Cruise Ship Crew Rescues Pilot off Hawaii, by Marex


By MarEx

The pilot of a single engine Cirrus SR-22 aircraft that ran out of fuel is safe after ditching his aircraft 253 miles northeast of Maui, Hawaii Sunday.

At approximately 4:44 p.m. the pilot was able to deploy the aircraft’s airframe parachute system and safely exit the aircraft into a life raft. Watchstanders at the Coast Guard Joint Rescue Coordination Center Honolulu identified the cruise ship Veendam, en route to Lahaina, Maui, and coordinated the pilot’s ditch near their location.

At 5:21 p.m. the crew of the Veendam rescued the pilot. The pilot was reported to be in good condition. The plane was last observed partially submerged. 

Weather conditions at the time of the rescue were seas of 9 to 12 feet and winds of 25 to 28 mph.

The Coast Guard HC-130 Hercules airplane from Air Station Barbers Point assisted the pilot during the process of ditching his aircraft and maintained communications throughout the ditching process. The Hercules crew remained on scene until the pilot was safely aboard the Veendam.

The flight originated in Tracy, California and was destined for Kahului Maui.

 At 12:30 p.m. the pilot contacted the Hawaii National Guard and reported his aircraft had approximately three hours of fuel remaining and he would be ditching 230 miles north east of Maui.

Indonesia is Toyota’s Key to Africa, by Marex


By Wendy Laursen

Last year, as Indonesia’s best performing exporter, PT Toyota Motor Manufacturing Indonesia received the Ministry of Trade’s Primaniyarta Award. Toyota also received the award in 2008, 2010, 2011, and 2013.

The award is a result of continuous growth in volume and value of exports, as well as growth in the number of export destinations. Toyota now exports from Indonesia to more than 70 countries around the world. 

According to news agency Nikkei, Toyota is part of an economic transformation that is gathering pace in Indonesia and Indian Ocean countries increasingly do business with each other. 

Indonesia occupies a key geographic position for such trade. Companies such as Toyota are using this to promote exports to Africa and the Middle East – the destination for about 40 percent of the 150,000 vehicles of all brands shipped abroad from Jakarta in 2013.

In 2014, Toyota’s overseas shipments from Indonesia grew by 35 percent, and for the first time included exports of the Yaris, Vios and Agya. Some of the Vios production was shifted from Thailand to a plant in Karawang, West Java, because of its superior location for exporting to the Middle East. 

Also, Indonesian-made Toyota minivans are exported to more than 10 African nations, including Nigeria and Mozambique. The vehicles are made to Indonesian specifications with high road clearance and strong off-road capabilities that translate well to African markets, says Nikkei.     

The Indian Ocean region’s population is projected to grow to three billion in 2040, from 2.2 billion in 2010, and total trade among the 20 members of the Indian Ocean Rim Association has already surpassed $1.2 trillion. In 2020, the region’s share of global exports is forecast to match that of the U.S, says Nikkei. 

Indonesia aims to boost maritime trade, and President Joko Widodo, inaugurated last October, has vowed to spend more than $400 billion on infrastructure development including ports. 

Egypt Awards $2.2 Billion LNG Tender, By Marex

LNG Tender

By MarEx 

Egypt’s state gas board has awarded a $2.2 billion tender to import 75 cargoes of liquefied natural gas (LNG) to four international firms, its chairman said on Sunday, as the country seeks new energy sources.

Declining production and increasing consumption has turned the Arab world’s most populous country from an energy exporter to a net importer, prompting a flurry of activity in past months to boost foreign supplies.

The four companies will supply four cargoes a month over about two years, Khaled Abdel Badie of state-run Egyptian Natural Gas Holding Company (EGAS) told Reuters.

Abdel Badie did not identify the four companies. Seven firms, including London-based energy major BP, bid for the tender in October.

The country of about 90 million relies heavily on gas to generate power for households and industry, but has had difficulty securing imports because it lacks a terminal to process LNG, which is natural gas chilled into a liquid state.

But after two years of delays, Egypt contracted Norway’s Hoegh LNG for a floating storage and regasification unit, opening the door to LNG imports once the terminal is operational by the end of March.

Since the deal with Hoegh was finalized, Egypt has signed a deal with Algeria for six LNG cargoes and expects to complete an agreement with Russia’s Gazprom later this month. Copyright Reuters 2014.

Engine Room Fire Disables Cruise Ship, by Marex

CRuise Ship

By Wendy Laursen

The cruise ship Boudicca is heading slowly towards the Canary Islands after suffering an engine room fire off Morocco on Sunday.

The ship, carrying 784 guests and 356 crew members, was left without power for about five hours. Two of the ship’s engines are reported to be disabled as a result of the fire which has now been extinguished.

The BBC reports texts from passengers that indicate that they experienced smoke and some put on life jackets, but the situation remained calm. The ship listed for a short time.

Fred. Olsen Cruise Lines has issued a statement saying there have been no injuries and there is a good atmosphere on board. “The ship’s master has confirmed that at no point were guests asked to don their lifejackets and gather at the muster stations, as the situation was contained within the engine room by our crew members. Services are operating normally, and guests are enjoying the usual activities on board, both inside and out on deck.”

(The company provided the picture above as evidence of guests continuing to enjoy the cruise.)

“We are reviewing the itinerary and assessing the extent of the damage to the two main engines and electrical cables and will make any repairs necessary at the next port of call. A revised itinerary will be advised in due course. The safety and well-being of all guests and crew on board Boudicca is Fred. Olsen Cruise Line’s utmost priority, and we continue to liaise with the relevant maritime authorities.”

Boudicca is on an 18-night D1502 ‘Cape Verde & the Canaries’ cruise, which departed from Southampton on 20th January 2015. The ship sailed from Cadiz, Spain on Saturday January 24 and was scheduled to arrive in Arrecife, Lanzarote tomorrow morning, Monday January 26.

LNG Carrier Aground in Nigeria, by Marex

LNG Aground

By Wendy Laursen 

A loaded LNG tanker has run aground in the mouth of Nigeria’s Bonny Channel.

According to media outlet, Interfax the Magellan Spirit was heading to the Gwangyang LNG terminal in South Korea but ran aground on 5 January after loading at the NLNG plant on Bonny Island.

The Nigerian Port Authority is attempting to refloat the vessel with the support of shipowners NLNG and Teekay LNG.

No injuries or environmental concerns have resulted from the incident so far.

The shipping lane remains open, and authorities are investigating the cause of the grounding. The tanker was scheduled to arrive at Gwangyang on 28 January.


Catamaran Sinks, 3 Dead, 106 Saved , by Marex



By Wendy Laursen

A catamaran carrying 109 people capsized and sank of Costa Rica on Thursday, killing three elderly passengers.

The 100-foot vessel was heading for Tortuga Island when it sank in rough weather about 15km off the coast.

Those that died were a 70-year-old woman from the U.S., an 80-year-old man from the UK and a Canadian. All others on board were rescued by private boats in the area and rescue authorities.

Although weather warnings were issued, the boat had been authorized to depart by the port captain.  The transport ministry said the catamaran, owned by the company Pura Vida Princess, was built in 2007 and was authorized to carry 120 passengers and 10 crew members, reports The Telegraph, UK. The ship appeared to have had enough lifeboats and life jackets, according to the ministry statement.

RCI Passenger Rescued by Disney Ship, by Marex


By Wendy Laursen

U.S. cruise passenger Frank Jade fell overboard from Royal Caribbean International’s Oasis of the Seas and was later rescued by a Disney Cruise Line ship travelling the same route. Jade fell overboard about eight miles from Cozumel, Mexico. Following along behind Oasis of the Seas, the crew of the Disney Magic was able to lower a rescue boat and pick him up after someone spotted him in the sea. 

Some media reports indicate that Jade’s fall went unnoticed by the Royal Caribbean vessel. Apparently Jade had been on one of the vessel’s open decks when a wave knocked him overboard. He is now on shore in a stable condition without any serious injuries. The 225,282 gross ton Oasis of the Seas is 362m long and accommodates 6,360 passengers and 2,394 crew.

The 84,000 gross ton Disney Magic is 300m long and accommodates 2,713 passengers and 950 crew.

Oil Glut Spurs Storage at Sea, by Marex

Oil Glut

Some of the world’s largest oil traders have this week hired supertankers to store crude at sea, marking a milestone in the build-up of the global glut.

Trading firms including Vitol, Trafigura and energy major Shell have all booked crude tankers for up to 12 months, freight brokers and shipping sources told Reuters.

They said the flurry of long-term bookings was unusual and suggested traders could use the vessels to store excess crude at sea until prices rebound, repeating a popular 2009 trading gambit when prices last crashed.

The more than 50 percent fall in spot prices now allows traders to make money by storing the crude for delivery months down the line, when prices are expected to recover.

The price of Brent crude is now around $8 a barrel higher for delivery at the end of 2015, with its premium rising sharply over spot prices this week due to forecasts for a large surplus in the first half of this year, in a market structure known as contango.

Brent LCOc1 hit a 5 1/2-year low of $49.66 a barrel on Wednesday. It was trading around $51 a barrel on Thursday. 

While major energy traders will often hire vessels for long periods as part of their day-to-day operations, industry sources said the fixtures booked in the last week had the option to hold oil in storage. Some could still be used for conventional oil transportation.

Vitol, the world’s largest independent oil trader, has booked the TI Oceania Ultra Large Crude Carrier, a 3 million barrel capacity mega-ship that is one of the biggest ocean going vessels in the world by dead weight tonnage (DWT).

The fixture lists, provided to Reuters by tanker brokers and oil traders, also showed Vitol has booked the 2 million barrel Maran Corona Very Large Crude Carrier (VLCC), while Swiss-based trader Trafigura has hired at least one VLCC, the Nave Synergy. Shell has taken two VLCCs, the Xin Run Yang and Xin Tong Yang, the lists showed.

Vitol, Trafigura and Shell all declined to comment.


The shipping lists indicate the trading firms have been able to hire the VLCCs for less than $40,000 a day – well below spot rates of between $60,000 to $70,000 a day. Average earnings reached $97,000 a day in December – the highest in years – and had so far put off many oil traders.

The lower rate has been possible to arrange, brokers said, by agreeing to take some older and less fuel-efficient vessels for up to 12 months.

“In 2009 freight rates were extremely low and owners were willing to put their ships out on charter in order to mitigate weak spot rates,” said Christian Waldegrave at leading tanker owner Teekay.

“In a rising freight market, such as we are in now, I would think that owners would be more hesitant to fix out their ships on time charter unless they felt strongly that rates were about to decline.”

Initial indications are around 12-15 million barrels of floating storage have been booked so far. In 2009 at least 100 million barrels of oil ended up being stored at sea.

Shipping sources said more oil traders have also been making enquiries in the past week.

Analysts at JBC Energy in Vienna said floating storage, while a sign of an oversupplied market, may provide some temporary support for oil prices in the coming weeks now that traders were able to move crude on to tankers.

“This will not only release some pressure on front-end prices, but also allow for the physical market to clear somewhat,” JBC Energy said in a note.

“The physical market could also turn temporarily supportive over the coming months thanks to the balancing effect of floating storage.”


UK Government Will Stand with North Sea Oil Industry, by Marex

North sea

Government support to mitigate the challenges facing the North Sea oil and gas sector will be the focus of discussions between the Scottish Secretary and the oil industry in Aberdeen.

Alistair Carmichael will discuss the package of allowances and tax reliefs the UK Government unveiled as part of last month’s Autumn Statement and the action it is already taking now to help ensure the industry continues to thrive and contribute to our economy.

The Minister will also discuss the impact of Brent prices falling below $50 a barrel and explain the ways in which the UK Government could continue to support the industry over the short and longer term.

He also said the industry can face the challenges of the drastic fall in oil prices as well as other issues facing the sector far more effectively as part of a wider UK economy. Carmichael also confirmed that UK Energy Secretary Ed Davey would visit Aberdeen next week to discuss the issue.

To put the issue in context, he revealed that the drop in prices would have seen an £18.6 billion “black hole” in the Scottish Government’s assumptions on oil prices – meaning that the tax revenues on alcohol and tobacco in Scotland would put more into an independent Scotland’s budget than oil.

Mr Carmichael said:

“I am in Aberdeen today and the Energy Secretary is here next week, which shows our commitment to the industry and the serious nature of the challenges facing the North East. The UK Government is making every effort to help and the Scottish Government must move more quickly than it has to support the sector. The First Minister’s plan to come to Aberdeen next month is not good enough.

“I and my colleagues will be listening closely to what the industry has to say and having a full exploration of the additional options available to us to help secure jobs and the future of this key sector. The package of allowances and tax reliefs the UK Government unveiled as part of last month’s Autumn Statement reflects our close working relationship with the industry and the action we are already taking now to help ensure it continues to thrive and contribute to our economy.

“These events have thrown the stakes involved in fluctuating oil prices into stark relief.

“The broad shoulders of the UK economy means we can manage the fiscal impact of the oil price far more effectively than an independent Scotland. An independent Scottish Government would have faced a huge hole in its budget which it would have had to fill with borrowing or cutting public services. The fact the gap between their assumptions and reality would see alcohol and tobacco duties outstrip oil revenues as a source of public spending should give everyone in Scotland pause for thought.”

The First Minister said at First Minister’s Questions today that the Scottish Government Cabinet would meet in Aberdeen next month.

Oil Price Crash Claims First U.S. LNG Project Casualty, by Marex


Excelerate Energy’s Texan liquefied natural gas terminal plan has become the first victim of an oil price slump threatening the economics of U.S. LNG export projects.

A halving in the oil price since June has upended assumptions by developers that cheap U.S. LNG would muscle into high-value Asian energy markets, which relied on oil prices staying high to make the U.S. supply affordable.

The floating 8 million tonne per annum (mtpa) export plant moored at Lavaca Bay, Texas advanced by Houston-based Excelerate has been put on hold, according to regulatory filings obtained by Reuters.

The project was initially due to begin exports in 2018.

Excelerate’s move bodes ill for thirteen other U.S. LNG projects, which have also not signed up enough international buyers, to reach a final investment decision (FID). Only Cheniere’s Sabine Pass and Sempra’s Cameron LNG projects have hit that milestone.

Back when LNG and crude oil prices were riding high in February, Excelerate, founded by Oklahoma billionaire George Kaiser, applied for permits to build the facility.

Eleven months on, its submission to the U.S. Federal Energy Regulatory Commission on Dec. 23 said that uncertainty generated by a steep decrease in oil prices has forced it to conduct a “strategic reconsideration of the economic value of the project” and to suspend all activities until April 1, 2015.

“Due to the recent global market conditions, the company has determined that, at this time, this project no longer meets the financial criteria necessary in order for us to move forward with the capital investment,” a company spokesman told Reuters.

Stiff economic headwinds are making new developments tough going.

Prices that LNG projects can charge for long-term supply are falling from historic highs as new producers crowd the market, which is already oversupplied due to slowing demand and rising output that has seen spot Asian LNG prices halve this year.

At the same time, major consumers from Japan to South Korea and China are seeking to offload some of their long-term LNG supply commitments, contributing to the glut.


Excelerate Energy will update the regulator on the status of Lavaca Bay in April, 2015, according to the filing. The export plant operates under a tolling model, whereby the developer sells liquefaction capacity to LNG consumers who then must arrange for shipping to transport the fuel.

Typically companies seek to lock-in buyers for around 85 percent of a project’s capacity before reaching an investment decision.

Excelerate hints in the filing that lackluster demand for capacity was behind the suspension, saying that only “renewed interest of potential counterparties” could get it moving again.

Even before the oil price slide, U.S. LNG projects were struggling to sign up the big Asian buyers needed to underpin multi-billion dollar investments, resorting finally to tapping vestiges of demand left in Europe.

Seen in the light of plus-$100 a barrel oil, projects to liquefy and export U.S. gas by ship promised major cost savings to Asian buyers reliant on costly oil-linked gas supplied by Australia and Qatar, which generated huge demand.

The advantage of U.S. export plants was that the LNG costs would reflect local benchmark Henry Hub gas prices, currently trading around $4 per million British thermal units (mmBtu), plus shipping and liquefaction costs.

“The oil price plunge makes U.S. LNG with prices linked to Henry Hub potentially uncompetitive with LNG from other sources especially those using an oil price linkage,” independent consultant Andy Flower said.

Prior to the oil price crash, the U.S. discount to rival Brent-linked LNG supply from Qatar and Australia was around $8-$9 per mmBtu. Now those supplies represent a cost saving over U.S. projects.

“With U.S. LNG no longer looking to be the cheap LNG that off-takers have been seeking, finding companies prepared to commit to tolling fees for 20 years has become more challenging,” Flower said. By OLEG VUKMANOVIC (C) Reuters 2014.