Chirag Bahri, MPHRP Regional Director for South Asia, L, with the 7 released seafarers.

 The Maritime Piracy Humanitarian Response Programme (MPHRP) has confirmed the news that seven Indian seafarers who have been held hostage since their ship, the MV Asphalt Venture, was hijacked in the Somali Basin on 28 September 2010 have been released and are safe in Kenya.

The 1991-built, Panamanian flagged, 3884 dwt., general cargo ship “MV Asphalt Venture”, with a crew of 15 was hijacked by Somali pirates on 28 September 2010. In April 2011 the vessel with 8 of her crew was released while the remaining 7 Indian seafarers were detained ashore. Following lengthy negotiations, the release of these men was arranged after a modest payment was made to cover the logistical and transport costs of the group holding the men.

Preparations are now being made for their return to India in the next few days. Their families have been informed.

Chairman of the Maritime Piracy Humanitarian Response Programme (MPHRP), Peter Swift, commented as follows: “After more than 4 years in captivity we are delighted for them and their families after the terrible ordeal and hardship that they have suffered. The tremendous efforts and generous support of all those who helped to secure their release and safe return are greatly appreciated, including the team at Holman Fenwick Willan who stepped in on a pro bono basis to help make this happen.”

30 seafarers and fishers are still held hostage by Somali pirates, some for more than four and a half years and the others for more than two and half years. It is thought that the pirates hold these men in the mistaken belief that substantial money can be raised to pay a ransom, whereas, in fact, working to free these people are charitable organisations with very limited resources. The United Nations and the international maritime community have called for their prompt release and for support and assistance to be given to them and their families.

The growing readiness for U.S. shipping companies to opt for LNG as bunker fuel has not escaped the attention of entrepreneurs.

VT Halter Marine made the news last week with the commencement of construction on the first of two LNG-powered, combination container RoRo (ConRo) vessels for Crowley. The vessels, designed by Wärtsilä Ship Design and Jensen Maritime, are due for delivery in 2017. 

Jensen is also currently designing LNG bunker barges for LNG America.   Last year, Harvey Gulf International Marine claimed to be the first U.S. vessel operator to contract for construction of vessels capable of operating exclusively on natural gas. The company is currently building the first LNG marine fueling facility in the U.S. located in Louisiana to serve the region’s offshore support vessel fleet.

Other movers on LNG include Matsen and Totem Ocean Trailer Express, both with dual-fuel container ships under construction, and Horizon Lines, retrofitting six container ships with LNG engines. 

LNG is an attractive fuel choice for many vessels because it exceeds the air quality standards set by the North American ECA, and the price of LNG is significantly lower than other ECA-compliant fuel. The problem for shipowners is that there is currently a lack of national infrastructure for LNG bunkering.

Enter Clean Marine Energy (CME), a global facilitator of finance mechanisms for LNG conversion and ECA compliance. The company has partnered with WesPac Midstream and is offering an Emissions Compliance Service Agreement (ECSA) that provides both the funding required for LNG conversion of ships and the construction of the infrastructure for LNG supply and delivery to the ships. The funds are managed by Oaktree Capital Management, a leading global investment manager.

Pace Ralli, CEO and co-founder of CME, explains: “The first question every shipowner asks is ‘Where will I get the LNG?’ because if they cannot ensure the future delivery of LNG then they will not see the investment payback. CME’s partnership with WesPac provides the answer to this question and greatly simplifies the decision to convert to clean, lower-cost LNG fuel.”

Ralli says that converting a ship to LNG can cost anywhere from $5m to $25m. ECSA is a capital efficiency solution that leverages third party capital to fund capex investments without adding to the shipowner’s cost basis by transitioning capex to opex. The shipowner pays no upfront capital for ECA compliance, and the company that pays for the ship’s fuel continues to pay what they would have paid anyway, with some immediate shared savings during the ECSA, says Ralli. The fuel purchasing arrangement is put in place for an agreed number of years.

“We’re dealing with all types of vessels: tankers, dry bulk carriers, car carriers, ferries and tugs,” says Ralli. “The best fit is typically vessels that have a higher fuel consumption. That creates higher savings which can be used to pay for the upfront capital.” The agreement is also ideal for liner services or vessels with fixed routes, so that the LNG infrastructure can be matched to the appropriate ports. “We will help convert your ship to run on LNG. We will also build the liquefaction plant to create the LNG out of the pipeline, and we will build the barge that moves the LNG from the plant to the ship. No one else is offering all three legs.”

CME already has a project underway: a Great Lakes 40,000dwt dry bulk carrier owned by VanEnkevort Tug & Barge that has a CAT 3612 engine being converted to dual-fuel.

Ralli sees North America taking a leading role in the adoption of LNG due to its abundance of clean, cheap natural gas. Additionally, the longer lifetime of Jones Act vessels, as a result of their increased value, means that LNG bunkering can make more sense than installing a scrubber in many vessels.   CME is not alone in moving on infrastructure development. LNG America has announced an agreement with Buffalo Marine to cooperate on the design of an LNG bunker fuel network for the U.S. Gulf Coast region. LNG America is developing a hub-and-spoke delivery system for LNG as fuel for the marine market and other high horsepower applications. Buffalo Marine is one of the premiere bunkering companies in the Gulf of Mexico with over 50 vessels dedicated to bunkering in the region. 

“Through LNG America’s LNG bunkering initiative, we plan to serve and facilitate the growing marine demand for LNG,” said Keith Meyer, CEO of LNG America. “LNG America sees the demand for marine LNG to be robust as long as LNG can be made available to the maritime industry on a reliable, dependable and cost-competitive basis. Our mission is to deliver competitively priced LNG as fuel where needed, when needed and in the quantity needed.”

LNG America was formed last July to develop LNG distribution infrastructure that serves not only the marine market but the burgeoning use of LNG in the oil and gas, rail, mining and heavy-duty trucking markets. 

Despite the financial boost offered companies such as by CME and LNG America, a report prepared by DNV GL for the U.S. Maritime Administration points to a number of issues that need to be resolved at a strategic level in the U.S. for LNG bunkering to move ahead. It is recommended that an analysis of vessel types that use U.S. ports is undertaken to determine what bunkering methods will be necessary. This would include assessing which ports would be best suited to LNG bunkering based on practical and security reasons and a comparative risk assessment looking at large-scale truck transport to port locations, large-scale rail transport to port locations and natural gas pipeline and local liquefaction. 

The report also states that proper training for crew and operators involved with LNG bunkering operations is critical to the establishment and maintenance of safe practices.

Although much of the LNG bunkering experience to date has been gained in Scandinavia, Ralli is optimistic that expertise in the U.S. will grow with the infrastructure, and he believes the next five years will see a lot of development in the Industry.

“We want to create bunkering solutions that are as close to business as usual as possible. The easiest way to change an industry is to make it feel like it’s not changing at all, and that’s CME’s vision,” he says.

Six tugboat crewmembers are missing after their vessel was hit by a passing freighter, roughly 9.1 nautical miles from Tanjung Gelang, Malaysia at about 5 a.m. (locally) on Thursday. Another report states that a tanker struck the tug in the waters off the Kuantan Port, about 6 nautical miles from Tanjung Gelang.

Maritime officials said that the tug was carrying five Indonesians and a local when it was hit by the ship. Another Indonesian on board, who spotted the vessel approaching quickly, jumped into the sea to save himself and was rescued by passing fishermen.

A search and rescue operation was immediately launched, but the six victims have yet to be located. The area’s marine police, the Malaysian Maritime Enforcement Agency and the state fire and rescue department are all involved. 

The Confidential Hazardous Incident Reporting Programme (CHIRP) recently investigated a near miss collision where the professionalism of bridge teams was called into question. The person reporting the incident was on a loaded tanker length 242m breadth 44m, draft 15m bound from Skagen to Rotterdam. Due to dense it was proceeding at 11.2 knots. From the east in traffic lane another vessel (vessel A) approaching on a collision course. The tanker’s heading was 220 and the other’s was heading is about 260. “Collision is imminent and we called them ask to go astern of as per Collision Rules. They refuse and said that it was too late for them. They told us that they will go ahead of us, crossing our bow. However, we could easily see that it was not possible as they have only 8.7 knots speed,” said the reporter, remaining anonymous through the CHIRP protocol. 

“Our only possibility was stop engine and let our speed go down. Finally they changed their course more to port as observed from the radar track plotting pictures. If we had not stopped our engine, they never would have passed our bow. We had three radars plotting their maneuvers continually and the situation was critical all the time. That’s why we decided to ask what they were going to do. Our speed was only about 5 knots when they finally passed our bow.”

On reflecting on the incident the reporter said, “It has been clear to me for some time that professionalism on ships bridges is lower than ever. Since STCW came into force we have seen worse and worse quality people working on ship bridges.

“Many pilots see exhausted masters who have been on bridges for days, as they can’t let the mates be there alone. It’s unbelievable how people vary with the same license from the same training requirements in schools. Almost every day we see and meet ships where people do not even know the ‘rules of the road’ or even basic seamanship skills. IMO and government authorities should exercise controls on how these licenses are issued.

“What have we learnt from this? One must be extremely careful, as most probably there are people with a very poor knowledge of navigation on the other bridge so keep well clear all of other vessels,” he continues. “We see these things more and more every day, and there is no end in this process unless somebody does something about it. Now in the ECDIS world, the game is going to get even worse. I don’t feel good to see this. It would be nice to hear other colleague’s comments.”

CHIRP contacted the ship owner of vessel ‘A’. They replied with a report from their ship’s officer of the watch (OOW) who confirmed the ship’s presence at the incident. The OOW observed the reporter’s ship to be making a speed of 9.6 knots with ARPA plot showing an opening bearing to his starboard side with the closest point of approach being 1.0 miles.

The OOW claims his course was 263 and speed 8.7–8.9 knots. He saw the ship abeam at 3–4 miles distance, not in thick fog as claimed by the reporter. The OOW also did not hear any fog signals. He called the reporter’s ship and told him of his intentions to alter course to port to increase the closest point of approach to 1.5 miles. The reporter asked that he pass astern but the OOW replied it was too late to undertake that maneuver. The reporter’s claim to have stopped his ship was not observed. The OOW on ship ‘A’ said he believed that in such situations, altering course and good cooperation is more effective to avoid risk of collision, especially in good visibility and not dense fog. Also there was sufficient sea room with no closer vessel at that time.

Captain John Rose, director (maritime) at CHIRP said that at a previous CHIRP Maritime Advisory Board (MAB) meeting, a comment was made that exercises on the ship simulator show that navigators are sometimes reluctant to make a large alteration to starboard to keep clear of a vessel on or near to their starboard beam. This appears to be such a case. It might also be that, as vessel ‘A’ was close to the northern edge of the Deepwater Route, the OOW may have been reluctant, perhaps unnecessarily, to go outside it. 

The MAB reviewed the statements from both ships and they noted a number of inconsistencies between the reports from each ship, most notably one ship claims to be in dense fog and the other having clear visibility. However, the statement from the OOW on vessel ‘A’ reveals he saw red lights on his starboard side and therefore he was the crossing vessel and should have taken early avoiding action. 

CHIRP has replied to the operators of vessel ‘A’ and advised them that based on the evidence they provided; the board is of the opinion:

● The OOW should have complied with the Collision Regulations and taken early and decisive action;
● The OOW should have called the master when the close quarter’s situation appeared to be imminent;
● The company should undertake OOW training in order to improve the level of understanding of the Collision Regulations, and
● The company should consider the adequacy of their auditing of bridge operations. 

CHIRP also replied to the reporter and advised him of the board’s appreciation of his report and relayed the opinion they have given to the cargo ship’s operators. In addition, the board reminded the reporter of the need for early and decisive action, as the other ship may not have easily noticed the reduction in speed of the tanker. The board has questioned whether the original speed of 11 knots in dense fog was appropriate.

The aim of CHIRP is to seek out root causes, identify the lessons learned and to consider how best this information can be used to prevent reoccurrence elsewhere in the maritime industry. CHIRP does not seek to apportion blame to any company or individual(s). The term ‘whistleblowing’ is not one used in CHIRP as that is often used to cast blame on an organization or an individual.  

A report can be generated either online (through a secure website), as a written report (via post/Freepost), or by telephone to the Charitable Trust’s office in Farnborough England.

Working while fatigued is equivalent to working while under the
influence of alcohol, says Captain Paul Drouin, the editor of the Nautical
Institute’s Mariners’ Alerting and Reporting Scheme (MARS) reports. The
Japanese Transport Safety Board report MA2014-1 brings home the importance of
adequate and continuous sleep for all crew and of keeping a proper lookout, he
says.

The report describes a small container ship that hit a seawall when the officer of the watch (OOW), alone on the bridge in the dark, fell asleep. It was the early morning hours, but still dark, and the ship was making way at about 15 knots on autopilot. The visibility was good and there was no traffic, so the master had given the instruction for the OOW to be alone on the bridge. A few hours into his watch the OOW began to feel drowsy, so he began walking briskly around the wheelhouse. He then sat in the chair in front of one of the radars, confident he would not fall asleep. However, somewhere between buoys four and five as they made landfall he fell asleep.

About 40 to 50 minutes later, at approximately 04:40, he woke up abruptly when he was thrown out of the chair by the impact of a collision. The vessel had hit the seawall on the northern side of a nearby bridge. The ship was not equipped with a bridge watch navigation alarm system (BWNAS) at the time of the accident, nor was it required to have one. 

Had a proper lookout been assigned to assist the OOW it is unlikely the collision would have transpired, had he reported his drowsiness to the master, alternative watch arrangements could have been made.

 Drouin says, “Although this ship was ostensibly operating under a three watch system, fatigue can affect anyone if proper ‘sleep hygiene’ is not practiced. It has been demonstrated in numerous studies that the average person needs seven to eight hours of continuous sleep for it to be truly recuperative. Working while fatigued is equivalent to working while under the influence of alcohol. Although a BNWAS is a device that can help prevent accidents like this (and today this ship would be required to have one), the real solution is proper rest for all crew and a proper lookout.” 

The Mariners’ Alerting and Reporting Scheme is a confidential reporting system run by The Nautical Institute to allow full reporting of accidents (and near misses) without fear of identification or litigation, to promote lessons learned.

A fire that started Sunday afternoon at the warehouses of Brazil’s largest sugar producer Cosan in Santos Port continues to burn out of control, the local fire department said. The fire broke out at Cosan’s Rumo sugar terminal at 4.30 pm local time Sunday and 12 fire trucks from the surrounding area were still trying to bring it under control, Sargent Rodrigues of the Santos Fire Department told Reuters.

Last October Cosan’s rival Copersucar, Brazil’s largest sugar trader, lost nearly all of its newly expanded sugar export terminal to fire. The loss of Copersucar’s five warehouses and its 10-million-tonne-a-year export capacity, which are still not fully repaired, quickly sent sugar futures prices rising. 

Copersucar is right next door to Rumo’s export terminal, which has a 12 million tonne a year capacity for shipping bulk and bagged sugar. Copyright Reuters 2014.

As the climate warms and sea ice retreats, the North is changing. An ice-covered expanse now has a season of increasingly open water that is predicted to extend across the whole Arctic Ocean before the middle of this century. Storms thus have the potential to create Arctic swell – huge waves that could add a new and unpredictable element to the region.

A University of Washington researcher made the first study of waves in the middle of the Arctic Ocean, and detected house-sized waves during a September 2012 storm. “As the Arctic is melting, it’s a pretty simple prediction that the additional open water should make waves,” said lead author Jim Thomson, an oceanographer with the University of Washington (UW).

His data show that winds in mid-September 2012 created waves of 5 meters (16 feet) high during the peak of the storm. The research also traces the sources of those big waves: high winds, which have always howled through the Arctic, combined with the new reality of open water in summer.

Arctic ice used to retreat less than 100 miles from the shore. In 2012, it retreated more than 1,000 miles. Wind blowing across an expanse of water for a long time creates whitecaps, then small waves, which then slowly consolidate into big swells that carry huge amounts of energy in a single punch.

The size of the waves increases with the fetch, or travel distance over open water. So more open water means bigger waves. As waves grow bigger they also catch more wind, driving them faster and with more energy.

Shipping and oil companies have been eyeing the opportunity of an ice-free season in the Arctic Ocean. The emergence of big waves in the Arctic could be bad news for operating in newly ice-free Northern waters.

“Almost all of the casualties and losses at sea are because of stormy conditions, and breaking waves are often the culprit,” Thomson said.

It also could be a new feedback loop leading to more open water as bigger waves break up the remaining summer ice floes.

“The melting has been going on for decades. What we’re talking about with the waves is potentially a new process, a mechanical process, in which the waves can push and pull and crash to break up the ice,” Thomson said.

Waves breaking on the shore could also affect the coastlines, where melting permafrost is already making shores more vulnerable to erosion.

The observations were made as part of a bigger project by a sensor anchored to the seafloor and sitting 50 meters (more than 150 feet) below the surface in the middle of the Beaufort Sea, about 350 miles off Alaska’s north slope and at the middle of the ice-free summer water. It measured wave height from mid-August until late October 2012.

 Satellites can give a rough estimate of wave heights, but they don’t give precise numbers for storm events. They also don’t do well for the sloppy, partially ice-covered waters that are common in the Arctic in summer. 

Warming temperatures and bigger waves could act together on summer ice floes, Thomson said: “At this point, we don’t really know relative importance of these processes in future scenarios.”

Establishing that relationship could help to predict what will happen to the sea ice in the future and help forecast how long the ice-free channel will remain open each year.

This summer Thomson is part of an international group led by the UW that is putting dozens of sensors in the Arctic Ocean to better understand the physics of the sea-ice retreat. 

“There are several competing theories for what happens when the waves approach and get in to the ice,” Thomson said. “A big part of what we’re doing with this program is evaluating those models.” 

The other author of the study is W. Erick Rogers at the Naval Research Laboratory. The research was funded by the U.S. Office of Naval Research.

The Ghanaian subsidiary of Quantum Pacific, the industrial investment group owned by Israeli billionaire Idan Ofer, has signed a deal with Golar LNG to build a $500-million liquefied natural gas import terminal.

The facility, to be situated offshore from the eastern port city of Tema, will provide gas directly to the state-run Volta River Authority (VRA) by mid-2016 to boost power generation, Don Ackah, chief executive of Quantum Power Ghana Gas told Reuters late on Saturday.

 West Africa’s Ghana is grappling with a power crisis caused by the frequent breakdown of ageing equipment and shortage of funds to purchase light crude oil for thermal generation. The World Bank says the situation could worsen unless authorities overhaul the sector to attract new investors. 

Ackah said President John Mahama, who has instructed his economic team to provide cheaper alternatives to light oil for power generation, endorsed the Tema LNG project.

 The VRA says it spends around $20 million every fortnight on crude oil purchases, draining the coffers of a country already struggling to cope with a mounting budget deficit. 

“A lot of work has already been done with payments committed to parts of the Tema LNG project. We are now aiming to complete all government approvals and secure gas supply and sales agreements for a final investment decision in the last quarter of this year,” Ackah said.

 Under the deal, Bermuda-headquartered Golar LNG will provide an offshore floating storage and regasification unit. Talks are also underway with French oil services firm Technip to construct subsea and onshore pipeline networks to deliver gas to Tema, he said.

The floating unit, currently being constructed by Samsung Heavy Industries in South Korea, will have the capacity to deliver at least 250 million cubic feet of LNG per day, or 1.75 million tonnes annually, Ackah said. 

He said Quantum Power Ghana was in talks with global oil firms, including BP, for the supply of natural gas. 

In addition, the Ghanaian government said it planned a state-to-state supply arrangement with Qatar for LNG to be delivered to the terminal. 

“The government is only playing a facilitating role to get gas at a cheaper cost for consumers,” Ackah added. 

Ackah said the offshore production unit is expected to arrive in Ghana under a lease agreement by January 2016, adding that all subsea construction should be completed by December next year. Copyright Reuters 2014.

The Jones Act tanker that set records for day rates may now be refinanced, as its private equity owner seeks to profit after an unexpected jump in rates for U.S.-flagged ships that could be reaching a plateau, market sources said. The American Phoenix has been inspected and valued since late last year by interested parties, including several American banks and the shipping arms of major oil companies, said people familiar with the discussions. Alterna Capital Partners, the Connecticut-based majority owner of the American Phoenix, is seeking to refinance at a time when the ship’s valuation has climbed thanks to record rates for Jones Act tankers because of the shale boom. Ships moving between U.S. ports are required to be Jones Act compliant – U.S.-flagged, U.S.-built, and U.S.-crewed – making them three times more expensive than international vessels.

The banks are considering financing for the vessel, which could take the form of a leasing arrangement, equity or debt. Alterna is also seeking at least $150 million to sell the 350,000-barrel vessel, sources said. 

That price tag represents a premium of $25 million over the purchase price of a dozen or so recently ordered new-build tankers set to be delivered starting in 2015. The owners of the Phoenix may be exiting just as easing of the export ban, a flood of new Jones Act tonnage, and investment in alternative transport like railcars could soften rates in the next year. The surge in oil production has led to increased scrutiny of a 40-year-old law banning the export of crude. This year, U.S. officials told energy companies that they may export a variety of ultra-light oil known as condensate if it has been minimally refined, in an apparent marginal loosening of the ban. Jones-Act tankers would not be needed for these shipments. Several industry executives cautioned that Alterna’s investigating options could be a function of the private equity investment cycle, rather than a call on the Jones Act market. “It’s the big home run they have in their fund, and they’re trying to raise another fund, so they’re trying to liquidate it,” said one Jones Act investor. 

Record-Setting

The Phoenix rose under unusual circumstances. Mid Ocean Tanker Company, a partnership between Alterna and minority owner and operator Mid Ocean Marine rescued the partially built hull from the scrapyard, buying it out of bankruptcy in Louisiana court proceedings for $12.65 million. The owners poured an additional $60 million to $80 million into its construction, according to shipping industry sources. 

Alterna leased the American Phoenix to Koch Shipping and Supply in July 2012 for $55,000 per day, at a time when daily U.S. crude oil production stood at 6.3 million barrels. Since then, it has been watching skyrocketing Jones Act rates from the sidelines. Less than two years later, U.S. crude production rose to 8.4 million barrels per day, and rates in the Jones Act spot market had nearly doubled. The ship set a record in June 2013 when it was leased to Exxon Mobil Corp. from Koch Shipping and Supply for $100,000 a day. In May, Exxon renewed its lease for another year, this time at $120,000 a day, shipping sources said. 

Any sale or refinancing would transfer Koch’s existing contract to the buyer, as well as a subsequent five-year charter to a major U.S. oil company, said a source familiar with the transaction.

Representatives from Exxon and Alterna declined to comment. A representative of Mid Ocean Marine could not be reached for comment. By Anna Louie Sussman (C) Reuters 2014.

An oil tanker has started loading a cargo of condensate, or ultra-light oil, the first such export from the United States since the easing of a 40-year-old ban on U.S. crude exports, two sources familiar with the matter said on Wednesday.

 Westport Petroleum Inc, the Franklin, Tennessee-based shipping arm of Japanese trader Mitsui & Co, chartered the BW Zambesi, an LR1 tanker, also known as a Panamax class vessel, in mid-July for the voyage. The tanker, owned by BW Group, docked at the Galveston terminal in Texas on Tuesday, AIS data on Reuters showed.

 In a July 22 statement, BW stated it was ultimately uniquely positioned because when the opportunity for the first cargo of condensate became available, it could provide both clean and dirty LR1 product tankers on demand due to deft handling of contracts and deployment of a sizeable fleet. Christopher Gomez, Senior Commercial Manager (Americas), said: “It has been many months of hard work for the BW Houston office leading up to this milestone.  We are very proud to have secured the charter, and thank our customers for their trust in BW’s quality fleet of vessels, and their support for us.”

 It will load just over 400,000 barrels of condensate and is expected to arrive in Asia in early September, one source said. South Korean refiner GS Caltex has bought the cargo from Mitsui. The Crude Oil Export Ban under the Energy Policy and Conservation Act 1975 was a specific response by the US Congress after the 1973 Arab Oil Embargo to conserve US natural resources and increase energy efficiency. The Act also set up the first Corporate Average Fuel Economy (CAFE) standards for auto makers as well as provisioning for the US Strategic Petroleum Reserve stockpiling of crude to dampen and prevent supply disruptions.

It is important to note the ban has not been lifted, but rather – forty years later – US regulators have developed their interpretation of what is considered ‘crude’ under the Act.  By lightly processing under specific processes, condensate is no longer considered crude oil and therefore not impacted by the ban. Condensate is a less dense, volatile mix of oil and light ends that exist in gas form within the oil reservoir but condense into a liquid at a lower surface pressure and temperature.