Marine Link
Tuesday, March 28, 2017

VLCC Rates to Remain Weak on Output, Tonnage Woes

© Björn Wylezich / Adobe Stock

Freight rates for very large crude carriers (VLCCs), which fell to a near six-month low on Thursday, will remain weak until the Asian refinery maintenance season gets completed, starting April-end. "I haven't seen a collapse in rates like this for some time. People are taking insane rates," said Ashok Sharma, managing director of ship broker BRS Baxi in Singapore. Output cuts by oil producers, refinery maintenance in Asia and the reactivation of older vessels previously used as…

Market Volatility Affects Sovcomflot

Tanker SCF Baltica. Photo:  PAO Sovcomflot

Sovcomflot is one of the world’s leaders in energy shipping as well as in servicing offshore upstream oil and gas projects. It has reported lower time charter equivalent revenue (TCE) of USD 1,142.2 million (2015: USD 1,240.1 million), EBITDA of USD 706.5 million (2015: USD 780.1 million) and net profit of USD 206.8 million (2015: USD 354.5 million). Sergey Frank, President and CEO of Sovcomflot said: “Sovcomflot has delivered a solid set of results for 2016, despite market volatility in a year that has severely tested our industry.

First LNG-fueled Aframax Tankers Ordered

Image: Hyundai Heavy Industries Group

Hyundai Heavy Industries’ shipbuilding affiliate Hyundai Samho Heavy Industries (HSHI) said it recently won a $240 million order to build four 114,000 DWT Ice-Class IA aframax tankers from Sovcomflot, the Russia’s state-owned shipping company. The vessels are said to be the world’s first LNG-fueled aframax tankers, and will measure 250 meters in length, 44 meters in width and 21 meters in height. They are scheduled to be delivered from the third quarter of 2018 and to be chartered to Shell.

Maersk Tankers to Trial Rotor Sails

Maersk P-Class Illustration with two 30x5 Norsepower Rotor Sails (Photo: Maersk Tankers / Norsepower)

Norsepower Oy Ltd. in partnership with Maersk Tankers, The Energy Technologies Institute (ETI), and Shell Shipping & Maritime, have announced that it will install and trial Flettner rotor sails onboard a Maersk Tankers-owned vessel. The project will be the first installation of wind-powered energy technology on a product tanker vessel, and will provide insights into fuel savings and operational experience. The rotor sails will be fitted during the first half of 2018, before undergoing testing and data analysis at sea until the end of 2019.

MAN 48/60CR Engines for New US Navy Tankers

The FM-MAN 14V48/60CR engine (T-AOX will use 2 x 12V46/60CR Engines) (Image: MAN Diesel & Turbo)

The U.S. Navy has chosen the Fairbanks Morse MAN 12V48/60CR engine as main propulsion for a new series of 17 ships as it begins plans to phase out its existing tanker fleet. Known colloquially as oilers, the existing aging fleet of 15 tankers is used to transfer fuel from coastal ports to naval vessels at sea. Lex Nijsen – Head of Four-Stroke Marine – MAN Diesel & Turbo, said, “The U.S. Navy knows our 48/60 engine very well, especially our L48/60A variant, and this played a key role in Fairbanks Morse winning this contract. In studying the replacement of the existing tankers, the U.S.

OCIMF Encourages Adoption of Inert Gas Systems

Andrew Cassels (Photo: OCIMF)

The Oil Companies International Marine Forum’s (OCIMF) latest information paper, released on March 13, addresses the use of inert gas for the carriage of flammable oil cargoes. In the paper, titled Inert Gas Systems: the use of inert gas for the carriage of flammable oil cargoes, OCIMF fully supports the IMO introduction (from January 1, 2016) of the mandatory fitting to new build tankers 8,000 DWT and over, of an inert gas system when carrying flammable cargoes. “The safety benefits of inert gas in cargo tanks are well recognized throughout the tanker industry…

Odfjell Inks LOI for Additional Chemical Tankers

Odfjell SE said it has signed a letter of intent (LOI) for two additional chemical tankers to be built by Hudong-Zhonghua Shipbuilding Co., Ltd. in China. The capital commitments will be about $116 million. The vessels will be 38,000 dwt with 40 stainless steel cargo tanks and a cargo capacity of about 45,000 cbm. Both vessels will be prepared for dual fuel solution. The LOI, which includes options, follows on orders already committed at the yard for four 49,000 dwt vessels with 33 stainless steel cargo tanks. “Following this order and other commitments recently taken, most of our renewal needs for the 'super segregators' have been met,” said Kristian Mørch, CEO of Odfjell SE.

GE Shipping Buys New Vessel

Photo: The Great Eastern Shipping Co. Ltd

The Great Eastern Shipping Company Limited (G E Shipping) signed a contract to buy a Supramax Dry Bulk Carrier of about 52,450 dwt. The 2006 built vessel is expected to join the Company’s fleet in Q1 FY18. The Company’s current fleet stands at 43 vessels, comprising 28 tankers (11 crude carriers, 15 product tankers, 2 LPG carrier) and 15 dry bulk carriers (1 Capesize, 8 Kamsarmax, 6 Supramax) with an average age of 9.56 years aggregating 3.54 mn dwt. The company has also committed to purchase 1 Secondhand Suezmax Crude Carrier.

IMO Secretary-General Urges Vigilance after Tanker Hijack

Official photograph of IMO Secretary-General Kitack Lim

In the wake of the recent hijacking of tanker Aris 13 off Puntland, Somalia, International Maritime Organization (IMO) Secretary-General Kitack Lim urged the shipping industry to be vigilant and apply diligently IMO guidance and best management practices to avert possible piracy attacks. “While we have seen a very welcome decline in piracy off Somalia since the last reported hijack by Somali pirates in 2012, the reality is that piracy off the coast of Somalia has not been eradicated and the underlying conditions have not changed,” Lim said.

WE Tech to Equip Ektank Vessels

WE Tech Solutions said it has received an order to deliver its permanent magnet shaft generator solution to two new 18,600 dwt chemical tankers with an option for another two. The tankers are built by China State Shipbuilding Corporation (CSSC) Chengxi Shipyard for the Swedish ship owner Ektank AB. WE Tech’s equipment delivery to Hudong Heavy Machinery Co., Ltd. will commence in October 2017. WE Tech’s solution is based on variable frequency drive technology (WE Drive) and the direct drive Permanent Magnet Shaft Generator. The solution allows the main engine to run at variable speed while the electrical network is generated by the Shaft Generator. Therefore, there is no need to run the auxiliary engines or generators when sailing.

Stena Impeccable Delivered to Stena Bulk

Stena Impeccable (Photo: Stena Teknik)

 Sten Bulk has taken delivery of Stena Impeccable, the 10th of 13 new IMOIIMAX tankers ordered from Guangzhou Shipbuilding International (GSI) in China.   The tanker, which is wholly owned by Stena Bulk, will be operated by Stena Weco and will sail in the company’s logistics system, which currently employs more than 60 vessels.   The chemical and product tanker Stena Impeccable has a length of 183 meters, a beam of 32 meters and a deadweight of 50,000 tons.  

Asia Tankers-VLCC Weighed by Excess Tonnage

File Image (CREDIT: AdobeStock)

MidEast, West Africa rates diverge; oil output curbs in Iraq and West Africa could weigh on tanker market. Freight rates for very large crude carriers (VLCCs) are likely to remain under pressure with hire rates from the Middle East to Asia tracking lower in the face of excess tonnage in the market, brokers said. Cuts in the output from Iraq and West Africa this month as part of an agreement between oil producers to curb crude production to bolster oil prices are also expected to weigh on the tanker market as the number of voyages are curtailed, brokers said.

TEN Strengthens Vessel Base

Photo: Tsakos Energy Navigation

Tsakos Energy Navigation (TEN)'s growth has continued unabated in 2017 with the delivery of one VLCC, the Hercules I, one aframax tanker the Marathon TS and the shuttle tanker Lisboa, currently all under long-term employment to solid counterparties. These came on the back of nine vessels that were delivered or acquired in 2016 and will be followed in 2017 by the last four, of nine, aframaxes that were built against long-term employment to a Norwegian oil major. With the delivery of these remaining high-end aframaxes…

TEN Announces Time Charter for Hercules I

Pic: Tsakos Energy Navigation

Tsakos Energy Navigation (TEN), a leading diversified crude, product and LNG tanker operator, today announced an up to 18 months time charter with minimum and profit sharing provision for the newly delivered VLCC Hercules I to a major US oil company. "All 15 new vessels in TEN's growth program, including the five for the rest of this year, have full long-term employment. This new time charter announced today with minimum base rate and profit sharing arrangements protects the Company's bottom line and ensures participation on the upside," stated Nikolas P.

Shipping Confidence Steady despite Industry, Political Pressures

© Federico Rostagno / Adobe Stock

Shipping confidence held steady in the three months to end-February 2017, according to the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens. In February 2017, the average confidence level expressed by respondents was 5.6 out of 10, unchanged from the previous survey in November 2016 and equal to the highest rating since August 2015. Owners were the only main category to show an improved level of confidence, up from 5.4 to 5.6.

Royal Australian Navy Conscripts MAN

Photo courtesy of RAN

Navantia, the major Spanish shipbuilder, has chosen MAN main and GenSet engines to power two fleet-support-tanker newbuildings it is currently constructing for the Royal Australian Navy (RAN). Each vessel will feature 2 × MAN 18V 32/40 main engines and 4 × MAN 7L21/31 GenSets with shipset deliveries scheduled for December 2017 and June 2018, respectively. Lex Nijsen – Head of Four-Stroke Marine – MAN Diesel & Turbo, said: “We are currently receiving a lot of enquiries within the Navy and Governmental segment for MAN engines and…

Shell Signs 3-year Contract to Lease Oil Tanks in Panama

Oil company Royal Dutch Shell has signed a three-year contract to lease storage tanks at a large terminal in Panama that had been used by U.S. refining company Tesoro Corp, sources involved in the deal told Reuters. The facility, designed for storage and transshipment of crude oil to tankers, is owned by Petroterminal de Panama (PTP) and includes up to 14 million barrels of storage capacity on the Atlantic and the Pacific shores. "We have signed a contract with Shell for a three-year period involving all the available space we have," said an official from the Panamanian government. The contract still needs final approval by the country's Finance Ministry.   (Reporting by Elida Moreno and Marianna Parraga)

DHT Sells 18-year-old VLCC for $19.1 Mln

Crude oil tanker owner and operator DHT Holdings, Inc. said it has entered into agreement to sell the 1999-built very large crude carrier (VLCC) DHT Phoenix for $19.1 million.   The 18-year-old tanker has just completed a “highly profitable” one year time charter at $45,000 per day to an Asian refining company, DHT said.   DHT did not identify the new owner in its press release announcing the sale, but said the tanker will be delivered during the second quarter and is expected to retire from the trading fleet.   The DHT Phoenix is debt free, and the entire net proceeds will be added to the company's cash balance. The company said it will record a book loss of about $3.5 million in the first quarter 2017 in connection with the sale.

Pirates Demand Ransom for Tanker Seized off Somalia

Pirates off the coast of Somalia, who hijacked an oil tanker with eight Sri Lankan crew on board, are demanding a ransom for the release of the vessel, the EU Naval Force said. The pirates seized the Comoros-flagged Aris 13 tanker on Monday, the first such hijacking in the region since 2012, and took it to the port of Alula in the semi-autonomous northern region of Puntland. "The EU Naval Force ... has received positive confirmation from the master of ... Aris 13, that his ship and crew are currently being held captive by a number of suspected armed pirates in an anchorage off the north coast of Puntland, close to Alula," the force said in a statement late on Tuesday.

Oman Shipping to Acquire 10 Tankers

Photo: Oman Shipping Company

Omani government-owned Oman Shipping Company (OSC) has secured USD 227 million in debt to finance the acquisition of ten tankers, Reuters said citing France-based Societe Generale. The new medium range tankers are chartered to Shell Tankers Singapore for seven years. Societe Generale acted as sole arranger and sole underwriter for the landmark transaction, which involved a combination of export credit agency (ECA) and commercial financing. Seven of the 10 vessels were covered by Korea’s export credit agency, K-Sure.

The Product Tanker Orderbook: Slimming Down?

Graph: Clarksons Research

A report by Clarksons Research said that following an extremely weak year for product tanker contracting in 2016, the product tanker orderbook has declined significantly and at the start of February 2017 was equivalent to 10.2% of fleet capacity, the lowest level in nearly 17 years. While orderbook trends have differed between vessel sizes, the shrinking orderbook is expected to lead to slower overall growth in the product tanker fleet in the coming years. At the start of February, the product tanker orderbook (10,000+ dwt) stood at 321 ships of 16.0m dwt.

Asia Tankers-VLCC Rates Falling as Tonnage Outweighs Demand

File Image (CREDIT: AdobeStock)

Freight rates for very large crude carriers (VLCCs), which fell to five-month lows this week, are set to drop further as excess tonnage and an absence of port congestion weigh on the market, brokers said. Supertanker charter rates, which are already below the breakeven levels for ship owners, could fall further due to new vessel deliveries, reactivation of older vessels from offshore crude storage, crude oil output cuts and refinery maintenance, brokers said. That will add to the volume of available tonnage as demand for cargo declines.

DryShips Completes Common Stock Offering

File Photo: DryShips Inc

DryShips Inc. has successfully completed the previously announced $200 million common stock offering, in which the Company raised net proceeds of $198 million, pursuant to the prospectus supplement filed on February 17, 2017. Following the completion of the offering, the Company has approximately 152,055,576 common shares outstanding. George Economou, Chairman and CEO commented: "We are very pleased to have successfully raised an additional $198 million of equity, which will increase our total available liquidity to about $455 million.

Maritime Reporter Magazine Cover Mar 2017 - The Green Marine Technology Edition

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