Chinese Company Picked to Salvage Sewol

By MarEx 2015-08-04 13:11:56

The South Korean government has hired Shanghai Salvage Co., a Chinese state-run consortium of companies, to salvage the Sewol ferry. The company has a signed a KRW 85.1 billion ($73 million) agreement with South Korea to raise the ferry.

The 6,825 ton ferry sank off the South Korea’s southern coast in April 2014, killing about 300 people, mostly school children.

Shanghai Salvage plans to raise the Sewol during the next year and projects the salvage operation will be completed by July 2016. The company will use two 10,000 ton cranes and about 200 workers, including 100 divers in the salvage of the ferry.

South Korea’s southern coast is known for its strong currents and winds, which could make salvaging the Sewol a more dangerous undertaking than most. Two divers died searching for survivors last year.

South Korea’s original plan was drilling a dozen holes into the side of the ferry and using naval cranes to lift the vessel from the seafloor. Shanghai Salvage offered to raise the ferry with a frame built with steel beams instead as they questioned the feasibility of relying on cables attached to a weakened ship to complete the task.

The agreement between Shanghai Salvage and South Korea is payable in three phases. The first payment will be made after the completion of loss prevention and oil recovery procedures. The second will be paid after the ferry is lifted and docked, and the final payment will be made after the ferry is brought ashore for demolition.

The sinking of the ferry resulted widespread public and political reaction within South Korea. Many criticize the actions of the captain and most of the crew of the ferry. More criticize the ferry operator and the regulators who oversaw its operations. Additional criticism has been directed at the South Korean government and media for its disaster response and attempts to downplay government culpability.

On May 15, 2014, the captain and three crew members were charged with murder, while the other 11 members of the crew were indicted for abandoning the ship. An arrest warrant was also issued for Yoo Byung-eun, the owner of Chonghaejin Marine, which operated Sewol, but a nationwide hunt to find him ensured and on July 22 2014, police revealed that he had committed suicide.

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One Dead In Product Tanker Fire

By MarEx 2015-08-04 10:26:02

A crew member was killed when a fire broke out on the product tanker YE CHI, which was sailing from Jinshan, near Shanghai, to Singapore. Four other crewmembers were also injured and taken to the hospital. The fire was reported to be under control by 14:00 UTC.

The Shanghai Marine Rescue Center dispatched four ships and one helicopter in the rescue operation. The YE CHI is a 2009-build 45,740 dwt vessel is owned by Ye Chi Shipping SA and operated by the China Shipping Tanker Company. The tanker was transporting 29,000 tons of diesel. According to reports, the incident occurred 8.8 nautical miles southwest of Dayang Shandao.

There is ongoing investigation of the incident conducted by the local marine authorities. Preliminary observations indicate that the fire started in the accommodation area of the ship.

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Crew Dies In Product Tanker Fire

By MarEx 2015-08-04 10:26:02

A crew member was killed when a fire broke out on the product tanker YE CHI, which was sailing from Jinshan, near Shanghai, to Singapore. Four other crewmembers were also injured and taken to the hospital. The fire was reported to be under control by 14:00 UTC.

The Shanghai Marine Rescue Center dispatched four ships and one helicopter in the rescue operation. The YE CHI is a 2009-build 45,740 dwt vessel is owned by Ye Chi Shipping SA and operated by the China Shipping Tanker Company. The tanker was transporting 29,000 tons of diesel. According to reports, the incident occurred 8.8 nautical miles southwest of Dayang Shandao.

There is ongoing investigation of the incident conducted by the local marine authorities. Preliminary observations indicate that the fire started in the accommodation area of the ship.

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Viking Offshore profits up 94%

Singapore-listed offshore services provider, Viking Offshore posted profits of SGD173 million (USD125.8 million), up 94% year-on-year for the second quarter this year as a result of higher revenue.
Revenue surged 32% to SGD21.6 million in 2Q15 compared to SGD16.3 million in 2Q14, due to order book
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MISC doubles profit in 2Q15

Malaysia-listed shipowner, MISC has more than doubled its profit to MYR766.4 million (USD198.9 million) for the second quarter of 2015 from MYR319 million in 2Q14, as a result of improved freight rates in petroleum business.
Revenue was up slightly by 2% to MYR2.6 billion in 2Q15 as compared to
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Dry bulk sentiment and rates improve

Spot freight rates for Capesize dry bulkers surged on 3 August and shipping analysts note the fundamentals of the sector were not as bad as the freight market had indicated in 1H15.
“Capesize rates rose 9% yesterday and stand now at USD17,162/day. The BDI (Baltic Dry Index) has now risen by 95% to
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Australia’s PM Makes Big Shipbuilding Promises

By MarEx 2015-08-04 05:01:57

The Australian government has committed to spend over A$89 billion ($65 billion) on naval ships and submarines as part of a long-term plan for a strong and sustainable naval shipbuilding industry.

The figure includes A$50 billion ($37 billion) expected to be spent on submarines, with France, Germany and Japan all competing for the contract.

The investment will generate significant economic growth and sustain several thousand Australian jobs over decades, and is a key part of our commitment to a safe and secure Australia, says Prime Minister Tony Abbott.

It’s the first time that any Australian government has committed to a permanent naval shipbuilding industry, he said.

The government will be bringing forward the Future Frigate program (SEA 5000) to replace the ANZAC class frigates. As part of this decision, the government will confirm a continuous onshore build program to commence in 2020.

“This decision will save over 500 hundred jobs and help reduce the risks associated with a cold start,” says Abbott. The Future Frigates will be built in South Australia based on a competitive evaluation process, which will begin in October 2015.

The government will also be bringing forward construction of Offshore Patrol Vessels (SEA 1180) to replace the Armidale class patrol boats by two years, with a continuous onshore build commencing in 2018 following a Competitive Evaluation Process. This decision will maintain around 400 skilled jobs that would otherwise have been lost. It will also reduce the number of man-hours that would be wasted on the Future Frigate program if the existing workforce was disbanded and reconstituted, setting it on a stronger path for earlier completion.

In the short term these two measures will sustain around 1,000 jobs that would otherwise have been lost, says Abbott. Once both programs ramp up they will guarantee around 2,500 Australian shipbuilding jobs for decades.

The announcement has been met with some skepticism. Independent senator Nick Xenophon said the Future Frigate project was an “eternity” away. “How is this promise – to build the future frigates in South Australia – any different from the Coalition’s 2013 promise to build 12 submarines in South Australia?” he asks.

The third major pillar of the government’s naval shipbuilding plan is building the submarines based on the outcomes of the competitive evaluation process. There will be more submarines and more submarine-related jobs in Australia, Abbott promised, but he would not be drawn on where the submarines would be built.

AWD Program

Abbott is also addressing the serious cost overruns, delays and productivity problems affecting the Air Warfare Destroyer (AWD) program. Following a forensic audit, and building on significant improvements made through the recent interim phase of reforms, the government is acting decisively to reform the AWD program, he said. By the end of October 2015 substantial additional shipbuilding management expertise will be inserted into the AWD program and an additional A1.2 billion ($887 million) will be invested in the program budget.

The government will also undertake further reform of shipbuilder ASC to ensure Australian shipbuilding is best structured to support a continuous build program and future naval projects are delivered on time and on budget. To this end, the government has commissioned a strategic review of ASC’s shipbuilding capacity. The review will consider how best to implement long-term arrangements.

Recognizing that the Adelaide shipyards and workforce are strategic national assets, the review will consider options to ensure they are structured to support the government’s commitment to naval shipbuilding.

The outcomes of the review will be considered in conjunction with future decisions on submarines and surface shipbuilding programs.

The government’s investment in Navy capability will be a centerpiece of the fully-funded Defence White Paper that will be released later this year. It will set out the government’s plan to equip the Australian Defence Force to meet current and future challenges.

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