Transcanada files Energy East application with NEB
Following 18 months of environmental studies and public consultation, TransCanada has now formally filed with the National Energy Board a project application for the US$12 billion Energy East Pipeline. The project involves 3,000 kms of existing LNG pipeline to be reversed to carry bitumen and the construction of 1,600 kms of new pipeline to carry product as far east as St. John NB where TransCanada and Irving Oil have formed a joint venture to build, own and operate a new deep water marine export terminal. Pipeline capacity will be 1.1 million barrels/day. Despite being already largely built, the project is starting to generate opposition, especially from within Ontario and Quebec.
Quicksilver seeks LNG partner
Proponents for the Campbell River LNG project, Texas based Quicksilver Resources has deferred further spending on its shale-gas assets amid negotiations for an LNG project partner. Current planning calls for the proposed LNG export terminal to be operated by a downstream partnership between Quicksilver and a third-party company as yet unnamed. The feed-gas for Discovery LNG would come from the Horn River Basin in northeast BC, one of Canada's prolific shale-gas areas and already earmarked to supply resources for several other LNG export plants. The company has filed an application with the NEB to export up to 20 million tons/year with a start up date of 2021.
Green Marine call for papers
The Green Marine team is organizing GreenTech 2015, the eighth annual conference on green technologies and innovation for marine transportation, to be held in Seattle, WA, May 27-29, 2015. Green Marine has issued a call for papers from marine transportation community members focusing on real-life experiences, case studies and/ or leading edge research that show delegates how best practices, new technologies and insightful partnerships make a difference in the field. See the call for papers
Conversations that matter
Capt. Kevin Obermeyer, CEO of Pacific Pilotage Authority joined Stu McNish in episode 6 in the weekly series of Conversations that Matter to discuss shipping oil along the BC coast. The interview provides an excellent overview of what measures will be put in place to enhance the safe movement of tankers through the west coast. View it on the Vancouver Sun website.
Pacific Regional Advisory Council call for new members
Transport Canada has issued a call for nominations for the Pacific Regional Advisory Council (PRAC) on oil spill preparedness and response. Existing membership on PRAC will expire at the end of December 2014. Transport Canada is seeking expressions of interest to fill these positions and to establish an eligibility list for future vacancies. View TC's PRAC Call for New Members.
Canada Labour Code Amendments
Amendments to the Canada Labour Code, Part II (Code), came into force on October 31, 2014 and are intended to reinforce and strengthen the internal responsibility system, provide a clearer definition of danger, and restructure the refusal to work process to ensure that workplace parties collaboratively assess and address hazardous situations more effectively.
Horizon Lines bites the dust
The U.S. containership operator Horizon Lines has been purchased by competitors Matson and Pasha. Matson has secured Horizon’s Alaska operations for $456.1m deal while Pasha has acquired Horizon’s Hawaii business for $141.5m. All three companies operate in U.S. Jones Act protected trades. The demise of Horizon is not a major surprise given the company’s aged fleet, high operating costs and heavy debt burden. Horizon also announced that it will shut down its Puerto Rico domestic liner service.
USWC port disruption becoming worse
After being an oasis of calm last week, Oakland became embroiled in the deteriorating west coast labor situation this week when the ILWU shut down the SSA Marine terminal – the port’s major container handling facility after SSA sent one ILWU unfilled gang home. Longshoremen in the other gangs then walked off claiming that SSA had not followed correct procedures for labor ordering
Meanwhile, U.S. senators from the western states along with Port Directors from Seattle, Tacoma, Portland and Oakland have written to both the PMA and saying the inability of both sides to reach a contract is causing economic hardship to retailers and to port-dependent workers at transportation companies across the country. In addition, a coalition of about 100 groups representing cargo interests, intermediaries and other organizations that do business at west coast ports has been pleading with the PMA and ILWU since spring to reach a speedy conclusion to the contract negotiations.
As if things were not already complicated enough, the Mayor of Los Angeles has been meeting with the Teamsters Union to try and avoid picketing of container terminals in LA & Long Beach which would be sure to shut down those ports – at least temporarily. There were 12 large container ships fishing off the ports of Los Angeles and Long Beach earlier this week despite some modest improvement in productivity at the terminals before the Teamsters action.
Quantum takes New York by storm
Arguably the most talked about new cruise ship of 2014, Royal Caribbean's Quantum of the Seas, arrived in New York this week, the ship’s home port for the winter before repositioning to home port in Shanghai next summer. With a GRT of 168,666 tons and capacity for 5,000 passengers, Quantum is the third largest cruise ship ever built and has incorporated many technologically groundbreaking design features. The unique deck-top ride into the sky, North Star, was fully extended more than 300 feet above the water after Quantum cleared the Verranzano-Narrows Bridge and approached the Statue of Liberty. She was to be officially christened today (November 14) while docked at Cape Liberty with actress Kristin Chenoweth serving as godmother. She then begins regular sailings from Cape Liberty to the Bahamas and the Caribbean on November 18. A sister ship, Anthem of the Seas, will debut in April 2015 and sail Mediterranean itineraries from the port of Southampton UK.
Sewol officers sentenced
A South Korean court has found the 68 year old Captain (above left) of the South Korean ferry Sewol, which capsized and sank in April, guilty of gross negligence and sentenced him to 36 years in prison. The ferry’s Chief Engineer was found guilty of murder and jailed for 30 years while 13 other crew members were given jail sentences of up to 20 years on charges including abandonment and violating maritime law. The Sewol was carrying 476 people when it went down with the loss of 304 lives, most of them high school students. Prosecutors had called for the death penalty for the Captain but judges acquitted him on that charge. Following the disaster, the South Korean coast guard is due to be disbanded and replaced with a new agency after accusations that it did not act swiftly or aggressively enough to save lives. Eight of the crew members have filed an appeal against their conviction while the International Transport Workers’ Federation has condemned the sentences as “excessive and unjust”.
OW Bunker declares bankruptcy
We reported last week that the Danish marine fuel supplier OW Bunker A/S (Denmark's third largest company by revenue) had filed for restructuring but less than 48 hours later, it was realized that there would be no choice but to file for full bankruptcy following an alleged $125 million bunker fraud scandal involving its Singapore-based subsidiary Dynamic Oil Trading (DOT). This unexpected turn of events comes only eight months after the company’s initial public offering on the Copenhagen Stock Exchange that valued the company at almost $1 billion. With Brent crude oil futures down 30% in value since June to levels last seen in 2010 there is speculation that the company may have been long on their hedges with inevitable results. OW Bunker had been supplying 100-200,000 tons of bunker fuel per month, worth up to US$118 million in current market terms.
U.S. Navy personnel attacked in Istanbul
Turkish nationalist protesters this week abused and assaulted three U.S. seamen in Istanbul including trying to put hoods over their heads and chanting "Yankees go home". Fortunately, the seamen were able to break free and sprint back to their ship, the guided missile destroyer USS Ross. Police arrested 12 members of the nationalist Turkish Youth Union but later released them. The Turkish foreign ministry condemned the attack, calling it "in no way tolerable". The U.S. navy cancelled all shore leave in Turkey until further notice.
Now for something completely different
A new musical, “The Last Ship”, featuring music and lyrics from Sting, has opened on Broadway. To celebrate the event, Sting partnered with Cunard Lines on board Queen Mary 2 in New York to perform a few of the numbers from the musical which is based on his own childhood growing up near the Swan Hunter Shipyard in Wallsend, Newcastle UK. The Last Ship is intended as a portrait of a tight knit working class community, bound together by passion, faith and tradition that did everything it could to preserve the only life they’ve ever known, ultimately to no avail. As can be seen by the picture above right, ships were built literally at the end of the street – quite amazing by today’s standards of social license and security. The original Broadway cast album for Sting’s “The Last Ship” will be released on December 16. See the short video clip: https://www.youtube.com/watch?v=SGTErDUvmk4
Market Report - November 14, 2014
The shine came off Capesizes this week resulting in the Baltic Dry Index closing on Thursday on 1264 points compared to 1436 points last week and 1424 points the week previously.
Spot time charter
One week ago
Dec 5 - Vancouver Grain Exchange Lunch
The Vancouver Grain Exchange's annual Christmas lunch will be held on December 5th at the Terminal City CLub. Each year the Vancouver Grain Exchange collects food donations at the Christmas lunch, with over 12 boxes of donations collected in 2013 for the Greater Vancouver Food Bank. For more information visit: http://www.thevge.ca/events/2014-annual-christmas-lunch/.
Dec 11 - CIFFA Western Region Christmas Lunch
The Canadian and International Freight Forwarders Association (CIFFA) will host its annual Christmas lunch this year on December 11, 2014 at the River Rock Casino. Organizers will be collecting unwrapped toys for donation to the Richmond Christmas Fund. Tickets are now available on-line at: http://learning.ciffa.com/index.php?module=course&page=event-enrolment.
Jan 28 - Cargo Logistics Canada Expo & Conference
The seminar listing for the Cargo Logistics Canada conference and registration is now available at: http://www.cargologisticscanada.com/. The Cargo Logistics Canada Expo & Conference is the largest and most diverse gathering of stakeholders in Canadian supply chains to be assembled in Canada. Until December 19th the CLC VIP Pass is only $275.
The Royal Fleet Auxiliary RFA Argus sailed last month from Falmouth in the UK to Sierra Leone to establish a floating Ebola treatment centre. With a crew of 380 including Royal Marines and a 100 bed hospital manned by a specialized medical contingent, the vessel is also carrying three Merlin helicopters (see below) and a fleet of 32 pick-up trucks.
RFA Argus was originally built as the container ship Contender Bezant (below left) and was requisitioned by the UK Government for the naval task force which played a crucial role in the recapture of the Falkland Islands in 1982 before being purchased outright in 1984 for conversion to a full time naval support role. On her return voyage to the UK following the war, she carried a damaged Harrier vertical take-off aircraft (below right). Following repairs and despite being operational, the Harrier was transferred to the navy’s School of Flight Deck Operations and was eventually donated to the Polish Aviation Museum at Krakow.
In 1991 Argus was fitted with a fully functional hospital for the 1991 Gulf War and further upgraded in this role in 2007. Thereafter in May 2012 she embarked a detachment of Royal Marines and a Super Lynx helicopter as part of a newly established Humanitarian and Disaster Relief Team.
As Ebola persists in West Africa, owners and charterers are building clauses into charter parties to cover the exposure of vessels calling West African ports. Some owners are demanding clauses clauses requiring charterers to nominate alternative safe discharge ports if Ebola means they cannot call at the intended port. At the same time, the International Maritime Organization has urged against any general ban on international travel or trade due to Ebola. The UK is taking the international lead role in tackling Ebola in Sierra Leone due to its historic links. Sierra Leone gained independence from Britain in 1961.