After three days of near media hysteria, the disabled multipurpose Russian cargo ship Simushir docked in Prince Rupert at 3am on Monday morning having been ocean towed by the 4,300 HP Barbara Foss and delivered to Smit for safe berthing with a pair of tractor tugs. The vessel had drifted off the west coast of Haida Gwaii for 18 hours before CCGS Gordon Reid was able to put up a tow line to the ship on Friday evening and slowly tow the Simushir a safe distance from shore. The CCGS Sir Wilfrid Laurier and USCGC Spar were also sent to the scene to provide back-up had it been required. If all goes to plan, the Sumishir will complete repairs and sail on the weekend.
Province introduces LNG tax and environmental legislation
The provincial government this week introduced new tax legislation for LNG projects.The tax rate on net income will be 3.5%, effective for taxation years beginning on or after January 1, 2017. During the period when net operating losses and the capital investment are being deducted, a tax rate of 1.5% will apply and is creditable against the 3.5% tax. In 2037, the LNG income tax rate will increase to 5% which in the words of the government “ensures that proponents have time to build a strong foundation in the communities in which they operatebefore the full extent of the tax is applied”. In addition, to encourage investment, the new tax framework will include a BC Corporate Income Tax Credit available to any LNG income taxpayer that has a permanent establishment in BC. This will be calculated based on the natural gas acquired for an LNG facility and will have the effect of reducing the provincial corporate income tax rate from 11% to as low as 8%.
The province has also this week introduced legislation designed to make potential LNG export facilities “the cleanest LNG facilities in the world” There are three main components to the policy:
An emissions benchmark with flexible options including purchasing offsets and a technology fund
The benchmark and its compliance costs, according to the government, should be viewed in the context of total BC operating costs to ensure the province remains a competitive place to invest.
A programme will be included to provide a pro-rated incentive to companies for achieving the benchmark based on the LNG industry's compliance costs, which will ensure the competitive investment environment continues.
Based on a review of other countries, BC is also implementing new interim ambient air quality objectives for nitrogen dioxide and sulphur dioxide for all new and expanding industrial facilities that are consistent with the benchmarks.
In response, Mr. David Keane President of the BC LNG Alliance representing the majority of major project proponents, issued a statement:
“LNG proponents appreciate the government revisiting its original tax structure. We believe there must be a fair return for British Columbians for the sale of their natural resources, while ensuring a stable fiscal policy so our industry is able to compete globally now and over the long term. This tax, along with other taxes we will pay have to strike the right balance that enables British Columbians to get fair value for their resource, but also recognize the huge technical and financial challenges of very large and complex projects with significant risk.”
“ BC is a high cost environment, for these projects to be economically viable, the LNG tax must be considered in conjunction with the overall fiscal framework, which includes other taxes, availability of skilled labor resources, constructing pipelines across two mountain ranges, global LNG market trends, and other fiscal and regulatory issues.” To understand how the tax impacts individual projects, journalists are encouraged to contact individual proponents.”
Business of Shipping presents in Calgary
The Chamber’s Business of Shipping presentation team was in action in Calgary this week at the invitation of the Canadian Association of Petroleum Producers (CAPP). Stephen Pyne, Peter Swanson, Christian Waldegrave, Paul Hexter, Daryl Raibl, Kevin Obermeyer and Stephen Brown provided eight hours of introduction to the world of shipping to a group of about 50 representatives from across the oil industry. Thanks go to the team for a great job.
Oldendorff joins World Ocean Council
It was announced this week that Oldendorff Carriers has joined the prestigious World Ocean Council. With the company’s Green Ships program and more than 40 new vessels expected in the next 2-3 years, the company’s Managing Director, Thomas Weber, stated, “Oldendorff is pleased to become a member of the World Ocean Council. The WOC has created an international cross-sectoral forum for ocean industry collaboration on sustainability that doesn’t exist elsewhere.” Oldendorff has already participated actively in WOC events, such as the recent WOC Business Forum on Ocean Policy and Planning held in New York City, 28-30 September.
The World Ocean Council (WOC) mandate is to bring together the diverse ocean business community to collaborate on stewardship of the seas, improve ocean science in support of safe and sustainable operations, and educate the public and stakeholders about the role of responsible companies in addressing environmental concerns.
Global Container Terminals join Green Marine
Global Container Terminals (GCT) has entered its four terminals, GCT Vanterm, GCT Deltaport, GCT New York and GCT Bayonne operating in the Port of New York and New Jersey into the Green Marine environmental certification program. “Joining Green Marine aligns with our company’s strategic priority to grow our business responsibly,” commented Stephen Edwards, President & CEO of GCT. “Our collaborative partnership with stakeholders is what makes GCT an industry leader. Taking part in this program is our commitment not to simply implement new procedures within our own facilities, but to share best practices.”
Irving still expecting to build six Arctic patrol vessels
Rumors that the federal government plans to reduce the number of Arctic patrol vessels to be built by Irving Shipbuilding are being played down by the yard which says it remains confident the company will be building six such vessels. The original indication was for between six and eight vessels but this looks more like a maximum of six even through the specifications have been modified to keep costs down. Construction is due to begin in Q3 2015 and complete in 2022.
The Government of British Columbia introduced legislation, the Container Trucking Act, yesterday to bring labour stability to the container trucking industry serving Port Metro Vancouver. The legislation will:
Bring into force rate regulation for the marine container trucking companies serving the port.
Establish a new, independent container trucking commissioner, who will assume responsibility for all Truck Licencing System licenses in place following planned licence reforms by Port Metro Vancouver, and will administer future truck licences.
The commissioner will be directed to establish and consult with an Industry Advisory Committee, to support the intended mandate of ensuring long term stability and efficiency in the sector. For more details view the full News Release.
USCG issue Ebola virus update
The US Coast Guard has issued a detailed update to the maritime industry with respect to assessing Ebola risks and the responsibility of vessel/facility agents, owners, masters, and operators. In discussions with Canada's Public Health Agency this week, there is no immediate intention to send out any further update to the initial circular issued by CBSA on August 8th, whereby vessels are to report any vessels or crew members that have been in the affected ports in Liberia, Sierra Leone, and Guinea within the last 30 days. To report, a completed Maritime Declaration of Health to should be submitted to CBSA at least 24 hours prior to arrival.
Congestion in the Port of Los Angeles appears to be worsening with accusations that each industry sector is taking a narrow view of the problems rather than working in unison to reach solutions. The port’s Executive Director appealed this week for “shipping lines, terminal operators, labor, truckers, railroads, equipment providers and the port authorities to meet as a single industry to talk about these unique opportunities.” The ports of Los Angeles and Long Beach this week reported respective increases of 9% and 7.3% in total container volumes in September compared to September of 2013. Part of the problem is seen to be the PierPass system which charges $133 per FEU for a day gate transaction and results in heavy traffic at night but comparatively light traffic on the day shift. The pressure is also on for the PMA and ILWU to conclude their contract negotiations which have now been dragging on for four months.
ICS welcomes new IMO progress on ballast water at MEPC 67
The International Chamber of Shipping has warmly welcomed some late in the day progress on the implementation of the IMO Ballast Water Management Convention. At last week’s meeting of the Marine Environment Protection Committee (MEPC) the concerns of the marine industry were finally acknowledged with an agreement to start work immediately on a revision of the G8 type-approval guidelines to make the process for approving ballast water treatment equipment more robust. It was also agreed in principle, that any ship owner that has invested in first generation treatment equipment, type-approved under the current G8 guidelines, should not be penalized, provided that the equipment is operated and maintained correctly. The adoption by IMO of new Port State Control guidelines to this effect are seen as seen as crucial. While there are still details to be finalized, there has been a sigh of relief all round. Please see the attached formal draft resolution.
Also approved at MEPC 67 were environmental provisions in the Polar Code together with draft amendments to MARPOL to make the code mandatory. MEPC will now look to adopt these amendments when it next meeting in May 2015 with a view to the Polar Code itself entering into force on January 1 2017. View the MEPC 67 Draft Ballast Water Resolution.
Ocean carriers continuing to serve Ebola affected West Africa
Ocean carriers regularly servicing trade to the three West African countries worst hit by Ebola are continuing to provide service but are seeing declining cargo volumes as the economies of Liberia, Sierra Leone and Guinea take a major hit from the health crisis afflicting them. There is general recognition that the severing of trade ties to these countries would only delay any prospect of bringing the current emergency under control. Notwithstanding its status as a hub for piracy, Lagos is also no longer categorized as a risk given that Nigeria appears to have contained its own Ebola outbreak. Simple precautionary measures are in place for those boarding ships with only essential visitors allowed access and crews are being confined to their vessels as an obvious precaution.
Market Report - October 24, 2014
The Baltic Dry Index gained a shot in the arm from a sudden spurt in Capesize rates this week to close on Thursday on 1155 points compared to 963 points last week and 974 points the week previously.
Spot time charter
One week ago
Containers:The Transpacific Stabilization Agreement is to raise rates between mid-November and early December on account of “congested US port terminals, harbour and over-the-road truck driver shortages, slower trains and longer rail terminal dwell times”. Increases of $100 per FEU and $90 per TEU are to take effect on or around November 15but by no later than December 1. The organizationhas also announced its recommended low sulphur fuel surcharge effective January 1 2015 of $67 per FEU to the US east coast and $53 per FEU to the west coast. Charges per TEU will be assessed at 90% of the FEU levels.
Nov 14 - Plimsoll Club 2014 Fall Banquet
The Plimsoll Club's 2014 Annual Fall Banquet will be held on November 14, 2014 at the Fairmont Waterfront Hotel. Guest speaker for the evening is Paul Nicklen, acclaimed Arctic photographer as seen in National Geographic. For more information visit: www.plimsollclub.ca or call Mariam at 604-681-2351.
In March this year, NYK Bulk & Projects Carriers signed a 15-year contract with Baja Bulk Carriers for the charter of a new build bulk carrier to replace the Isla de Cedros in continuous carriage of salt from Mexico to Vancouver. Isla de Cedros completed 216 successful voyages.
Built by Oshima Shipbuilding, Sasebo, Nagasaki, Japan, 2014 Operated by NYK Ship Management, Singapore LOA 209.3m Beam 32.2m GRT 35,669 tons DWT 62,915 MT
Propulsion: Mitsubishi UEC50LSE-Eco-B1, maximum continuous output 8110 KW, HP 10871.31 / RPM 102
Eco-ship structural design
The vessel was delivered to NYK in August 2014. She comes with an eco-ship structural design and is equipped with an advanced electronically-controlled engine. For cargo handling she has two mobile cranes rated at 750 tons/hour each, a belt conveyor, a boom conveyor, and a hopper in order to meet charter party requirements.
Travelling Deck Crane 2 sets x 750 t/h
Hopper with above 2 sets x 1000 t/h
Main Belt Conveyor 1 set x 2000 t/h
Cross Conveyor 1 set x 2000 t/h
Boom Conveyor 2 sets x 2000 t/h
Grab Bucket 3 sets x 15 m3
Baja Bulk Carriers, a joint venture between Mitsubishi Corporation and the Mexican government, engages in the transportation of salt. The company was incorporated in 1976 and is based in San Diego, California. The salt load port is Guerrero Negro, Mexico. The same group has supplied salt to Canexus and its predecessors for 50 years and is certainly one of the oldest customers of PMV. For her part, Buena Ventura is proving to be a very well made ship that is fully living up to expectations.