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December/January 2023/24www.tankershipping.com BALLAST WATER What seafarers really need from BWMS FINANCE Three companies, three methods of financing – is there a ‘best’? TST AWARDS Recognising excellence and innovation across the tanker sector OPERATIONS The Panama Canal – is the shipping icon still fit for purpose? Arsenio Dominguez IMO’s new secretary-general, on the path that led to shipping’s top seatPREVENT SNAPBACK WITHOUT CHANGING YOUR LINES. INTRODUCING DEFENDER FUSE One system add-on can make a massive difference. Get Defender Fuse to combat the potential for snapback in your mooring system — without changing a single line. SamsonRope.com/defender-fusewww.tankershipping.com Tanker Shipping & Trade | December/January 2023/24 Contents December/January 2023/24 volume 17 issue 6 www.tankershipping.com 28 34 36 06 REGULARS 5 COMMENT 6 CONTRACTS AND COMPLETIONS 29 LEGAL BRIEFING 39 LESSONS FROM A LIFE IN SHIPPING 40 LAST WORD TANKER TOP 10 – THE VLCC SECTOR 8 The implications of the recently announced Frontline/ Euronav takeover MARKET ANALYSIS 10 The volatile trends impacting the tanker market REGULATIONS 12 The complicated dynamic between owners and charters as the EU ETS begins to impact both SIRE 2.0 14 With the new regulation being phased in, owners and operators continue to register confusion BALLAST WATER 16 What do owners want from their BWMS? CARBON CAPTURE 18 How the shipping industry can benefit from a hand-in- glove relationship with the CCS industry FUELS 20 Owners continue to seek clarity over which future fuel will prove most cost effective BUNKERING 22 Experts discuss the implications of a spot LNG bunkering market and supply chain transparency 23 Singapore’s MPA is spearheading the drive to adopt electronic bunker delivery notes OPERATIONS 24 Is the Panama Canal becoming a hindrance to the MR tanker sector?Tanker Shipping & Trade | December/January 2023/24 www.tankershipping.com www.tankershipping.com Contents December/January 2023/24 volume 17 issue 6 Disclaimer: Although every effort has been made to ensure that the information in this publication is correct, the Author and Publisher accept no liability to any party for any inaccuracies that may occur. Any third party material included with the publication is supplied in good faith and the Publisher accepts no liability in respect of content. All rights reserved. No part of this publication may be reproduced, reprinted or stored in any electronic medium or transmitted in any form or by any means without prior written permission of the copyright owner. Tankers & Markets Editor: Craig Jallal t: +44 20 8370 1717 e: craig.jallal@rivieramm.com Senior Production Editor: Kevin Turner t: +44 20 8370 1737 e: kevin.turner@rivieramm.com Brand Manager – Sales: Ian Pow t: +44 20 8370 7011 e: ian.pow@rivieramm.com Head of Sales – Asia: Kym Tan t: +65 6809 1278 e: kym.tan@rivieramm.com Senior Creative Manager: Mark Lukmanji t: +44 20 8370 7019 e: mark.lukmanji@rivieramm.com Chairman: John Labdon Managing Director: Steve Labdon Finance Director: Cathy Labdon Executive Editor & Head of Business Relations: Edwin Lampert Managing Editor: John Snyder Published by: Riviera Maritime Media Ltd Mitre House 66 Abbey Road Enfield EN1 2QN UK www.rivieramm.com ISSN 1753-7029 (Print) ISSN 2051-0578 (Online) ©2024 Riviera Maritime Media Ltd Subscribe Today A year’s subscription to Tanker Shipping & Trade for £299 includes: • 6 print issues of the magazine, sent every other month over a 12 month period. • Digital edition library access. To purchase more than one copy or for corporate subscriptions please contact Sally Church e: sally.church@rivieramm.com t: +44 20 8370 7018 Subscribe online at: TST AWARDS 26 Recognising excellence and innovation across the industry SHIP DESCRIPTION 28 Thun Tankers latest addition to its fleet, the 7,999-dwt ice-class 1A vessel, Thun Resource AREA REPORT: EUROPE 30 How tanker owners can navigate the challenges of the EU’s ETS regulation TANKER TECH 32 A roundup of the latest ‘green’ solutions coming to market FINANCE 34 Experts assess three very different approaches to financing their operations INCIDENTS 36 Inoperable inert gas systems and bridge fires – what can be done to make shipping safer? NEXT ISSUE Main features include: Special report: Dubai; Finance and legal; Fleet performance and analysis; Propulsion/EEXI and CII; Regulations and incidents; Maintenance – cargo tanks/ hull/propellers; Fleet dataInternational Registries, Inc. in affiliation with the Marshall Islands Maritime & Corporate Administrators info@register-iri.com www.register-iri.com▪ Live video call and chat ▪ Invite colleagues to join the call/chat ▪ Share files ALL FLAGS ARE NOT ALIKE www.liscr.com The Liberian Registry’s DOVC connects shipowners and operators to 24/7 live support within seconds. Receiving immediate solutions is as simple as going to liscr.com, selecting the “Duty Officer Video Call” button from the top navigation menu, providing your information, and clicking “connect now.” Duty Officer Video Call (DOVC) Wherever you go, Liberia is there. Live global 24/7 video support 30 full-service regional offices 550+ inspectors and auditors Duty Officer Video Call (DOVC) Duty Officer Video Call (DOVC) Connect live on a video call with an expert within seconds Share documents and chat live Showcase the issue within the video feature call Schedule a call at your convenience Beijing • Busan • Dubai • Guangzhou • Hamburg • Hong Kong • Houston • Imabari • Istanbul • Leer • Limassol • London • Manila Miami • Monrovia • Mumbai • Ningbo • Oslo • Panama • Piraeus • Qingdao • Rio de Janeiro • Seoul • Shanghai Singapore • Tianjin • Tokyo • Washington, DC (Virginia) • ZurichCraig Jallal, Editor COMMENT | 5 www.tankershipping.com Tanker Shipping & Trade | December/January 2023/24 2023 – the key takeaways L ooking at 2023 chronologically, one of my highlights involved participating in the International Chemical & Product Tanker Conference, held in London in 2023. This year, the Chemical & Product Tanker Industry Leader Award was presented by MarFlex Europe corporate manager Technics, Peter Raaijmakers, to Stolt Tankers managing director, Maren Schroeder, adding an extra layer of excitement and celebrating a truly deserving winner. Following the challenges of the pandemic, Nor-Shipping made a triumphant return in 2023, showcasing a multitude of energy-saving devices. Alfa Laval, with its OceanGlide hull air-lubrication system, and Danish tanker operator Terntank, along with Kongsberg Maritime, were honoured with the 2023 Nor-Shipping Next Generation Ship Award for their innovative wind-assist technology. Nor-Shipping also brought attention to the important theme of Scope 3, with Frontline Management delivering an enlightening technical seminar alongside emissions software and AI provider, Arundo Analytics. A significant step forward occurred on 7 July, as IMO’s Marine Environment Protection Committee 80th meeting (MEPC 80) adopted the 2023 IMO GHG Strategy. This strategy outlines ambition levels of emissions reduction, indicative checkpoints, and a timeline for the decarbonisation of international shipping. Outgoing IMO secretary-general, Kitack Lim, can rightfully include progressing shipping’s decarbonisation among his achievements during his tenure at the helm of maritime’s global administration. In 2023, we saw how decarbonisation presents a market opportunity for tanker companies embracing cutting-edge technologies. This positive message resonated strongly at the International Tanker Shipping & Trade Conference, Awards & Exhibition 2023, as articulated by Angelicoussis Group’s energy efficiency director, Zoran Lajic, who noted: “I see CII as an opportunity.” Looking ahead to 2024, two intriguing prospects await in the form of regulatory opportunities. The first is the EU ETS, which introduces new reporting and regulatory requirements for tanker operators. Preparation and registration are required in 2024, with action to be taken in 2025. The second regulatory consideration is the ballast water treatment D-2 standard, which takes effect on 8 September 2024. The industry is eagerly awaiting the reaction of Port State Control — will non-compliant vessels be refused entry, or will exemptions be issued by class, or will nothing significant happen? On a more extended horizon beyond 2024, the fundamental dynamics of tanker supply and demand come into focus. Despite a slight uptick in newbuilding contracts, the tanker orderbook-to-fleet ratio remains remarkably low. According to Clarksons Research Services, the tanker orderbook, as of mid-November 2023, was only 4.3% of the entire fleet, with the VLCC sector ratio at a mere 2.7%. For owners of modern tankers, particularly VLCCs, the outlook appears exceptionally promising. TST I SEE CII AS AN OPPORTUNITY ” “ Safety. Efficiency. Sustainability. This 2-day event takes place again in April in London and is being organised in response to continued market demand for a focused chemical and product tanker conference. London23-24 April 2024 INTERNATIONAL CHEMICAL & PRODUCT TANKER CONFERENCETanker Shipping & Trade | December/January 2023/24 www.tankershipping.com 6 | CONTRACTS & COMPLETIONS A new tanker yard, and a new direction for Euronav September and October saw a new shipyard winning VLCC orders and the resolution of the Frontline-Euronav impasse, which somewhat overshadowed the first sale of a large tanker for recycling in over a year A new name shipyard in China has taken on two significant VLCC contracts. The VLCCs were contracted during September and October 2023 at Hengli Shipbuilding, for what appears to be an associated company, Hengli Petrochemical. Hengli Shipbuilding is the new name for STX Dalian Shipbuilding, which went bankrupt and delivered its last recorded vessel in 2017. The yard produced 74 vessels - that are still in the water - between 2009 and 2017, including one VLCC, according to VesselsValue. The two VLCCs are scheduled for delivery in 2025 and the shipyard has another 24 vessels on its orderbook, which opened earlier in 2023 following the revival. Suezmax and LR1 and LR2 tankers were the focus of other large tanker orders in September and October. Four Suezmax tankers were ordered by Greek owners – two for Atlas Maritime (Leon Patitsas interests) and a pair for an unnamed owner. The Atlas Maritime vessels, North Star and Viking Star, are scheduled for delivery in 2025 and 2026, respectively, and were priced at US$84M each. A UK-registered financial investment company, Hayfin Capital Management is reported to be behind two of the Suezmax tankers on order at Hyundai Samho, for US$85.4M each. Another UK entity, Union Maritime, is behind four LR2 tankers contracted in the period. Union Maritime now has 20 tankers on order – this places the company in the top 10 investors by number of large tanker newbuilding tonnage. There was also renewed interest in the LR1 tanker sector. International Seaways of the US followed up an order placed in August 2022 for two 73,600 dwt LR1 tankers from K Shipbuilding in South Korea, when it exercised options for a further two vessels in October 2023 for the same reported price of US$57.5M. The age profile of the LR1 tanker fleet is becoming stressed, with 45% of the fleet over the age of 15 years. At the International Tanker Shipping & Trade Conference in Athens in November 2023, the LR1 fleet was highlighted as a particularly interesting area of potential investment. Completions in September and October Viken Shipping took delivery of two new 110,000 dwt LR2 dual-fuel LNG- powered tankers in October 2023. Angleviken and Askviken were delivered by Guangzhou Shipyard International to the Viken Shipping AS fleet for management by Wallem Group. Viken Shipping of Norway, which now has a fleet of eight tankers, has been an investor in the global shipmanager and marine services group, Wallem Group Ltd, since 2006. Taking on the management of Angleviken adds to the body of dual-fuel expertise being acquired by the Wallem Group (source: Wallem)www.tankershipping.com Tanker Shipping & Trade | December/January 2023/24 Wallem Group managing director of shipmanagement, Ioannis Stefanou said: “These dual-fuel vessels have brought exciting opportunities for our crew to expand their expertise. They provide a platform to train experienced crews of various ship types on dual-fuel engine system requirements. Wallem is ready to manage any type of vessel equipped with dual-fuel engines for our clients.” Wallem deployed a newbuilding experience equivalent to almost 230 years during the GSI construction project, in a multi-national team of 11 technical staff which included a site manager, hull and coatings supervisors, machinery specialists and electricians. “With the exception of two of the junior staff, all of the yard personnel assigned to this project have been with Wallem for six or more years,” said Mr Stefanou. Special attention was given to the 3,600 m 3 fuel storage tanks on board Angleviken and Askviken, he said, the capacity of which is sufficient for six to eight weeks at sea, with the extended period between bunkering reducing operational costs and risks. Sale and purchase Sales of large tankers for recycling returned in September and October 2023, with a report that the 1998-built, 159,900 dwt Suezmax tanker Alana had been sold to Bangladesh recyclers for a reported US$570 per light deadweight (ltd). Previous to the sale, the last reported large tanker sold for recycling was the 2002-built, 299,200 dwt Uranus , which was sold to Bangladesh recyclers in August 2022 for US$610 per ldt. The sale for recycling of an elderly Suezmax tanker was remarkable, as vessels of this age are still in high demand for further trading. In September 2023, the 21-year old Bear Mizar Suezmax tanker was sold for an undisclosed amount, but VesselsValue lists values for 20-years at US$34M. Before the invasion of Ukraine by Russia, a Suezmax of this age was a firm recycling candidate and the January 2022 value of such a vessel was US$15M. One exception to the rule are tankers qualifying for the US Jones Act trades. In October 2023, it was reported the 2004, NASSCO (San Diego, US)-built, Alaskan Frontier had been sold for a reported US$50M. The vessel had been in lay-up and will require extensive reactivation costs to be met by the new owner, OSG. Finally, the long-running attempt by Jon Fredriksen’s Frontline to takeover Euronav, which led to a tactical stalemate, was resolved with, among other resolutions, the sale of the Euronav VLCC fleet to Frontline. CMB chief executive, Alexander Saverys, is now the chief executive of Euronav, taking over from Lieve Logghe, after the carve-up and sale of 24 of Euronav’s VLCCs to John Fredriksen in return for his stake in Euronav. The “new chapter” at Euronav, according to Mr Saverys, “solves the strategic and structural deadlock in Euronav and allows a new board and new management team to ... engage with the new supervisory board on how to execute a strategy around diversification and decarbonisation.” Compagnie Maritime Belge’s (CMB) would get Famatown Finance’s and the rest of John Fredriksen’s stake in Euronav, in return for US$2.35Bn and 24 recently-built VLCCs. Outlining its “new strategic direction” to investors, Belgium-based CMB said it intends to reconfigure the remaining Euronav fleet, setting out options including acquiring vessels, ordering newbuildings or combining fleets with the group’s other companies, CMB and CMB.Tech. Low- and zero- carbon fuels, including hydrogen and ammonia, are targets in making the fleet “future-proof,” according to CMB. Also in October 2023, Euronav ordered two new VLCCs at an unnamed Chinese yard. The first vessel will cost US$112M and is expected in Q3 2026. Euronav lifted an option at the same shipyard for a second VLCC for the same purchase price, with delivery also anticipated in Q3 2026. TST Alexander Saverys (CMB): Euronav’s new CEO sees the sale of 24 VLCCs as the start of a new direction for the company (source: CMB) Top 10 investors of large tanker tonnage by number (source: VesselsValue) Beneficial owner Dynacom Tankers Rosnefteflot TMS Tankers Atlas Maritime Union Maritime Maran Tankers Thenamaris Pantheon Tankers Management Capital Ship ManagementNavios Maritime Partners LP No of VLCC-, Suezmax- & Aframax-sized tankers on order 25 20 15 10 5 0 23 14 12 101010 888 6Next >