Showing posts with label Market Intelligence. Show all posts
Showing posts with label Market Intelligence. Show all posts

Saturday, December 17, 2011

Political Shenanigans


My posts are generally related specifically to the Marine Industry, so this is a modest one-time departure from that theme. Today, the congress passed a two month extension of the payroll tax cut, in addition to funding the government for the remainder of the governments fiscal year. There is an incredible amount of political grandstanding happening at the expense of the American people. 

I am currently unemployed, trying to survive on the income generated by this blog (which isn't easy.) I have been denied unemployment; I am a Veteran; and I have been dedicating 40 to 50 hours per week looking for a new career. No less than 9 times, I have been told by prospective employers that they were waiting to see what the tax implications are before taking on any new employees. 

So, to the American Congress, I would like to give a big (and yes, very sarcastic) "Thank You!" 

Perhaps the most stomach turning rhetoric I'm hearing is the push to create more jobs for the Veterans coming home from Iraq. Meanwhile, the Keystone Pipeline remains on hold; the payroll tax cut is temporarily extended for two moths; major shipping ports are in need of significant improvements; Inland waterways are in need of improvement; Schools are still a mess; and there is still no dramatic economic rebound from the  800 billion dollars in "shovel-ready" projects that were supposed to save us all. 

Businesses like stability, and our Congress is not providing that. Two months? Again, my sarcastic thank you. Thank you for giving business 2/3 of one fiscal quarter in stability and predictability.
So, what will I do? Well, I will continue looking for work. Hopefully, the new year will  yield more positive results.

Record Breaking Volumes for Port of Los Angeles

Fron IFW Freight and Logistics News Service
16 December 2011


The US port of Los Angeles has reported a record year for exports, buoyed by an all-time monthly high for goods shipped overseas in November, the second consecutive month of record export volumes.

LA exported 1.9 million containers in the first nine months of 2011, breaking the previous record of 1.8 million in full-year 2010.

And imports were 6.2% higher in November than in 2010.

The largest US container port said it was on course to export more than 2 million teu this year.

Exports reached the highest monthly volume in the port’s history last month, handling 195,877teu, 15% up on the previous November. And in October, the port handled 193,547teu, up 28% on October 2010.

Goods exported include raw materials, cotton and grains, as well as high-value goods, including computers, medical equipment and aerospace components.

The rise in export volumes from LA has been buoyed by the weak US dollar boosting demand for US goods, particularly in Asia. The stagnant domestic economy also has forced the country to find new income in foreign markets.

Last year, President Obama outlined a National Export Initiative, aiming to double exports through the nation’s seaports by the end of 2014 to boost the ailing domestic jobs market.

The US will focus on India, China, Brazil and other emerging markets with strong potential for growth.

Friday, December 9, 2011

Like the Railroads, but better.

From Professional Mariner 


08 December 2011



 
 
(NASHVILLE, Tenn.) -- America's barge industry is entering the spotlight in an effort to win more federal dollars, National Public Radio reported. Waterborne infrastructure needs an estimated $8 billion worth of work. The industry said barge transportation is "like railroads but better." One critic argues that private business should pay for the improvements.
 
 For the original NPR broadcast click here.

Tuesday, December 6, 2011

Navy Purchases Nearly Half Million Gallons of Biofuel

WASHINGTON, Dec 5, 2011 (GlobeNewswire via COMTEX) -- Dynamic Fuels, LLC, a joint venture between Tyson Foods, Inc. and Syntroleum Corporation, has been awarded a contract to supply the U.S. Navy with 450,000 gallons of renewable fuels. Solazyme, Inc., a renewable oil and bioproducts company, will help Dynamic Fuels fulfill the contract, which the Navy and the USDA report is the single largest purchase of biofuel in government history.
The contract involves supplying the Navy with 100,000 gallons of jet fuel (Hydro-treated Renewable JP- 5 or HRJ-5) and 350,000 gallons of marine distillate fuel (Hydro-Treated Renewable F-76 or HRD-76). The fuel will be used as part of the Navy's efforts to develop a "Green Strike Group" composed of vessels and ships powered by biofuel.
The Navy contract follows on the heels of both companies' involvement in historic commercial airline flights using biofuel. This includes Dynamic Fuels' renewable jet fuel work with KLM Royal Dutch Airlines, Finnair, Thomson Airways and Alaska Airlines, and Solazyme's recent flight and partnership with United Airlines, which includes a letter of intent to provide 20 million gallons a year starting in 2014.
The fuel for the Navy will be manufactured at Dynamic Fuel's Geismar, Louisiana, renewable fuels plant using U.S.-sourced yellow grease (used cooking oil) as well as Solazyme's tailored algal oil as feedstocks. The fuel will be delivered to the U.S. Navy in May 2012. The Dynamic Fuels plant, which has been in operation for more than a year, is designed to convert non-food feedstocks such as algal oil, animal fats, and greases into renewable fuels.
"This award clearly demonstrates that we're building momentum for the sale and use of our renewable fuels," said Jeff Bigger, director of the Dynamic Fuels LLC Management Committee. "We've previously provided the U.S. military with fuel for testing. We believe this contract confirms they recognize the performance and environmental advantages of our fuel since they're coming back for more and are asking for a much larger volume."
"This is an historic contract and we are proud to be teaming up with Dynamic Fuels to produce and deliver the advanced biofuel to the U.S. Navy to sail the Great Green Fleet. Dynamic Fuels has been a leader in next generation advanced biofuels technology and this partnership further solidifies the progress that both of our companies are making in bringing advanced renewable fuels to commercialization," said Jonathan Wolfson, CEO, Solazyme. "Solazyme is honored to be working with the U.S. Navy and DLA-Energy in driving forward the Navy's effort under Secretary Ray Mabus to source 50 percent of its energy from renewable sources by 2020."
To see video of operations at Dynamic Fuels, click on the following link:
http://www.youtube.com/watch?v=zsI1dov9Xbw
Photos of the facility can be seen by clicking:
http://www.flickr.com/photos/tysonfoods/sets/72157625319377772/ .
About Tyson Foods
Tyson Foods, Inc., founded in 1935 with headquarters in Springdale, Arkansas, is one of the world's largest processors and marketers of chicken, beef and pork, the second-largest food production company in the Fortune 500 and a member of the S&P 500. The company produces a wide variety of protein-based and prepared food products and is the recognized market leader in the retail and foodservice markets it serves. Tyson provides products and services to customers throughout the United States and more than 130 countries. The company has approximately 115,000 Team Members employed at more than 400 facilities and offices in the United States and around the world. Through its Core Values, Code of Conduct and Team Member Bill of Rights, Tyson strives to operate with integrity and trust and is committed to creating value for its shareholders, customers and Team Members. The company also strives to be faith-friendly, provide a safe work environment and serve as stewards of the animals, land and environment entrusted to it.
The Tyson Foods, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3224
About Syntroleum
Syntroleum Corporation owns the Syntroleum(R) Process for Fischer-Tropsch (FT) conversion of synthesis gas derived from biomass, coal, natural gas and other carbon-based feedstocks into liquid hydrocarbons, the Synfining(R) Process for upgrading FT liquid hydrocarbons into middle distillate products such as synthetic diesel and jet fuels, and the Bio-Synfining(R) technology for converting animal fat and vegetable oil feedstocks into middle distillate products such as renewable diesel and jet fuel using inedible fats and greases as feedstock. The 50/50 venture -- known as Dynamic Fuels -- was formed to construct and operate multiple renewable synthetic fuels facilities, with production on the first site beginning in 2010. The Company plans to use its portfolio of technologies to develop and participate in synthetic and renewable fuel projects. For additional information, visit the Company's web site at www.syntroleum.com
About Solazyme, Inc.
Solazyme, Inc. is a renewable oil and bioproducts company that transforms a range of low-cost plant-based sugars into high-value tailored oils. Headquartered in South San Francisco, Solazyme's renewable products can replace or enhance oils derived from the world's three existing sources -- petroleum, plants and animal fats. Initially, Solazyme is focused on commercializing its products into three target markets: (1) fuels and chemicals, (2) nutrition and (3) skin and personal care. Solazyme's oils and fuels provide compelling solutions to increasingly complex issues of fuel scarcity, energy security and environmental impact while fitting into the pre-existing multi-trillion dollar fuel infrastructure. For more information, please visit our website: http://www.solazyme.com
Solazyme(R), the Solazyme logo and other trademarks or service names are the trademarks of Solazyme, Inc.
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Solazyme, including statements that involve risks and uncertainties concerning: the future manufacture and delivery of jet fuel by Solazyme and the timing of such delivery; the potential purchase of fuel by United Airlines; the timing of the delivery of fuel to the U.S. Navy and what that fuel will be used for; and Solazyme's future commercialization plans. When used in this press release, the words "will," "expects," "intends" and other similar expressions and any other statements that are not historical facts are intended to identify those assertions as forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such statement may be influenced by a variety of factors, many of which are beyond the control of Solazyme, that could cause actual outcomes and results to be materially different from those projected, described, expressed or implied in this press release due to a number of risks and uncertainties. Potential risks and uncertainties include, among others: the ability of Solazyme and/or Dynamic Fuels to produce in-spec jet fuel at a commercially acceptable price; Solazyme's ability to access sufficient manufacturing capacity; and Solazyme's ability to maintain existing, and establish new, strategic business relationships. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of Solazyme.
In addition, please refer to the documents that Solazyme, Inc. files with the Securities and Exchange Commission, including its Quarterly Reports on Form 10-Q, for a discussion of these and other risks. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this press release. Solazyme is not under any duty to update any of the information in this press release.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Dynamic Fuels

Monday, December 5, 2011

The Russians Are Coming!

This is a nice follow up to our post on November 29th about the failed fuel delivery to Nome, Alaska. The Jones Act Actually gets in the way of a more economical solution. I will also be a historical event for the Nome and the State of Alaska.


By Laureli Kinneen, KNOM - Nome | December 5, 2011 - 1:28 pm 

Photo courtesy of Elaine Smiloff, Adak Harbormaster
A failed marine delivery of 1.6 million gallons of fuel due to November’s storm spurred the leadership at the Sitnasuak Native Corporation in Nome to get creative. They’re looking to Russian and Korean companies to keep fuel costs down in the Western Alaskan community.
Sitnasuak and a Russian shipping company may very well make history this month. Sitnasuak Native Corporation has signed a contract with Vitus Marine to deliver 1.5 million gallons of fuel to Nome – via marine tanker. The delivery in the double-hulled Ice Classed Russian tanker is scheduled for late December and will replace the 1.6 million gallons that was not delivered by Delta Western due to the November storm.
If the newly-planned delivery is successful, Sitnasuak Board Chairman Jason Evans says the voyage will mark the first time a marine fuel delivery is made to a Western Alaska community in winter.
Evans says, overall, while untraditional, the icebreaking option is significantly lower in costs than flying fuel to Nome. He says there are too many variables at this point for a specific number that consumers will eventually pay.
The Russian vessel, the Renda is currently in Vladivostok, Russia and will be inspected by the Coast Guard on Wednesday. The Jones Act states that a foreign vessel cannot carry cargo from the U.S. to the U.S., so the fuel will be purchased in Inchon Korea. Evans says there will be added costs to this mode of delivery.
When it comes to Delta Western – the company that did not deliver the original fuel purchase – Vice President Kirk Payne says he’s not sure what fair share means.
Payne says there are no lawyers involved and nothing has been filed. He says a dialogue continues between the two companies.
The double-hulled Ice-Class Russian tanker the Renda is certified to travel through four feet of ice and recently traveled through five feet of ice while delivering fuel to the Russian Far East. It’s unclear whether the Renda will dock at the inner or outer harbor once it arrives in Nome. The tanker has two kilometers of hose that could be put over the ice to the fuel depot.
The U.S. Coast Guard is getting approval for the U.S.’s only icebreaker – the Healy – to remain in the area until the delivery is made.

Monday, November 28, 2011

Interferry says meeting low-sulfur deadline is "mission impossible"

I find this interesting in contrast with the study done by the Glosten Associates on the conversion of Washington State Ferries to LNG Propulsion. (Refer to our  21 November Blog Post.) I guess that the contrast comes from the economic hardships facing Europe versus our own here in the United States. I think this deadline hits them economically where we were three or four years ago. It will be interesting to see how they emerge from it.

From MarineLog News Article.
28 November 2011

The international trade association for the ferry industry, Interferry, claims that ferry operators in northern Europe face a "near-impossible" choice in trying to meet the 2015 deadline for ultra-low sulfur emissions from bunker fuel. It also says that the low-sulfur legislation will " percentprompt an environmentally damaging modal shift from short-sea to overland transport and pose severe financial implications for the overall European economy.

Under pending IMO and soon to be agreed European Union (EU) environmental requirements, vessels operating in the Baltic, North Sea and Channel Emission Control Areas (ECAs) will have to comply with a 0.1 percent limit on fuel sulfur content.

Interferry says that meeting the 2015 deadline is "mission impossible" because of "unsustainable cost increases."

The association argues that, despite the ferry industry's efforts to develop alternative technologies and feasible alternative fuels, abatement technologies and financial support will not be available or sufficient enough to avoid a modal shift from sea to road.

A "toolbox" of technical and financial solutions proposed by the European Commission (EC) suggests the use of clean LNG fuel or, for vessels that continue to run on heavy fuel oil, the use of scrubbers - exhaust gas cleaning systems. It also points operators towards EU funding initiatives and state aid.

Interferry says that these are not realistic options because:

  • It is widely recognised in Europe that LNG is only an option for new vessels due to the prohibitive cost of converting existing vessels, and in any case the LNG fuel supply infrastructure is inadequate
  • Scrubber technology is not a "miracle cure." Ferry operators have contributed financially and operationally to developing the technology and Interferry says it is a solution that seems to be able to remove sulfur particles from the exhaust gases on some ships. However, a new Interferry feasibility study covering 108 vessels from six leading operators reveals that scrubbers would not be technically or financially viable for 60 percent of the existing fleet. Furthermore, trial installations among association members have shown that it will not be possible to have scrubbers in operation in time for 2015 for the other 40 percent
  • EU funding is virtually non-applicable as it applies largely to newbuilds and new routes – a low priority among operators who have invested heavily in new tonnage in recent years, and who now face a desperate economic climate that also reduces the likelihood of state aid
"There is no financial support for existing ferries, while LNG and scrubbers are not feasible," says Johan Roos, the association's executive director of EU and IMO affairs. "In effect, the toolbox is completely empty.

"Our only option is to use marine gas oil – technically straightforward but very costly and potentially counter-productive in environmental terms. Operators have warned that they will not be able to pass on the 70 percent or more fuel cost increase to customers with a choice of transport modes, which will inevitably push up to 50 percent of cargo off short-sea ships and back on to the road network."

Mr. Roos added that, apart from cost, availability is also an issue with MGO, stressing: "At the very least, the IMO must bring forward its availability review from 2018, as mandated in MARPOL Annex VI, to 2012 or 2013. It's also clear that the ongoing revision of the EU Directive must put provisions in place as to what should happen if low-sulfur fuel is simply not available to operators in 2015."

Interferry conducted the scrubber feasibility study among six Interferry members operating in the north European ECAs - Brittany Ferries, DFDS, Grimaldi Group, P&O Ferries, Stena Line and TT-Line.

The conclusion that more than half their existing ships could not be fitted with scrubbers was based on five critical parameters:
Vessel age and the consequent commercial viability of making a massive technical investment
  • Stability reserves taking into account the weight of scrubber units and how high up the stack they would be fitted
  • Deadweight reserves and the resulting impact on cargo capacity
  • Casing – because many ferries have very limited void in the ideal stack casing location and would therefore need special scrubber casing that reduces cargo capacity
  • Whether or not Selective Catalytic Reduction (SCR) technology was already fitted to reduce NOx emissions – if so, retrofitting wet exhaust scrubbers would be more challenging as these cool gases to below 100 degrees C compared with temperatures above 400 degrees C required by SCR

The detailed results are being offered to the European Maritime Safety Agency for independent audit and will also be made available to relevant authorities.

The EC toolbox was discussed in Helsinki on November 18 when senior personnel from Interferry members joined Mr. Roos at a special seminar organized by the Finnish Ministry of Transport & Communications and the Finnish Transport Safety Agency. Invited delegates also came from national authorities, shipowners' associations and equipment manufacturers.

Mr. Roos reports that at the meeting, where an EC representative and various national administrators also participated, it became obvious that current funding support programs are only allowed for new ships or new routes and are not available to address the "real problem"of safeguarding existing fleets and the routes they already service – offloading millions of trucks from the European road network every year.

November 28, 2011

Hornbeck Offshore orders 16 new OSVs from VT Halter, Eastern


From a Hornbeck Offshore Press Release
27 November 2011

COVINGTON, La., Nov. 17, 2011 /PRNewswire/ -- Hornbeck Offshore Services, Inc. (NYSE: HOS) announced today the execution of definitive contracts for the construction of sixteen high-specification offshore supply vessels ("OSV"), in connection with its latest newbuild construction program announced on November 7, 2011. This is the Company's eighth newbuild vessel program since its inception in 1997, and its fifth newbuild program involving state-of-the-art, technologically advanced new generation OSVs.
The Company has separately contracted with VT Halter Marine, Inc. of Pascagoula, Mississippi and with Eastern Shipbuilding Group, Inc. of Panama City, Florida for the construction at each yard of eight 300 class vessels with options to build additional such vessels should future market conditions warrant. The Company's first decision with respect to the exercise of options will need to be made in September 2012. Delivery dates for option vessels will be approximately 26 months following the option exercise. The aggregate cost of the first sixteen vessels under this program is expected to be approximately $720 million, excluding construction period interest. Construction costs will be funded with cash on-hand (including the net proceeds of the Company's recently completed equity offering), projected free cash flow from operations and, if necessary, available capacity under the Company's currently undrawn and recently expanded $300 million revolving credit facility.
VT Halter Marine will construct eight vessels based on the Super 320 design that it developed for Hornbeck Offshore. These DP2 OSVs are designed to have 6,200 long tons of deadweight capacity, approximately 20,900 bbls of liquid mud carrying capability, 11,863 sq. ft. of deck area and a fire-fighting class notation. The Super 320 design is based on a larger version of the HOS Coral, an existing 290 class DP-2 OSV which the Company has successfully operated since her delivery in early 2009. The Super 320 design has been developed with particular attention to the most stringent regulations for environmental stewardship, including a double-hull that eliminates any fuel storage adjacent to the sideshell, and propulsion machinery that meets the requirements of EPA Tier 3 for stack emissions.
The eight OSVs to be constructed by Eastern Shipbuilding Group will be DP-2 classed and consist of four vessels based on the STX Marine SV 300 design and four vessels based on the STX Marine SV 310 design. Features of the STX design include over 20,000 bbls of liquid mud carrying capacity and a fire-fighting class notation. In addition, the SV 300 design calls for 5,500 long tons of deadweight capacity and 10,976 sq. ft. of deck space, while the SV 310 design calls for 6,144 long tons of deadweight capacity and 11,536 sq. ft. of deck space. The STX designs meet the same environmental standards mentioned above for the Super 320 design and will also carry the ENVIRO class notation by the American Bureau of Shipping.
Based on the schedule of projected vessel in-service dates below, the Company expects to own and operate 56 and 67 new generation OSVs as of December 31, 2013 and 2014, respectively. These vessel additions result in a projected average new generation OSV fleet complement of 52.2 and 62.8 vessels for the fiscal years 2013 and 2014, respectively. Inclusive of the vessel deliveries referred to below, the aggregate cost of the Company's fifth OSV newbuild program is expected to be approximately $720 million, of which $44 million, $227 million, $348 million and $101 million is expected to be incurred in 2011, 2012, 2013 and 2014, respectively. The first sixteen OSVs under this newbuild program are expected to be placed in service in accordance with the schedule shown in the table below:



2Q2013E
3Q2013
4Q2013
1Q2014
2Q2014
3Q2014
4Q2014

Estimated
In-Service Dates:








300 design
1
1
1
1
-
-
-

310 design
-
-
-
1
1
1
1

320 design
-
-
2
2
3
1
-


1
1
3
4
4
2
1












All of the above capital costs, anticipated periods of their incurrence and delivery date estimates for the contracted newbuild program are based on the latest available information and are subject to change. All of the figures set forth above represent expected cash outlays and do not include the allocation of construction period interest.
Hornbeck Offshore Services, Inc. is a leading provider of technologically advanced, new generation offshore supply vessels primarily in the U.S. Gulf of Mexico and Latin America, and is a leading short-haul transporter of petroleum products through its coastwise fleet of ocean-going tugs and tank barges primarily in the northeastern U.S. and the U.S. Gulf of Mexico. Hornbeck Offshore currently owns a fleet of 80 vessels primarily serving the energy industry.

Saturday, November 26, 2011

Port of Los Angeles to participate in clean-ships program

The Following is a press release from the Port of Los Angeles.
(SAN PEDRO, Calif.) -- The Port of Los Angeles is working with the International Association of Ports and Harbors (IAPH) to develop incentive program strategies to participate in the Environmental Ship Index (ESI) Program starting in 2012.
ESI is an international web-based ship-rating system ports can use to promote clean ships by rewarding operators whose vessels exceed current environmental performance standards and regulations. Port staff presented an outline of the program to the Board of Harbor Commissioners last week and expects to submit recommendations for participation in the program to the Board by early 2012.
The announcement comes on the fifth anniversary of the Port's adoption of the Clean Air Action Plan (CAAP), a landmark pollution reduction initiative whose measures have helped to cut harmful air emissions from port-related sources in the San Pedro Bay by as much as 76 percent. The CAAP was designed as a blueprint for charting a permanent course for the Port of Los Angeles to operate the cleanest, most environmentally sustainable port. In 2010, the Port reaffirmed its commitment to the CAAP by expanding its programs and setting more aggressive targets with near-term goals through 2014 and long-term objectives through 2023.

"The Port of Los Angeles continues to be a world leader in combating pollution," said Los Angeles Mayor Antonio Villaraigosa. "We've had five years of extraordinary success with the Clean Air Action Plan and now we're looking at the next generation of strategies for running the cleanest possible port and improving air quality in Los Angeles and throughout Southern California."
"The Port of Los Angeles is looking forward to being part of these international standards and setting the stage for North American ports to follow suit and reward operators for greening their fleets," said Port of Los Angeles Executive Director Geraldine Knatz, Ph.D. and IAPH president. "As participation grows, the benefits increase for carriers and communities."

The Port of Los Angeles adopted the CAAP to help tackle harmful emissions in the South Coast Air Basin. After launching the CAAP in 2006, the Port has met or exceeded nearly all its goals for reducing air pollution from port-related sources. Ships remain the toughest challenge, as they are regulated by international convention and represent the single largest source of air pollution from port-related operations.

The ESI identifies voluntary engine, fuel and technology enhancements ships can use to exceed current environmental performance standards. The ESI targets primary pollutants, which include nitrogen oxides (NOx), sulfur oxides (SOx), and diesel particulate matter (DPM). The program also contains a component to help reduce greenhouse gases. The index was developed by some of the world's major ports collaborating under the World Ports Climate Initiative, a project of the IAPH.

Nine European ports in the Netherlands, Norway, Germany, Belgium and Italy have signed on to participate in the ESI and either have current programs or are in the process of developing programs to offer financial incentives to reward operators whose ships outperform environmental standards.

The Port of Los Angeles is America's premier port and has a strong commitment to developing innovative strategic and sustainable operations that benefit the economy as well as the quality of life for the region and the nation it serves. As the leading seaport in North America in terms of shipping container volume and cargo value, the Port supports more than 830,000 regional jobs and $35 billion in annual wages and tax revenues. A proprietary department of the City of Los Angeles, the Port is self-supporting and does not receive taxpayer dollars.

Wednesday, November 23, 2011

Maritime Industry Urges Support for Cargo Preference


From the Seafarers InternationalUnion
22 November 2011

SIU Executive Vice President Augie Tellez and other maritime labor and company officials on Oct. 3 attended an open forum on an important program that greatly affects Seafarers and the industry at large. The multi-component program known as cargo preference stipulates that a certain percentage of U.S.-made or U.S.-funded items must be shipped on American vessels with American crews. The meeting was organized by the Maritime Administration (MarAd), whose stated goal was to open up the issue to public discussion.

Tellez (pictured below) and other speakers pointed out that cargo preference law enforcement is becoming increasingly more important to the maritime industry. With overseas conflicts starting to wind down, non-military cargo is going to become a more vital source of income for shipping companies and subsequently for merchant mariners.

“We in the maritime industry understand the critical need for our cargo preference laws, particularly those that affect food aid, our loan guarantee programs and other nondefense cargoes,” said Tellez. “As Operation Iraqi Freedom and Operation Enduring Freedom wind down after almost a decade, our industry needs to find cargo wherever it can, and we recognize we cannot continue to rely on the Pentagon for everything. Non-defense cargo is more important now than it has ever been.”

Maritime Trades Department, AFL-CIO (MTD) Executive Secretary-Treasurer Daniel Duncan was also on hand at the meeting expressing the department’s support for cargo preference laws.

“The MTD firmly believes that the nation’s series of cargo preference laws is a bedrock of the U.S.-flag maritime industry,” said Duncan. “These laws have played a vital role in ensuring that America has a strong domestic shipbuilding base and merchant marine. Cargo preference laws help create good-paying jobs for American workers, provide tax revenues at the local, state, and federal levels, and make sure America’s merchant marine is ready and available when needed for strategic sealift and other defense interests.”

The Marine Engineers’ Beneficial Association (MEBA) and the International Organization of Masters, Mates, and Pilots (MM&P) also jointly voiced their support for cargo preference laws and talked about the impact that they have on their respective memberships.

“There should be no question that, in order to grow and maintain the U.S. Merchant Marine, U.S.-flagged vessels should be used to the greatest extent possible when shipping government-impelled cargoes,” said William Doyle of MEBA. “Rigorous enforcement and oversight of cargo preference laws enables MarAd to fulfill its mission. Without oversight and enforcement from MarAd, the presence of the U.S.-flag fleet in the foreign trades would cease to exist, leaving a glaring hole in our national defense capabilities and negatively impacting our economy.”

Other speakers pointed out the economic importance the laws have on private shipowners and the costs that are deferred from the government because of them. Cargo preference laws, according to several presenters, provide an economically efficient way to bolster private industry and support jobs.

“Virtually every privately owned U.S.-flag vessel engaged in the foreign trade depends to some degree on cargo preference to remain economically viable,” said Bill Kenwell of Maersk Line, Limited on behalf of USA Maritime, an industry group consisting of shipowners, operators, and labor groups. “Indeed, absent cargo preference, it is no exaggeration at all to say that the U.S.-flag fleet in foreign commerce would disappear and the U.S. government would have to duplicate that sealift capability at enormous expense with government-owned vessels.”

In spite of these facts, however, many in the room were disappointed with MarAd’s efforts to enforce cargo preference laws. Even with revisions made by Congress that would bolster the programs, the agency’s efforts are still seen as lacking.

“If I had to sum up our feelings about MarAd’s performance when it comes to cargo preference matters in one word, that word would be frustration,” said Tellez, pointing to long vacancies in important MarAd positions and the lack of implementation of a three-year-old revision that punishes entities that don’t adhere to cargo preference rules.

Richard Berkowitz of the Transportation Institute, another maritime industry group composed of multiple sectors, agreed.

“Judging from the lengthy time it has taken to fill key management positions at MarAd related to cargo preference administration, it is difficult to believe that the administration’s role to ‘promote … the viability of the U.S. Merchant Marine’ is being taken with the earnestness and purpose needed to direct the government-impelled cargo so key to sustaining U.S. vessels in international trade lanes,” said Berkowitz.

Liberty Maritime Corporation CEO Philip Shapiro sent a letter to MarAd to throw his company’s support behind USA Maritime’s statements but added that the agency could be doing more in regards to cargo preference.

“Liberty Maritime would only like to add that it is imperative that the U.S. Maritime Administration place a high priority on cargo preference implementation and enforcement,” said Shapiro. “Congress has charged MarAd with ensuring that cargo preference achieves its objectives of supporting a strong and vibrant U.S.-flag Merchant Marine.”

In spite of some complaints, the SIU and others at the meeting reinforced their eagerness to work with the administration.

“The cargo preference laws work when they are properly enforced,” said Tellez. “They work when the resources needed to ensure that they’re being enforced are there. I am confident that MarAd can resolve these issues swiftly and I look forward to working with the agency in the future as we all strive to promot and protect our merchant marine.”

###

Wärtsilä completes unique conversion of vessel to LNG operation

We recently published an article on the conversion of Washington State Ferries to LNG propulsion. This seemed like an appropriate follow up for that article which was based on a study by the Glosten Associates.

Wärtsilä Corporation, Trade & Technical Press release, 23 November 2011
The product tanker ‘Bit Viking’ was the first vessel ever to undergo a conversion by Wärtsilä from heavy fuel oil to liquefied natural gas (LNG) operation. The conversion enables the ‘Bit Viking’ to qualify for lower nitrogen oxide (NOX) emission taxes under the Norwegian NOX fund scheme.
The unique fuel conversion of the product tanker ‘Bit Viking’, from heavy fuel oil to gas operation, has been finalised and in October the vessel was handed over to the customer, Tarbit Shipping. The re-commissioned vessel is operated by Statoil along the Norwegian coastline, and the conversion carried out by Wärtsilä enables it to qualify for lower NOX emission taxes under the Norwegian NOX fund scheme. The fund is a cooperative effort whereby participating companies may apply for financial support in return for introducing NOX reducing measures. Furthermore, liquefied natural gas (LNG) operation means lower carbon oxide emissions, and virtually no sulphur oxide or particle emissions whatsoever.
First marine dual fuel (DF) conversion
This is the first marine installation in the world to involve converting Wärtsilä 46 engines to Wärtsilä 50DF engines, and the first 50DF marine installation with mechanical propulsion. By operating on LNG, the ‘Bit Viking’ becomes one of the most environmental friendly product tankers in the world.
In August 2010, Wärtsilä announced that it had signed a turnkey project with Tarbit Shipping to convert the ‘Bit Viking’ to LNG operation. The scope of the conversion package from Wärtsilä included deck-mounted gas fuel systems, piping, two six-cylinder Wärtsilä 46 engines converted to Wärtsilä 50DF units with related control systems and all adjustments to the ship’s systems necessitated by the conversion. The vessel’s classification certificate was also updated. The engines are connected directly to the propeller shafts through a reduction gearbox, thus avoiding the electrical losses that are an unavoidable feature of diesel-electric configurations. This enables a significant improvement in propulsion efficiency, reduced fuel consumption, and corresponding reductions in emissions. This is the first LNG fuelled vessel to be classified by Germanischer Lloyd.
New LNG storage system
The ‘Bit Viking’ utilises Wärtsilä’s new LNGPac system, which enables the safe and convenient onboard storage of LNG. The two 500 cubic metre LNG storage tanks are mounted on the deck to facilitate bunkering operations and permit the bunkering of LNG at a rate of 430 cubic metres per hour. The storage tanks provide the vessel with 12 days of autonomous operation at 80 per cent load, with the option to switch to marine gas oil if an extended range is required. When visiting EU ports, which have a 0.1 per cent limit on sulphur emissions, the vessel operates on gas.
“Wärtsilä’s unique expertise and experience with dual fuel technology, as well as with fuel conversion projects, were the main reasons for us choosing them. We appreciate the technological efficiency of the Wärtsilä solutions and the expert way in which this conversion project has been handled. We are proud that the ‘Bit Viking’ is now one of the world’s most environmentally sustainable tankers in operation,” says Anders Hermansson, Technical Manager, Tarbit Shipping.
“This is a major step for Wärtsilä in consolidating its market leading position in LNG solutions for the shipping industry. The successful sea trials with this vessel provide yet further validation of the viability of LNG as the marine fuel of the future. We anticipate that this development will rapidly accelerate during the coming few years,” says Sören Karlsson, General Manager, Gas Applications, Ship Power Technology

Saturday, November 19, 2011

Pacific Drilling Raises $46 Million in IPO

LUXEMBOURG--(BUSINESS WIRE)-- Pacific Drilling S.A. (NYSE:PACD - News) (NOTC:PDSA) (“Pacific Drilling” or the “Company”) announced that yesterday it closed its previously announced initial public offering of shares of common stock at a price of $8.25 per share. Pacific Drilling sold a total of 6,000,000 shares, resulting in net proceeds of approximately $46 million after deducting underwriting discounts and commissions. The underwriters have been granted a 30-day over-allotment option to purchase up to an additional 900,000 common shares.
Morgan Stanley and Deutsche Bank Securities acted as joint book-running managers for the offering. DnB NOR Markets, Howard Weil Incorporated, Pareto Securities AS and Simmons & Company International acted as co-managers.
This offering was made solely by means of a prospectus, copies of which may be obtained by contacting: Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, New York, NY 10014, telephone 1-866-718-1649 or by emailing prospectus@morganstanley.com or Deutsche Bank Securities Inc., Prospectus Department, Harborside Financial Center, 100 Plaza One, Jersey City, NJ 07311-3988, telephone 1-800-503-4611 or by emailing prospectus.cpdg@db.com.
A registration statement relating to this offering was declared effective by the Securities and Exchange Commission (“SEC”) on November 10, 2011. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Pacific Drilling
Pacific Drilling is an international ultra-deepwater offshore drilling company. Pacific Drilling’s fleet consists of six ultra-deepwater drillships. The Company currently operates three recently delivered drillships, expects delivery of its fourth drillship by end of 2011, and has two additional drillships on order at Samsung to be delivered in 2013.


Contact:
Pacific Drilling S.A.
Amy Roddy, Director, Investor Relations, 1-832-255-0502
Investor@pacificdrilling.com

Friday, November 18, 2011

Foss Maritime Awarded Washington State Ferry Newbuild Contract

WSF Director of Communications
17 November 2011

Washington State Department of Transportation (WSDOT), Seattle, WA, recently awarded a $9.6 million contract to Foss Maritime Co., Seattle, to build an all-aluminum, double-end, 20-car ferry to operate on Lake Roosevelt in Eastern Washington.
The new Keller Ferry vessel will have an overall length of 116 ft, beam of 45 ft 8 inches and molded draft of 7 ft. It will admeasure less than 100 gross tons and be built to conform with and certified to U.S. Coast Guard Subchapter T regulations. The ferry’s design and construction will be in accordance with ABS requirements, although it will not be ABS classed and the shipyard is not required to arrange onboard ABS inspection. ABS certificates will be required for certain pieces of equipment and the propulsion system vendor will be required to obtain ABS certification of the propulsion control system.

Building the ferry will also pose some unique challenges. The remote location of the Keller Ferry operation will require that the ferry be built in sections at Foss' Rainier, OR, facility and then transported about 350 miles across state and assembled on site at the ferry landing.

The new ferry, shown in the computer rendering at right, is being built to replace the 63-year-old Martha S. The Martha S. makes about 30 to 35 daily trips on a 1.25 mile route crossing the Columbia River between Lincoln and Ferry counties. The operation serves as a critical transportation link for nearby residents, school children, freight haulers and emergency services.
WSDOT said that the bid by Foss of $9,557,178 was nearly $250,000 less than the state’s estimate. Foss will deliver the new ferry in May 2013.


General Maritime files for Chapter 11

From Marine Log
17 November 2011
 
Tanker operator General Maritime Corporation (NYSE: GMR) says it has filed for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Substantially all of the company's subsidiaries – with the exception of those in Portugal, Russia and Singapore as well as certain inactive subsidiaries– have also commenced Chapter 11 cases.

The company says the bankruptcy filing is necessary to implement a restructuring agreement reached with its key senior lenders, including its bank group, led by Nordea Bank Finland plc, New York Branch as administrative agent, as well as affiliates of Oaktree Capital Management, L.P.

General Maritime says the restructuring agreement and related equity commitment letter have the support of over two thirds of the company's obligations from its banks and Oaktree. Under terms of the agreements, Oaktree will provide a $175 million new equity investment in General Maritime and convert its prepetition secured debt to equity. Under the terms of the agreement, General Maritime expects to substantially reduce its funded indebtedness and enhance its liquidity profile. It says that operations are expected to continue without interruption.

In conjunction with the filing, General Maritime has received a commitment for up to $100 million in new debtor-in-possession (DIP) financing from a group of lenders led by Nordea as administrative agent. The initial amount of the DIP is $75 million, however, the credit facility contemplates that, if needed, the company will have access to another $25 million of future financing, subject to the applicable lenders' agreement, certain other conditions and further order of the Bankruptcy Court.

November 17, 2011

Tuesday, November 8, 2011

Horizon Lines hit by third quarter losses.

Company hopes refinancing and exit from the trans-Pacific market will 
bring stability


 








Horizon Lines, the US’s busiest domestic ocean shipping company, sustained considerable losses of $126.5 million from continuing operations in the third quarter, the company has revealed.









The huge losses compared with a $8.2 million net profit a year earlier. In a defiant statement issued yesterday Horizon said it expects its recent refinancing and exit from the trans-Pacific market to stabilize future results despite “challenging” economic conditions.

Last month , as the US’s largest shipping line announced its decision to discontinue its Five Star Express (FSX) transpacific container shipping service between the US west coast, Guam and China, President and CEO Stephen Fraser said: “Our decision to exit this highly volatile market will allow Horizon to focus on our core domestic ocean shipping services, and provide the opportunity to produce a more profitable and stable financial performance over time.”

The results, announced yesterday included a $117.5 million goodwill impairment charge stemming mainly from the shutdown of the trans-Pacific service and deteriorating earnings.
Horizon said the amount of the goodwill impairment is an estimate that may be adjusted during the fourth quarter.

The company said it expects the shutdown of the trans-Pacific service to produce a pretax restructuring charge of $105 million to $110 million in the fourth quarter, following negative adjusted earnings before interest, taxes, depreciation and amortization of approximately $43.7 million for the year’s first nine months.

Horizon launched the trans-Pacific service last December after Maersk Line did not renew a take-or-pay agreement for eastbound capacity on the backhaul of Horizon’s service from the U.S. mainland to Guam. Horizon is laying up the service’s five chartered ships, each with capacities of 2,824 20-foot-equivalent units, and seeking to subcharter them.

Earlier this year Horizon Lines completed a complicated $650 million financial restructure that saved the shipping line from bankruptcy and will left bondholders with most of the company’s stock.

The carrier had struggled to straighten its finances since pleading guilty last March to price-fixing in the Puerto Rico trade.

Horizon operates between the US mainland and Puerto Rico, Alaska, Hawaii and Guam, and between China and the US west coast.

Bad News for the US Shipping Industry.



Average US vessel operating costs last year were almost three times higher than their international counterparts, according to a report from MARAD, the US maritime administration body.

The report, Comparison of US and Foreign-Flag Operating Costs, says: “US flag-carriers are at a distinct disadvantage in their ability to compete in international transport markets.”

The comparison used aggregate average total operating costs.

MARAD also found that average operating costs for US-flagged containerships and ro-ro vessels in particular were generally three times higher than foreign-registered ships.

Difference in crew costs were even more noticeable – roughly 5.3 times higher for US-flagged vessels in 2010, even though their average crew size is slightly smaller. Crewing costs on US bulk carriers were 5.7 times higher.

The report attributes the higher operating costs to regulatory requirements on vessel labour, insurance and liability, maintenance and repairs, taxes and expenses associated with environmental compliance, higher wage rates and social benefits.

The report also notes that approximately 110 ships fly the US flag, while more than 540 US-owned vessels are registered in 31 other countries, presumably to reduce costs.

The report also suggests several options MARAD may pursue to encourage participation in the US fleet.

These include promotions and missions to secure additional streams of commercial cargo for US-flagged vessels, encouraging US companies to support domestic industry by using US vessels and providing information on annual cargo preference volumes to assist carriers with business planning.

Monday, November 7, 2011

Port of Seattle Turns Up 10 Explosive Containers

US Coast Guard admits it has no plans yet for dealing with containers
 

At least ten more potentially explosive containers have been found at the Port of Seattle with a question mark still hanging over the fate of the growing collection of containers.

Earlier this year maritime authorities reported that three reefer containers exploded or caused a fire, resulting in two fatalities in Vietnam and one in Brazil.

The explosions were believed to be the result of contaminated gas added to the boxes’ refrigeration units during servicing in Vietnam.

According to local reports, a growing stack of 80 refrigerated containers at the Port of Seattle have been sitting by itself, isolated from the rest of the port for safety reasons.

The US Coast Guard said it is working with the terminal operators to keep the 80 containers away from everyone, but admits there is no specific plan yet for dealing with them.

Rudy Finne of the International Longshore and Warehouse Union, said: "I personally think it’s ludicrous to have possible bombs at every corner here and have everybody seem not that concerned about it."

The Pacific Maritime Association, which represents the various terminal operators, said it is looking for a solution to checking each container to see if it poses any risk. These at-risk containers are being turned away from terminal operators, and as a result, they remain out in the public.

Meantime, the union is worried about containers that left Vietnam and may have passed through local ports before the security alert was put in place.

The three reefers that exploded were operated by Maersk Line, but since the danger was reported all carriers are scrambling to find any reefers that have been repaired in Vietnam since February.

Maersk has removed all its 844 reefer containers that have been repaired in Vietnam.

Sunday, November 6, 2011

Sailing The Gulf of Aden Is Like Playing Russian Roulette.

Source: EU NAVFOR

Christian Colombo, a former French Navy sailor and his wife were on their way to fulfil their dream. They were sailing to see the world in their yacht, the SY TRIBAL KAT until this dream was destroyed in the most traumatic way.
E.Colombo threatened with AK47
E.Colombo threatened with AK47
The TRIBAL KAT was attacked by Somali suspect criminals off the coast of Yemen while passing through the Gulf of Aden. Christian Colombo was killed during the attack, his body thrown overboard and his wife taken against her will by the suspect criminals. She was being moved by skiff towards Somalia when by a combination of good fortune, considering the vast area to be searched, and close cooperation between the counter-piracy forces in the region, a complex and dangerous rescue operation succeeded in recovering Mrs. Colombo uninjured.
The SY TRIBAL KAT was only the most recent of about 10 yachts attacked and their crews captured by Somali suspected pirates in the Gulf of Aden and the Indian Ocean in the past three years.
Nearly every recorded attack on a yacht has led to the crew being taken hostage and moved to Somalia where they were kept on land, their yachts being discarded. SY ROCKALL was completely stripped of everything onboard including the engine.
On land, the level of risk and hardship on the hostages is increased. They are removed from their familiar environment and exposed to a rough country with a harsh, hot climate. Often, hostages are held in the most basic conditions, i.e. no electricity, no sanitary installations, rationed basic food and water. Pirates have frequently moved hostages at short notice to avoid detection, increasing the stress and strain for the hostages.
The ordeal hostages have to endure can include every form of abuse. Physical and psychological mistreatment can include physical violence and mock executions. In some cases, crews and families have been separated for extended periods of time exposing hostages to the stress of uncertainty on the fate of their partner or child. When hostages were separated, pirates have simulated killing one or more of the hostages with machine gun fire out of sight of the remainder to increase the pressure for a ransom to be paid; the hostages are assumed to be very rich and the ransom demands can be for millions of dollars.
On average, maritime hostages have been held for over 7 months. However, for Paul and Rachel Chandler from the SY LYNN RIVAL, their captivity lasted 388 days in the Somali bush. They were eventually released after payment of a ransom however others are not so fortunate; French yacht-owner, husband and father, Florent Lemacon, was killed in April 2009 during the liberation of the SY TANIT. In February 2011, pirates shot and killed four Americans aboard the SY QUEST off the coast of Somalia when U.S. naval forces were trying to negotiate their release.
The presence of warships from EUNAVFOR, NATO and the Coalition Maritime Force, in addition to other naval forces, in the Gulf of Aden has significantly reduced the success of piracy attacks in this area. However, there remains a serious and increasing threat from piracy from the southern Red Sea, through the Bab el-Mandeb to the Gulf of Aden, off the coast of Somalia and into the Indian Ocean. This area is the same size as Western Europe and there are only between 12 and 18 warships in the area, with far higher priority tasking than protection of yachts and their crews, so if attacked, the chance of release is remote.
The risks to yachts from pirates are significant – they operate from one or more small skiffs, able to reach up to 25 knots. Increasingly, pirates use small arms fire and Rocket Propelled Grenades (RPGs) to stop and board vessels. Attacks have taken place mostly during the day, but pirates have also attacked at night. Pirates are likely to be aggressive, highly agitated, and possibly under the influence of drugs, (including khat, an amphetamine like stimulant).
Yachts cannot out-run the pirates and are unable to prevent boarding. Merchant ships, which have higher freeboards and can adopt the self-protection measures recommended in the fourth edition of “Best Management Practices for Protection against Somalia Based Piracy” (BMP) improve their chances but even these only delay a determined pirate.
There is only one sure way of avoiding your yacht and crew being captured – freight the yacht across the high-risk area.
Otherwise you could be playing Russian Roulette with your crew and family.

The Changing Face of Piracy

From Maritime Reporter & Engineering News, October 2011
 
David Rider
File
As the NATO and EU NAVFOR operations Ocean Shield and Atalanta continue their work in the Gulf of Aden, Indian Ocean and Red Sea areas, one could easily be forgiven for thinking, well, that’s that. Tough luck, pirates, the world is on to you. Sadly, as anyone involved in international shipping knows, that is very far from the truth.
The fact is that the areas patrolled by the world’s navies are vast and the chance of early interdiction of a pirate skiff or mothership by a naval vessel is small. In the risk versus reward world of the pirate, it’s a virtual no-brainer.
Given that around seven percent1 of the world’s oil supplies and an estimated 22,000 vessels transit the Gulf of Aden (GoA) annually, it would be reasonable to expect that same transit route to be safe and free of incident, but the reality is far from it.
In early August 2011, the International Chamber of Commerce’s Commercial Crime Service reported that there had already been 22 successful hijackings by Somali pirates, while countless others have been approached, attacked and pursued by pirates in high speed skiffs, launched from nearby motherships.
As the methods employed by the world’s navies to combat them have become more sophisticated and organized, so the pirates have changed their tactics to suit, with the first six months of 2011 showing a dramatic rise in attacks over the same period for 2010; some 266 attacks on vessels in the period, compared with 196 for last year2.
This year’s monsoon season has been a stark reminder that pirates are highly motivated to capture their quarry. While normally shipping could breath a sigh of relief at the arrival of the summer monsoon, this year the IMB issued a statement warning seafarers of the continuing danger of pirate attack. The organization said that the movement of pirates to the GoA and Southern Red Sea (SRS) areas, due to monsoon conditions in the Indian Ocean were a, “cause for concern.” IMB Director, Captain Pottengal Mukundan, said: “It may be that these recent Indian Ocean incidents are a sign of desperation by pirates, or that there are many more pirate groups operating now than there were in 2010, particularly outside the Gulf of Aden.”
As a leading supplier of armed security personnel to the maritime community, Neptune Maritime Security continually has Vessel Protection Teams (VPTs) transiting both the IRTC and High Risk Area, and identified a potential trend in pirate tactics during the monsoons.
While July was a quiet month in the SRS region, with only a handful of minor reports, a string of what can only be termed ‘swarm’ attacks took place in August off the coast of Eritrea, possibly due to pirates moving up through Bab el-Mandeb, the ‘Gate of Tears,’ the strait that connects the Red Sea to the Gulf of Aden and Indian Ocean. When the monsoons bring dangerous conditions to the open sea, pirates will retreat here to calmer waters.
It was here that large numbers of pirates were reported to be operating in ‘packs’ and attempting to swarm vessels in large numbers.
The first incident, on August 7, according to the report filed with the IMB’s Live Piracy Reporting Center3, saw 12 skiffs containing between five to eight pirates per skiff pursue and attack a bulk carrier approximately 20nm off the coast of Eritrea. As the skiffs approached to within 300m of the carrier, the Master ordered the armed security guards onboard to fire warning shots at the pirates’ skiffs. While this show of force saw the majority of pirate vessels break off their attack, two skiffs continued in their pursuit for some 30 minutes, returning fire at the armed guards until they, too, aborted their attack. If one believes the report – and there is no reason to doubt the legitimacy of reports filed with the IMB – then even underestimating the number of pirates to just 60 still leaves us with evidence of a worrying trend in pirate tactics.
Following an advisory notice issued by Neptune Maritime Security to both the media and other companies in the industry, we received news of a second ‘swarm’ attack4 on August 10. On this occasion, a Panama-flagged tanker, Golden Topstar, was pursued while underway at 13:08N-043:07E by pirates in 12 skiffs. The vessel evaded the attack by employing evasive maneuvers and firing flares. The site of the incident is just 6.5nm away from the attempted attack three days previously.
A third ‘swarm’ attack occurred5 on August 17. A bulk carrier underway, approximately 22nm off Assab, Eritrea, at 13:16N-043:01E, was approached by seven high speed boats, each containing three to five men, armed with automatic weapons. Again, the attack was repelled thanks to the employment of evasive maneuvers and an increase in speed by the vessel. This attempt occurred just 10.2nm away from the incident on August 10th.
Reports then emerged from the Iranian Navy, concerning a wave of attempted attacks on the bulk carrier ‘SAEI’ at the mouth of the SRS at Bab-el-Mandeb, although exact location information was not provided. According to the Iranian Navy report, the first attack saw four skiffs containing 20 pirates engage the vessel, the second wave featured eight skiffs with a force of 40 pirates and a third and final attempt was said to feature just two skiffs with just 12 pirates on board.
While some sources have questioned the credibility of these reports, the bulk of available data should at least raise concerns in the industry as to the changing and malleable nature of the tactics employed by pirates in the area. The IMB reports6 that (at the time of writing), since May 20, 14 vessels have been attacked in the Southern Red Sea.
Further east, pirates were also changing their MO, choosing to avoid the rough Arabian Seas in favour of daring raids near major shipping hubs.
The successful hijacking of the chemical tanker, Fairchem Bogey7, on August 20, illustrates how pirates have altered tactics in response to pressure from EU NAVFOR, the monsoon and better practice by vessels transiting the HRA. According to reports, the Fairchem Bogey, carrying a cargo of methanol, anchored 4-5 miles off the Omani port of Salalah. Ironically, the armed guards employed by the shipping company to watch over the vessel in transit had disembarked once the ship reached what was thought to be safe anchorage. Then, at approximately 0630 UTC, a group of pirates stealthily boarded the vessel and took its crew of 21 hostage. Did the pirates have someone on shore, advising them of the protection team’s departure, or was this just dumb luck? We may never know.
The attack caused concern not only due to its brazen nature, but also because Oman has a well resourced Coast Guard, who were on the scene within an hour. Unfortunately, by then it was too late, and they were warned off by the hijackers, who later sailed the vessel to Garacad and demanded a $10m dollar ransom for its release8.
The attack shows parallels to the hijacking of the cargo ship, Leopard, which was boarded off the Omani coast on January 12. The freighter had discharged its armed guards and was boarded shortly afterwards. Six crew members are still being held hostage by the pirates involved9. Since the hijacking of the Fairchem Bogey, there have been several other attempts made to attack vessels, which the Omani Coast Guard have rebuffed.
While attacks on vessels off Oman are hardly news, recent weeks have seen an increase in attempted hijackings in the region, which perhaps illustrates the increasing pressure pirate gangs have felt due to local weather conditions, the presence of naval vessels and more recently, the presence of armed security guards onboard vessels. According to EU NAVFOR, 90% of ships surviving a pirate attack in the Gulf of Aden this year have credited a security team for aiding their escape10.
As we reach the end of the monsoon season, international shipping can once again expect Somali pirates to strike out further into the Arabian Sea and Indian Ocean in an attempt to make up for time lost due to the monsoon, utilising hijacked fishing boats and merchant vessels as mother ships. As Captain Keith Blount, Chief of Staff with EU NAVFOR told Reuters: “I think we are going to see a surge in piracy because we always have done at this time when the southwest monsoon abates and the seas become flatter.”
 “Typically the pirates have a really good go in the autumn and winter,” he said on the sidelines of a shipping conference11.
The international battle against piracy continues its cat and mouse game, with no immediate end in sight for either the beleaguered shipping companies who have paid an estimated $95 million in ransoms this year alone, or the estimated 343 seafarers still being held hostage in Somalia12.

Neptune Maritime Security
www.neptunemaritimesecurity.com
Email: info@neptune-ms.com

(As published in the October 2011 edition of Maritime Reporter & Engineering News - www.marinelink.com)

Saturday, November 5, 2011

Offshore Renewable Energy: Servicing North Sea Wind Turbines

Friday, November 04, 2011
File
A boat with suspension, a giant robotic arm and a vessel resembling a seahorse are just three of the innovative concepts shortlisted by the Carbon Trust as part of a competition to solve the problem of transferring engineers and equipment safely on to wind turbines as far as 300km offshore in wave heights up to around three meters. The project aims to improve the economics of offshore wind by keeping turbines generating electricity in the harshest sea conditions to increase revenues by as much as £3bn for the next generation of the UK’s offshore wind farms.
Through its Offshore Wind Accelerator program, the Carbon Trust is an industry collaboration of eight UK wind farm developers - E.ON, DONG Energy, Mainstream Renewable Power, RWE Innogy, ScottishPower Renewables, SSE Renewables, Statkraft and Statoil – to reduce the costs of offshore wind.
A technically rigorous process was used by the co-funded industry collaboration to select 13 designs from 450 submissions. The technical merit of these 13 concepts suggests they have the best chances of successfully driving down cost. Today’s offshore wind farms are typically less than 25km offshore in relatively benign sea conditions, and consist of up to 100 turbines. Maintenance is possible in boats about 90% of the time when wave heights are up to about 1.5m. The new ‘round three’ offshore wind projects will be as far as 300km offshore in rougher sea conditions, and may consist of as many as 2,500 turbines. At these sites, today’s access systems would only allow transfers about 210 days a year. The aim of the competition is to find concepts that can be commercialized to make transfers possible for a minimum of 300 days a year. Among the 13 designs shortlisted are a giant robotic arm for transferring engineers and equipment to the turbine base; a boat that uses suspension inspired by Paris Dakar-winning rally cars to remain stable for the transfer; a ‘seahorse’ vessel consisting of a towering keel that minimizes movements in the ocean swell; and a giant harbor mother ship that would act as a base for engineers for weeks on end, dispatching smaller daughter craft to access the turbines. Each of the successful applicants to the competition will benefit from funding of up to £100,000 to support the design and development of their concept, as well as technical support from the eight developers in the Offshore Wind Accelerator.  The competition has selected the following thirteen designs, in three categories, to receive funding:

Transfer Systems
To transfer personnel and equipment from vessel to turbine, potentially with motion-compensation
•    Autobrow, South Boats
•    MOTS, Momac GmBH
•    Wind Bridge, Knud Hansen
•    TAS2, BMT Nigel Gee /
    Houlder

Vessels
Vessels for transporting personnel and equipment from permanent bases or mother ships to turbines, incorporating a transfer system
•    Pivoting Deck Vessel, North Sea
    Logistics
•    Nauti-Craft, Nauti-Craft
•    Fjellstrand Vessel, Fjellstrand
•    SES Vessel, Umoe Mandal
•    SolidSea, University of
    Strathclyde
•    TranSPAR, Extreme Ocean
    Innovation

Launch and Recovery Systems
Systems fitted to the permanent bases or mother ships for launching and recovering daughter craft from the sea.
•    Launch & Recovery, Offshore
    Kinetics
•    Z Port, Z Technologies
•    Launch And Recovery System,     Divex

(As published in the October 2011 edition of Maritime Reporter + Engineering News - www.marinelink.com)