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.

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

Alaska factory trawler to upgrade steam boiler plant

From Marine Log Article:
22 November 2011

Flekkefjord, Norway, based Parat Halvorsen AS has been awarded an order for an 8000 kg/h steam boiler plant to be installed in the factory trawler, Northern Hawk, which is owned by Coastal Villages Pollock, LLC.

Northern Hawk is a stern trawler, built by the shipyard Ulstein Hatlø in 1990. parat's delivery is a retrofit of the existing boiler plant, designed to meet the needs of the on-board fishmeal plant and vessel heating system. The new boiler plant will be delivered with the latest technology for burning fish oil.

Northern Hawk, whose homeport is Chevak, Alaska, will be docked in Seattle, Wash., in April of 2012 for the installation of the boiler plant, and for general maintenance and repair. Northern Hawk is a sophisticated commercial fishing vessel that operates in the waters of the Bering Sea harvesting Alaska pollock

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.

Hornbeck Executes Contracts for Newbuilds, $720 Million

From Marine Log
17 November 2011

Hornbeck Offshore Services, Inc. (NYSE: HOS) says it has executed definitive contracts for the construction of sixteen high-specification offshore supply vessels. Deliveries will take place between the second quarter of 2013 and fourth quarter of 2014.

VT Halter Marine, Inc. of Pascagoula, Mississippi and Eastern Shipbuilding Group, Inc. of Panama City, Fla, will each build eight 300 class vessels, with options to build additional vessels. Hornbeck'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 total 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 a recently completed equity offering), projected free cash flow from operations and, if necessary, available capacity under the Hornbeck 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 has 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 environmental regulations, 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. Four vessels will be based on the STX Marine SV 300 design and four will be 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. 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 as the Super 320 design and will also carry the ENVIRO class notation by the American Bureau of Shipping.


November 17, 2011

STX Anounces Eoseas Concept Ship, Incredible Eco-Friendly Design!

The Following is an Article from Ship Technology . This is a pretty incredible design. I would venture to call it the mother of all Sailing Vessels! 

 (11/9/2011)

www.ship-technology.com

Eoseas is a concept cruise ship being developed by STX Europe in collaboration with Stirling Design International (SDI).

The 105,000t ship will have an overall length of 305m, breadth of 60m and draft of 8m. Eoseas is being developed as a part of the Ecorizon programme launched by STX France in 2007.

STX's Ecorizon programme

Ecorizon is a technical programme aimed at developing innovative marine clean technologies and alternatives to oil fuels. The project attained maturity in 2009 after two years of research and development work.

Jointly funded by STX Europe and the Regional Council, Ecorizon consists of five major work programmes including energy management, air emission management, water management, waste management and sustainable design.

Ecorizon addresses the entire environmental footprint of the ship throughout the design, construction and operation stages. The long-term goal of the concept is to reduce the use of non-sustainable energy to 50% by 2015.

Eoseas design and features

Eoseas incorporates a pentamaran hull design. The double hull design will feature long promenade decks on both sides of the ship.

The ship will be a trimaran on five hulls, of which two hulls on either side will have the same fore-and-aft plane. An air cushion under the main hull optimises the hydrodynamic characteristics of the vessel.

The double skin on the ship will function as a natural air conditioning system. The frictional resistance of the ship is reduced with the air film injection and the froude number is reduced by incorporating vertical bow.

Fresh water is generated onboard using highly efficient multistage evaporators and reverse osmosis. The ship will feature an advanced wastewater purification system to treat grey and black waters. An absorption chiller absorbs rain water from the upper decks. It uses heat generated from engines.

The design objectives of the Eoseas are to reduce power consumption by 50%, emissions of CO2 by 50%, SO2 by 100%, NOX by 90% and ash by 100%.

Accommodation onboard the concept cruise ship

Eoseas can accommodate 3,311 passengers in 1,403 cabins. There are 555 cabins for 1,089 crew members. The ship allows the passengers to fully explore the maritime environment. The passenger space ratio of the ship will be 31.7 when full and 37.4 based on lower berths occupancy.

The cabins are designed to use natural lighting and are fitted with presence sensors and light sensors. The energy management systems in the cabins reduce energy consumption by 30%.

Propulsion and power

Eoseas will be powered by four dual-fuel LNG diesel electric generator sets. Each genset provides 8MW power for propulsion and hotel load. There are four screws, two pump propellers with shaft lines on the outriggers and two pump propeller pods on the central hull.

LNG is stored in a storage system similar to that of LNG carriers and is transferred in a pressurised service tank. The ship will have an advanced heat recovery plant to recover thermal energy.

8,300m² photovoltaic panels fixed on side and upper deck provide maximum power of 108MW and an average of 270kWe. The organic waste gasification plant onboard generates 300kWe syn gas which is used in the generator sets.

The ship is equipped with an innovative sail concept patented by STX France. The sails mounted on five masts over 12,440m² significantly use wind energy for propulsion.

STX France conducted 13 tank tests with different hulls and propulsion configurations during 2008 and 2009, achieving 17% improvements over conventional propulsion / hull systems.

The innovative propulsion system aboard the ship enhances fuel efficiency, redundancy and manoeuvring.

VIGOR & US Fab Deliver New Ferry to Washington State

From Professional Mariner

(11/7/2011)

SEATTLE, WA - One completed, one to begin. Even as VIGOR Industrial this week delivered the final new 64-car ferry to Washington State Ferries, the company's US Fab shipbuilding division received a green light from the state to begin constructing the system's next vessel. On Monday, the companies delivered the state's newest ferry, Kennewick, to WSF, three months ahead of schedule. Separately, the state today authorized the shipbuilder to begin constructing Washington's next new ferry, a 144-car vessel designed to provide maximum capacity in the system's Pacific Northwest waters. Today's "notice of award" allows US Fab to begin production after it finalizes its contracts and begins to order steel and other materials. The ferry construction will generate more than 500 jobs around Puget Sound, with more than half of the work and materials expected to come from two dozen regional subcontractors and vendors. "These are two great steps for the people who ride and rely on Washington State ferries as well as for those of us who build these ships," said Kevin Quigley, president of VIGOR's US Fab division. "Tens of thousands of people will ride the Kennewick and then the new 144-car ferry every month. And hundreds of Washington workers will have jobs building and outfitting the new boat in our shipyards and with our subcontractors and suppliers throughout the region." The just-completed ferry and the just-approved one are both major milestones for Washington's vessel replacement program. "We're elated that our partners at Vigor shipyards delivered the Kennewick three months ahead of schedule — that means our customers will get to enjoy a new vessel even sooner than we'd planned," said David Moseley, Assistant Secretary of Transportation and WSF director. "And I am thrilled that we are moving forward with the 144-car ferry program. This vessel will allow us to retire the 55-year old ferry Evergreen State and provide more reliable service to our customers." The final negotiated price of $115.4 million includes more than $6 million cut from the company's initial contract submission. VIGOR, US Fab and WSF worked closely together to eliminate non-essential items while maintaining safety, performance and passenger conveniences. Savings include the use of some new materials and improved methods for building mechanical systems, as well as improved construction scheduling, more efficient training, stricter quality assurance and new contract management approaches that VIGOR and its team learned from building the 64-car ferries. The new ferry will cost $400,000 less per car-slot than the initial 64-car Kwa-di Tabil class vessel. Construction will generate an estimated 200 family-wage jobs at VIGOR's large Harbor Island facility, which the company acquired when it purchased Todd Pacific Shipyards in February. The work also will provide an additional 350 jobs at subcontractors, vendors and other shipyards in the region and will support thousands of additional indirect jobs. "Industrial jobs really matter in this state," said Frank Foti, VIGOR president and chief executive officer. "With this ferry, we're expanding the proud, hundred-year legacy of shipbuilding at Harbor Island. We're continuing the successful model of teaming with other shipyards around the state, as we did with Kennewick and its two sister ships. And we'll be building the newest ferry that passengers, Washington State Ferries, the Legislature and the Governor all determined is very much needed." Today's notice of award is the next step in a contract initially adopted by the state in December 2007 with funding overwhelmingly approved by the legislature and governor this spring. "We're ready to get underway," Quigley said. "We believe our subcontractors share our commitment to building the vessel the Legislature and WSF want at the lowest possible cost, delivering the best value possible to the state and the ferry passengers." The 144-car ferry will be the ninth built at Harbor Island when it joins Kennewick and 22 other vessels in the WSF fleet. The system is the largest ferry operation in the United States and the fourth largest in the world. The shipbuilders expect to start "cutting steel" in early 2012; final construction will last up to 27 months.

DryShips and OceanFreight Complete Merger

Friday, November 04, 2011

 

DryShips Inc. (NASDAQ: DRYS) and OceanFreight Inc. (NASDAQ: OCNF) announced today that following approval by OceanFreight's shareholders at a special meeting, the companies have completed the merger and OceanFreight has become a wholly-owned subsidiary of DryShips. Under the terms of the merger agreement, OceanFreight shareholders will be entitled to receive $11.25 in cash and 0.52326 of a share of common stock of Ocean Rig UDW Inc., a global provider of offshore ultra deepwater drilling services, for each share of OceanFreight common stock owned by them.

As a result of the merger, OceanFreight's common shares will cease trading on the NASDAQ Global Market today, and OceanFreight expects to deregister and suspend its reporting obligations under the Securities and Exchange Act of 1934, as amended.

American Stock Transfer & Trust Company has been appointed to serve as the agent for payment of the merger consideration to OceanFreight shareholders, and will promptly mail to shareholders instructions on how to surrender their stock certificates and receive payment for their shares. Banks, brokerage firms or other nominees will provide those shareholders who hold their shares in "street name" with their proceeds from the transaction. For more information, shareholders who hold their shares in "street name" should contact their bank, broker or other holder of record, and shareholders of record may contact American Stock Transfer & Trust Company at (877) 248-6417 (toll free). Shareholders of record should wait to receive the letter of transmittal before surrendering their shares.

Where are the Jobs?

In a recent Op-Ed piece for  The Wall Street Journal, Harold Ford Jr., wrote about several major projects which will provide several thousand jobs in various parts of the country.

 A brief listing of the projects he mentioned included:

• Two new build oil tankers in the Philadelphia Shipyard

• Alaska, 500 off-shore drilling leases to move forward

• New-York, Natural Gas drilling to commence after lifting Hydraulic Fracturing moratorium

• Ohio, new steel-mill to be built in  Youngstown

• Multi state pipeline project from  U.S. Gulf Coast to Canada

The main point that Mr. Ford was getting at in his Op-Ed is that thousands of jobs would be created if policies were lifted to allow it. These are real jobs being prevented from starting due to government red-tape.

 The politicians are continually posturing over how to fix the nations employment problem and in turn, fixing our economy.

I will say, that there are jobs out there. There are industries that are succeeding despite the downturn. Some of the jobs Mr. Ford  outlined in his comments are slightly more complicated than a simple "green light" from the Government. For instance, the Multi-state pipeline requires not only an "OK" from the EPA, but also from each of the states it passes through.

The fact that the two oil tanker builds in Philadelphia are pending is miraculous, considering Exxon could have taken the builds to Korea at half the cost. So in addition to authorizing these builds, I would suggest we take a hard look at how the Historic Philadelphia Shipyards received these contracts. Perhaps there's some value added element that has not been reported on yet, and other industries, who are losing jobs to Korea and China, could learn from.

There's a lot that can be done, and lifting government red-tape is only one step. We don’t necessarily support recent jobs bills, but we do believe that any jobs bill passed have elements that begin to lift regulations that hinder job creation.

(Mr. Ford, a former Democratic member of Congress from Tennessee, is a visiting professor at New York University.)

K. Swanson