Navigation standards slammed - Tanker Operator

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GREECE/POSIDONIA PREVIEW
TANKER
Operator
An unprecedented ordering spree
Buy low, sell high - is still the Greek’s mantra when it comes to manouevring
in the minefield that is the newbuilding and secondhand markets.
From the time IACS and ABS chairman
and ceo Robert D Somerville
declared to the Intertanko Athens
Event in April, 2005, that "the finest technical
minds" had worked on the Joint Tanker
Project, the Common Structural Rules
(CSR) for tankers were a fact. It was just a
case of when they would be ready and
brought into force, writes David Glass.
The CSR missed the then January 1,
2006 deadline, but made the second date
and have been with us since April 1,
despite the ongoing protests of owners,
the Greeks in particular. In fact, it became
clear Greek tanker owners, although not
convinced the rules were adequate, were
ready to accept them, when they were in
the thick of a pre-Christmas 2005 ordering
spree involving energy carrying ships.
Greek owners have been renewing
their tanker fleets, with a fairly stable
orderbook of around 150/180 ships at any
one time, since 2001.However, in the
autumn of 2005 there was a rush and by
the time it was clear the January 1 target
for the introduction of the CSRs would not
be met, some $4.9 bill had been committed
by the world's tanker industry to newbuilding
projects in November and
December, traditionally a period when
shipping catches it breath. Greeks were
heavily involved in this stampede.
With tanker newbuildings requiring an
additional 3% to 7% of steel, depending on
the ship type, to comply with the CSR, a
higher price and a longer
period of construction, it was
hardly surprising there was
such a move to order.
Some of the orders had
been in the pipeline for a
while as owners and yards
closely negotiated prices,
which had risen to record
levels earlier in the year.
Most ship commissioning
dates were slated for the second
half of 2008 with a handful
running into 2009.
Though Singapore's
Ocean Tankers and Turkey's
Geden Line were the biggest
investors pre-Christmas,
Greek tanker men and
women had invested over
$500 mill in projects in Japan,
South Korea and China.
Ocean Tankers firmed up
two projects, an order for six
105,000 dwt aframaxes, plus
six options, at China's
Shanghai Waigaoqiao
Shipbuilding (SWS) and
another for four 40,000 dwt
products tankers at South
Korea's Shin-A for a total firm
investment of $537 mill.
Meanwhile, Geden booked
four 46,600 dwt products
tankers at Hyundai Mipo,
three ice class products tankers of 37,000
dwt at the same yard and two suezmaxes at
Samsung - a total investment of $457 mill.
One wonders how many of these ships will
ultimately end up in Greek hands.
A slice of Geden's investment was likely
covered from the $160 mill which
flowed into the Turkish operator's coffers
via the sale of two suezmaxes off the berth
at Hyundai-Samho to Greece's Diamantis
Diamantidis' Marmaras Navigation just
before Christmas. These ships, which
deliver mid-2007, were ordered at around
$52 mill each and the purchase marked a
deeper involvement in the wet trades for
this traditional bulk carrier operator.
Recently delivered to John Angelicoussis’ Kristen navigation was the VLCC Aries Voyager.
The group is now Greece’s largest shipowner.
Never one to do things in a small way, this
lifts to four the number of suezmaxes to
deliver from the yard to Diamantidis, who
also has two 92,000 dwt vessels on order at
Sungdong Shipbuilding for delivery 2007.
This owner has 10 x 93,000 dwt bulk carriers
under construction and with a current
orderbook worth $740 mill has invested
some $1.2 bill in new ships in recent years.
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in Piraeus were talking of Diamantidis
selling his tanker operation for $1 bill,
including ships on order. The owner has
not officially commented, but those close
to the company believed a sale would be
on if Diamantidis 'gets the price he wants'.
Basil Papachristidis' Hellespont continued
its re-birth by ordering four 115,000
dwt tankers from New Century
Shipbuilding in China at $58 mill apiece.
The same yard is building six 73,620 dwt
products tankers for the owner.
Papachristidis was re-investing the $448
mill collected when he sold four ULCCs to
Euronav in the spring of 2004.
Papachristidis is known for his blasts at
the classification societies and shipbuilders,
but continues to build ships. By
ordering in China, he came to the defence
of the Chinese shipbuilding industry,
which continued to be dogged by teething
troubles. He reckoned that an owner willing
to persist in China could reap the benefits.
Though the financial clout of new
shipbuilders made the refund guarantee a
major issue, the Hellespont chairman said
that for him, staffing and equipment
delays were the biggest drawbacks.
Most problems centred on workers, particularly
the issue of a high turnover of personnel,
which resulted in a high influx of
untrained workers, which, said
Papachristidis, meant owners had to
employ excessively large site teams, maybe
three to five times the average.
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TankerOperator May/June 2006 page 7