Striking Ferry Workers Ease Blockade

By Reuters 2015-07-01 16:19:52

Striking ferry workers blocking access to Calais port in northern France agreed on Wednesday to let some boats through, partly lifting a blockade in its third day.

Workers at ferry service MyFerryLink are trying to prevent job cuts after their company was sold to a Danish company earlier this month.

They agreed to let some boats go after their representatives were invited to meet with Transport Ministry officials on Thursday morning, following a threat to disrupt traffic through the Channel Tunnel for 48 hours.

“We’ve accepted to lift the blockade of the port from 20:00 (1800 GMT) to let P&0 boats through one by one,” union official Eric Vercoutre told journalists.

The threatened disruption of Tunnel traffic for Thursday and Friday would coincide with a surge in travel at the start of school summer holidays if the workers went ahead.

The protesters had already blocked the tunnel’s entrance for several hours on Tuesday by setting fire to tires thrown onto railway tracks.

MyFerryLink was previously owned by Eurotunnel, the company that operates the undersea cross-Channel rail link.

Migrants from Africa and the Middle East seeking to slip into Britain tried to profit from the strike to stow away on waiting trucks.

Dozens of migrants sat on the roadside around the port in the hope of sneaking aboard one of the vehicles, lined up bumper to bumper to limit their chance of getting in the back doors.

Adam, 36, a Sudanese migrant who fled the war-torn Darfur region, said he had nothing to lose and hoped to take advantage of the chaos.

“I am from the Zaghawa ethnic group and I no longer have a future in Sudan, although I have graduated,” he said. “I have been in France for the last two months and our life these days is very difficult. I hope to arrive to the UK because I will have identification documents quicker than in France.”

Calais is one of the flashpoints of the immigration crisis facing European Union countries, who are struggling to agree among themselves how to deal with the thousands of migrants heading their way to escape conflict or poverty.

Up to 3,000 migrants are estimated to be amassed around the port. Many want to get to Britain because they speak English, have family connections or are convinced they stand a better chance of getting a job there.

“Some try to get on the trucks by all possible means. Sometimes they cause damage to the freight we carry and then the client may refuse to pay for the freight we ship,” said a 58-year-old truck driver who gave his name as Elso.

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MOL Confirms Successful Methanol Dual-fuel Engine Tests

By MarEx 2015-07-01 16:03:37

Japan’s Mitsui O.S.K. Lines, Ltd (MOL) has confirmed the successful testing of the world’s first low-speed methanol dual-fuel engine, which will be used in a series of newbuildings.

MOL announced today that engine building has already been completed and the manufacturer, Mitsui Engineering & Shipbuilding Co., Ltd has test-operated the unit using methanol fuel and confirmed that it met expected performance.

The new engines will be added to a fleet of new builds for Vancouver-based Waterfront Shipping Company Ltd. (WFS), which will be completed in 2016. The 50,000 dwt methanol flex-fuel carriers will be the first to utilize the new MAN Diesel & Turbo ME-LGI engine design, which can operate on methanol, fuel oil, marine oil, or gas oil. Eventually the engines will run on 95 percent methanol, ignited by 5 percent pilot oil.

Ole Grøne Senior Vice President – Low Speed Promotion & Sales – MAN Diesel & Turbo called completion of the tests a significant milestone in the development of diesel technology.

He went on to add, “we welcome our partners’ interest in our technology and acknowledge their taking the lead in proving the ME-LGI concept. We are confident that their faith will be rewarded in the immediate future.”

International and local regulatory requirements for CO2, NOX and SOX emissions have increasingly forced vessel owners to investigate greener and more innovative fuel sources. This new duel fuel technology has the capability to reduce a vessel’s CO2 emissions by 25 percent and NOX emissions by 60 percent when compared with traditional fuel oil. Also, since methanol does not contain sulfur it also successfully enables ships to operate with zero SOX emissions.

In comparison with other alternative fuel sources, methanol lends itself to easy transportation since it can be stored in normal, unpressurized tanks. It is also liquid at room temperature, which facilitates storage aboard vessels.

In March of this year the Stena Germanica underwent a conversion to become the world’s first methanol-powered ferry. It also operates on a dual-fuel design with methanol as its primary source and marine gas oil (MGO) as a backup option.

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Ship Transporting Chemicals Runs Aground in Dardanelles

By Kathryn Stone 2015-07-01 13:12:22

A cargo ship transporting chemicals ran aground this morning in the Dardanelles.

According to local media reports the 7,618 dwt Ibrahim Konan was carrying ammonium sulfate, a common fertilizer additive, when it ran aground in a narrow part of the strait near Eceabat, Turkey. The incident occurred around 3:00am local time after the ship suffered a rudder failure. The captain of the ship reported the incident to the Directorate General of Coastal Safety, which responded by sending the Put 7 tug to the scene. Efforts to refloat the vessel are still underway.

Both the ship’s captain and an investigative team failed to find leaks or any signs of pollution in the surrounding area. No one was injured in the incident.

The Ibrahim Konan was traveling from Russia to Egypt when the grounding occurred. The ship is operated by Konan Shipping and is flagged in Panama.

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Shell Greenlights Its Largest GOM Floating Platform

By MarEx 2015-07-01 10:54:21

Shell gave the greenlight today for construction and installation of its largest floating platform in the Gulf of Mexico.

The Appomattox deepwater oil and gas field is located 80 miles offshore in Louisiana and is expected to reach an average peak production of approximately 175,000 barrels of oil equivalent (boe) per day. Once online, the field could boost Shell’s production in the region by more than 60 percent from 2014 levels.

“We have again delivered a globally competitive investment scope for another significant deep-water project,” said Marvin Odum, Shell Upstream Americas Director.

“Appomattox opens up more production growth for us in the Gulf of Mexico, where our production last year averaged about 225,000 boe per day, and this development will be profitable for decades to come. With its competitive cost and design, Appomattox is next in our series of deep-water successes.”

The Appomattox development host will consist of a semi-submersible, four-column production host platform, a subsea system featuring six drill centers, 15 producing wells, and five water injection wells.

Shell said it had reduced the project’s cost by 20 percent through design improvement and cost reductions, bringing its breakeven price to around $55 per barrel of oil equivalent.

The sanctioned project includes capital for the development of 650 million boe resources at Appomattox and Vicksburg, with start-up estimated around the end of this decade.

Shell Pipeline Company LP also made a final investment decision on the Mattox Pipeline, a 24-inch corridor pipeline that will transport crude oil from the Appomattox host to an existing offshore structure in the South Pass area and then connect onshore through an existing pipeline.

Shell holds a 79 percent stake in the project while Nexen Petroleum, a wholly owned subsidiary of China’s CNOOC, holds the remaining 21 percent.

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Shipping Confidence Falls to Seven Year Low

By MarEx 2015-07-01 10:23:07

Overall confidence levels in the shipping industry fell during the three months to May 2015 to a level equal to the lowest rating recorded in the past seven years, according to the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens. Respondents complained predominantly about low freight rates and overtonnaging, while some expressed continuing doubts about private equity funding.

In May 2015, the average confidence level expressed by respondents in the markets in which they operate was 5.3 on a scale of 1 (low) to 10 (high), down from 5.5 in February 2015. This equals the lowest figure recorded in the life of the survey, which was launched in May 2008 with a confidence rating of 6.8.

Charterers were the only category of main respondent to record an increase in confidence, albeit from the all-time survey low last time of 3.9. But their rating of 4.2 was still the lowest in the latest survey.

A number of respondents expressed the view that an upturn in market conditions was some way off. One said, “after eight years of misery, rates must go up if shipping companies are to survive. Another remarked, “boom / bust cycles in the shipping industry usually last about seven years, which is sufficient time for any money lost to return to the market, with interest rates at, say, 6 percent. But now, because of excess liquidity in the markets and low interest rates, there is a feeling that any recovery will be a very long time coming.”

The depressed state of the dry bulk sector and the effect of the entry into the market of private equity were the subjects which dominated responses to the survey, neatly encapsulated by the respondent who noted, “the remarkable acceleration of scrapping of larger bulk carriers and the conversion of many newbuildings into tankers will have a positive effect on the dry bulk market sooner than had previously been anticipated – provided, of course, that suicidal private equity has learnt its lesson and accepts that this is not an opportunity to make a quick fortune.”

Demand trends, competition and tonnage supply featured as the top three factors cited by respondents as those likely to influence performance most significantly over the coming 12 months. The numbers for demand trends and competition were each down on last time by one percentage point, to 23 percent in the case of the former and to 20 percent for the latter. Tonnage supply, meanwhile, was up by one percentage point to 15 percent, one percentage point ahead of finance costs. Operating costs, down by one percentage point to 11 percent, featured in fifth place, followed by fuel costs, down by one percentage point to 6 percent, equalling the lowest figure recorded in this category since February 2010. One respondent said, “Only the big owners can make investments in order to be ready with good tonnage, and not be displaced by competitors, when the market recovers.”

Turning to the freight markets, there was a fall in the number of respondents anticipating higher rates in the dry bulk sector, but expectations of improved rates in the tanker and container ship trades were up on the figures for February 2015. Overall net sentiment, based on the difference between the number of respondents who expected rates to improve and the number who thought they would deteriorate, was positive in all three main tonnage categories covered by the survey.

Richard Greiner, Moore Stephens Partner, Shipping Industry Group, explainedthe fact that shipping confidence has revisited the low point recorded twice before in the seven-year life of the survey underlines both the current volatility of the markets and the fragile nature of confidence itself in an industry where, little more than 12 months ago, it was at an all-time high.

“The nature of the concerns expressed by respondents to the survey comes as no surprise. Familiarity in this case breeds continuing uncertainty rather than contempt. There are no quick fixes for the likes of overtonnaging and low freight rates. The solutions, like the problems themselves, are long-term in nature, and will undoubtedly involve some pain along the way. Moreover, there is a not a one-size-fits-all solution for the industry as a whole. What is good news for some sectors is quite the opposite for others.

“Lower oil prices might be helping smaller operators to compete by virtue of reduced bunker costs, but in many respects they are bad news for the bigger players with whom they are competing. Access to finance for newbuildings in either the traditional or private equity markets is good news for owners with an eye on expansion, but bad news for those seeking investment to upgrade existing tonnage.

“Shipping has enough problems to occupy itself for the foreseeable future. But it must not take its eye off the ball when it comes to the incipient costs associated with achieving regulatory compliance, or indeed of properly managing the increasing risks which it faces on a daily basis, encompassing everything from the financial stability of counter-parties to cyber security threats.

“It is not all bad news. The Baltic Dry Index (BDI) has started to nudge upwards after an extended period in freefall. The tonnage supply / demand imbalance, although still unsatisfactory, is improving rather than deteriorating. There will always be a demand for shipping. Moreover, given the high operating and regulatory costs involved, and the fact that the economic and industry downturn has already claimed significant numbers of weaker companies, the shipping industry is likely to be stronger than it has been for many years once the recovery does get under way. In the meantime, it is just a question of holding one’s nerve.”

The opinions expressed herein are the author’s and not necessarily those of The Maritime Executive.

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