HMM shrinks VLCC fleet

Hyundai Merchant Marine (HMM) is now left with just one very large crude carrier (VLCC) after selling two VLCCs in May.
South Korea’s second-biggest shipping company confirmed to IHS Maritime that 2005-built Universal Crown and Universal Queen have been sold to compatriot Sinokor Merchant Marine.

Vard launches new innovation project

Singapore-listed offshore vessels designer and shipbuilder, Vard Holdings has launched a new innovation project in ship design.
The project, named ‘A step forward’, are design innovations developed with an emphasis on safety, user-friendliness, functionality, operability, cost optimisation, fuel

Statoil Sees European Gas Demand Recovery

By Reuters 2015-06-02 18:25:32

Norwegian energy firm Statoil sees some signs of gas demand in Europe recovering after years of decline, particularly in Britain, its chief executive told Reuters on Tuesday.

Norway overtook Russia as Western Europe’s main gas supplier in the last quarter of 2014 and was also ahead in the first quarter of this year, industry data showed.

“For some years we have seen a reduction in the European gas consumption starting with the financial crisis, with coal substituting gas in the power generation segment and that has been a very disappointing development for us,” Statoil CEO Eldar Saetre said.

“There are some positive signs that hopefully will at some point be a turning point for gas,” he added, referring to carbon tax introduction in Britain, which has led to gas demand rising in the power sector last year after three years of decline.

Saetre was speaking during a visit to Statoil’s Troll A platform in the North Sea with Miguel Arias Canete, European commissioner for climate and energy.

The platform, standing firmly on four huge concrete legs extending some 300 metres to the seabed, is the tallest such structure ever transported.

Norway’s biggest gas field Troll alone produces about 30 percent of gas output from the Norwegian continental shelf, enough to meet Spain’s annual demand.


Gas demand for power generation in Britain rose last year for the first time since 2010, data from UK’s Department of Energy and Climate Change showed.

“I can’t comment on whether a shift has happened for Norwegian gas, but… we see growing interest for more longer-term commitments on gas in many parts of Europe,” Saetre said.

Statoil expanded the scope of its long-term gas supply contract with Britain’s SSE on Monday, after agreeing to supply more gas to rival Centrica in May.

Norway’s exports to the EU totalled 29.2 bcm in the first three months of the year against 27.2 bcm Russian supplies, Reuters calculations showed.

Russia remained EU’s main gas supplier for 2014 as a whole.

European buyers held off purchases of Russian gas during the last two quarters, expecting its oil-indexed prices to catch up with last year’s fall in crude oil.

Canete said that while Russia and Norway were to remain the EU’s main gas suppliers, the Commission wants to increase competition from other sources, including imports of liquefied natural gas (LNG).

“We will launch an LNG strategy in December and in that framework we will make our forecast for gas consumption,” Canete said. Currently about 80 percent of the EU’s LNG import capacity is idle.

Norway could explore for more gas, but needed a more predictable long-term climate policy, which would favour gas over coal, Statoil officials said.

“We need signals from Europe that gas remains important in the future energy mix,” said Oeivind Dahl-Stamnes, Statoil’s vice president for Troll operations.


Navy Secretary Urges Pentagon to Cut Overheads

By Reuters 2015-06-02 18:09:20

U.S. Navy Secretary Ray Mabus has urged budget cutters to target what he called duplicative and ineffective agencies such as the Pentagon’s payment services arm instead of cutting needed weapons programs.

“If you want to look at real money, 20 percent of the Pentagon’s budget – one dollar out of every five – is spent on … the Office of the Secretary of Defense and defense agencies. Pure overhead,” Mabus said during a speech at the conservative American Enterprise Institute think tank.

Mabus said the Navy had cut spending on service contracts, which accounted for about $40 billion out of the Navy’s overall budget of $160 billion, by 1 percent, saving about $4 billion. Further savings were still possible, he said.

The U.S. Defense Department is girding for large budget cuts that are due to resume in fiscal 2016 unless Congress revises existing law. Mabus said he would do all he could to protect shipbuilding accounts if the cuts went back into effect.

Mabus said the inability of Defense Finance and Accounting Services, the payment services agency, to account for data that it had received from the Navy could impede the Navy’s ability to conduct a clean audit this year.

Nine of 10 of the agency’s internal controls had been found to be ineffective, Mabus said, adding, “Do we really need that?”

Mabus said he had learned while serving as governor of Mississippi that consolidating agencies often made sense in theory but not always in practice because it created larger, more bureaucratic organizations.

For instance, he said the Defense Logistics Agency was set up to purchase materials for the entire military and benefit from larger economies of scale, but the Air Force and the Navy used different types of fuel, which meant that goal could not be achieved anyway.

“I think you ought to take a look at every one of these … There’s a lot of duplication going on,” he said.

He said the individual military services could also likely cut overhead costs further.

Mabus also criticized the Pentagon’s current approach to testing weapons, noting that hundreds of millions of dollars were spent on tests that were sometimes not needed.

For instance, he said, the Pentagon’s office of test and evaluation had criticized the Navy’s littoral combat ships for not being able to survive in a conflict, but the plan had never been to send those smaller ships out by themselves, he said.