shipping 

organisations and their members 

by surprise. 

What happens at Suez has 

much more affect on the tanker 

and gas industry than what 

happens at Panama. However, the 

Panamanians could narrow the 

gap after 2014 when in theory we 

could see almost fully laden 

suezmaxes and certainly 

aframaxes transiting down to 

their marks. 

New trade routes will 

undoubtedly open up, most 

notably from the Caribbean to the 

US and South America west 

coasts and across the Pacific, 

giving Chavez the opportunity of 

lifting much more oil cheaply to 

China from his Venezuelan oil 

fields, if he's still around by then. 

What seems to have got 

everybody's back up is that 

between 2007 and 2009, the rate 

for tankers transiting the Panama 

Canal will go up by 34% to $3.98 

per tonne from today's $2.96 per 

tonne. Today, the Canal is mainly 

used by chemical and products 

tankers of up to panamax 

dimensions. There are very few 

crude oil tankers in this sector, 

most being somewhat larger. 

A new Panama Canal will 

mean that the chemical tanker 

boys and girls will no longer have 

to rely on 32 m beam parcel 

tankers. In fact, the products 

sector had already gone aframax 

several years ago. However, the 

chemical tanker operators rely on 

the Panama Canal for their virtual 

round-the -world liner services, 

much the same as the 

containership operators used to 

before the advent of the so called 

post-panamax box ship 

As for the Suez Canal the 

percentage rise for tankers is only 

3.73%. Unlike Panama, tankers 

already account for the largest 

number of transits. The detractors 

will argue that the 2006 figures 

showed that the Canal recorded a 

record $3.8 bill revenue from the 

more than 680 mill tonnes of 

cargo that moved through the 

waterway. Suez is looking at 

accepting fully laden VLCCs, 

whereas at present a pipeline 

operates the length of the canal 

with terminals at each end. 

Of course, before we see a rush 

of larger tanker tonnage queuing 

at the entrances of the canals, the 

calculators will be out in the 

brokers and operators offices 

working out the latest cost of fuel 

oil, transit fees etc against 

steaming around the two capes. 

The Black Sea and the US east 

coast will always be hampered by 

draught restrictions of around 15 

m. The Turkish authorities have 

already banned VLCC traffic 

from the Bosporus and we have 

recently seen rising waiting times 

at both entrances of the narrow 

waterway that bisects Istanbul as 

the Turks struggle to cope with 

the shear volume of tanker traffic 

lifting Russian crude in aframax 

and suezmax hulls. Another canal 

boasting the largest number of 

transits is the Kiel Canal. This 

waterway has benefited from the 

upturn in the economies of the 

countries bordering the Baltic Sea 

and the Finnish Gulfs. However, 

it is restricted to vessels of up 

to panamax size and around 

10 m draught. 

No doubt the Panamanians will 

come in for a bit of stick at the 

forthcoming CMA and Intertanko 

functions to be held in the US 

next month. At CMA there is a 

session devoted to the Panama 

Canal where the administrators 

will explain their masterplan and 

how they are going to fund it. A 

public hearing has been called by 

the ACP, the canal's administrator, 

to take place on 14th March to 

discuss the transit cost rises. 

The Panamanians will probably 

come to both meetings cap 

in hand! 

TO 

Identifying the Risk 

Risk assessment, or 

lack of it, was high on 

the agenda at 

TANKEROperator’s 

recent conference in 

Limassol. 

Fortunately, by and large, the 

tanker industry has taken in the 

concept of assessment, which 

forms an integral part of TMSA. 

Accidents will happen to the best 

of us, but the key is how you 

handle an incident and learn by it. 

Risk assessment is closely allied 

to safety management. In fact they 

could be taken as more or less the 

same thing. If you successfully 

identify and manage a risk, the 

odds are that you are running a 

relatively safe operation. 

As chairman Dimitris Lyras put 

it "Safety management is not all 

about hard hats and the right 

shoes, it is ensuring that today's 

tankers are safely operated." He 

gave the example of BP's 

problems in Texas as an operation 

having "no risk management." 

During the conference the 

speakers from two of the leading 

Cypriot-based shipmanagement 

companies gave an overview of 

their companies approach to 

safety management and 

identifying the risks. 

Such phrases as 'allocation of 

responsibility', 'failure to follow 

procedures', 'analyse all the 

critical data', 'refresh 

assessments', 'use preventive 

maintenance' and many more 

were thrown up. 

A leading class society 

introduced a risk assessment tool, 

whereby all the data relevant to a 

certain vessel is kept on a 

database and analysed with the 

'critical' items identified. The 

better the equipment is 

monitored, the better knowledge 

you will have of a possible 

failure, BV said. 

To a large extent it is a 

question of change management, 

that is getting shore staff and 

seafarers to change the way they 

think, therefore the way they act. 

An interesting comment came 

from the floor from a senior 

shipmanager, who claimed that 

TMSA was invented by bigness, 

ie the oil majors, for bigness, ie 

those companies that had the 

resources to implement it. 

Lyras complained that thus far, 

there had been no feedback from 

OCIMF on TMSA, although 

obviously individual tanker 

concerns were talking with their 

principals on a one to one basis. 

Despite some misgivings most 

people who have discussed 

TMSA with TANKEROperator 

said it was a good idea and have 

launched themselves into it with 

some enthusiasm, which this 

writer admits, took him somewhat 

by surprise. 

We can now all look forward to 

InterManager's list of KPIs. TO 

02 

TANKEROperator • March 2007

INDUSTRY - NEWS 

Letter to the Editor 

Dear Sir, 

I have noticed that there is an 

increasing demand for tankers 

to change their summer 

deadweight (and increase the 

corresponding freeboard) in 

order to be allowed alongside 

certain berths - of course this 

is a complete nonsense since 

the only thing that changes is 

some paintwork on the 

ship's side. 

Regrettably this additional 

paintwork is often performed 

under far from safe conditions 

with sailors working over the 

ships side, as for accuracy, 

that's anyone's guess. What's 

even more regrettable, those 

requiring this change 

obviously just don't 

understand. 

It could be argued that 

changing deadweight would 

make a difference at a loading 

terminal, a sort of quasi legal 

restraint on the master on how 

much he can load, though I've 

seldom heard of a vessel 

loading more than their 

voyage orders dictate. In any 

case under most flags, the 

master can change the 

deadweight and corresponding 

freeboard up and down at the 

stroke of a pen in the Official 

Log Book. 

What is even more 

ridiculous is that the 

deadweight is not even 

mentioned on the new, shiny, 

normally 'short term' loadline 

certificate. I once had the 

pleasure of insisting to a 

senior class surveyor (to his 

absolute horror) that he 

amend the deadweight in the 

IOPP, Safcon and Safety 

Equipment certificates also, 

three of the few documents on 

a tanker where the deadweight 

is officially mentioned. 

So, apart from being a nice 

little earner for the 

classification societies, the 

exercise of changing a 

tanker's deadweight is, in 

reality completely futile. 

I have thought about 

advocating maximum 

displacement as more 

suitable restraint to put on a 

vessel, but I fear that 

concept would be lost on 

those most responsible for 

this latest craze. 

Yours etc, 

Capt. Graeme W. McNaught. 

MRIN, MNI. 

8 Kalypsous 

Glyfada 

Athens 

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Checklists to curb pollution 

The management and 

control of marine 

pollution is steadily 

assuming a higher 

priority as governments, 

official bodies and 

politicians focus 

increasingly on MARPOL 

infringements and 

threaten key personnel 

with criminal 

prosecution. 

A checklist to help owners, 

operators and in particularseafarers 

- comply with MARPOL 

and prepare for Port State Control 

(PSC) inspections in the light of 

increasing threats of commercial 

disruption, fines and possible 

criminal proceedings, a booklet 

Marine Pollution Prevention 

Pocket Checklist has been 

published by Lloyd's Register and 

the UK P&I Club. 

LR's Alan Gavin explained that 

PSC rankings provided the 

industry with a tangible measure 

of the quality of the world's 

tonnage. PSC authorities had 

become increasingly effective at 

squeezing sub-standard operators 

out of the market, particularly 

through targeted inspection 

campaigns. 

The Paris and Tokyo MOUs 

and the US Coast Guard's annual 

reports gave the industry an 

effective measuring stick for 

gauging performance and 

deciding on methods of 

improvement. 

In 2005, PSC found over 220 

MARPOL infringements among 

LR classed vessels. 

The top 10 detention items 

related to oil filtering equipment 

(40), shipboard oil pollution 

emergency plan (SOPEP) (36), 

oil record book (27), 15 PPM 

(parts per million) alarm 

arrangements (23), retention of 

oil on board (22), other 

MARPOL Annex I (19), 

prevention of pollution by oil 

(IOPP Certificate) (18), garbage 

record book (17), garbage 

management plan (11) and oil 

discharge monitoring and control 

system (9). 

Gavin pointed out that LR 

monitored its fleet's PSC 

detentions to identify areas 

needing improvement. "Since 

2002, we have used this data as 

the basis of a comprehensive PSC 

benchmarking system and 

migrated the data to ClassDirect 

Live, our online class information 

system. This ensures surveyors 

have up to date PSC information 

at their fingertips, providing the 

most detailed possible view of 

any ship they are about to board." 

The system allowed potential 

Alan Gavin -PSC rankings provide the industry with a tangible 

measure of the quality of the world's tonnage. 

risks to be identified. "Where a 

confluence of factors might not 

individually be cause for alarm 

but together represent a 

significant risk, we are able to 

warn the owner and take action. 

For instance, a dirty engine room 

with flammable material close by, 

an unattended machinery space 

and an inoperable emergency fire 

pump would not necessarily pose 

substantial risks in themselves. 

Occurring at the same time and in 

close proximity, they would 

amount to a significantly 

hazardous situation," Gavin 

explained. 

Karl Lumbers, the UK Club's 

loss prevention director 

emphasised that the Club 

supported the PSC system. 

However, lowering detentions 

was not just about cutting down 

on deficiencies but reducing 

environmental damage and 

insurance claims. "Class looks at 

environmental problems from a 

position based on rules and 

standards. Insurers focus on risk," 

he said. 

Pollution accounted for 18% all 

UK Club claims outgoings in 

2005. Deficiencies with oily 

water separators were down from 

30 in 2001 to 14 in 2006. 

However, other MARPOL 

deficiencies were up from zero in 

2001 to 22 in 2006, an especially 

worrying trend as the increase in 

the past 12 months was 

considerable. Taken together, 

MARPOL and OWS violations 

were the most frequent reasons 

for UK Club ship detentions 

in 2006. 

"The variety of vessels 

involved in pollution claims in 

1987-2004 is perhaps surprising," 

continued Lumbers. "As might be 

expected, tankers featured in 46% 

incidents (24% of Club entry). It 

follows that the sources of large 

environmental claims are also 

widely spread. Crude oil and fuel 

oil as cargo accounted for just 

under one quarter each, with 

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04 



Karl Lumbers - Reducing environment damage and insurance claims. 

chemical, clean and dirty 

products, dirty ballast, bilges and 

smoke appearing in the analysis. 

However, 33% were down 

to bunkers. 

"This is highlighted by 

comparing the quantities spilled 

in 1990-94 with those in 2000-04. 

Pollutions of five to 1,000 tonnes 

have dropped dramatically from 

59 to 16. Those under five tonnes 

have only eased from 53 to 49. 

This illustrates how important it 

is to guard against the smallest 

spillages. The authorities can be 

expected to target all incidents 

with increasing zeal, larger fines 

and, possibly, imprisonment for 

certain onboard and shore 

personnel," Lumbers warned. 

Underlying causes of pollution 

incidents included failure and 

misuse of valves, overflows, 

defects in plate and pipes, hose 

rupture, contaminated bilges and 

faulty gauges. 

Lumbers stressed the 

importance of human error in 

causing large spills. Given their 

responsibilities, deck officers are 

most likely to commit the errors. 

They were at fault in 27% 

incidents in 1987-2004. However, 

taken together, crew, engineering 

officers, pilots and shore 

personnel slightly exceeded this 

figure. Further, 75% claims by 

value involved human error. 

He concluded: "Deficiencies 

discovered by Port State Control 

should be seen in a wider context. 

Oil filtering equipment 

shortcomings mean pollution; an 

inadequate shipboard oil pollution 

emergency plan means a reduced 

capability to contain spills; and 

problems with the oil record 

books lead to fines and 

prosecutions." 

In 2005, LR published a preport 

arrival, pocket-size PSC 

checklist to help owners and 

masters ensure that items that 

commonly lead to detention 

conform to international 

conventions prior to entering port. 

It covered the most common 

detention items, including fire 

pumps, lifeboats, oil filtering 

equipment, engine room 

cleanliness and certificates for 

masters and officers. More than 

40,000 copies have been 

distributed worldwide. In the 

future, LR plans to create a 

library of checklists. 

TO 

The South of England 

Protection and 

Indemnity Association 

(Bermuda) Limited 

Hamilton, Bermuda 

For further information regarding this 

alternative P&I club please contact: 

The South of England Services GmbH 

Zimex Business Aviation Center 

Bimenzältenstrasse 75, CH-8058 

Zurich Airport, Switzerland 

Tel +41 (0) 433 88 34 88 

Fax +41 (0) 433 88 34 89 

Email ships@soem-pandi.com 

Website www.sepia-pandi.com 


INDUSTRY - US NEWS 

Alaskan Tankers’ teething troubles 

BP has reported a raft of 

problems with its new 

fleet of chartered US oil 

tankers, including cracked 

rudders, faulty anchors 

and now broken bitts. 

One of the bitts fell off a tanker 

and as a result, tests found that 

dozens more on three of the four 

ships were defective. The 

mooring bitts have now been 

replaced, a BP spokesman said. 

NAT expands 

US quoted Nordic 

American Tanker 

Shipping (NAT) took 

delivery of the last of 

the three suezmax 

vessels last December. 

The 2003 built suezmax 

has been renamed 

Nordic Cosmos. 

The NAT fleet has increased from 

three to 12 suezmaxes since the 

autumn of 2004. All the vessels 

are of double hull construction. 

This vessel also increased the 

company's exposure to the spot 

market from 10 to 11 vessels, 

while the 12th vessel is employed 

on a long term contract. It was 

later announced that the 

suezmaxes Nordic Moon and 

Nordic Cosmos are joining the 

Stena/Sonangol pool. 

Herbjorn Hansson, chairman 

and ceo said that the average spot 

market rate for suezmax tankers 

during the last three months of 

2006 was $39,727 per day 

according to the spot assessment 

of the Imarex Tanker Index, which 

gives an indication of the level of 

the spot market. During the 4Q the 

tanker market was finely tuned 

with high capacity utilisation. 

He explained that at the end of 

2004, the company had four 

vessels - one year later - in 

December 2005 the company had 

eight vessels, and now at the turn 

of the year 2006/2007 the company 

has 12 vessels - all suezmaxes. 

Eleven of these vessels are 

trading in the spot market or on 

spot related terms, and one vessel 

A mooring bitt broke off the 

tanker Alaskan Navigator last 

September as a tug pulled it 

towards a jetty in Valdez, according 

to the US Coast Guard, the ship's 

operator and a Valdez-based oilindustry 

watchdog group. 

The ship's operator, Alaska 

Tanker of Beaverton, Oreg, used 

X-rays and other tests to find the 

other defective bitts. 

Other structural problems have 

is on long term fixed charter. "We 

believe that we have effectively 

managed our growth and have 

expanded the company's earnings 

and dividend potential 

considerably", Hansson said. 

"It is becoming increasingly 

clear that single hull tankers are 

in a precarious position. There are 

mandatory rules that provide for a 

phase out of these vessels by the 

end of 2010 at the latest. Single 

hull vessels are facing challenges 

in today's market as customers 

prioritise double hull vessels. 

Some major oil companies have a 

policy to charter double hull 

tankers only. All our vessels have 

double hulls", he explained. 

Going forward, the market will 

to a large extent depend on the 

development of the world economy. 

He said that NAT wishes to 

continue to build on a predictable, 

transparent and simple strategic 

platform, consisting of the 

following main elements: 

• Profitable expansion of 

the fleet. 

• Operation of a modern, 

homogeneous fleet. 

• Distribution of available cash 

flow to shareholders. 

• A strong balance sheet. 

• Ensure exposure to spot 

market rates which 

historically have been above 

timecharter rates. 

• A low cash break-even of 

approximately $9,500 per day 

per ship. 

• Focus on low general and 

administrative costs. 

cursed the fleet of NASSCO-built 

193,000 dwt $250 mill doublehull 

tankers, which started to lift 

Alaskan North Slope crude oil to 

US West Coast refineries in the 

summer of 2004. 

In spring 2005, cracks were 

discovered in the rudders of two 

of the ships - Alaskan Frontier 

and Alaskan Navigator. And in 

December, 16-tonne anchors 

broke off the same two the ships 

OSG increases orders 

Overseas Shipholding 

Group (OSG) has signed 

an agreement in principle 

with Aker Philadelphia 

Shipyard, a subsidiary of 

Aker American Shipping, 

to construct up to six 

additional Veteran Class 

MT-46 Jones Act Product 

Tankers (three firm 

orders, plus three 

options). 

Once transferred to another Aker 

subsidiary, American Shipping 

Corporation, OSG will bareboat 

charter the vessels initially for 10 

to 15 years. The agreement in 

principle is subject to, among 

other conditions, approval by the 

boards of directors of OSG and 

Aker American Shipping, 

preparation and agreement of 

final documentation and relevant 

government approvals. 

OSG also said that a 

timecharter agreement has been 

signed between OSG and BP for 

one more of the 46,000 dwt Jones 

Act product tankers being built at 

Aker Philadelphia. Of the original 

10-ship order announced in April 

2005, the BP charter brings the 

number of vessels OSG has 

chartered out to nine. The first 

ship, the Overseas Houston, was 

scheduled to be delivered to 

Shell during the week of 

February 26, 2007. 

The nine ships are chartered to 

Tesoro (four), BP (three) while 

two have been taken by Shell. 

OSG said that future Gulf of 

Mexico tanker shuttle 

as they transited the Gulf of 

Alaska in a laden condition. 

In addition, the anchors of 

sister ships Alaskan Legend and 

Alaskan Explorer were inspected 

and have since been replaced 

with temporary anchors, with 

those vessels 'operating under 

restrictions outlined by the 

USCG'. Each of the anchors 

inspected were "showing signs of 

metal fatigue", the USCG said. 

opportunities and the Military 

Sealift Command replacement 

programme could lead to further 

orders of Jones Act tonnage. 

Late last year, OSG 

strengthened its position with the 

$455 mill purchase of primarily 

'blue water' operator Maritrans. 

Maritrans has been renamed 

OSG America, following the 

transaction. As a result, OSG's US 

flag fleet now totals 35 operating 

and newbuild vessels that includes 

handysize product carriers, a car 

carrier, drybulk carriers and 

articulated tug barges. 

Concurrently with the delivery 

of the Overseas Houston Aker 

American Shipping has closed a 

senior secured credit facility of 

$770 mill with Fortis as Agent, 

financing its long term ownership 

of the first 10 vessels. 

This facility secures the 

permanent financing for the first 

10 product tankers and provides 

for an advance of $80 mill per 

vessel. The facility refinances the 

$350 mill facility currently in place 

for the first five product tankers 

that provided for an advance of 

$70 mill per vessel. Akasa has also 

entered into interest rate swaps, 

which secure the interest rate of 

the new credit facility. 

• Meanwhile, US Shipping 

Partners has ordered nine 49,000 

dwt Jones Act products tankers 

from NASSCO for $1 bill. 

Deliveries will begin in 2009. 

There are also options for five 

more. BP has taken the first one 

on long term charter. 

06 


A more technologically advanced tug was needed in 

North Puget Sound. Check out Crowley’s Response. 

“Our Markey tow winch was built just for the Response. 

In full power mode, it can still winch in a line against a 

250-ton resistance. There’s nothing else out there like it.” 

~ Ron Rubright • Chief Engineer of the Response 

To meet the challenges of oil tanker escort and assist work 

in the rough waters of North Puget Sound, Crowley created 

a tug like no other. We took the basic technology of our 

Harbor Class tugs and modified it to create a vessel specially 

designed for the task at hand: the Response. Its two 

powerful CAT engines, together with enormous 5-blade Voith 

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indirect force at 12 knots. Its huge skeg is forward and the 

cycloidal units are in back, focusing its immense power 

where it’s needed most. And its 10" amsteel blue tow line is 

rated at one million pounds, which is strong enough to keep 

even the biggest tankers in place. The bottom line? The 

Response performs the fastest, most efficient assists and 

escorts on North Puget Sound. 

There’s one more necessary element: an exceptional crew. 

Take Ron Rubright. The Response’s chief engineer joined 

Crowley 26 years ago, so it’s safe to say he knows his way 

around a Crowley tug. Rubright also participates in extensive 

training courses on CAT engine technology. Plus, he 

and the rest of the crew take part in rigorous on-board and 

shoreside training sessions and safety drills. 

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INDUSTRY – FUELS AND LUBES 

Fuels pricing policy 

and risks* 

Due to anticipated 

shortage and price 

increase of low 

sulphur residual fuels 

in SECAs (Sulphur Emission 

Control Areas), some signs have 

already appeared in favour of the 

generalisation of distilled fuels (ie 

gas oils, diesel oils), the prices of 

which are much higher than the 

residual fuels used today. On the 

other hand, INTERTANKO has 

proposed to IMO that the industry 

should adopt a worldwide low 

sulphur regime. 

By narrowing the worldwide 

bunker consumption to just one 

type of fuel, starting with a higher 

price level than residual fuels 

used today, refineries and fuel 

suppliers will have a free hand to 

manipulate prices at their 

discretion. However, this may 

have an immediate knock-on 

effect of an increased cost of 

transported goods, and eventually 

to a huge growth in the economy, 

swallowing dragon inflation, 

which could trigger a 3rd 

worldwide war, if prudent people 

stay apathetic. Therefore, such a 

unilateral proposal for the use of 

only one type of fuel should not 

be accepted and totally rejected. 

We must not lose sight of the 

enormous burden put on the 

environment by the excessive 

emissions of CO2 in order to 

produce the 150 mill tonnes of 

low sulphur fuel, we estimate to 

be demanded annually by 2010, 

through the distillation of residual 

fuels, when the SECA areas are 

extended to the Mediterranean, 

North America and Canada, as 

anticipated. 

In a worldwide extension of 

SECA areas, which we trust will 

occur by 2012, the major 

environmental problem from CO2 

Industry usually reacts with 

general measures when its 

free pricing policy is at stake. 

in desulphurising residual fuels 

can be commonly recognised. 

Residual fuels 

Most of the marine diesels are 

basically designed to burn residual 

fuels with a high sulphur content. 

Using low sulphur distilled fuels 

on these engines causes a complex 

problem to their lubrication with 

unforeseen wear, maintenance and 

repair costs. 

Ships deciding to use both high 

sulphur and alternatively low 

sulphur fuels in SECA areas, 

must also use two different types 

of Lubricating oils, that is TBN 

70 and TBN 40. This will require 

avid attention by ships' engineers. 

It will also be risky to try to use 

TBN 70 at a reduced supply rate 

with low sulphur fuels, as some 

manufacturers have suggested. 

This is where the unforeseen 

wear problems may occur, as it 

will be impossible for the 

engineers to check and control the 

lubricant's film inside the cylinders 

while the engine is running. 

Comply simply and 

economically 

The Canadian exhaust gas 

cleaning system EcoSilencer, not 

only ensures a superior protection 

system for the environment than 

by using distilled fuels, but also 

allows the continued operation of 

vessels' engines and boilers with 

today's high sulphur residual fuels 

and lubricants for the whole life 

of a ship without a problem. The 

equipment's operation is simple 

and requires little or no 

maintenance at all. 

EcoSilencer is manufactured in 

austenitic stainless steel and 

cleans ships' exhaust gases of 

sulphur oxides, soot, carbon 

oxides, part nitrogen oxides, 

particulate matter, including 

nickel, vanadium, copper, lead, 

The exhaust gas scrubbing 

system ecosilencer 

manufactured in Canada. 

zinc, phosphor, calcium, sodium, 

total hydrocarbons and other 

harmful combustion compounds, 

through a proven seawater 

scrubbing process and other 

patented equipment by MES 

of Canada. 

The system's centrifugally 

collected sludge (ecoSilencer 

does not use filters or chemicals) 

of about 100 -600 kilos per week 

depending on the size of the 

engines, is easily collected by 

shore receiving stations together 

with other oily wastes from the 

ship. The water returned to the 

sea from the scrubbers complies 

with US EPA criteria. 

European directives 

The previous version of European 

Directive 1999/32 was unclear 

because it was defining all marine 

distilled fuels, as mgo without 

making any distinction between 

the various grades of marine 

diesel oils and mgo. From July 

2000 when it entered force, ships 

were only allowed to use these 

marine distilled fuels with a 

maximum Sulphur content of 

0.2% between European ports. 

The revised European Directive 

2005/33, makes a distinction 

between mdo and mgo. According 

to the latest directive, the 

maximum sulphur mgo content 

will remain at 0.2% until January 

2008, whereupon it will fall to 

0.1%. The limit for mdo was 

raised from 0.2% to 1.5%, which 

enables vessels to use this fuel. 

This means that European 

members should ensure that mdo 

is not available on the market in 

their territory if the sulphur 

content exceeds 1.5% by mass. 

Although 1.5% sulphur mdo can 

be used to supplement cases where 

low sulphur residual fuel is not 

08 


INDUSTRY – MARKETS 

available, the resulting lubrication 

and wear problems to main 

engines should not be forgotten. 

European Involvement 

The involvement of a European 

committee on marine 

environmental issues is 

appreciated, but when it comes to 

duplication of decisions by the 

IMO, it creates 

misunderstandings and confusion 

in the marine industry. For 

example, the different SECA 

implementation dates. 

IMO is managing 

environmental issues very well 

and the best that the European 

committee on marine matters 

would do is to harmonise its 

efforts and decisions with those 

from the IMO. We must not lose 

sight of the facts that we are 

striving for a safe environment, 

but that we also need a simplified 

understanding of the rules and 

economical transport of goods. 

The so called 'free world' 

would also appreciate the same 

happening from the US 

Environmental Protection 

Agency (EPA), as well as from 

similar organisations. 

We all live on a single planet 

and the better we can do with 

respect of environment 

preservation is to exercise our 

efforts to harmonise our decisions 

and actions on a worldwide scale, 

irrespective of political, religious 

or economical differences or 

interests. 

For achieving this goal our 

considered opinion is to "let IMO 

lead the way". 

*This is the second of two 

articles written by George 

Kaminis of Kamenco. The 

first article appeared on 

page 28 of the January/ 

February edition of 

TANKEROperator. 

Oversupply leading to a downturn? 

This year, overall marine 

transport of oil is 

expected to be 

essentially unchanged 

from last year. However 

in the years following, 

rates are expected to 

decline until 2010-2011 

when they are expected 

to firm again. 

The decline will be as a result of 

a general slowing of the global 

economy, which will temporise 

overall oil demand, having a 

knock-on effect on transportation 

demand said McQuilling 

Services in its recently published 

report Tanker Market Outlook 

2007-2011. 

This report is produced biannually 

and looks at five major 

tanker types and trades. The 

analysts have expressed their 

forecasts in timecharter equivalent 

terms, which have been calculated 

by estimating spot rates on 10 

major tanker trades using a round 

trip voyage scenario and assuming 

future voyage costs, such as port 

and canal expenses, will be taken 

care of in future increases in the 

WS100 tariff rate. A bunker price 

of $320 per tonne was used in the 

calculation. 

Taking VLCCs as a starting base, 

this sector should see 5% growth 

this year over 2006. This is due 

mainly to the stunted demand last 

year bought about by the lingering 

effects of hurricanes Katrina and 

Rita and an excessively large 

refinery maintenance programme in 

the west. 

Suezmax demand is expected 

to increase by just 2%, boosted 

by incremental light sweet 

Atlantic basin crude demand, due 

to another deep refinery 

maintenance cycle in the US. 

However, dirty aframaxes and 

panamaxes are forecast to decline 

this year, driven by trade changes, 

while clean products trades are 

expected to be flat. 

McQuilling said that its clean 

products forecast for this year is 

on the conservative side and 

demand may be greater, 

especially in the medium range 

sector, where increased arbitrage 

trading could influence the 

forecast. Basically, the clean 

sectors are expected to 

outperform the dirty sectors in the 

short term. 

Even with demand growth in 

certain sectors, there exists a 

growing tonnage supply overhang, 

which will become more and more 

difficult to overcome as 

newbuilding orders continue. 

This tonnage supply picture is 

completely different from the one 

only six months ago as an 

ordering spree encouraged by 

TCE Revenues Forecast by Trade ($ 000/day) 

Vessel/trade 2007 2008 2009 2010 2011 

VLCC 280,000 Ras Tanura/LOOP 41.9 36.4 26 31 41.9 

Suezmax 130,000 Bonny/Philadelphia 40.3 32.4 21.9 24.5 35 

Aframax 70,000 Jose Terminal/Texas 35 33.4 28.7 30.3 31.9 

MR 38,000 CPP Aruba/New York 22.1 22.1 20.4 23.8 28.9 

Source: McQuilling 

continued investment 

attractiveness in the tanker sector, 

coupled with newly disclosed 

orders for relatively prompt 

delivery and increased Chinese 

shipyard participation, has 

dramatically changed tonnage 

supply expectations in the 2007- 

2011 time frame, McQuilling said. 

Today asset prices are double 

what they were in 2002. 

Forecasted freight rates contained 

in the report, however, generate 

less free cash flow than in 

previous six monthly reports. 

This may lead to a slackening of 

the ordering spree seen recently 

and as a result shipyard prices 

may fall this year. 

Significant uncertainty still 

surrounds the IMO 13-G induced 

tonnage reduction in 2010. A 

rebounding world economy may 

increase oil demand and 

corresponding oil transport 

demand to absorb the additional 

tonnage on order. However, 

should events conspire to limit 

demand growth and allow an exit 

scenario closer to a lenient single 

hull phase out assumption where 

older tankers survive for a few 

more years, the pressure on rates 

will be substantial. 

In conclusion, the report states 

that a downward trend is forecast 

through 2009, due primarily to 

oversupply of tonnage with 

increases seen in 2010-2011, 

also on the back of supply 

TO 

considerations. 


INDUSTRY - PROFILE 

An Epic voyage 

On 1st February, the Epic Shipping Group successfully completed a planned corporate 

name change of two of its businesses. As a result, Eastern Product Carriers became 

Epic Product Carriers and those offices formerly under the ICSM banner became 

Epic Ship Management. 

The name Epic first 

appeared in 2004 

when the large 

handysize bulker 

concern Pacific Basin was 

launched on the Hong Kong stock 

exchange. Epic was set up to 

handle the non-bulk carrier sector 

of the business and since then 

Epic Ship Management has 

grown to control around 50 

vessels, including VLCCs, 

products tankers and LPG 

carriers, among others. 

Nigel D Cleave 

Epic has management bases in 

Singapore, Hamburg, Limassol 

and an operation in Liverpool 

through a joint venture. Epic also 

has a crewing agency in the 

Philippines - Epic Maritime 

Personnel. The German office 

was set up to tap into the KG 

finance system. 

Former Dobson Fleet 

Management guru Nigel D 

Cleave has taken over the mantle 

of Epic Ship Management's chief 

executive officer. He said at the 

time: "The name change for 

ICSM had been accomplished on 

time and neatly brought its 

offices under the Epic umbrella, 

in line with the re-branding of 

Epic Ship Management." 

Speaking to TANKEROperator 

in Cyprus recently, Cleave said 

that Epic Ship Management had 

highly experienced in-house 

expertise in the fields of crude oil 

tankers, product tankers, chemical 

tankers and gas carriers. As well 

as the more specialised tanker 

contracts, today Epic also 

manages bulk carriers, car 

carriers and ro-paxes. Cleave 

explained that he is looking to 

expand Epic's portfolio of vessels 

under management across the 

board, not only in specialised 

tonnage, such as gas carriers, but 

also in more standard type 

vessels. "All options are open for 

the future," he said. 

Training is on everybody's lips 

today and to cope with the 

increasing demands, Epic has its 

own in-house training capability. 

Cleave also described Epic's 

management fees as "...being inline 

with the market." He said 

that Epic's motto was 'When 

safety, teamwork and the personal 

touch counts,' explaining that 

safety was absolute paramount, 

team work between client, crew 

and others crucial and in 

providing that extra special 

personal attention to a client, this 

set them somewhat apart from 

other players, he claimed. 

Cleave will remain in Limassol, 

having overall responsibility for 

the worldwide activities of Epic 

Ship Management, where he has 

been active for 16 years. While its 

Singapore base was the perfect 

location for its Far Eastern 

clientele, he said the advantages 

for third party shipmanagers and 

other companies wishing to make 

Cyprus their home were threefold: 

The LPG carrier Minorca was delivered from Kanrei in January. 

She is currently managed from Singapore. 

1) Time zone advantages from 

both an eastern and western 

perspective. 

2) A good business structure and 

experienced local support 

staff in place. 

3) Excellent communications. 

The joint venture mentioned 

earlier is Meridian Marine 

Management, between Epic and 

Liverpool-based Bibby Line. 

Meridian primarily concentrates 

on the offshore sector and in short 

sea transportation, managing jackup 

rigs, dive support vessels, 

accommodation units, a floating 

storage unit (FSU), as well as 

tankers, ro-paxes and ro-ro ferries. 

Another string to Epic's bow 

came in the form of a contract to 

supervise the newbuilding of six 

3,000-5,000 cu m capacity LPG 

carriers. Epic Ship Management 

has oil majors' approval for 

tanker and gas carrier technical 

management. 

The latest newbuilding delivery 

is the LPG carrier Minorca. She 

was a product of Kanrei 

Shipbuilding and was formerly 

handed over on 15 January this 

year. The ship is managed out of 

Epic's Singapore office where the 

vessel's commercial and technical 

operation, plus crew management 

are also handled. 

Apart from the Minorca, the 

Singapore office currently 

manages a fleet of LPG carriers. 

In Singapore, the chartering, 

operations and technical 

management are all handled from 

the same office, which is claimed 

to make communications between 

the various departments 

beneficial to the ships' operations. 

As for the products tankers, 

these focus on the handysize 

sector, which are trading clean 

products in the Asian market. 

VLCCs add to Epic Ship 

Management's portfolio, making 

it a truly all-round serious tanker 

manager, Cleave said. 

TO 

10 


Material costs 

Scheduling 

Productivity 

Innovation 

Support 

Technical solutions 

Communication 

matters 

Availability 

Market knowledge 

Impartiality 

Trust 

Rule clarity 

Life, like information, is better when it’s shared. Our classification and training 

services can help give you control over the costs of designing safer ships and 

building them more efficiently – and our market knowledge can help shape your 

business planning. Get in touch, because we know that communication matters. 

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INDUSTRY - CYPRUS REPORT 

Flag is now part of 

the Establishment 

Indeed, the register has gone 

through a radical 

transformation since the 

days when a ship flying the 

Cyprus flag was jumped upon 

almost immediately by port state 

control inspectors. 

By agreeing to join the EU, the 

Cyprus registry had to get its act 

together in no small way. This 

has been duly achieved, 

culminating in the flag being 

taken off the 'Black List' and 

'Grey List' and finally being 

promoted to the Paris and Tokyo 

MOU's 'White List' of virtually 

blue chip flag regimes last year. 

It is now a fully paid up 

member of the Paris MOU and 

has been publicly acknowledged 

by the seafarer organisation ITF 

as having put its house in order. 

Another plus point was that the 

register became only the second 

flag state to submit to the 

voluntary IMO audit, following 

Denmark. 

"It was an extremely useful 

exercise", Captain Andreas 

Constantinou, Cyprus Ships' 

senior surveyor told 

TANKEROperator. He explained 

that the audit was carried out by 

high ranking officials of IMO 

member states’ Japan, US and 

Denmark maritime 

administrations, while the 

European Maritime Safety Agency 

(EMSA) acted as an observer. 

He explained that at first you 

must prepare yourself for such an 

audit. "If things are not in order, 

then you have to put them in order 

and iron out the discrepancies and 

take in the observations and 

recommendations for 

improvement", he explained. 

Painful experience 

The revolution has come at a 

cost, as several owners and 

There has been considerable upheaval 

in the Cyprus flag since the country 

entered the EU on 1st May 2004. 

managers and their vessels were 

either thrown out or opted to 

leave for a less stringent regime. 

For example, single hull tankers 

were no longer acceptable under 

EU membership, which hit a few 

people hard. As a result of the 

accession to the EU, the registry 

had to upgrade and expand its 

human resources to cope with the 

raft of new legislation that came 

with it. Constantinou said that for 

Cyprus being an island rich in 

shipping expertise, this was not a 

problem. For example, as part of 

the enhancements needed for 

becoming an EU member, the 

number of in-house surveyors 

was increased from 49 to 60 and 

the number of inspectors was 

increased to 62 from 43. There 

were also increases in the 

numbers of officers and 

clerks/assistants. 

Another major problem facing 

Cyprus shipping in general, 

including the registry, is the 

Turkish embargo on any Cypriot 

flag or controlled vessel calling at 

any Turkish port. The one 

exception is transiting the 

Bosporus, which is still an 

international waterway as laid 

down by the Montreux Treaty of 

1936. The boycott has finally 

been called illegal by the EU, 

which has led to sanctions, which 

were finally endorsed on 15th 

December last year. 

Tonnage stabilised 

At the time of joining, the registry 

had lost almost 10 mill gt of ships. 

However, the situation has now 

stabilised and as at 31st December 

last year, the register had 1,845 

vessels of 22 mill gt, compared 

with 2,031 ships of 24.2 mill gt on 

31st December 2003. 

The 2006 figure includes 113 oil 

tankers of 3.533 mill gt, 12 

chemical tankers of 193,700 gt, 

four liquefied gas carriers of 14,000 

gt and five obos of 136,000 gt. 

In world terms, the current 

tonnage entered puts Cyprus in 

10th place in the world's fleet. 

Unlike other flag states, such as 

Liberia, Panama and the Marshall 

Islands, Cyprus does not have a 

marketing department or arm. It 

now operates as virtually a notfor-profit 

organisation, a situation 

it can afford given the other 

maritime interests on the island, 

which tend to pull together as a 

maritime cluster. 

At present, maritime related 

activities account for about 4% of 

Cyprus' GDP, the majority of 

which comes from the huge 

shipmanagement concerns that are 

spread across Limassol and 

beyond. The registry itself brings 

in around Cyp£6 mill per year out 

of the maritime industry's Cyp£650 

mill per year. Cyprus is due to join 

the Euro on 1st January next year. 

Constantinou described the flag 

state's revenue as roughly being 

equal to its expenditure. 

He said Cyprus was the only 

Prisco Singapore's aframax Sakhalin Island is one of the new breed of vessels flying the Cyprus flag. 

state where shipping had gone 

from virtually zero in an 'open 

register' to create a whole new 

industry. For example, the 

registry had just two ships 

totalling 96 gt in 1963, but 

reached a peak of 2,799 vessels 

in 1997 in terms of numbers 

and 28.37 mill gt in 2000 in 

tonnage terms. 

TO 

12 



Limassol’s ice experts 

Not surprisingly for a shipmanagement company having Russian principals, Limassolbased 

Unicom Management Services is heavily involved in ice class tankers. 

Sovcomflot's 

shipmanagement arm 

currently handles 

around 15 ice class 

tankers. Currently a further 11 

newbuildings are either under 

construction, or on order. One of 

the main reasons for this 

investment in ice class tankers is 

that loading terminals located in 

environmentally challenging 

positions, such as Primorsk, are 

ramping up their operations 

enabling an ever greater volume 

of tonnage to be handled all 

year round. 

Unicom will also manage five 

70,000 dwt newbuilding tankers, 

which are specifically being built 

for operation in Arctic waters 

where extreme weather conditions 

can be encountered. The vessels 

are under construction at Samsung 

and Admiralty shipyard St 

Petersburg and will be delivered 

2007 - 2009. 

The main areas of expansion 

for ice class tanker traffic are the 

Baltic, White Sea, Kara Sea, 

Barents Sea, plus the newly 

developed terminal at De Kastri 

off Sakhalin Island. On average 

tanker traffic will have to 

contend with temperatures as 

14 

low as - 15 ° C in the Baltic and 

a massive - 35 ° C in the Arctic. 

Speaking at TANKEROperator's 

Ice Class Tanker Conference in 

Hamburg recently, David Sharp, 

Unicom's marine and safety 

manager said that to operate in 

severe weather conditions, the 

right ships, people and regulations 

are needed. Unicom is working 

closely with Russian, international 

research institutes and industry 

groups developing best practice 

guidelines and training 

programmes for both ship and 

shore staff. He gave a list of 

hazards to look out for, which 

included: 

1) Strong growth in tanker 

traffic. 

2) Rescue operations in ice 

conditions. 

3) Ship manoeuvring capability 

in ice. 

4) Combating oil spills in ice 

and cold conditions. 

5) Untrained crew not used to 

winter conditions. 

6) Stoppages in icebreaking 

operations. 

7) Navigational errors in ice 

conditions. 

8) Lack of traffic separation 

zones. 

Special training and equipment are needed to cope with conditions 

such as these. 

David Sharp - Right ships, people and regulations needed. 

9) Quickly changing ice 

conditions. 

10) Icing of equipment, deck, 

tanks etc. 

Explaining further, he said that 

the icebreaking fleet were 

normally only about 22 m wide 

compared with a large tanker of 

twice the beam, resulting in a 

too narrow path being cut 

through the ice for today's large 

beamy vessels. 

High definition radar is also an 

asset when navigating in ice, 

effective use being another 

training issue, which again comes 

back to training the right people, 

Sharp said. Another example is 

the forecastle anchor and mooring 

equipment, which need heating in 

low temperatures. Arrangements 

are required for sea chests, 

steering gear, emergency 

generator and the deck machinery 

hydraulics, which cannot be water 

cooled for fear of icing and they 

all need to be accessible in 

conditions where temperatures 

can go down to - 35 ° C. The 

loading equipment, manifold, 

cargo control equipment will also 

need heating arrangements. 

The ballast tank vents will 

need steam heating, while the 

ballast water exchange becomes 

a problem as does the fire 

fighting equipment. 

There are also lifeboat and raft 

limitations in extreme 

temperatures and ice conditions. 

The liferafts need to be of a 

special design while the ships' 

ladders need to be ice free. "How 

do you clean up an oil spill? How 

do you get the oil off the ice?" he 

queried. Operators of Russia's 

Arctic and Far East oil and gas 

projects are paying particular 

attention to environmental issues. 

Unicom undertakes its seafarer 

training in St Petersburg and 

Nakhodka and when sourcing 

potential crew, Russian seafarers 

come high up the list. Sharp also 

warned, "We must reward people 

for going to sea in such 

conditions." 

Unicom celebrated its 15th 

anniversary during March of last 

year and now has a total of 62 

ships in its managed portfolio, 

plus another 15 on order. TO 



Limassol offers full 

service possibilities 

Being a medium size port with a sheltered deepwater anchorage and strategically 

located in the eastern Mediterranean, Limassol boasts three bunker suppliers - 

Ajax Offshore Bunkering Services, BP and Island Oil. 

Island Oil was formed in 

1992 and over the 

intervening years, has 

diversified into cargo 

trading, ships agency, maritime 

software and the domestic supply 

of energy. 

Physical bunker supplies are 

carried out by a fleet of three 

bunkering tankers and two 3,300 

dwt supply tankers, which bring 

the product from refineries in 

Israel. Due to Cyprus' entry in the 

EU, Island Oil's subsidiary 

Petronav Shipmanagement, which 

manages the vessels, had to look 

for double hull tankers. 

This has obvious increased the 

management company's costs, both 

in day-to-day operations and with 

maintenance. Petronav managing 

director Chrysostomos 

Papavassiliou told 

TANKEROperator that paying $9- 

$12 mill for a newbuilding was not 

an option, but that the company 

had looked to the secondhand 

market to replace tonnage and had 

carried out a conversion of a single 

hull tanker into a double 

hull/double bottom vessel. 

The tankers are crewed by 

Ukrainian and Romanian 

seafarers. There are only two 

Cypriot seafarers employed on the 

tankers as like everywhere else, 

persuading local people to go to 

sea is a major problem, something 

that Cymepa is trying to address 

by visiting local schools on the 

island in co-operation with the 

local shipping fraternity. 

A major problem for the local 

suppliers is that Cyprus is right 

on the edge of the EU range, 

meaning that just 50 miles away, 

a supplier does not have the 

burden of complying with the 

new regulations, therefore can 

offer product at a better margin. 

Compared with other supply 

centres, Limassol is a small 

market, which was badly hit last 

year by the Israel/Lebanon 

situation. Some ports in the near 

East virtually ceased offering 

bunkering facilities. Other 

Cypriot ports are also supplied by 

Seatankers changes roll 

John Fredriksen’s former 

shipmanagement arm 

Seatankers Management 

is now an investment 

vehicle, looking after the 

group's interests from 

its offices in Limassol. 

The office looks after six 

aframaxes that have been assigned 

to third party shipmanagement 

concern Thome of Singapore, 

while the commercial 

management, such as post-fixture 

work, is handled by V Ships (UK). 

Seatankers has become the 

private investment arm of 

Fredriksen's huge empire and 

takes care of private placements 

worldwide. 

Director Dimitris Hannas 

explained that Cyprus is a good 

place to do business having a 

sympathetic tax regime, which 

only charges 10% tax on 

dividends, good communications, 

lawyers and accountants. 

TO 

tanker from Limassol, such as 

Larnaca, Vassiliko and Moni. 

Papavassiliou claimed that a 

refuelling tanker could be ready 

virtually on a ship's arrival and 

that there was no problem with 

quality or quantity. Most grades 

of bunkers are offered with IFO 

from 30-380 cSt, MDO and 

Gasoil with a maximum sulphur 

content of 0.2%. Low sulphur 

fuel should be available by April 

or May from an Israeli refinery, 

which is the nearest outlet to 

Cyprus, being around 15 hours 

sailing time away. 

All the small tankers fly the 

Cyprus flag and are classed by 

IACS member societies. Island Oil 

has offices in Piraeus and Odessa 

from where a terminal is operated 

in Nicolaieff on a joint venture 

basis. This terminal handles low 

sulphur gasoil in vessels of up to 

around 10,000 dwt. 

The agency side of the business 

handles around 40-45 vessels per 

month. The agency carries out 

crew changes, supplies, 

husbandry and other services. 

Papavassiliou claimed that crew 

changes are not a problem in 

Cyprus at the major airports of 

Larnaca and Paphos. Indeed, a 

vessel can anchor at Larnaca, 

almost touching the main runway, 

resulting in a crew change being 

possible in a very short space of 

time alleviating the need for 

costly hotel accommodation. 

Seafarers can pass through 

immigration with little 

formalities, which saves on costs. 

The group's software interest 

involves a joint venture with 

Danaos where the Greek 

company's integrated 

shipmanagement system products 

and services' software is marketed 

in Cyprus and elsewhere by 

Island Oil. 

Island Oil also markets its 

products to Cypriot-controlled 

vessels worldwide in co-operation 

with UK-based Cockett Marine 

Oil. Island can also supply oil 

major brand lubricants, both 

locally and internationally. TO 

Cymepa school initiative 

Cymepa, the Cypriot 

version of the Greek 

Helmepa organisation, 

differs from its larger 

influence in that, as well 

as focusing on the 

environment, it 

promotes initiatives to 

persuade senior school 

children to join the 

shipping industry. 

Secretary general Dr Michael 

Ierides explained that the idea was 

to get secondary school pupils 

interested in shipping. A biennial 

'day of the sea' is held and school 

children are encouraged to 'adopt' 

a ship by communicating with the 

officers by e-mail about twice per 

month. Thus far, the scheme has 

been extended to around 10 ships 

and 10 schools. 

Starting at Limassol, Cymepa 

members are attempting to visit 

the over 100 schools on the island 

to give a presentation. 

TO 


INDUSTRY - US REPORT 

Is shipping a good 

investment? 

Each February, New York's Hellenic American and Norwegian American Chambers 

of Commerce host a conference that invariable succeeds in identifying 

a topical issue and then bringing together some experts, explains Barry Parker. 

The 2007 event, which 

drew both locals as 

well as visitors from 

Europe, homed in on 

changing dynamics. The 200 or 

so attendees were lectured on 

tanker market fundamentals, on 

whether shipping can be 

considered a good investment, 

and a keynote address on the 

longer term super-cycle that we 

are in the middle of. Away from 

the usual pattern, the organisers 

arranged for a Marshall Islands 

flagged chemical tanker owned 

by an American stock exchange 

listed shipping company (with 

Cypriot technical managers) to 

feature on the evening television 

news after spilling its bunker 

fuel in New York harbourhappily 

this was a role playing 

exercise only. 

Luncheon speaker, Clarkson 

Research head Martin Stopford, 

added context to the entire day, 

suggesting that shipping markets 

now have changed radically from 

those of the 1950s. One element 

of the change has been the rise of 

the public company; with more 

transparency coming from more 

share listings, as pools of money 

are attracted to the now thriving 

business. Stopford said that the 

globalisation of recent years has 

propelled trade growth, as 

measured in relation to overall 

economic growth, to levels way 

above its long term averages. 

However, while commodity 

economists (such as Morgan 

Stanley's Wiktor Bielski and 

others) would place us at the 

beginning of a lengthy series of 

rising waves, Stopford suggested 

that we could be near a cyclical 

peak, reminiscent of the early 

1970s and the late 1940s before 

that. He suggested that large 

vessel orderbooks were 

symptomatic of these cyclical 

peaks- "shipbuilding is amplified 

on the bigger cycles". Stopford 

“ 

did acknowledge the importance 

of China, which reflected an 

important regional growth spurt 

not unlike Japan in the 1970s, but 

suggested that economists should 

look beyond China into other 

parts of Asia. Stopford's most 

telling comment while 

moderating one of the morning 

sessions, "The market's cyclical 

rise came very unexpectedly in 

2003; it could quite possibly end 

just as unexpectedly." 

Poten & Partners' General 

Counsel, New York-based 

Stefanie Kasselakis, offered her 

viewpoint on the tanker markets, 

concentrating on the impact of 

politics over traditional logistics. 

She said, "We all come to this 

business from different vantage 

points." She also suggested that 

cyclicality was alive and well, but 

that the seasonal aspects may 

have changed pointing to the 

impact of new players and 

different business practices on the 

tanker trades. With these new 

players, and an emphasis on 

political considerations, security 

of supply and diversification of 

supply, oil or products were no 

longer moved simply according 

to logistical efficiencies. That is, 

tankers may not always take the 

shortest voyage. 

Tonne-mile increase 

Her view on the increased 

orderbook was that it had risen 

dramatically because vessel 

supply would need to expand to 

meet the greatly increased tonnemile 

demand. She said that with 

the new trades (using West 

African crude moving to Asia as 

one of several examples on a map 

criss-crossed with trade routes), 

demand for tonnage (measured in 

those tonne miles displayed on 

her map) had grown dramatically, 

and "VLCCs are passing each 

other in the night". "Arbitrage 

pricing opportunities are driving 

the market- this may bring about 

a disconnect with traditional 

origins and destinations, but it 

supports a bigger fleet." She 

concluded by saying that the 

market was still cyclical, but that 

everyone would be surprised how 

this cyclicality ends up. But, in 

the meantime, the market was 

strong in historical terms. 

“The market’s cyclical rise came very 

unexpectedly in 2003; it could quite 

possibly end just as unexpectedly.” 

Martin Stopford, Clarkson Research 

” 

Several bankers and analysts 

touched upon tanker-related 

issues in various sessions 

throughout the one day 

conference. Citibank shares 

analyst John Kartsonis presented 

a cautious view on whether 

investors should continue to 

pump money into share buying. 

Kartsonis provided a numerical 

example based on a hypothetical 

VLCC owner buying at the 

present price, and worked out the 

numbers to support his thesis that 

the returns available may not be 

in line. In discussing the dividend 

paying rage (see page 18) among 

tanker stocks, he suggested that 

companies paying out rich 

dividends, and driving stock 

prices above company 

net asset value, may not be 

reserving sufficient money for 

16 



fleet renewal. 

During the day others 

disagreed with this viewpoint. 

Dean Criares, from private equity 

powerhouse Blackstone Group, a 

newcomer to shipping, talked 

about the perceived 

supply/demand imbalance in the 

US flag sector. Considerable OPA 

induced retirements were not far 

off, which were behind 

Blackstone's decision to invest in 

US Shipping Partners- with plans 

to build product tankers at the 

NASSCO shipyard in San Diego. 

Good share trading base 

Niels Lyng-Olsen, at DNB Nor 

Markets in New York, talked 

about the excellent trading 

environment for shares now, 

exactly because of the divergent 

points of view. Lyng-Olsen also 

sang the praises of the offshore 

sector, where a huge business 

backlog and contracts at high 

rates are drawing "excess 

shipping capital" in. Longtime 

banker Paul Slater, Griffin 

Holdings Group chairman, 

offered a different slant on the 

China exuberance. Noting China's 

plans to jump to the front of the 

shipbuilding leagues, Slater (who 

has also been an owner) raised 

the spectre of a Japan-like 

situation where shipyards were 

encouraged to over-build, 

with the resultant impact of 

cheap freight rates on raw 

material imports. 

The changing dynamics of the 

shipping industry were perhaps 

most visible in the mock oil spill. 

A local TV reporter peppered US 

Coast Guard Captain of the Port 

Scot Graham with questions 

about the spill's severity and 

whether the oil would drift into 

Brooklyn and Staten Island. A 

dozen role players, including a 

leading ship registry and legal 

figures, worked through the cycle 

of two newsdays; following a 

calamitous explosion with loss of 

life. The spill was contained and 

plans were set in motion to move 

the vessel to a terminal for 

emergency repairs. 

Aside from the sheer 

complexity of who exactly does 

what, and how funds are 

released, a number of interesting 

asides emerged. Listed 

companies face additional 

liabilities, such as suits by 

shareholders who see value 

evaporating if the market reacts 

negatively to the accident. Such 

litigation might give owners 

cause to move outside the private 

company sector, irrespective of 

the lofty valuations identified 

during the financial presentations 

earlier in the day. One sidebar, 

ostensibly to compare the mock 

event with a real event, the MSC 

Napoli containership stranding, 

led to a debate between two class 

societies attending the 

conference- one represented on 

the panel, and another offering 

divergent opinions from the 

audience during the Q & A 

session. But the sharpest 

delineation of the new era we are 

all in came from the fight to 

interview crew members between 

the P & I Club (tasked with 

defending the management and 

supporting the crew) and the US 

Government attorney (eager to 

build a criminal case against the 

company, officers and crew). 

Probably the greatest 

indictment of the criminalisation 

trend came from the one outsider 

on the panel, TV reporter Eric 

Shawn, who sadly had covered a 

number of high profile air-crashes 

in the New York area. Shawn 

observed, "If this were an 

airplane accident, the company 

president would not hide from 

the media, nor would the 

government try to lock him up 

before a lengthy fact-finding 

into what happened." 

TO 

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Cash in the bank, 

or in the ship? 

Tanker companies have gone from strength over the past four years, on the back of 

firming freight markets. Even during the dips, timecharter equivalents exceeded the 

previous historical highs of the 1980s and 1990s, says Barry Parker. 

Maritime partnership 

or joint stock 

structures are 

hardly innovative. 

However, when a tanker company 

chooses to list on a regulated 

exchange, it competes in capital 

raising against other sectors 

where much of the revenue 

capacity has been contracted out 

under long contracts. This article 

picks out four companies 

operated out of the US*. 

Nordic American 

Tankers (NAT) 

Suezmax specialist Nordic 

American, with shares trading on 

the NYSE (under the symbol 

NAT), was formed in the mid 

1990's, around three Samsung 

built double hull suezmaxes that 

were bareboated to BP Shipping 

in 1997. NAT's arrangements 

were similar to those for UK’s 

Knightsbridge; the oil major paid 

a bareboat hire of $13,500 per 

vessel per day, plus an 

operational component of at least 

$8,500 per day that could rise 

with the market rates on suezmax 

trades- as calculated by the 

London broker panel. 

Upon expiry of the original 

charters, with an Ugland related 

concern acting as the company's 

manager, BP exercised options to 

continue employment on two of 

the original vessels- under 

timecharters indexed to the spot 

market. The third was put on a 

five year time charter to Gulf 

Navigation, through end 2009. At 

the same time, NAT was 

expanding beyond its original base 

and at end 2006, it took delivery 

of its 12th double hulled vessel, 

named Nordic Cosmos. Built at 

Samsung in 2003 for Greek 

interests it was sold to NAT as part 

of a three vessel deal worth $246 

mill. Except for the five year 

timecharter, NAT has maintained 

spot market exposure - even on 

timecharter type contracts. 

Technical management was 

farmed out to V Ships, OMI and 

Teekay (which acquired Ugland 

Nordic in 2001), while the spot 

vessels operate in various suezmax 

pools, including those of Teekay, 

OMI, Frontline and StenaBulk. 

NAT continued to pay out its 

surplus operating cash flow, after 

adjusting for needed reserves as 

dividends. In its second 2006 

stock offering, worth $184 mill 

including the 'greenshoe', the 

company said: "Our business 

strategy is to manage and expand 

our fleet in order to enable us to 

continue to pay attractive 

dividends to our shareholders." 

More ships equal more cash flow 

and more distributions. Indeed, the 

dividend performance has been 

impressive, paying $3.57, $5.31, 

$4.47 for the results of 2003, 

2004, and 2005, respectively, a far 

cry from the $1.35 per share paid 

out during 2002. 

The ability of any tanker 

company to pay dividends is 

constrained by covenants in credit 

facilities, which include measures 

of financial strength or ship 

valuation in relation to debt 

outstanding. NAT entered into a 

fresh debt arrangement, which was 

renegotiated in late 2005 - and 

subsequently upped to $500 mill 

in late 2006 in conjunction with an 

equity raise. NAT's policy of 

capping debt at $15 mill per vessel 

is very conservative in a 

marketplace where its vessels are 

worth $65- $70 mill (mid to late 

1990s built) to $80 mill (2002 and 

2003 built), and very respectful of 

debt covenants which, if violated, 

would lead to a prohibition on the 

ability to pay dividends. 

General Maritime 

General Maritime, with stock 

symbol GMR, went public in late 

Summer 2001, at a price of nearly 

$20 per share, with backing of a 

smart-money crowd of investors 

cultivated by the company 

founder, ex-banker Peter 

Georgiopoulos. During 2002, 

while maintaining a spot posture 

in a weak market, GMR shares 

dipped to under $5 per share. But 

rising rates and accretive 

acquisitions turned the company's 

fortunes upward. During 2002, 

the shares of the then peer 

company Stelmar Tankers 

(absorbed into OSG in late 2004) 

held up much better because of 

the defensive strategy of placing 

the majority vessels out on 

timecharters. But GMR's savvy 

set of financial managers, 

recognised that they, like 

Frontline (which began buying 

GMR shares around the same 

time), could offer both payouts 

with upside. GMR shifted to a 

dividend payout strategy in early 

2005, which had the effect of 

bolstering the share price, partly 

on the back of the out-sized 

dividend payouts flowing from 

Worldscale rates and timecharter 

business at historic highs. 

In early 2005 presentations to 

investors, GMR defined its 

strategy, saying: 'We intend to 

pay a dividend in an amount 

substantially equal to: 

• EBITDA during the previous 

quarter. 

• Less interest expense. 

• Less a reserve for indefinite 

fleet maintenance and renewal.' 

At that time, when GMR had 

$250 mill of high yield bond debt 

on its books, it added: 'The Board 

currently intends to establish a 

reserve for maintenance capital 

expenditures, as well as the 

indefinite renewal of the fleet.' 

The slimmed down GMR, 

which absorbed two large fleets 

and then sold its single hulled 

tonnage at premium prices (and 

paid off its 10% bonds), has been 

a good performer in the stock 

market. Its timecharter coverage 

was in the middle of the road, 

with 55% - the equivalent of nine 

vessels, on period employment, to 

2009 in some cases. 

Meanwhile, the Frontline/SFL 

experiment spawned imitators, 

with specialist companies created 

by larger companies optimising 

their finances. Two entities with 

similar structures are tied to 

StenaBulk/Concordia, and 

Overseas Shipholding Group. 

Both are large owners that have 

been able to profit from the 

opportunity to sell vessels in a 

strong asset market while 

retaining control of the tonnage in 

the marketplace. 

Arlington Tankers 

Arlington Tankers, listed with 

symbol ATB on the NYSE is a 

18 



vehicle holding eight modern 

vessels (including the two well 

known 'V-maxes' Stena Victory 

and Stena Vision) operated 

commercially by Concordia and 

companies in the Stena camp. The 

vessels, all technically managed 

by a related company- Northern 

Marine - are on timecharters at 

market reflective rates back to 

their sellers varying between three 

and five years. Nevertheless, a 

market responsive element is tied 

on to the basic timecharters, as 

described in a recent prospectus: 

'each Vessel has the possibility of 

receiving additional hire from the 

charterers through profit sharing 

arrangements related to the 

performance of the tanker markets 

on specified geographic routes, or 

from actual time charter rates.' The 

extra hire is computed based on 

50% of the surplus earned by the 

timecharterer, above the 

timecharter rate from ATB, as 

computed by specified formulas. 

Arlington seeks to pay out the 

maximum dividend feasible from 

charter hire after paying cash 

expenses and establishing 

appropriate reserves for 

maintenance. Since its founding 

in late 2004, dividends have been 

paid every quarter. Its prospectus 

shows a calculation for estimated 

2006 payouts thus:- 

Basic hire per timecharters 

Extra hire- V Maxes 

Extra hire- panamaxes and product carriers 

ESTIMATED TOTAL HIRE RECEIVED 

Less vessel operating expenses 

Less company administrative expenses 

Less finance expenses (interest only on debt) 

In the calculation above, the 

vessel operating expenses, set at 

$5,843/day during 2007 for its 

four product tankers, $6,339/day 

for its two panamaxes, and 

$8,269/day for the V-maxes, 

include a reserve for drydocking. 

The financial expenses reflect the 

terms of Arlington's loan with 

Royal Bank of Scotland, which 

provides for no repayments of 

principal prior to maturity (in 

January, 2011). 

Double Hull Tankers 

(DHT) 

OSG, a giant in its own right, 

controlling more than 12 mill 

dwt, has been exploring varied 

financing strategies in recent 

years, including operating ships 

that are owned by others; this 

enables an 'off the books' 

accounting treatment not 

$64.5 mill 

$2.4 mill 

$2.3 mill 

$69.2 mill 

-$18.8 mill 

-$2.4 mill 

-$12.3 mill 

ESTIMATED CASH AVAILABLE FOR DIVIDENDS $35.7 mill 

ESTIMATED PER SHARE DIVIDEND 

Arlington's V-Maxes are on timecharter back to the sellers at market reflective rates.VisiononthebusyDelawareRiver 

$2.30p/share 

employing capital. In 2005, it 

created a new company, DHT, 

which owns three VLCCs and 

four aframaxes, all modern ships 

that are timechartered back to 

OSG with various expiry dates 

in late 2010 through 2012 and 

later, if renewal options are 

exercised. Like Arlington, DHT 

holds on to funds needed to pay 

all its expenses, with the 

intention of passing through the 

maximum feasible amounts 

(after establishing needed 

reserves) to shareholders. 

Similarly to ATB, an affiliated 

company handles technical 

management. 

The charter rates, reflecting 

the strong period market at the 

time the deal was structured in 

3Q 2005, also provide for a 40% 

profit split on spot market rates 

earned by OSG employing the 

ships in their respective VLCC 

and aframax pools - Tankers 

International and Aframax 

International. Management fees 

for much of 2007 are $5,800 per 

day on aframaxes and $6,500 per 

day for VLCCs. In a recent 

prospectus for shares being sold 

as OSG reduces it's holding in 

DHT, it estimated cash available 

for distribution to be $1.23 per 

share during 2007, down from 

anticipated 2006 levels. The 

volatility of DHT's dividends 

reflect the volatile market in the 

VLCC and aframax sectors; its 

1Q 2006 payment was a strong 

53 cents per share; its is 

estimating that its 4Q 2006 

dividend will be 30 cents per 

share, which would put 

dividends for 2006 earnings at 

$1.61 per share. 

The future 

In 2007, after nearly half a decade 

of healthy shipping markets, the 

sometimes conflicting concerns of 

yield (periodic payouts in relation 

to share price) and revenue 

visibility (the proportion of 

potential vessel-days are 

committed in forward markets) 

have been important 

considerations to investors. In the 

marketplace, analysts said that 

tanker companies with higher 

payouts, and yields competing 

with bond investments, achieve a 

higher ratio of share price to net 

asset value per share than their 

cash-hoarding brethren. 

Ten years after the formation of 

UK-based Knightsbridge Tankers, 

Singapore has now got the bug, 

with First Ship Lease and its 

portfolio of long term steady 

paying charters, including seven 

products and chemical tankers, is 

now set to be offered to the public. 

When the market picks up, several 

tanker IPOs presently on hold, but 

in the pipeline, may well be 

brought to market. No doubt, 

investors and ship operators will 

be keenly aware of this aspect of 

TO 

company valuation. 

*A profile of a few 

quoted UK-based 

companies will appear in 

the April issue of 

TANKEROperator. 


INDUSTRY - CMA/INTERTANKO REPORT 

Its Stamford then 

south to Houston 

The first is the 

Connecticut Marine 

Association's (CMA) 

Shipping 2007 

shipping and trade conference 

plus its attendant exhibition in its 

usual home of Stamford, 

Connecticut, while the second, 

Intertanko's Houston Tanker 

Event, takes place a week later. 

Intertanko's Bill Box explained 

that the date had been picked a 

long time ago and that the timing 

had been more positive than 

negative in that would be 

participants have said that they 

would take advantage of both. 

First, under the banner of 

'Adapting to Change - Riding the 

Dragon', CMA's annual event 

takes place at the Westin 

Stamford from 19th-21st March. 

A new addition this year, given 

the drive to recruit people into the 

shipping industry worldwide, is a 

'job fair' taking the form of table 

top displays given by companies 

looking to hire new people. 

More than 1,700 visitors are 

expected from 50 countries 

attending the conference sessions 

and visiting the exhibition area. 

However, the undoubted highlight 

of each event is the annual 

Commodore Award presentation, 

which for 2007 goes to Morten 

Arntzen, president and ceo of the 

Overseas Shipholding Group 

(OSG). This is presented at the 

gala dinner on Wednesday 21st 

March. Last year's recipient was 

Torben Jensen, chairman and ceo 

of the Clipper Group. The first 

person to be awarded 

Commodore status was Ole 

Skaarup in 1990. 

Shipping 2007 kicks off on 

Monday afternoon 19th March 

when the exhibition opens and 

the first conference session takes 

place. Called 'Defining 

During March two major conventions 

take place in the US somewhat 

surprisingly almost on top of one another 

yet at different ends of the country. 

Leadership', it will be opened by 

CMA's president Peter Drakos, a 

partner in Blank Rome LLP. The 

moderator will be Per 

Heidenreich of Heidmar. 

Bill Gallagher's IRI is 

sponsoring CMA's first 

evening cocktail party. 

The first panel for the session 

will include Admiral Thad Allen, 

commandant USCG; Philip 

Embiricos, director Embiricos 

Shipbrokers and president 

designate of BIMCO; Sean 

Connaughton, maritime 

administrator, US Department of 

Transport (MarAd) and Spyros 

Polemis, chairman ICS, president 

ISF and chairman and managing 

director of Seacrest Shipping. 

The second panel will consist 

of Intertanko's managing director 

Peter Swift, ABS's recently 

appointed president and coo 

Christopher Wiernicki and Ole 

Stene, president InterManager 

and managing director Aboitiz 

Jebsen Bulk Transport. 

This will be followed by the 

opening cocktail reception 

sponsored by International 

Registries (IRI). 

On Tuesday 20th March, the 

morning session will be split into 

two distinct forums. One will 

address the complexity of 

markets in the 21st Century, 

while the other will take in the 

technical and regulatory changes. 

The moderator of the markets' 

morning is Jeremy Penn, the ceo 

of the Baltic Exchange and the 

panellists will include Peter 

Sandler, director Louis Dreyfus 

Commodities; Jonathan 

Rodriguez-Atkatz, ceo Jacob 

Stern & Sons; David Morgan, 

managing director Morgan 

Stanley; Gilbert Landy, a broker 

with Pasternak Baum; Robert 

Curt vice president, SeaRiver 

Maritime and Ted Petrone, 

president Navios Corp. 

As for the regulatory sessions, 

the moderator will be Clay 

Maitland, managing partner of 

IRI. LR's Alan Gavin will present 

a paper on 'The Politics and 

Realities of Criminality in 

Europe: Significant Challenges 

and Constructive Approaches. 

Gavin will be followed by Joseph 

Cox, president and ceo of the 

Chamber of Shipping of America 

who will address 'Environmental 

Compliance: When the 

Department of Justice is Intent on 

Jail, how do you avoid the trap?' 

The next conference addresses 

KPIs under the stewardship of 

Svein Sorlie, senior vice 

president Wilh Wilhelmsen and 

chairman InterManager's KPI 

steering committee. He will be 

joined by Peter Cremers, ceo 

Anglo-Eastern and Eric 

Christensen, commander USCG 

and Tor Svensen, DNV's coo. 

At lunch, the keynote speech 

will be given by Bureau Veritas' 

Bernard Anne. 

During the afternoon, professor 

Costas Grammenos of London's 

City University will moderate on 

a session devoted to 'Maritime 

Clusters', which will include 

panellists such as Michael 

Hudner, chairman and ceo B&H 

Management; Ken McLean, 

director Bahamas Maritime 

Authority; Stamatis Molaris, 

president and ceo of Quintana 

Maritime and Saleem Alavi, 

business development manager of 

Dubai Maritime City. 

Another evening cocktail 

reception will end the day's affairs 

coinciding with the Job Fair. 

Wednesday is another split day 

with one session (Track 1) 

looking at the expansion of the 

Panama Canal, while the other 

(Track 2) addresses legal issues. 

The moderator for the Panama 

Canal session is Ernst Frankel, 

professor of management, Sloan 

School of Management, 

Massachusetts Institute of 

Technology. Not surprisingly, the 

panellists include Alberto Aleman 

Zubieta, the Panama Canal's 

administrator; Robert West of 

Global Insight and Alexei 

Oduber, administrative manager, 

GAC - Wilford & McKay. 

Following this, the next session 

looks at manning under the 

moderator Robert Kunkel, vice 

president business development, 

Seacoast Electronics and 

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chairman Short Sea Shipping 

Cooperative Program (SCOOP). 

Kunkel will be joined by 

Roberto Giorgi, V Ships' 

president; Norm Gauslow, vice 

president marine labour relations, 

OSG; John Torgersen, quality 

and safety director of McAllister 

Towing and Transportation and 

Rear Admiral Peter Brady, 

director general of the Maritime 

Authority of Jamaica and also 

chairman of the IMO STCW 

sub-committee. 

The parallel conference on 

Wednesday morning tackles legal 

issues and is co-sponsored by the 

US Maritime Law Association 

and the Admiralty Committee of 

the Association of the Bar of New 

York City. 

The moderator will be 

Raymond Burke Jr, counsellor at 

law and partner in Burke & 

Parsons, while the first session 

looks at the legal loopholes 

allowing single hull tankers to 

trade after 2010 with James 

Power, attorney, Holland & 

Knight at the helm. Arrest of 

ships will be addressed by 

Clive van Aerde, lawyer and 

partner with Van Aerde & 

Partners and recent 

developments in US taxation 

will be looked at by Joseph 

Gulant, partner Blank Rome. 

During the afternoon, delegates 

and panellist will discuss 

branding - how shipowners 

distinguish themselves. The 

moderator for this session will be 

Brad Berman, president of the 

Liberian Registry. The panellists 

will include Gary Vogel, 

managing director Clipper Bulk 

(USA); Kim Ullman, executive 

vice president and coo 

StenaBulk; Keith Denholm, 

commercial director Pacific 

Carriers; Paul Gridley, chairman 

and ceo US Shipping Partners 

and Jean Lemay, senior vice 

president Fednav. 

In the evening, the whole event 

ends on a high when the 

Commodore Gala Dinner takes 

place at which Morten Arntzen 

assumes the title of Commodore 

from predecessor Torben Jensen. 

Peter Swift, Intertanko's 

managing director. 

Intertanko 

This event kicks off on Sunday 

25th March with a welcome 

reception at the venue - Houston's 

Hilton Post Oak Hotel. All day 

Monday and on Tuesday 

morning, Intertanko will hold its 

executive committee meeting, 

which is closed to all other than 

to committee members. 

Past events have drawn anything 

from 400-500 people through the 

door and there are around 15 

exhibitors at this year's event. 

For the three day conference, 

once again an array of top speakers 

has been lined up covering many 

subjects, all of which are pertinent 

to the tanker industry. 

The seminars start on Monday 

26th March with three sessions 

on the technical issues facing 

shipping, such as air emissions 

and common structural rules. The 

chairman is Intertanko's Dragos 

Rauta. His first panel includes 

Keith Michel of Herbert 

Engineering, Dr Rudolph 

Kassinger of DNV Petroleum 

Services and Gary Horn of ABS. 

The second panel will discuss 

chemicals and biofuels with Inge 

Steensland's Tina Gilje, ABS' 

Philip Rynn, Kinder Morgan's 

John Mahon and Dow Chemical's 

Dennis Reiswig. Another couple 

of panellists have been invited to 

lead a debate on the LNG Market, 

notably Braemar Seascope's 

Debbie Turner and BG LNG 

Services' Marc Hopkins. 

Later on in the afternoon the 

The Marshall Islands 

maritime registry 

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Dalian • Ft. Lauderdale • Hamburg • Hong Kong • London • New York • Piraeus • Shanghai • Singapore • Tokyo • Washington, DC/Reston • Zurich 

www.register-iri.com 

22 



contentious subject of vetting will 

be aired with the help of V Ships' 

Bob Bishop who is in the chair 

and is also Intertanko's vetting 

committee chairman. He will be 

helped by John Dudley, vice 

president Koch Shipping and 

Doug McCormick, insurance 

manager Chevron Shipping. 

On Tuesday 27th March, the 

conference will be opened by 

Intertanko chairman Stephen van 

Dyck and his keynote speakers 

will be the USCG's commandant 

Admiral Thad Allen and the 

executive director of the Port of 

Houston. 

In the afternoon, a more 

commercial tone will be adopted 

chaired by Basil Mavroleon, 

managing director of shipbrokers 

Charles R Weber and a member of 

Intertanko's associate committee. 

Speakers will include EA Gibson's 

Steve Christy, Braemar Seascope's 

Colin Cridland, Inge Steensland's 

Tina Gilje, McQuilling Services 

David Saginaw and Trans-Energy 

Research Associates' Nancy 

Yamaguchi. 

On Wednesday 28th March, the 

talk turns to the Poseidon 

Challenge, once again under the 

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Intertanko's chairman Stephen 

Van Dyck. 

chairmanship of Stephen van 

Dyck. Speakers for the morning 

session will include Mitch Tamiya 

of NYK; Rear Admiral Craig 

Bone of the USCG, LR's Alan 

Gavin representing class; 

FONASBA's president Philip 

Wood, representing the agents 

viewpoint; LISCR's Brad Berman 

representing flag states; SAMCO's 

Bengt Hermelin, representing the 

owners; and IUMI's president 

Deidre Littlefield who will be 

representing hull insurance 

interests. 

After lunch, Stephen van Dyck 

will introduce OSG's Bob 

Johnson for the owners; a leading 

ship manager; Thomas Tay of the 

Singapore Maritime Officers' 

Union and a board member of the 

ITF, representing the seafarers; a 

cargo representative; the 

executive director of the Port of 

Houston, who is also the 

president of IAPH, representing 

the ports; Don Toenshoff of 

Marine Spill Response and 

representatives of both pilots and 

the finance sector. 

The procedures end with a gala 

dinner, sponsored by OSG, 

General Maritime and the 

Marshall Islands Registry (IRI). 

A separate event takes place on 

Thursday 29th March, which 

takes the form of an International 

Seminar on Tanker Chartering - A 

Legal Perspective. 

TO 

24 


Winner - Sea Trade, 

Dubai International 

Maritime Awards, 2006 for 

“Outstanding Maritime Services” 

Finalist - Lloyd's List, 

Middle East and Indian 

Subcontinent Awards, 2006 for 

“Shipping Agent of the Year”

INDUSTRY - SHIPMANAGEMENT 

Creating a socially 

acceptable profession 

While leading 

shipmanagement 

companies who 

employ huge 

pools of seafarers - V Ships alone 

employs some 23,000 seafarers as 

well as a further 1,600 shore staff 

- seek to retain experienced 

personnel by increasingly 

investing in training and 

developing initiatives to improve 

the welfare of crews and their 

families, poaching staff has 

become a major issue. 

Indeed, Emmanuel Vordonis, 

executive director, Thenamaris 

Ships Management, warned in his 

keynote address to the recent 

annual LSM Ship Management 

Conference in Cyprus: "With new 

vessels coming into the market at 

a rapid pace, companies will start 

poaching seafarers from one 

another as there is a desperate 

need to man these ships." 

Another recent development 

that must be of concern to 

shipmanagers has seen oil major 

BP take back control of ships' 

officers in its growing fleet from 

the hands of Dorchester Atlantic 

Marine. According to BP 

Shipping, the main reason for the 

move is rapid fleet growth and an 

ability to ensure enough 

competent key personnel to meet 

requirements. 

One leading Hong Kong 

shipmanager told 

TANKEROperator that as far as 

the crewing problem goes, "we 

have seen nothing yet". He said 

that in addition to market 

pressures for quality sea staff, 

heightened by the recent 

newbuilding boom, the problem 

was exacerbated by formerly 

unacceptable people being 

employed without references 

being taken and without regard to 

Without any shadow of doubt the key issue 

concentrating the minds of shipmanagers 

is crew, or rather the lack of them, 

writes Nigel Kitchen. 

their poor previous performance. 

Faced with such issues, last 

December V Ships took the 

decision to rebranded its crewing 

operation under the name V 

People Marine, with headquarters 

on the Isle of Man. Managing 

director David Greenhalgh said 

the new brand's aim was to 

become the preferred seafarer 

employer by approaching the 

crewing of ships in a strategic 

fashion. V People Marine's crew 

recruitment network is to be 

expanded and will seek to develop 

David Greenhalgh, 

md of V People Marine. 

long-term relationships with 

professional seafarers, as it has 

about 16,000 positions to fill on 

about 900 managed vessels and 

others to supply on a contractual 

basis to further owners. 

A substantial cadet training 

programme is in place with 750 

cadets. The company currently 

sources seafarers from Poland, 

Lithuania, Latvia, Russia (five 

offices), Ukraine (four offices), 

Georgia (two offices), Romania, 

Bulgaria, Croatia and 

Montenegro (two offices), Italy 

(two offices), India (five offices), 

Myanmar, Philippines, China, 

Brazil and Canada. 

The sheer enormity of the 

seafarer shortage crisis was 

emphasised recently at the 

Cyprus conference by Emmanuel 

Papalexis, chairman and ceo of 

Mare International, who said 

more than 4,700 vessels will be 

built between the end of 2006 and 

2010, with 50% of these 

replacing existing tonnage. This 

means that there will be about 

2,400 additional vessels requiring 

10,000 extra officers and 60,000 

more ratings. Papalexis asked 

why people don't go to sea given 

that: "The employment conditions 

today are excellent. Short-service 

contracts, good salaries, good 

food, good accommodation, 

adequate facilities on board and 

ample help from ashore." 

So what are we doing wrong? 

It is a fact that ratings from 

traditional European maritime 

nations have been seriously 

depleted for many years and there 

appears no way of reversing this 

and that the number of officers is 

getting smaller on a daily basis 

and at such a speed that, in a few 

years time, it may be difficult to 

find one. Papalexis does not 

believe that it is only; "…..new 

'draconian' legislation, such as the 

European Union Criminalisation 

of Accidental Pollution, which 

keeps people away". 

He said: "I believe that what 

we have failed to achieve so far, 

as an industry, is to create a 

feeling of confidence that going 

to sea is a life-long career and, 

moreover, a good one. That it is a 

career which has continuation. 

The continuation will bring them 

to shore management to become, 

for example, port captains, port 

engineers and surveyors. We need 

to 'upgrade' the profession of 

mariner and to make it socially 

acceptable." 

Nigel Cleave, ceo of Epic Ship 

Management (see page 10), puts 

more emphasis on the 

criminalisation of seafarers issue, 

while accepting that the "shortage 

of officers is a matter on 

everyone's mind today". He said: 

"At Epic, we will continue to 

retain our long-serving, loyal and 

dedicated sea staff, where good 

promotion prospects exist as a 

result of expansion in our 

managed fleet. We will also 

maintain market level terms and 

conditions. So far as 

criminalisation is concerned, we 

will continue to lobby through the 

respective organisations to protect 

a seafarer's interest." 

On the issue of terms and 

conditions, Vordonis asked the 

Cyprus conference whether 

commodity market pricing 

policies should be applied to 

seafarers. "Is it right to increase 

the salary of a Filipino officer 

from $2,000 per month to say 

$9,000 per month when demand 

for their services is high, but then 

when the situation changes, 

reduce the wages back to the 

former?" The problem of officers 

from around the world seeking 

different conditions of 

26 


INDUSTRY - SHIPMANAGEMENT 

employment was highlighted by 

Mike McCabe, fleet personnel 

manager, Dobson Fleet 

Management, who pointed out 

that while many European 

officers wished for shorter tours 

of duty of four months, Indian 

officers preferred longer voyages. 

Further challenges 

While accepting that sourcing 

quality crew is the biggest 

challenge facing the industry, 

McCabe said that there were 

further daunting challenges to be 

met. "The International Marine 

Employers' Committee is 

seriously concerned about the 

need to not only train more 

officers, but to ensure the training 

quality improves. The insurance 

company AON has warned that 

the shortage of skilled officers is 

threatening to result in an 

increase in claims resulting from 

human error and the ILO is 

saying there needs to be an 

internationally agreed minimum 

standard for maritime working 

conditions." 

According to Papalexis it is not 

too late to promote seafaring as 

socially acceptable. He said: "I 

see thousands of college 

graduates who, after several years 

of studies, remain unemployed or 

are compelled to undertake 

menial jobs for which they are 

overqualified. I believe that it is 

possible to attract these people 

and make them believe in this 

profession, provided that we will 

be in a position to prove to them 

that 'we mean business'. 

"Provision of long-term 

contracts, pension schemes, jobs 

ashore ... are some of the 

ingredients and incentives which 

can be used to attract people and 

keep them. And while this is one 

aspect of the manning problem, 

the other is how we handle the 

mariners we already have. We 

hope and assume that they will 

operate our ships in a safe, 

efficient, environmentally 

friendly and economical manner." 

Papalexis then posed the 

question: "Do we ask too much?" 

He maintained this probably is 

Ms Annette Malm Justad, new EMS ceo. 

not the case, "particularly if we 

put our demands in a logical 

perspective and understand these 

people better". 

He said: "We have to consider 

where these people come from, 

their social background, their 

educational standard, their 

behaviour and their abilities. If 

we do not carefully consider all 

these factors and, instead, we try 

to assimilate them into a 

sophisticated environment which 

they may have difficulty in 

understanding, we will fail as 

ultimately it will prove 

too daunting." 

The key Papalexis believed 

was training. "Dealing with the 

manpower issue we should bear 

in mind the ever increasing cost 

of vessels and their equipment. 

Assets of many millions of 

dollars are entrusted in the hands 

of 20 to 30 people serving on 

board. It is therefore common 

sense that these people [crews] 

should be properly educated, 

trained and have the appropriate 

experience. It is obvious that 

when budgeting crew costs, they 

should be directly proportionate 

to the cost of the investment for 

the acquisition and operation of 

the vessel itself." 

TESMA is no more 

Meanwhile, in another rebranding 

exercise the well known name of 

TESMA has been replaced by 

EMS Ship Management. Eitzen 

Maritime Services, the parent 

company of the global maritime 

services group operating within 

three business sectors, is to 

rebrand all subsidiary companies 

in a drive to create a larger and 

more competitive group. 

According to ceo Annette Malm 

Justad: "We believe size is 

important and is becoming a 

major driver. We at EMS want to 

be prepared for the consolidation 

in the maritime industry." 

The three segments that make 

up EMS are TESMA Holding, a 

shipmanagement company 

delivering full technical 

management to 117 vessels and 

crewing to 275 vessels; Strømme, 

an international ship supply 

company delivering products and 

services to more than 4,000 

vessels annually and Polaris, an 

insurance broker to an 

international client base. All 

subsidiaries were re-branded 

to EMS Ship Management, 

EMS Ship Supply and EMS 

Insurance Broker respectively on 

1 st February this year. 

Justad explained that the 

supply and management sectors 

are both essential to the running 

of a ship and that by combining 

them, EMS can achieve larger 

economies of scale and obtain 

better terms and conditions by 

buying larger volumes to the 

benefit of the shipowner 

and EMS. 

Sales at EMS in 2005 reached 

NoK505 mill, up from NoK442 

mill in 2004, although gross 

profit was down to NoK83 mill 

compared with NoK174 mill in 

2004. Sales to the third quarter of 

last year were NoK445 mill, with 

gross profit up to NoK160 mill. 

Last year, EMS continued to 

expand through acquisition. 

Justad explained: "By including 

Polaris the group extended the 

service range to shipowners and 

the acquisition of Blystad Ship 

Management gave further 

economies of scale. The group is 

well balanced with regard to the 

two main divisions. Last year was 

used to build the business and to 

clean up the accounts. 

Procurement and branding 

projects were initiated and the 

number of vessels on technical 

management and crewing rose by 

25% and ship supply revenue 

rose revenue by 31%." 

According to Justad, EMS's 

strategy is to improve 

procurement and organisational 

efficiency. "We want to release 

operational synergies and volume 

potential to deliver high revenue 

growth and expand our global 

network. Today EMS is located in 

the traditional shipping centres, 

but we also see other 

geographical areas with growth 

potential. We will actively seek 

acquisition targets and new 

partners and also aim to 

grow organically." 

She continued: "I see ship 

management and ship supply as 

complimentary businesses where 

our people have a better insight 

into each other's segments and are 

able to provide knowledge driven 

services to the shipowners with a 

focus on maintaining 

transparency and building trust". 

Justad is pragmatic in her 

approach and accepts that the 

EMS' business model is a 

concept which will take time to 

be established and for 

shipowners to realise its 

complete benefits. 

TO 

28 


TECHNOLOGY - CARGO MONITORING 

Military specialist 

goes commercial 

For a company that was the first to hit upon the concept of radar based liquid level 

sensors, VEGA Grieshaber is not a name that springs easily to mind when thinking about 

liquid cargo measurement. But that was 20 years ago in 1987, writes Brian Warshaw. 

By 1991, the 

Company was in a 

position to reveal 

the results of its 

development work - an 

instrument that used a pulse to 

obtain the level of a liquid in a 

tank. A further four years on, in 

1995, microprocessor technology 

had reached the stage where it 

could be integrated into the 

instrument, thereby increasing 

the sensor's memory capacity, 

and enabling the introduction of 

a digital signal processor using 

fuzzy logic algorithms to aid 

in echo discrimination. Two 

years on it became possible to 

power the microprocessorcontrolled 

sensor via a 2-wire, 

4-20mA signal. 

Developments to the sensor 

have continued, and, today, 

more than 175,000 non-contact 

radar units have been sold for 

level measurement in storage 

tanks on land and at sea. In 

January this year, a new low 

temperature unit was added to 

the range, which is suitable for 

use with LNG products. 

The shipbuilding industry is 

just one in which VEGA sensors 

are sold, operating on vessels 

worldwide, in applications 

covering cargo and ballast tanks, 

oil and water monitoring, 

separation, fuels and waste water 

tanks, and ship engine 

management systems, as well as 

measurement systems controlling 

the ship's trim and list. 

Four years ago, VEGA 

introduced a system it called 

plics®. Plics® is a mix and 

match design concept for 

assembling the units, allowing 

the use of different process 

connections, standard or 

adjustable indication, four 

versions of housing - plastic, 

stainless steel, coated 

aluminium, a choice of 

electronics, and different sensor 

types. The concept and units 

have gained approval from 

several classification societies, 

including Lloyd’s Register, GL, 

RINA, ABS, CCS and Det 

Norske Veritas. 

In recent years, VEGA has 

focused on developing products 

that provide a high level of 

reliability, seeking to prevent 

cargo tanks being overfilled. The 

sensors can be used for 

continuous level measurement 

and provide dual redundant 

monitoring by installing level 

switches in the cargo tanks. IMO 

regulations require that, when the 

level reaches 95%(High), and 

again at 98% (High High) of tank 

capacity, the alarm must be 

raised and indicated on various 

control panels. 

The principle of operation 

adopted for the VEGAPULS 63, 

which is the radar sensor that it 

recommends for level 

measurement in the cargo tanks, 

is to use extremely short 

microwave pulses with low 

emitted power in the C-band and 

K-band frequency range. The 

pulses are directed at the product 

surface and on contact are 

reflected back, and are received 

by the antenna system. With 

tank dimensions preloaded into 

the microcomputer, the level and 

volume of product in the tank 

can be calculated, based on the 

time that lapsed between the 

transmitted and returned pulses; 

lapsed time being proportional to 

the level of the liquid in the 

tank. The signal processing 

software ECHOFOX® 

embedded in the microprocessor 

is able to detect the level echo 

reliably out of a number of false 

reflections and to measure the 

echo exactly. 

TO 

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30 


TECHNOLOGY - NAVAIDS 

What’s the latest 

with ECDIS? 

ECDIS equipment has been on the market since 1998 but for most shipping companies 

it remains as something to fit in the future, if at all. Probably rather less than 10% 

of vessels are using ECDIS and of these only a small proportion are using ENCs, 

which are the official vector charts, writes Andy Norris. 

There now seems to be 

less misunderstanding 

concerning electronic 

charts. Most bridge 

officers and technical 

superintendents know that ECDIS 

is the IMO approved electronic 

chart system. When displaying 

updated ENCs, which are 

inherently authorised by national 

hydrographic offices, use of 

ECDIS can replace the use of 

paper charts. 

In practice, flag states set the 

detailed requirements, 

particularly those regarding 

backup, which could for instance 

be another ECDIS or a suitable 

set of paper charts. It is 

interesting that the main takeup 

of ECDIS has been on ships 

that have safety high on the 

agenda, including tankers and 

cruise liners. 

ENC coverage during February this year. 

The IMO Safety of Navigation 

sub-committee (NAV) has 

recently looked at both the safety 

and the cost effectiveness of 

ECDIS, and favourably 

commented on the positive 

results from formal safety 

assessments undertaken by 

member states on various 

examples of vessel: an 80,000 

dwt oil tanker, a 4,000 dwt 

products tanker, a 75,000 dwt 

bulk carrier and passenger ships 

covering a range of sizes. 

RNC Coverage 

So if ECDIS is so good, why has 

it yet to catch on? The most 

valid reason is that ENC 

coverage is not complete. 

However, the situation is rapidly 

improving. The illustration 

shows the coverage as at 

February 2007. The red areas 

show the ENC cells currently 

available and the blue areas 

those cells under preparation. 

An up-to-date version of this 

diagram can be downloaded 

from http://ih-net-www. 

hidrografico.pt/website/icenc/ 

viewer.htm. 

Over 6,000 ENC cells are 

available for use; this is 

increasing by about 1,000 every 

year. It is seen that much of the 

coastline of Europe, Asia and 

North America is already covered 

at a detailed level. Many ocean 

areas are also covered by 

overview charts. 

IMO's Maritime Safety 

Committee (MSC) is currently 

determining whether there should 

be a phased introduction of 

compulsory carriage requirements 

for ECDIS on all vessels. It has 

already mandated that ECDIS is 

fitted to high speed craft from 1st 

July 2010. NAV is giving 

preliminary consideration to the 

proposal, with a view to 

submitting a report to MSC 

in 2008. 

The discussion at NAV has 

already emphasised that 'ENC 

coverage was a necessary 

prerequisite for the introduction 

of a mandatory carriage 

requirement for ECDIS', although 

what is meant by 'ENC coverage' 

is a debating point. 

The International Hydrographic 

Organisation (IHO), which 

represents the national 

hydrographic offices, recognises 

the importance of this occurring 

in the short term. 

Rear Admiral Kenneth Barbor, 

who is a director of the 

International Hydrographic 

Bureau, the secretariat for IHO, 

told TANKEROperator that "The 

IHO is conducting an extensive 

assessment of ENC coverage 

that will, at the request of IMO, 

be recorded in an on-line 

catalogue. From this 

assessment, areas where ENC 

coverage is not projected to be 

sufficient to support HSC or 

international shipping will be 

targeted for production through 

bilateral or regional agreements 

to ensure their timely 

availability". 

If coverage is seen to be 

sufficient in 2008, when MSC 

debates the possible mandatory fit 

of ECDIS, it will undoubtedly 

have a significant impact on 

its decisions. 



In the minds of all shipping 

companies the cost of ECDIS 

remains at the forefront of any 

decision on its implementation. 

The total cost includes the 

purchase and fitting of units, the 

training of users and the cost 

of data. 

Price reduced 

The price of type approved 

ECDIS hardware has 

substantially reduced since its 

introduction. Also, the now 

universal use of flat panels on 

new equipment has made retrofit 

easier and generally less costly, 

because of their smaller space 

requirements. 

Data prices have also reduced 

since earlier days. Thomas Gunn, 

managing director of the 

international chart agent TGNS, 

has said "We have helped a 

number of companies to transfer 

from paper charts to ENCs. 

The annual cost of data is very 

similar." 

Chart agents play an essential 

role in the use and distribution of 

In the minds of all shipping 

companies the cost of ECDIS 

remains at the forefront 

of any decision on 

its implementation 

“ 

” 

ENCs. Good agents are 

conversant with the regulations, 

have distribution contracts with 

all ENC data suppliers and can 

provide good advice on providing 

a cost effective set of data. 

Updates are provided by CD, 

or increasingly by satellite data 

links, through companies such as 

ChartCo. 

Flag Approval 

Another barrier had been fears 

that there will be difficulty in 

achieving flag state approval. 

There is also a worry that some 

port states may have different 

views than the flag state on 

conformance to IMO ECDIS 

requirements. If so, could this not 

lead to port inspection delays? 

The approval process for many 

flag states is now clear - but it is 

essential that proper liaison is 

made with the flag state when 

contempla-ting the fitment and 

use of ECDIS. 

There have always been 

differences between flag states in 

the detailed interpretation of IMO 

requirements. This is rarely an 

issue for visiting ships as port 

states are required to respect 

the certification of flag states 

under Regulation 19 of Part A of 

SOLAS. 

There is no indication that this 

is not applying to vessels using 

ECDIS with ENCs. 

It is now becoming clear that 

the use of ECDIS with ENCs 

is both beneficial and practical 

for many shipping operations. 

Furthermore, future mandatory 

fitting of ECDIS is inevitable 

because of its benefits 

to safety. 

More costly 

Just as importantly to shipping 

companies, paper charts will 

become the more costly option. 

They are expensive to print, 

store and distribute and need 

extensive manual updating. 

Digital charts have far less costs 

associated with their replication 

and distribution. Updates are 

quick and easy to apply. 

However, hydrographic 

offices will need to ensure that 

the momentum on data 

production is maintained and 

that the quality of data 

necessitated by ENCs is steadily 

improved. The clinical display 

of charts on ECDIS makes 

charting inaccuracies a lot more 

evident than they appear to be 

on a paper chart. 

TO 

Enraf 

Tanksystem 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Enraf 

 

 

 

32 



Integrated bridge 

systems in a state of 

continuous evolution 

According to the Ergonomics Society, the origins of which go back to 1947, the term 

ergonomics was first used by Wojciech Jastrzebowski in 1857. The word is derived from 

Greek, ergon, work, and nomos, principles or laws. In its simplest definition, it is the 

science of designing a workstation to be compatible with the worker. It embraces the 

notion that each worker is physically unique and the physical work surroundings should 

reflect each worker's uniqueness, reports Brian Warshaw. 

SOLAS Chapter V, 

Regulation 15, 

Principles relating to 

bridge design, design 

and arrangements of navigational 

systems and equipment and bridge 

procedures requires owners, naval 

architects, manufacturers and 

administrations to ensure 

compliance with specific 

ergonomic principles; and for 

owners and masters to ensure that 

bridge procedures are adopted 

which take ergonomic criteria into 

consideration. Equally, there is a 

requirement that integrated bridge 

systems (IBS) should be 

organised so that the failure of 

one sub-system is brought to the 

immediate attention of the officer 

in charge of the navigational 

watch, using both audible and 

visual alarms, and that it does not 

cause failure to any other subsystem. 

In the event of failure in 

one part of an integrated 

navigational system (INS), it must 

be possible to operate all other 

individual items of equipment or 

part of the system, separately. 

The UK's Maritime and 

Coastguard Agency (MCA) has 

stated that the IMO's document 

MSC.Circ/982 relating to the 

ergonomically designed bridge 

equipment and layout is for 

guidance only, and that in order 

to comply, it is necessary to 

follow ISO 8468 and, if 

applicable, ISO 14642. 

Det Norsk Veritas maintains that 

approximately half of all accidents 

at sea can be related to navigation 

bridge system failures, causing 

collision, grounding, or contact 

damages. It's NAUT-OC notation 

is the minimum of its 

requirements to ensure that the 

bridge has been designed for 

reduced workload and improved 

operational conditions. It also 

stipulates that the bridge layout 

should provide the information 

and equipment required for safe 

performance of the functions to be 

carried out at dedicated 

workstations; and that the working 

conditions must allow the officer 

of the watch to perform all 

primary bridge functions, 

including lookout, from one 

workstation when sailing in ocean 

and coastal waters. 

'The bridge environment', 

according to Øystein Andreassen, 

'is a constellation of the human, 

the technical system and the 

physical environment acting 

together.' Andreassen is a 

principal engineer, working in 

business development, with 

Kongsberg Marine of Norway. 

His involvement in control 

systems in the marine 

environment has encompassed the 

past 25 years, and since 1996, he 

has been directly concerned with 

the engineering of bridge systems. 

The ergonomy of the bridge is 

not just a question of equipment 

Kongsberg's IBS' are compliant with class rules. 

and functions; but is also about 

factors such as fields of vision, 

interior colours and lights, 

ventilation and other aspects that 

have to do with the construction 

of the bridge itself, Andreassen 

told TANKEROperator. 

'Yet the equipment and design 

are not the only factors to 

consider.' he explained. 'For safe 

operation, it is also essential that 

the crew develops good procedures 

for navigation and manoeuvring. 

It is the reason that we encourage 

them to be trained to work as a 

team in stressed situations.' 

Andreassen said that the 

current trend in bridge design was 

towards more and more systems 

being computerised or, at the very 

least, to have a display with a 

mouse user interface. At the 

same time, bridges are more often 

being designed for seated 

operators, and this creates another 

challenge for equipment 

manufacturers, requiring more 

equipment to be located within a 

smaller area. Kongsberg's 

response to this demand for 

smaller panels and multifunctional 

displays is the K- 

Bridge navigation system, which 

includes the extra facilities 

needed to control auxiliary 

functions like window wipers, 

deck lights, signal lights, 

navigation lights, and ventilation, 

directly from the bridge displays. 

Kongsberg's bridge systems are 

compliant with classification 

societies' rules for nautical safety 

class notations. In addition, 

Andreassen said that the company 



SAM's NACOS IV IBS' is fitted on board Fisher's Speciality. 

designers seek to provide a full 

field of vision to the operator, 

also focussing on the displays, on 

careful design of alarm systems, 

and to give a recognisable look 

and feel between different subsystems. 

These all help the 

operator make the right decisions 

when in a stressful situation. 

The Company has recently 

delivered the first of four systems 

ordered by Samsung and Hyundai 

for incorporation on the QatarGas 

vessels, which are being 

constructed for the QSG/QGII 

expansion project. QatarGas is the 

first company to purchase the K- 

Bridge solution. The total value of 

the four systems is said to be worth 

approximately $3.2 mill. The first 

of the systems successfully passed 

its factory acceptance tests in 

South Korea, last May. 

Another company that works 

comfortably with DNV NAUT-OC 

notation, and the more extensive 

AW notation, is SAM Electronics 

of Hamburg. The company's latest 

Series 5 range of navigation and 

command systems (NACOS) is 

available in nine configurations. 

They all feature a fully integrated 

radar, and electronic chart display 

and information system (ECDIS) 

with interactive on-screen highresolution 

displays. 

The latest NACOS also forms 

an integral part of SAM 

Electronics' new series of Ship 

Control Centre (SCC) total bridge 

assemblies, which was introduced 

at the SMM Exhibition last 

September. The SCCs combine 

navigation, communication, 

propulsion control and alarm 

monitoring functions through a 

series of newly designed 23-inch 

flatscreen monitors that can also be 

provided in a retractable design. 

Comprising a standardised 

package of common hardware 

and software, which can be 

adapted to the individual 

requirements of ship operations, 

they significantly reduce 

engineering costs at the point of 

installation. According to a 

company spokesperson, it meets 

the growing requirements from 

the shipyards for a proven singlesource 

supply of turnkey bridge 

systems. To date, SAM 

Electronics has commissioned 

over 150 NACOS systems. 

SAM is participating in the 

EU-supported Design, Operation 

and Regulation for Safety 

(SAFEDOR) project, and as a 

result, the company anticipates 

further design refinements in its 

NACOS components. 

SAFEDOR was launched in 

2005 with Germanischer Lloyd as 

project co-ordinator. It is the 

single largest maritime safety 

programme to be funded by the 

EU, which has contributed 12 of 

the Eur20 mill budget; the 

remaining sum is being met by the 

consortium of 53 partners drawn 

from all sectors of the European 

maritime industry. The four-year 

SAFEDOR project advocates a 

risk-based approach to maritime 

safety, wherein safety is regarded 

as a basic design objective rather 

than as a constraint. 

SAM Electronics is a member 

of the SAFEDOR project 

steering committee, and is 

making a direct contribution 

involving the development of 

new safety-critical energy 

distribution networks, as well as 

technical and ergonomic 

improvements to bridge layouts. 

The work will involve replacing 

switches and local area networks 

with a single programmable logic 

controller, and touch-screen 

panel for direct control. 

In May last year, the UK's 

Kelvin Hughes confirmed that it 

had fitted bridge systems certified 

to DNV NAUT-AW onboard two 

SAM's new Ship Control Centre (SCC) total bridge assembly. 

vessels, the Stena Arctica, and 

SCF Baltica, both being built at 

Hyundai Heavy Industries Ulsan 

shipyard in Korea. The two 

113,600dwt ice strengthened 

crude oil tankers were fitted with 

Manta IBS with multifunction 

workstations, operating on a dual 

redundant CanBus network. As 

defined by the notation AW, the 

bridge is equipped with a 

grounding avoidance system. The 

officer of the watch is able to 

perform all the bridge functions 

pilot station to pilot station under 

normal operating conditions. 

ERGOPOD controls were fitted 

to the navigator's chairs. 

ERGOPODS is Kelvin Hughes' 

patented user machine interface 

with its display systems, utilising 

a tracker ball and three buttons. 

Although the interface is usually 

mounted on a desktop, and can be 

used to control a variety of 

systems including radar, ECDIS, 

and HAP, it was in this case 

installed in the navigators chair 

arm, and enabled the office of the 

watch to select and remotely 

operate any of the displays. The 

facility is particularly useful in 

rough sailing conditions, allowing 

the navigator to remain seated 

while carrying out his job. 

The development of IBSs or 

SSCs, as they are also known, is 

in a state of continuous evolution, 

differing in the equipment that is 

installed, the technology used, 

and in layout. New technologies 

will enter the market place and be 

adopted by some manufacturers 

and passed over by others in 

favour of an alternative concept, 

and as Brian Sherwood of 

Process Contracting Limited 

wrote, in the September 2004 

issue of Lloyd's Register's 

Horizons magazine, 'The scale of 

this variation means that a fully 

prescriptive approach to the 

installation and integration of 

new systems is not achievable, so 

safe and effective operation will 

depend on vigorous risk 

assessments, supported by sound 

ergonomic criteria.' 

TO 

34 


in marine fuels 

Sorry we couldn’t enclose a drip sample 

Bunkers look alike—until you sample them. That’s the moment of truth for 

product quality. Closer inspection also reveals telling differences between 

suppliers. Like whether they’re willing to put their reputation on the line by 

trading in their own name—as we do at OW Bunker. You can see a lot in a 

drip sample. More than you might think. 

Physical Supply · Global Trading · Risk Management 

www.owbunker.com

TECHNOLOGY - CARGO PUMPS 

Ice age pumps 

As the world faces up to the problems of global warming, engineers at the headquarters 

of Marflex are looking towards a new ice age. The management too, have responded, 

and are in the process of building 4,000 sq m of extra space 

in order to meet the challenge, reports Brian Warshaw. 

In October 2006, Russia's 

largest shipping company, 

Sovcomflot, placed an order 

with Samsung for three 

70,000 dwt Ice Class 1A tankers. 

The tankers will be equipped with 

a dynamic positioning system, two 

10 megawatt (MW) Azipod 360 

deg rotatable propulsion units, two 

13,180 kW main generators, 

helipad, and an Arctic bow loading 

system in which the hose 

connection is located well within 

the deck area. The vessels, which 

are 256 m in length, 34 m wide, 

and have a draught of 14 m, will 

be equipped with three main 

diesel-electric engines, which are 

capable of delivering propulsion 

totalling 24 MW. 

Able to sail in the harsh winter 

months, the vessels will be 

capable of ploughing through 

1.57 m of ice without the 

assistance of an escorting 

icebreaker, and to operate in 

conditions of down to 45 deg C 

below zero. In the event of 

entrapment in the ice, the Azipod 

thrusters can be turned to move 

the vessel sideways to break free 

from the ice. These are the first 

ships to have the ability to move 

fore, aft, port and starboard; a 

factor included in the price of the 

vessel which is believed to have 

cost three-times that of a 

conventional oil tanker. 

Built to a dual classification of 

the Russian Maritime Register of 

Shipping LU6 class, and Lloyds 

Register 1A ice class, the vessels 

Pump warning device 

A simple, yet effective 

safety device has been 

developed by Pres-Vac 

Engineering of Allerød, 

Denmark, for 

installation on its deepwell 

cargo pumps. The 

device provides a 

warning when the main 

impeller bearing has 

been damaged or, as a 

result of long usage, 

has reached the stage 

where significant wear 

had taken place. 

Pres-Vac cargo pumps, which 

are electrically driven, feature a 

magnetic coupling between the 

drive shaft and the impeller. 

Unlike pumps that use a direct 

mechanical coupling to transfer 

power from the drive shaft to 

the pump head, and have always 

been subject to a small leakage, 

the magnet coupling ensures 

that the pump is leak-free. A 

static housing prevents 

lubrication oil from the drive 

shaft seeping out to contaminate 

the cargo, and conversely, the 

cargo cannot enter the drive 

shaft housing to dilute or 

replace the lubricating oil. 

The warning device consists 

of a nitrogen charged capillary 

tube, one end of which is fitted 

in the pump housing just below 

the impeller: the other end being 

attached to a small pressure 

container mounted on the pump 

deck. In the event of a failure in 

the main bearing, the impeller 

will oscillate, break the tip of 

the capillary tube, and the tube 

will operate under a 25 year 

timecharter. They will be used to 

transport oil from Varandey Island 

in the Pechora Sea, north-western 

Arctic Russia, to international 

markets, on behalf of 

Naryanmarneftegaz, a jointventure 

company between LukOil 

and ConocoPhillips. The three 

vessels are due to be delivered at 

the end of 2007, spring 2008, and 

in early 2009. The Varandey 

terminal is currently being 

expanded from 200,000 to 

240,000 barrels per day, and due 

to shallow water in the area of the 

terminal, oil is loaded on the 

tankers from an offshore platform. 

Dutch deepwell pump 

manufacturer Marflex is supplying 

42 deepwell pumping sets to 

will lose its pressure. The loss 

of pressure will immediately 

effect an indication and alarm on 

the control system. The pump 

will continue to operate safely 

on its secondary bearings in the 

period during which the pump is 

automatically shutting down. 

Pres-Vac's Eric Sorensen told 

TANKEROperator that the unit 

had been developed in response 

to the findings of an industry 

study into incidents that had 

occurred on chemical carriers. 

He said that at the moment it 

was an optional feature on Pres- 

Vac pumps, although it will be 

fitted as a standard on the 

company's next generation of 

single-stage magnetic driven 

pumps when they become 

available later this year. • 

Samsung in a contract worth 

nearly Eur6 mill. The pump sets 

for the first vessel are scheduled 

for delivery in June this year. 

Each vessel will be fitted with 

10 cargo pumps, type MDPC- 

250, with a discharge capacity of 

up to 800 cu m per hour, two 

slops-tank pumps operating to 

500 cu m per hour and ballast 

tank pumps with a flow rate of 

2,500 cu m per hour. The pumps 

are electrically driven and the 

controls are being supplied to 

Marflex by Siemens Netherlands. 

The Marflex deepwell pump 

consists of three major parts, an 

electrical drive motor that is 

installed on the deck, an oil 

lubricated drive shaft rotating in a 

separate pipe, and the pump head. 

It is claimed by the manufacturer 

that the drive shaft has a life 

exceeding 10,000 operating hours 

without maintenance, and is 

sufficient to last the 20 to 25 

lifespan of an average tanker. 

Each of the 14 pumps fitted per 

vessel is fitted with EExd 

certified electric motors, which 

are designed to a particular 

specification for Marflex, and are 

linked to a series of variable 

drives. The variable Sinamics 

drivers, and Simatic S7 

programmable logic controllers, 

deliver an electrical output of 

between 220 and 390 kW, which 

controls the pump discharge at 

flow rates within the range of 400 

and 2,500 cu m per hour. 

Communication signals to the 

electric motors are facilitated by a 

Profibus interface, and the operations 

are managed from the ships' 

bridge using a Siemens designed 

panel. This solution enables the 

pumps to be directly controlled, and 

36 


One pump 

One tank 

One supplier 

Frank Mohn AS, located outside Bergen 

in western Norway, is the leading supplier of 

submerged cargo pumps to the world tanker market. 

More than 32.000 Framo submerged cargo pumps 

are in service onboard some 2.000 tankers. 

In 2006 alone about 200 complete cargo pumping 

systems were commissioned. 

Framo Cargo Pumping System 

• Submerged Framo Cargo Pumps with 

individual capacities up to 2.000 m 3 /h 

• Submerged Framo Ballast Pumps with 

• Deck mounted Framo Cargo Heaters 

• Framo Hydraulic Piping System 

• Framo Control System 

Ballast Pumps 

Hydraulic piping 

Control Panel 

Hydraulic Power 

Unit (HPU) 

UPCOMING EVENT: 

Please visit us at Europort Eurasia, Istanbul. 

25. - 29. April 2007 

Cargo Heaters 

Cargo Pumps 

Bow thruster 

motor 

Hydraulics for 

deck machinery 

Frank Mohn AS 

P.O.Box 98 Slåtthaug - NO-5851 Bergen - Norway 

tel. +47 55 999 000 - fax +47 55 999 380 

marine@framo.no 

www.framo.no 

HOUSTON 

BER 

GEN 

GOTHENBURG 

ROTTERDAM 

SHANGHAI 

PUSAN 

TOKYO 

SINGAPOR 

E 

“To a brave and faithful man 

nothing is difficult” 

RIO DE JANEIRO

TECHNOLOGY - CARGO PUMPS 

also through a linkage with the 

ship's cargo computer. 

Paul van Beveren, Marflex's 

general manager, told 

TANKEROperator that the 

company's growth had been 

phenomenal, and that was the 

reason for the new assembly and 

testing area being built. Last year, 

the order intake was four times the 

yearly turnover, and he believed 

that the upward trend would 

continue for at least the next five 

or six years. This belief is based 

on current market demand, the 

company's direct approach to 

customers, and the reliability 

record of the Marflex product and 

organisation, he claimed. 

Marflex has received at least 15 

other orders for deepwell pumps to 

be installed on Ice Class tankers. 

Van Beveren said that, 'There are a 

number of Russian companies, 

including Primorsk Shipping and 

Rosnefteflot/Sovcomflot, that 

have ordered, or are planning to 

order Arctic tankers, and Marflex 

is obviously hoping to be 

considered for the supply of these 

pump systems.' 

Another company involved in 

the unloading of oil and 

chemicals from Ice Class vessels 

is Frank Mohn of Bergen, 

Norway. The deepwell cargo 

pumps manufactured by Framo of 

Frank Mohn's marine division, 

differ from those of Marflex, 

which are electrically driven, by 

being powered by a traditional 

hydraulic motor. 

Since 2003, Framo said that it 

has enjoyed a boom in orders from 

the medium range tanker market, 

those between 35,000 and 50,000 

dwt. Eivind Borgen, a senior 

member of the management team, 

said, 'The boom has been brought 

about by a replacement of older 

tonnage, and an [industry] belief 

in the future for increased cargo 

volumes to be carried. A majority 

of these replacement tankers are 

equipped with Framo submerged 

cargo pumps with individual 

capacities of 500 to 600 cu m per 

hour and a total vessel discharge 

rate of 3,000 to 4,000 cu m 

per hour.' 

With sales of more than 200 

Framo cargo-pumping systems 

during 2006, Frank Mohn has 

continued its progress and 

capitalised on the market 

opportunities offered by the 15,000 

to 95,000 dwt products carriers 

being built in South Korea, Japan, 

China, and Croatia. A significant 

number of these installations have 

been on products tankers built to 

Ice Class 1A, intended for winter 

Plenty Mirrlees pumps satisfy a tall order 

Plenty Mirrlees Pumps, 

an SPX Process 

equipment company, has 

developed a solution for 

the bulk transfer of Tall 

oil using its Twinro 

W125 (125 cu m per 

hour) and W225 (225 cu 

m per hour) pumps. The 

electric motor driven 

pumps are used for 

discharging tankers to 

storage tanks. 

The Tall oil, which is produced 

from Scandinavian trees, is a 

product currently being 

introduced to UK industries as a 

new biofuel having low 

environmental emissions. The 

construction of this pump 

presented Plenty Mirrlees with a 

problem whereby the company 

had to produce an engineering 

solution to ensure complete 

sealing of the product. 

The Twinro is a positive rotary 

twin screw pump developed 

primarily for the bulk transfer of 

liquids. Twin screw pumps are 

fully self-priming and have 

excellent air/vapour handling 

A cutaway drawing of a Twinro pump. 

characteristics, which makes them 

ideally suited to applications 

involving tank and line stripping. 

The pumping element consists of 

two contra-rotating shafts from 

which right hand and left hand 

epicycloids screw shapes are 

accurately machined. The screw 

set conveys the fluid being 

pumped from each end and out 

through the centre. The screw 

shafts are carried in roller bearings 

at the drive end and ball bearings 

at the non-drive (gear case) end. 

The driven (lower) screw is 

synchronised from the driving 

(upper) screw by a pair of 

hardened and ground timing gears. 

To satisfy non-lubricating 

products, the Twinro has been 

designed with four 

mechanical seals to 

contain the product 

with the timing 

gears and bearing 

outside the pumped 

fluid. The 

mechanical seals 

are normally 

unheated and 

flushed by the 

product in the suction chamber as 

it passes the seal. However, in the 

case of this application were the 

seal area to cool, the tall oil will 

crystallise and failure of the seal 

will occur. To ensure that 

adequate heat is maintained at the 

mechanical seals, Plenty Mirrlees 

incorporated a steam quench and 

flush was into the design this 

involving a complete re-design of 

the seal chamber area. 

According to Jim Miller of 

Plenty Mirrlees, this design of 

pump has proved to be successful 

and now that government 

subsidies are available for the use 

of this fuel, the company sees 

more orders and enquiries for 

this application. 

• 

Framo deepwell hydraulic 

cargo pump 

operation in the Baltic Sea and 

Russian Arctic waters. 

According to Borgen, the 

benefit of the Framo cargo pump 

design is that it has no rotating 

parts installed on the deck. 'The 

hydraulic motor', said Borgen, 'is 

located inside the pump head, 

down in the tank and surrounded 

and protected by the returning 

hydraulic oil. This is a definite 

advantage over a deepwell pump 

with an electric motor that is 

located on the deck, where ice 

conditions may be severe in 

Arctic waters, during wintertime.' 

Borgen claimed that the 

company had delivered pumping 

systems to over 70 Ice Class 1A 

tankers of between 5,000 and 

70,000 dwt, for shipowners 

operating out of Sweden, Norway, 

Germany, Greece and Cyprus. 

Framo pumps employ a single 

stage, single suction impeller 

connected by a short shaft to the 

hydraulic motor. The motor 

control module provides a smooth 

transition in rotational speed that 

enables discharge rates of between 

50 and 2,000 cu m per hour on all 

types of oil and chemical, 

regardless of weight, viscosity, and 

temperature. The hydraulic fluid, 

which drives the pump head, is 

also used for lubrication and 

cooling functions. 

TO 

38 


TECHNOLOGY - SHIP TO SHIP TRANSFER 

STS expert expands 

empire and gets into gas 

This was achieved by 

the purchase of 

Melbourne Marine 

Services, which now 

trades under the banner of SPT 

Marine Services (SPTMS). 

Skaugen's Simon Duncan 

explained that the purchase of 

Melbourne Marine gave the 

company entry into markets that 

had been previously identified for 

expansion and was viewed as a 

long term strategic acquisition. 

SPTMS is active in the UK, 

northwest Europe, Mediterranean 

and West Africa. Ian Laws 

remained as managing director 

along with all his employees. 

One of the areas that had been 

under investigation for some time 

is the Firth of Forth. Plans have 

been submitted to the local 

authorities with the backing of 

Forth Ports for the development 

of both STS procedures and oil 

spill contingency plans. Duncan 

said that SPTMS is hopeful of 

gaining the necessary approvals 

to go ahead with the project. 

He said: " We feel that this 

location is ideal from a number of 

different perspectives namely - it 

is a sheltered and protected 

anchorage offering a high level of 

reliability in terms of conducting 

operations on an uninterrupted 

basis, the location should attract 

business opportunities, not only 

from the Baltic region, but also 

from elsewhere within 

northwestern Europe. 

"All operations will be 

conducted in accordance with the 

approved STS manual and 

existing ship vetting and 

suitability standards," he asserted. 

He also explained that one 

advantage that SPTMS has is a 

well established naval 

architecture division. 

The largest company involved in shipto-ship 

transfers Houston-based Skaugen 

Petrotrans has been operating in the US 

Gulf/Gulf of Mexico for many years and 

last year expanded its horizons. 

LNG STS 

Last year was another milestone 

for Skaugen in that in August the 

company completed the first two 

LNG lightering operations. The 

cargo was transferred between 

two of Excelerate Energy's LNG 

regasification vessels in the Gulf 

of Mexico. 

While the two cargoes were 

relatively small parcels of 

liquefied natural gas, it allowed 

for the verification process with 

regards to the cargo hoses, quick 

disconnect/dry break couplings for 

the hoses, vapour management 

and other necessary items. 

Both operations were 

completed without incident in the 

presence of SIGGTO 

representatives. Skaugen 

Petrotrans is a member of the 

working group currently 

developing a LNG STS guide. 

Duncan explained that the 

company had put a lot of time 

and resources in the development 

of LNG transfers and feel that it 

is well positioned going forward 

as interest grows in this particular 

industry segment. This is as a 

Trial LNGC STS transfers took place last year in the Gulf of Mexico. 

result of the growing number of 

offshore LNG terminals that are 

either approved or being 

considered worldwide. 

This month, the first full cargo 

STS trial transfer of 132,000 cu 

m LNG took place at Scapa 

Flow, Orkney Islands for 

Excelerate Energy using the 

Exmar LNGCs - the laden 

Excalibur and the receiving 

Excelsior. The cargo was 

destined for Excelerate's Teesside 

regasification receiving terminal. 

A risk assessment was carried 

out at Scapa Flow last December, 

while the three companies 

involved - SPTMS, Excelerate 

and Exmar - were in the area 

during September outlining the 

pans to the local council. The 

STS transfer was carried out in 

daylight, while a number of 

observers were invited, including 

the MCA, USCG and 

environmental regulators. 

Scapa Flow has been used for 

oil tanker STS since 1980 without 

any incidents occurring. 

Lightering tankers 

Skaugen Petrotrans is also 

heavily involved in shuttle 

aframaxes used for lightering 

purposes. The company currently 

has four of the six newbuildings 

under construction at Tsuneishi. 

These are 105,000 dwt purpose 

built lightering aframax tankers, 

of which the first SPT Champion 

is scheduled for delivery in May 

of this year. 

These newbuildings will 

incorporate features that will 

enhance the overall safety ofthe 

vessel and STS operations, 

Duncan claimed. They will be 

fitted with fender davits, 

enhanced manoeuvrability 

incorporating a bow thruster, 70 

degree rudder and ultra slow 

speed main diesel engines, 

increased deballasting capability, 

increased loading rate, hose 

handling crane with an extended 

reach boom and a cargo loading 

station in the wheelhouse. 

The first four will be 

technically managed for SPT by 

Bergshav management of 

Grimstad, while the remaining 

two will be managed by Teekay 

Shipping. 

TO 


TECHNOLOGY - SHIP TO SHORE INTERFACE 

A Ropey Business 

With today's tankers and their attendant tugs becoming more powerful, so powerful 

in fact that some mooring equipment, such as bitts, is becoming damaged 

on a regular basis, fibre is increasingly replacing wire in rope technology. 

One company, DSM 

Dyneema has 

developed what it 

calls, its patented 

ultra-strong Dyneema fibre, 

which has been taken up by rope 

manufacturers for the LNG and 

For wire, read fibre. 

oil transport sectors. 

This fibre was developed 

through research and 

development in close cooperation 

with end users and rope 

manufacturers, such as Bridon in 

the UK and Samson in the US. 

Dyneema claimed that the 

strength-to-strength ratio of the 

fibre rope allowed the 

manufacturers to engineer lighter 

and more flexible ropes without 

comprising its strength. 

A number of advantages were 

claimed over the more traditional 

steel wire and conventional 

synthetic fibres, including a much 

lighter weight making the lines 

easier and faster to handle, 

reducing mooring times and the 

seafarers' physical workload. The 

material's low elongation 

minimised rope backlash for 

improved safety on board ship 

and ashore. 

Maintenance costs are also 

reduced as ropes with the 

Dyneema fibre will not damage 

chocks, bits, fairleads, or other 

parts of the vessel, nor do they 

need to be lubricated, resulting in 

less possible pollution to the 

environment and on the deck of 

the vessel. In addition they have 

an increased service life, DSM 

Dyneema claimed. 

Alaska Tanker has been in the 

news recently for the wrong 

reasons, but said that the 

company has been using mooring 

lines with the fibre for four years 

and is very satisfied with the 

performance. "The lines are 

holding up well and the crews 

especially like working with the 

lines, as they are much lighter 

and easier to work with that the 

wire rope we had previously 

used," said Bill Gould, port 

captain Alaska Tanker. 

DSM Dyneema said that the 

company was working closely 

with the rope manufacturers to 

develop new technologies based 

on the Dyneema fibre. Edwin 

Grootendorst, DSM Dyneema's 

market segment manager mooring 

explained," By pooling our 

expertise with manufacturers and 

end-users, we are making 

significant strides in creating the 

next generation of marine ropes." 

Dyneema is marketed by DSM, 

which claimed it is the world's 

strongest fibre. It is an ultra 

strong polyethylene fibre that 

offers maximum strength 

combined with minimum weight. 

It is claimed to be up to 15 times 

stronger than quality steel and up 

to 40% stronger than aramid 

fibres, both on a weight for 

weight basis. 

It can float on water and is 

extremely durable and water, UV 

light and chemical resistant. 

James Mackay of UK rope 

manufacturer Bridon said the 

company was making a major 

push into the LNGC market, 

which the company entered four 

or five years ago. Mackay said 

that Bridon has secured 90% of 

the market for LNG carriers, 

mainly coming out of South 

Korea yards. He said that Bridon 

had been involved in the 

manufacture of mooring lines 

since 1991 and had been involved 

with Dyneema synthetic tow lines 

since the late 1980s/early 1990s. 

Explaining the need for new 

rope technology Mackay said that 

with very powerful escort tugs in 

service, especially in Alaska, 

mooring ropes were needed with 

a break load of up to 127 tonnes. 

On average, each vessel will 

have between 24-26 sets of ropes, 

making it a significant piece of 

business. The rope is 

manufactured in Coatbridge, 

Scotland and the new fibre rope 

can have a service life of 10 

years. Some training of seafarers 

is necessary to keep the rope 

operational for long periods of 

time, Mackay said and to make 

them comfortable with the fact 

that they are not dealing with 

steel. The rope tends to become 

damaged rather than suffer from 

fatigue as it will not react to 

sharp bends and edges as with 

wire rope. 

He did admit that the new fibre 

rope was two to three times the 

cost of the traditional wire rope, 

but that end users would see long 

term benefits in that no dedicated 

equipment or grease was 

necessary and the rope needed 

minimum maintenance. 

In the oil tanker sector, 

Mackay said that BP Shipping 

was a major customer as it was 

in the LNGC sector and has been 

since 1998. Other tanker owners 

and managers using Bridon ropes 

included Besiktas, Vela, 

SeaRiver, Alaska Tanker, OSG, 

Keystone Shipping and Polar 

Tankers. 

TO 

40 


CAPITAL LINK FORUM 

Invest in International Shipping 

Presentations & Panels March 23, 2007 

Shipping in a New Era 

Cantor Fitzgerald - Anthony Argyropoulos, Managing Director 

Containers 

Fortis Securities - Gregory Lewis, Shipping Analyst 

Danaos Corporation - John Coustas, CEO 

Euroseas - Aristides Pittas, CEO 

Lazard Capital Markets - Urs Dur, Vice President, Equity Research 

Howe Robinson Hamburg - Nick Bailey, Director 

Investing through Blank Check Companies 

Maxim Group - Clifford Teller, Director 

Gas (LNG / LPG) 

Fortis Securities - Dan Barrett, Head of Equity Research 

MC Shipping - Tony Crawford, CEO 

Morgan Keegan - Michael Drickamer, V.P, Equity Research 

Lorentzen & Stemoco - Thor Erik Lie, Partner & Director, Gas Department 

The Baltic Exchange - Jeremy Penn, Chief Executive 

Metropolitan Club 

One East 60th Street 

New York City 

In Cooperation With 

Tankers (Products & Crude) 

Fortis Securities - Dan Barrett, Head of Equity Research 

Arlington Tankers - Arthur Regan, President & Co-CEO 

Omega Navigation - George Kassiotis, CEO 

Tsakos Energy Navigation - Nikolas Tsakos, CEO 

JPMorgan - Jonathan Chappell, V.P., Transportation Analyst 

Mallory, Jones, Lynch, Flynn & Associates - John Stichter, Partner 

Shipping and The Global Economy Today 

Fortis Merchant Banking - Guy Verberne, Head of Economic Research 

Dry Bulk 

Fortis Securities - Lewis, Shipping Analyst 

DryShips - George Economou, CEO 

Excel Maritime - Christopher Georgakis, CEO 

Quintana Maritime - Stamatis Molaris, CEO 

TBS International - Joe Royce, CEO 

Jefferies & Company - Douglas Mavrinac, Maritime Group Head 

Clarkson Hellas - George Margaronis, Managing Director 

Media Sponsors 

Barron's 

Bloomberg 

Forbes.com 

Institutional Investor 

Tanker Operator 

TradeWinds 

FOR INFORMATION & REGISTRATION CALL 212-661-7566 OR E-MAIL shipping@capitallink.com 

www.capitallink.com

First Class tankers: a new perspective 

TAKING 

TANKERS 

SERIOUSLY 

Tankers are like a work of art – the more quality they offer, the more 

valuable they are. Welcome to GL, your First Class partner in improving 

the operational safety and profitability of your tankers! 

Germanischer Lloyd Aktiengesellschaft 

Vorsetzen 35 · 20459 Hamburg/Germany 

Phone +49 40 36149-0 · Fax +49 40 36149-200 

headoffice@gl-group.com · www.gl-group.com

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