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Articles from 2016 In December


Keppel FELS resells $206m jackup rig

Keppel FELS resells $206m jackup rig

Uruguay's Parden Holding had entered into a contract with Keppel FELS in August 2013 to purchase a KFELS B Class jack-up rig at a price of $206m.
 
“Following Parden's failure to take delivery of the jackup rig and make payment for the balance 80% of the contract value, among others, KFELS has today, following discussion with the guarantor of Parden's obligations under the construction contract, entered into a settlement agreement with the guarantor,” announced Keppel Corp, parent of Keppel Offshore & Marine which owns Keppel FELS.
 
“The settlement agreement provides for the concurrent execution of a sale contract with 361 Projects, which is an associate of the guarantor, for the purchase of the jackup rig at a price equivalent to the balance contract value of the construction contract,” Keppel Corp stated.
 
The rig is now scheduled for delivery to the new buyer in the fourth quarter of 2017.

Hyundai Glovis car carrier lists in North Sea

Hyundai Glovis car carrier lists in North Sea

The car carrier was en route from Hamburg to Gothenburg before heading to the Middle East when it was caught in bad weather east of Cuxhaven, North Sea on the night of December 26, leading to cargo shift on the cargo decks.

The ship turned back and headed for anchor at outer anchorage Bremerhaven in the afternoon of 27 December when it developed a 15-degree listing on the portside, it was reported.

Attempts to bring the ship on even keel via ballasting have not succeeded.

Ode to Joy for freight market

Ode to Joy for freight market

No one has a firm answer but the signs are telling us that the higher commodities prices will provided the strength and stamina for freight market to recovery at least on theory. However, all the stakeholders are relieved that the freight market had cheated death in 2016 and defied doom-sayers of imminent slump at the last leg of the year.

Baltic Dry Index (BDI) bores the testament of the eventful year with pains and joys all rolled into one as well as seeing the Baltic Exchange accepting a $104m takeover bid by Singapore Exchange (SGX) in September 2016.

Initially, the index started on a wrong foot and tumbled to a never-before lowest points at 290 in February 2016, just right after the Lunar New year. Then, the index embarked on a great restoration movement at the second half of 2016, backed by growing demand on iron, coal and grains to bring the once- dead BDI back to life again to reach 1,000 points by November 2016.

Currently, BDI has scaled back to around 960 points and seem to proceed for a strong or better start in 2017, as believed by most industrial experts. But challenges still poised to upset the party in 2017, especially on China’s demand; whether the stimulus package for infrastructure will be continued in the new year and whether they are as effective as previously injected. Then, the freight market also rest on whether US will keep its promise for the $1trn spending on infrastructure over the 10 years that supported the dry bulk market indirectly.

On the respectively freight market, capesize rates seem to poise for more improvement in coming year, bolstered by the wave of iron ore exports from Brazil and Australia in record numbers. In the last quarter of 2016, capesize rates hit a two-year high driven by higher iron ore demand and looks to continue the upward trend when more mines ramp up in the coming year.

In the new year, the panamax rate will continue to draw strength from the grains market based on the shipments from the South America and Gulf of Mexico. In the meantime, the supply of panamax vessels remained trim as no newbuilds are being ordered in 2016.

Supramax, however, might face more headwinds ahead, mainly attributed to the drop of coal imports by India as the country increases its domestic coal output and improves its coal distribution channels. Lastly, the handysize market is expected to have strong market in 2017, as the ship scrapping programme has progressed well and effectively limit the supply of vessels in the market.

Therefore, the freight market might have already march toward the path of “joy” but it needs to take cautious steps ahead, if not the joy will be short-lived and become bittersweet.

Incheon port eyes 3m teu box throughput in 2018

Incheon port eyes 3m teu box throughput in 2018

The 2.68m teu figure will represent a 12% increase from last year’s volumes of 2.37m teu.

Incheon port’s throughput have been on a steady increase since reaching 1m teu in 2005 when the IPA was established.

The container volume growth for Incheon was attributed to Incheon New Port located at the southern end of Songdo International City which opened in 2015. The opening of the new port made it possible to expand cargo services such as provision of various route services and handling of fresh food cargoes.

The IPA said another reason for the volume growth was the extension of shipping service routes to the Americas and the Middle East, expanding from the Asian region.

In June, a Middle East route service was launched, adding six new routes to Incheon port. The port currently offers 45 routes, including three routes to the Americas, the Middle East and Africa.

China, the largest trading partner of Incheon port, also helped the increase in cargo volumes this year. The cargo volume trade with China stood at 1.5m teu from 1 January to 15 December this year, an increase of 10% year-on-year.

In the same period, the port handled a 25.2% increase in cargoes for trade with Vietnam compared to the previous year by handling 220,000 teu. Taiwan, the US and Iran also recorded 96,000 teu, 19,000 teu and 9,000 teu respectively.

Big three Korean shipbuilders will not merge: FSC

Big three Korean shipbuilders will not merge: FSC

At a recent briefing to reporters, FSC chairman Yim Jong-yong shrugged off the merger of Hyundai Heavy Industries (HHI), Samsung Heavy Industries (SHI) and Daewoo Shipbuilding & Marine Engineering (DSME).

“Those big three companies are all under restructuring and a potential big deal will harm all of them,” Yim was quoted saying. “A pre-condition for a big deal is all of those companies undergo restructuring thoroughly and stand on their own. However, they are not in such a condition.”

He added that having three separate big shipbuilders would allow South Korea to maintain its status as a global shipbuilding powerhouse.

Yim mentioned in particular that the embattled DSME needs to be kept afloat and not allow the yard to go bankrupt. The FSC has projected a global shipbuilding industry recovery to happen in 2018, and the yards have to hang on until the upturn.

In September, Clarksons Research reported that it expects the number of new ship orders worldwide to improve from 586 in 2016 to 1,322 in 2018. The IMO has also decided to enforce stricter environmental regulations of a 0.5% fuel sulphur content cap by 2020, which will spur shipowners to replace old vessels.

“By 2020, tougher environmental regulations will take effect. Given two or three years required for building a ship, orders will start increasing in the second half of 2017,” Yim said.

DP World increases stake in Pusan container terminal

DP World increases stake in Pusan container terminal

The newest investment has raised DP World’s stake in PNC to 66.03%.

PNC is the largest terminal in the Busan port with 5.25m teu capacity, handling 34% of the new port volumes. The New Port of Busan began operations in 2006, and operates 23 container berths.

“We are delighted to announce the increase of our stake in Pusan Newport Company Limited, which is the largest terminal in the port of Busan and a major gateway hub of Northeast Asia. We expect the port of Busan to remain an important part of our global network and this investment further underlines our commitment to South Korea,” commented Ahmed Bin Sulayem, group chairman and ceo, DP World.

Overall, the port of Busan is the sixth largest port worldwide with throughput of 19.5m teu in 2015 and accounts for approximately 75% of total container volumes in South Korea.

Seadrill gets rig extension deal from Saudi Aramco

Seadrill gets rig extension deal from Saudi Aramco

Seadrill said the extension is in direct continuation of the current contract and will add approximately $112.5m in contract backlog for the company.

The extension, however, is at reduced rates in order to remain competitive in the challenging offshore market.

This extension follows the three-year extensions of two sister rigs AOD I and AOD II, with their contracts expiring June 2019 and July 2019 respectively.

All three units have been working for Saudi Aramco since 2013.

The rigs are owned by Asia Offshore Drilling (AOD), a partnership venture between Seadrill owning 66.24% equity stake and Mermaid Maritime with the remaining 33.76%.

ASL Marine seeks to extend maturity of notes by three years

ASL Marine seeks to extend maturity of notes by three years

The notes involved a series of SGD100m 4.75% due in March 2017, a series of SGD50m 5.35% due in October 2018, which together are issued pursuant to a SGD500m multicurrency debt issuance programme.

Apart from seeking to extend the maturity date of the notes by three years, ASL Marine also seeks to introduce a call option and mandatory redemption event for the notes, amend interest rates payable, allow for a form of security to be taken, and amend certain financial covenants.

ASL Marine's call for support from noteholders came as the company faces credit tightening by financial institutions, subcontractors and suppliers, amidst the severe downturn in the offshore marine market.

The Singapore-listed firm cited difficult operating conditions in the market such as the fall in charter rates and muted demand for OSVs, tugboats and barges. The company's fleet utilisation rate has fallen to 57% as of 30 September 2016.

The ship repair and conversion business has no upcoming conversion jobs for OSVs, while the shipbuilding division has no new orders since May 2016, as well as stiff competition from other yards and costs overrun for projects.

ASL Marine pointed out that the company has raised gross proceeds of approximately SGD25.17m from rights issue, and signed a commitment letter with various lenders for a five-year club term loan facility worth SGD99.9m. The company has also done a review of clients on their profitability to assess business viability and implemented tighter working capital management.

Singapore enters 2017 with mandatory use of mass flow meter bunkering

Singapore enters 2017 with mandatory use of mass flow meter bunkering

The Maritime and Port Authority of Singapore (MPA) has been steering Singapore to adopt the use of MFM since 2014, as the regulator has been actively engaging the industry to prepare for the operational transformation and working with technical committees to draw up new bunkering standards.

The MFM is in fact not a new technology as they are already widely used in landbased power plants, but they are new to the marine industry, which up to today continues to rely on manual fuel measurements such as tank dipping and sounding.

The fuel quantity variance of using MFM is estimated at a maximum of 0.5%, lower than the traditional sounding tape method of up to 0.7%.

The benefits of using MFM in bunkering include enhanced transparency to reduce malpractices and disputes, greater efficiency with time savings and higher productivity for quicker bunker tanker turnaround without the need to expand port capacity.

The use of the meters has been proven to reduce bunkering time by about 2-3 hours per vessel and increase bunker tanker turnarounds to 10-12 times a month from the present eight on average.

Bunker deliveries conducted using the meters, however, will apply only for high-viscosity grade bunker fuel deliveries, excluding the low-viscosity marine gas oil (MGO). The MPA has said that it will follow up on a compulsory implementation of MFM for MGO sometime in early 2017, as tests are already underway and results so far have been encouraging.

There will be an estimated 132 fuel oil bunker tankers fitted with MFM to carry out bunker deliveries, allowing Singapore to continue meeting demand volumes every month.

Singapore is the runaway leader in bunker fuel sales with 45.2m tonnes sold in 2015, and volumes sold in January-November 2016 have reached 44.71m tonnes, up 838% year-on-year, according to MPA statistics.

The cost of installing MFM on bunker tankers can range from a low of $30,000 to a high of $200,000, depending on the condition of the vessel. The MPA has offered assistance to the industry with a lump sum incentive of SGD80,000 ($55,200) for each existing bunker tanker delivering fuel within port waters.

With the new regulation in place and a ready fleet of Singapore-flagged MFM-fitted bunker tankers, ships buying bunker fuels in Singapore from 2017 would have to agree to the meter readings of the MFM installed on the bunker tankers.

A technical reference standard for MFM, termed the TR48:2015, was launched in February this year. The standard covers a set of core requirements for metering system qualification, installation, testing procedures and documentation for bunker custody transfer using MFM.

The technical reference has been developed under the auspices of the Technical Committee (TC) for Bunkering of the Chemical Standards Committee (CSC). Back in March 2009, the TC for Bunkering agreed to undertake the MFM project and to form a Working Group to develop the standard.

While the MFM process of bunker custody transfer from bunker tankers to receiving vessels is ready for commercial practice, one grey area remains and that is the fuel custody transfer from onshore oil terminals onto the receiving bunker tankers. Terminal operators, like shipowners, are not bounded by the MFM regulation and bunker suppliers have questioned whether they will accept the readings on the bunker tankers’ MFM, in the event of a major quantity difference.

A source familiar with the matter told Seatrade Maritime News that the TC and the relevant regulators are aware of this missing piece of jigsaw in the entire MFM bunkering chain, but it is not a stumbling block as all custody transfer meters used in terminals follow requirements set by national standards and conformance body SPRING Singapore, which has similar requirements for MFM.

Antwerp port container volumes to pass 10m teu in 2016

Antwerp port container volumes to pass 10m teu in 2016

Antwerp is projected to record 10.06m teu of throughput for 2016, representing an increase of 4.2% year-on-year.

“With these excellent growth figures Antwerp has further expanded its market share in the Hamburg – Le Havre range. Antwerp has also managed to considerably improve its position in the Far East trade over the past few years, at the expense of its direct competitors Rotterdam and Hamburg,” the port authority said in a statement.

Antwerp Port Authority also pointed out that in 2017, the shipping scene will be dominated by new container alliances such as 2M, Ocean Alliance and THE Alliance, making it more important than ever for ports to secure their place in the respective sailing schedules.

“So far Antwerp has managed very well in this respect,” the port authority stated.

Meanwhile, Antwerp Port Authority will have a new ceo from 1 January 2017, as the current ceo Eddy Bruyninckx will retire after 25 years with the port authority.

Bruyninckx will be succeeded by Jacques Vandermeiren, who until January 2015 was ceo and president of the executive committee of the network operator Elia.