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Bunker Fuel

Performance Shipping orders LNG-ready, scrubber fitted LR2 tanker duo

Firm has signed two shipbuilding contracts with China Shipbuilding Trading and Shanghai Waigaoqiao Shipbuilding for the construction of two 114,000 DWT LNG-ready LR2 tanker vessels.

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Performance Shipping orders LNG-ready, scrubber fitted LR2 tanker duo

Performance Shipping, specialising in the ownership of tanker vessels, on Wednesday (20 December) announced that, through two separate wholly-owned subsidiaries, it has signed two shipbuilding contracts with China Shipbuilding Trading (CSTC) and Shanghai Waigaoqiao Shipbuilding (SWS) for the construction of two 114,000 DWT LNG-ready LR2 Aframax product/crude oil tanker vessels. 

The vessels are expected to be delivered in January and April of 2026, at a purchase price of US$64,845,000 per vessel, net of third-party commission. 

15% of the purchase price is payable upon receipt of a refund guarantee; 10% of the purchase price is payable at each of the milestones of steel cutting, keel laying, and launching of the vessels, and the remaining 55% of the purchase price is payable upon the delivery of the vessels.

The vessels will be equipped with electronic main engines with high-pressure selective catalytic reactors (HPSCR) for Tier III (NOx Emissions) compliance, exhaust gas cleaning systems (EGCS – commonly referred to as scrubbers) for Tier II (NOx Emissions) compliance, and ballast water treatment systems (BWTS).

Company’s Chief Executive Officer, said: “These shipbuilding contracts supplement the previous contract we entered into with SWS in March 2023 for a Tier III product/crude oil carrier scheduled for delivery around October 2025. The construction of these LNG-ready LR2 oil tankers, equipped with the latest high-specification engines and meeting stringent emission requirements, along with scrubbers and water ballast treatment systems, will take place at the largest and most reputable state-owned shipyard in China.”

“Following the sale of our oldest, 2007 built, Aframax tankers, M/T P. Fos in October 2022 and M/T P. Kikuma in November 2023, the Company is now poised to take delivery of three identical “sister” vessels in late 2025 through early 2026.”

“These sales and acquisitions constitute our core fleet expansion and renewal strategy. We believe that tanker fleet growth will reach historical lows in the coming years and maintaining a modern fleet among an aging global fleet during periods of high seaborne trade demand will result in sustainably strong fundamentals and higher asset values.”

Photo credit: Scott Graham on Unsplash
Published: 21 December, 2023

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Bunker Fuel

Cargo ship “Tony Stark” detained in Spain for bunker fuel spill

Authorities have not allowed the Antigua & Barbuda-flagged ship to leave the port on Africa’s north coast until the owners pay bail of EUR 120,000.

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Marine Traffic / Raul Buque

Spain detained a cargo ship for causing a spill during a bunkering operation near the Spanish enclave of Ceuta, according to Reuters on Tuesday (23 July). 

Authorities have not allowed the Antigua & Barbuda-flagged Tony Stark ship to leave the port on Africa's north coast until the owners pay bail of EUR 120,000 (USD 130,129), Reuters reported, citing comments from Spain’s Merchant Fleet. 

Trails of fuel oil were found in front of Benitez beach, the breakwaters of the port and San Amaro beach in Ceuta, in the Alboran sea.

The Merchant Fleet estimated the size of the fuel spill was one metric tonne. It opened a disciplinary procedure that will determine the final fine.

 

Photo credit: Marine Traffic / Raul Buque
Published: 24 July 2024

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Decarbonisation

DNV: Leading maritime cities driving decarbonization of shipping

Dr Shahrin Osman, Business Development Director, DNV Maritime Advisory and co-author of Leading Maritime Cities report, explains the central importance that decarbonization and digitalization occupy within shipping.

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Dr Shahrin Osman, Business Development Director, DNV Maritime Advisory

Dr Shahrin Osman, Business Development Director, DNV Maritime Advisory and co-author of the Leading Maritime Cities report, explained the central importance that decarbonization and digitalization occupy within shipping in this article published on Tuesday (23 July). 

He outlined how maritime cities are the centres of gravity driving this forward, facilitating innovation and coming up with the solutions which are needed for shipping to reach its ambitious decarbonization goals:

The Leading Maritime Cities report shines a light on the key cities driving the maritime industry forward. With decarbonization and digitalization key factors in today’s maritime world, the report’s co-author explains how these are being advanced by activities in the leading maritime cities.

The latest edition of the Leading Maritime Cities (LMC) report was published in April this year. The collaboration between DNV and Menon Economics delivers fresh insights into the maritime cities which offer the best policy measures, infrastructure and supporting institutions, and how these are driving advancements in the maritime industry.

Leading maritime cities in a world of transition

The LMC report recognizes the central importance that decarbonization and digitalization occupy within shipping. The impact of these two dimensions cuts across the traditional pillars that cities are benchmarked on. To address their transformative effect, this year’s report introduces new indicators – such as capabilities in the adoption of digital technologies and automated processes for port operations, and proactivity in implementing green and sustainable financing practices.

“The maritime industry is in the midst of a major transformation,” says Dr Shahrin Osman, Business Development Director, DNV Maritime Advisory and co-author of the report. “Decarbonization targets mean that the entire industry is looking at how it can undergo a transformation of technologies and fuels to reduce emissions, all of this being supported by advances in digitalization.”

Singapore dominates rankings with strong decarbonization efforts

“Maritime cities are the centres of gravity driving this forward. This is where the leading companies and talents are residing and where the real transformations are taking place. They provide platforms for progress and serve as conduits, linking the industry with the wider global economy.”

Like in the previous edition of this report in 2022, a combination of objective and subjective indicators are used to rank the different cities. Singapore was once again recognized as the leading maritime city, followed by Rotterdam and London, with Shanghai and Oslo making up the remainder of the top five. The Asian city-state hit the top spot in three out of the report’s five pillars, retaining its position as leader in Attractiveness and Competitiveness and overtaking Athens and Shanghai in Shipping Centres and Ports and Logistics. Much of this is due to Singapore’s strong positioning towards decarbonization.

The Silicon Valley of the maritime industry

“Driven by key bodies like the Maritime and Port Authority of Singapore and the Global Centre for Maritime Decarbonization, Singapore has a forward-leaning, future-ready approach. They look at things not just for the next few years, but for the next decade,” says Shahrin. “This includes policies towards building up a multi-fuel infrastructure, the electrification of harbour craft, and the promotion of green shipping corridors.”

“Overall, this has made Singapore an attractive location for shipping businesses, to the point where we now regard it as the Silicon Valley of the maritime industry.”

Government policies driving the green transition in key cities

As the example of Singapore has shown, strong, progressive government policy is one of the key factors behind the evolution of maritime cities, underpinning a forward-leading approach. This can attract companies and top talent to a city, while creating a competitive economic environment with well-developed infrastructure can encourage these actors to stay.

“This is especially relevant for decarbonization initiatives, where returns on investments take longer, and are dependent on wider infrastructure being in place,” says Shahrin. “Government support mechanisms can be crucial in facilitating innovation, so that new products and solutions can be developed.”

Shahrin points to the Norwegian Green Shipping Programme as a prime example of good government policy in action. This brings together public and private actors to overcome key decarbonization barriers, supported by funding from the Norwegian parliament.

Attraction of talent to cities key to progress

Central to the attractiveness and competitiveness of a maritime city is its ability to attract and retain top talent. The presence of research and educational institutions can help to develop talent within that location. The availability of professional opportunities and general high standards of living will encourage leading talents to relocate.

“Achieving technological progress is dependent on aggregating available knowledge that could otherwise be located in silos, and bringing it all together in clusters,” says Shahrin.

Note: DNV’s full Maritime Impact can be viewed here

 

Photo credit: DNV
Published: 24 July 2024

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Research

New study shows real world complexities and shortcomings of IMO CII formula

If IMO aims to maintain CII as a meaningful measure to incentivise shipping’s decarbonisation, a thorough review of the formula is necessary, says Royal Belgian Shipowners’ Association and AMS study.

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RESIZED IMO Building

The Royal Belgian Shipowners' Association (KBRV) released a study that investigated issues with the International Maritime Organization’s (IMO) Carbon Intensity Indicator (CII) formula. 

The study, titled Evaluating the Carbon Intensity Indicator: Challenges and Recommendations for Improvements, was done in collaboration with four master’s students from the Antwerp Management School (AMS). 

As part of their thesis project, the research conducted by the students included a comprehensive literature review, a qualitative analysis, and a quantitative analysis using data from Belgian-controlled ships.

The following are the key findings and recommendations of the study:

Key Findings 

Both literature review and qualitative analysis identified three variables with the most adverse impact on CII ratings:

  • Waiting Time: Time spent idling or waiting in ports or awaiting orders.
  • Number of Ports of Call: The frequency with which a ship docks at different ports.
  • Distance Travelled: The total nautical miles covered by the vessel.

The quantitative analysis confirmed the significant impact of these variables. However, a deeper dive into different shipping segments revealed a complex interplay of factors affecting CII ratings, making it difficult to pinpoint the main adverse variables universally.

For example, container vessels are highly affected by the number of port calls. An increased number of stops results in a worsened CII rating.

When comparing three Very Large Crude Carriers (VLCC) with similar distances travelled, waiting times, and number of port calls, differences in CII ratings still occurred. This could be attributed to external factors beyond anyone's control, such as adverse weather conditions.

For LPG carriers, there was a clear correlation between waiting days and CII ratings. Carriers that traded on routes with major port congestions - thus longing waiting time - scored lower than a sister ship with identical design efficiencies on less busy operating routes.

Recommendations

These findings underscore the multifaceted nature of CII ratings. If the IMO aims to maintain the CII as a meaningful measure to incentivise shipping's decarbonisation, a thorough review of the formula is necessary, taking into account the various factors beyond the control of both shipowners and charterers that influence the CII ratings. At a higher level, the scope and goal of the CII within the basket of measures needs to be reassessed as well.

Shipping is the most efficient way of transporting goods, emitting the lowest GHG per ton of transported cargo. Addressing the carbon efficiency of the sector requires the effort of every stakeholder involved, from shipowners and charterers to port authorities and customers. Placing the responsibility for a ship's efficiency solely on the shipowner does not accurately address the complexities and other influencing factors that exist.

Note: The study titled Evaluating the Carbon Intensity Indicator: Challenges and Recommendations for Improvements can be downloaded here

Manifold Times has covered several parties calling for the amendment of CII in the past including:

Related: INTERCARGO joins shipping industry in calls for IMO to amend CII flaws
Related: IBIA pursues amendment to Carbon Intensity Indicator for bunker vessels

 

Photo credit: International Maritime Organization
Published: 24 July 2024

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