Front Cover.Qxd 26/11/2012 13:47 Page 1 Tankeroperator November/December 2012 IFC Nov-Dec 2012 Front Cover.Qxd 26/11/2012 15:34 Page 1
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Front cover Nov-Dec 12_Front cover.qxd 26/11/2012 13:47 Page 1 TANKEROperator November/December 2012 www.tankeroperator.com IFC Nov-Dec 2012_Front cover.qxd 26/11/2012 15:34 Page 1 WE UNDERSTAND BALLAST WATER TREATMENT At Severn Trent De Nora, we have over 35 years of leadership and expertise in electrolytic disinfection treatment solutions. Setting new standards with the Type-Approved BALPURE® ballast water treatment system, we have created a simple, reliable and cost-effective solution for both new and existing vessels. - Easy to install - Easy to operate - Low capital cost - Low operating cost - Non-corrosive - Operator safe - Suitable for hazardous cargo area installations - Surpasses IMO D-2 standards by ten-fold To learn why BALPURE is the right ballast water treatment solution, contact [email protected] or visit www.balpure.com TO Nov-Dec 2012 Contents p1_p1.qxd 26/11/2012 18:11 Page 1 Contents Markets Bunkers 04 Delivery problems 22 n NAECA - California experience n LNG as fuel draws nigh n A people business n Cat fines still pose problems n Inatech in the clouds Anti-piracy 30 n Guidelines needed n Door locking systems n Is BMP4 effective? Technology 35 35 Chemical cleaning supply 38 LPG buoys Wärtsilä Hamworthy News Focus 06 n OPEX hitting owners’ pockets n Teekay fits fleet wide satcoms Sweden Report 12 Win some, loose some Navaids 17 n Furuno’s new ECDIS n SAM unveils BNWAS and ECDIS Ship Description n Jeppesen’s ‘Pay as you sail’ 40 n Six eco Aframaxes n Winds can play havoc n Aframax design launch Training Systems 44 n UK eNav centre n New engine room simulator n Certifying academies Ballast Water Treatment 52 n Type approval methods questioned n Latest equipment initiatives 3 Conference Report 59 A question of mentoring Front cover Thomas Gunn’s ever expanding product range now includes worldwide coverage of UKHO Admiralty charts, Admiralty Collection charts, Admiralty Leisure charts, Canadian charts, Imray charts, Imray 2000 charts, Norwegian charts, and US charts. In addition, the company sells nautical books, navigation equipment, navigation lights, chart plotting instruments and stationery, electronic charts, digital publications, chart plotting software and other marine related software. November/December 2012 l TANKErOperator 01 TO Nov-Dec 2012 p2-11_p2-7.qxd 26/11/2012 18:14 Page 1 COMMENT ‘Market Leading’ thoughts on OSG’s demise New York-based Basil Karatzas, CEO of Karatzas expectations of good performance that the company routinely described Marine Advisors takes a look at the reasons for itself as ‘market leader’ in its communications with its stakeholders. OSG’s filing of Chapter 11*. The filing for bankruptcy protection was precipitated by the recent The news of OSG’s ‘death’ (reorganisation for practical purposes) resignation of an OSG board member over tax considerations; given had not come as a surprise, as rumours to its demise had been that OSG has a wholly owned Jones Act subsidiary, the tax structure is circulating for some time. more complicated than other shipowners, who are active only in the When freight rates have been so close to, or below cash breakeven international flag business. levels for more than a year, it’s a foregone conclusion that cash At the time of the filing, the company had less than $50 mill market positions in this sector are running low and pressures are building up. capitalisation and listed assets of $4.1 bill and liabilities of $2.7 OSG is neither the only tanker company, nor the only publicly traded bill. With a fleet of about 110 vessels under its control of which, company that had to file for protection. General Maritime and Omega around 70 vessels are under ownership and 40 under charter- Navigation had to seek protection in the US several months ago and in/management, 20 of which fly the US Flag, plus a syndicate of more TORM and BLT have done similarly overseas. than 20 banks and also bondholders, it is expected to be one of the most One can be assured that privately held tanker companies are facing complicated reorganisation processes. the same reality, but they do not have to ‘publicise’ their pain, since it’s The outcome is several months, if not years away, but a likely not required by law. scenario is for the company to be split between the international flag In OSG’s case, the significance of the filing rests with the fact the and cabotage businesses. company has never been a myrmidon of the ‘tonnage provider’ school In keeping with the strategy of banks in similar situations, the of thought. In the go-go years of the hot shipping IPO market, a lot of international flag business can be restructured so that the lenders publicly traded companies were effectively financial/beneficial owners become equity holders and get rewards for their additional risk; the of vessels where, in the name of ‘core competencies’, ‘synergies’ and Jones Act business can be sold off in its entirety to another Jones Act ‘efficiencies’, the technical management was completely outsourced to player, or get spun off as an independent going concern. third parties and the commercial strategy of the vessel management was The Jones Act has been one of the few promising segments in based on bareboat, or timecharters where the ‘commercial management’ shipping in the past year. The least likely scenario is that OSG of the vessels was actually passed on to the charterers. owned/controlled tonnage will end up on the selling block in a For certain companies, the management of the vessels was passed on piecemeal fashion. to third-parties at arm’s length transactions, but quite often, the vessel The fact that a ‘market leader’ like OSG was brought down in such a management was undertaken by an ‘affiliated’ company. manner, may be testament to factors just beyond the ferocity of the OSG had strong and competent in-house management teams based in business cycle. the US, UK and Greece. On the debate whether to outsource, or keep Likely, the fall-out of such a high calibre owner will once again start management in-house, OSG had a clear position; under the traditional debates as to whether shipowners’ management can deliver ‘alpha’ ‘shipowning’ model where ownership and shipping expertise reside (outperform the market consistently), whether fleet and segment under the same roof, both the charterer and the owner benefit in several diversification provides stability in difficult times, or whether strategy ways, but mostly by establishing deeper, closer symbiotic relationships and execution really matter. where they can feed on each others competencies and expertise. After all, OSG had been lead by a seasoned banker and the company Another market distinguishing attribute of OSG’s strategy was that expanded in the Jones Act market by acquiring Maritrans (and certain the company exhibited diversification across both market segments but of its newbuildings) for a high price but had missed deadlines in an also market sectors; the company had been active in the crude, product offshore conversion project that gave the right to the counterparty to re- and LNG carrier markets, from ULCCs to Aframaxes to MR2 tankers, negotiate the original charter at lower levels. TO from tankers registered under open registries to articulated tank barges (ATBs) trading in the Jones Act market. *Basil Karatzas can be reached by email at [email protected], or In short, the company had many different types of vessels in many phone at +1 646 884 0803. different ponds and with enough critical mass in each market and TANKEROperator Vol 12 No 2 EdITOR Tanker Operator Magazine Ltd Ian Cochran SUBSCRIPTION PROdUCTION 2nd Floor, 8 Baltic Street East Tel: +44 (0)20 8150 5295 1 year (8 issues) Wai Cheung London EC1Y 0UP, UK Mobile: +44 (0)7748 144265 £195 / US$320 / €220 Tel: +44 (0)20 8150 5291 www.tankeroperator.com [email protected] 2 years (16 issues) [email protected] £300 / US$493 / €336 Printed by PRINTIMUS PUBLISHER/EVENTS/ AdVERTISING SALES Subscription hotline: Ul.Bernardynska 1 SUBSCRIPTIONS Melissa Skinner Tel: +44 (0)20 7017 3405 41-902 Bytom Poland Karl Jeffery Only Media Ltd Fax: +44 (0)20 7251 9179 Tel: +44 (0)20 8150 5292 Tel: +44 (0)7779 252272 Email: [email protected] [email protected] [email protected] 2 TANKEROperator l November/december 2012 TO Nov-Dec 2012 p2-11_p2-7.qxd 26/11/2012 18:14 Page 2 TO Nov-Dec 2012 p2-11_p2-7.qxd 26/11/2012 18:14 Page 3 INdUSTRY - MARKETS Delayed deliveries come to the aid of a beleaguered market On their own, the delivery of the glut of tankers ordered around 2008, before the current crisis, would have been enough to pressure owners’ earnings, but in today’s environment of falling oil demand growth and a weak economic outlook, the pinch has become a squeeze. owever, a breath of fresh air for January assessment (Figure 1). tanker owners, has been the At this point of the year, the slower than expected tanker financial health of shipyards, deliveries this year. or owners, which will account HThe year-to-date (end of October) slippage for some vessels being rate is about 20%, much higher than the delayed, is not being assessed. traditional level of around 5%. This has been In addition, classifications for influenced by shipowners employing a variety clean product tankers are not of measures to delay deliveries. Tactics being assigned. include outright cancellations, foregoing Historically, about 2% of options, taking delivery of a different vessel LR2 and LR1 are classified class, or inspection delays, said McQuilling under the IMO 1 or 2 Services in a recent report.