China is seek to take a bigger investment stake in Canadian LNG projects both in BC and Nova Scotia where a 3rd export project has just been announced bringing the total number of projects across the country to 23 namely:
West Vancouver Council has now joined Lions Bay Council in passing a motion in opposition to the future movement of LNG carriers on Howe Sound.
Yesterday Apache Corp. announced its decision to withdraw from the LNG business following pressure from investors. This leaves the Kitimat LNG, where Apache was an equal partner with Chevron Corp, and Australia's Wheatstone LNG projects up in the air. Chevron Corp. has since confirmed that they actively looking for a new partner and will move ahead with early-stage development work in Kitimat.
Also in the news on the LNG front is that FortisBC is to partner with the Canadian division of US construction group Bechtel to expand its LNG plant on Tilbury Island on the Fraser River. Bechtel is expected to break ground on the $400 million project in September and complete construction in 2016. The expanded facility will add 1.1 million gigajoules of LNG storage and 34,000 gigajoules of liquefaction capacity per day. The plant currently has the capacity to liquefy 5,000 gigajoules of LNG per day.
Meanwhile the BC energy regulator, the Oil and Gas Commission, has updated its LNG rule book for the future engineering and construction of some of the 16 export projects and two domestic plants currently planned for theprovince.The revised regulations cover engineering and liquefaction plant construction using such methods as modular design whereby pieces of plant equipment units will be fabricated at Asian yards then shipped to BC for installation.The rule book covers the main engineering issues and the responsibilities of permit holders in respecting the regulations.
At this year’s BCIT convocation ceremony for graduating marine cadets, Stephen presented awards on behalf of the Chamber of Shipping to Engineering officer David Mehain (above left) and Deck Officer Philip Sutherland (above right). The Chamber awards are intended for students who have demonstrated particular resilience in making it through four years of study and onboard ship learning to reach their goal. (At least David Mehain didn’t make Stephen look so small).
Also this week, the Western Marine Community Coalition scholarship committee (Kevin Obermeyer, Phillip Nelson and Stephen Brown) met to consider applications for scholarships. Five worthy candidates were selected to receive cheques of $2,000 each. Eligible applicants are required to be following a marine related course of education and must demonstrate a high level of extracurricular involvement.
It was revealed last week that the RCMP is still in dispute with the charterer of three cruise ships hired in to accomodate the Integrated Security Unit during the 2010 Winter Olympics. In a dispute related to taxation, currency fluctuations and costs, a US judge has awarded US$19 million plus interest to the charter company Cruise Connections Charter Management (CCCM) of Winston-Salem, N.C, the RCMP’s contractor. The judge ruled that the RCMP breached the contract in September 2008 and then formally terminated it in November 2008 by declaring default.
By way of background, the RCMP hired CCCM on a CAD$55.35 million contract in June 2008 to source three cruise ships for Vancouver 2010. However, the value of the US dollar slumped during the subsequent financial crisis reducing the contract to US$53.48 million meaning CCCM saw its profit margin disappear. CCCM had agreed to pay Holland America US$12.5 million for the MS Statendam for hotel service charges and guaranteed net onboard revenue (including food and beverage). CCCM also agreed to pay Royal Caribbean Cruise Lines US$25.74 million for the Jewel of the Seas and Radiance of the Seas. The total cost of US$38.237 million was not in dispute, however the level of administrative and operational costs to support the ships’ extended stay at Ballantyne Pier and disputes over taxation became major issues between CCCM and the RCMP caused the relationship to fracture. Additionally, CCCM’s contract with Holland America anticipated a four-day repositioning cruise from San Diego to Vancouver before the Olympics and a four-day repositioning cruise from Vancouver to San Diego afterward, but the judge ruled that the RCMP breached the contract before CCCM could reach an agreement on the repositioning cruises. In 2009, the RCMP eventually went direct to Holland America to contract the Statendam and Oosterdam and the Elation from Carnival, for lump sum CAD$76 million -- more than $20 million higher than the originally announced deal with CCCM.
The Pacific Maritime Association (PMA) and International Longshore and Warehouse Union (ILWU) “recessed” contract negotiations this week and until August 4 to allow the ILWU officers to participate in what is being described as unrelated contract talks with locked out grain handlers on the Columbia River. Despite the obvious uncertainty and while there is no contract extension in place, both parties have pledged to keep cargo moving. The grain terminals are not PMA members and their contract is therefore independent of the coastwide contract.
The salvaged hull of the Costa Concordia was gently eased into the port of Genoa last Sunday morning to be broken up for scrap. The four day trip north from the Tuscan island of Giglio, where she sank on Jan. 13, 2012, was flawlessly executed and marked the conclusion of one of the largest and most complex maritime salvages ever attempted. Italian Prime Minister Mr. Matteo Renzi flew to Genoa to acknowledge the successful completion of the operation. Above right: Mr. Michael Thamm, CEO of Costa Crociere, congratulates Salvage Master Nick Sloane in the salvage control room onboard the Costa Concordia.
Six teenagers who survived the sinking of the Sewol re-lived their experience in a Korean courtroom this week. They described how their classmates helped them float free as water flooded their cabins despite crew instructions to stay put even as their ferry sank taking 304 people with it, 250 of them school children. The teenagers, were giving testimony at the trial of 15 crew members, who face charges ranging from homicide to negligence for abandoning the sinking ship. “We were waiting and, when the water started coming in, the class rep told everyone to put on the life vests … the door was above our heads, so she said we’ll float and go through the door and that’s how we came out,” one of the teenagers said. “Other kids who got out before us pulled us out.” Others described how coast guard officers waited off the stricken ferry for passengers to swim out rather than go into the ship to try and rescue them. They were the first of 75 children who survived the sinking and are scheduled to give evidence.
The Paris and Toyko Memorandums of Understanding are to launch a three month concentrated campaign starting in September to verify deck and engine room watchkeeper hours of rest under the Manila amendments of Standards of Training, Certification and Watchkeeping (STCW). The inspections will be based on the ship’s records of rest against criteria set out in the vessel’s Minimum Safe Manning Document. The IMO first adopted a resolution on fatigue in 1993.
Continuing the trend of German container carriers absorbing their Chilean competitors, Hamburg Sud signed a preliminary agreement this week to purchase Companía Chilena de Navegacion (CCNI). This move is expected to see CCNI withdraw from the container sector but continue with its car carrier and other shipowning businesses. The agreement which is valued at $160 million is expected to be sealed before the end of the year.
As rumored for some time, wealthy Qatar has taken a controlling interest in rapidly growing, Dubai based, United Arab Shipping Co. (UASC) with a 51.3% shareholding. Partners in the company are Kuwait, Qatar, Saudi Arabia, the United Arab Emirates and Iraq. The company’s existing fleet stands at 55 ships and a combined 329,649 TEU but the order book is substantial comprising 17 various vessels of various size totaling 272,300 TEU, six ships of 18,000 TEU and 11 of 14,500 teu capacity.
The City of South Portland, Maine, has this week voted to block the export of Alberta bitumin through the city’s port. South Portland is currently a key terminus in the 4,600kms Enbridge Energy East Line 9 pipeline reversal project, which would carry 1.1 million barrels per day of Alberta crude east to the Suncor refinery in Montreal. Although no official plan has been submitted, the expectation was that exports could also be sent south by reversing the Portland-Montreal Pipe Line to be then loaded to tankers and exported from South Portland. The project involves conversion of an existing LNG pipeline between Burstall, Saskatchewan and Cornwall, Ontario. New sections of pipe will also need to be constructed in Alberta, Saskatchewan, Manitoba, Eastern Ontario, Québec and New Brunswick to link up with the converted line. South Portland is a scenic city of 25,000 people but is also the east coast’s second largest oil port.
Speaking at the Pacific Northwest Economic Region (PNWER) annual conference this week held in Whistler, Premier Christy Clark was upbeat on prospects for development of an LNG export industry in terms of contribution to a reduction in global air pollution and increased provincial revenues. The Premier disclosed that the government is banking on at least three LNG export plants operating in B.C. by 2020. In a more cautious assessment of LNG prospects, the Director of energy policy at the University of Calgary this week urged BC to be more assertive warning that delays beyond 2024 risk complete competitive loss of market entry for Canadian LNG exporters. He underlined that BC is already way behind schedule on the government's goal of having a single terminal operational by 2015.
It was also disclosed this week that Petronas lead Pacific Northwest LNG in Prince Rupert is seeking to close Canada's biggest ever debt financing deal by raising up to $15 billion whilst also seeking tax relief from the Ottawa before making a final investment decision by the end of this year. The project’s total investment in Canada could amount to $36-billion by 2018, including the $6-billion investment in Progress Energy Canada already made in 2012.
Just as Vancouver and Prince Rupert container terminals struggle to keep their head above water as a consequence of a surge of U.S. imports coupled with a limited allocation of rail cars to U.S. corridors, the Port of Seattle saw a drop of 27% in throughput in the month of June compared to June 2013. Just less than 105,000 containers moved through Seattle last month, compared to 144,000 TEU in June 2013. Overall, the U.S. National Retail Federation last week warned that imports into the U.S. are expected to reach their highest levels for five years as retailers rush to stock shelves in case current west coast contract negotiations break down. This is being particularly felt in the ports of Los Angeles and Long Beach, both of which are gridlocked and the situation is not much better across Europe right now.
Today's derailment of a CN train 20km west of Burns Lake involving 22 rail containers will only compound the problem.
Adding to the west coast uncertainty, the contract negotiations themselves are set to take another break from July 28 to August 1 to allow the ILWU to spend time on “unrelated contract negotiations in the Pacific Northwest”. While there is no contract extension in place, both parties have pledged to keep cargo moving. However, the distraction of long standing labor issues on the Columbia River seems certain to ratchet up the level of uncertainty in concluding a new coastal agreement.
The bottom damaged Panamax bulk carrier Amakusa Island came alongside at Prince Rupert’s Atlin Terminal on Wednesday this week. As we reported previously, the vessel grounded in loaded condition early last week whilst shifting from Ridley Terminals to an anchorage to clear paper work before final departure from the port. Divers will attempt to complete temporary repairs at Atlin to allow the vessel to sail and deliver her coal cargo of prior to undertaking permanent repairs overseas.
Police in South Korea have confirmed that a decomposed body they found in June in a closet at his holiday home is that of the fugitive owner of 73 years old Mr. Yoo Byung-eun head of the family that owned Chonghaejin Marine Co, the registered owner of the ferry Sewol which sank in April with the loss of more than 300 teenage school children. The billionaire businessman went missing shortly after the disaster sparking a major manhunt across Korea. Police had wanted to question him on charges of criminal negligence with a reward of almost $500,000 offered for information leading to his capture.
Following the shooting down of Malaysian flight MH17 last week, the French government has announced that it is prepared to cancel the sale of a second Mistral class helicopter carrier to Russia (picture above) if the European Union decides to expand its sanctions against Russia. The vessel due for delivery in 2016 has yet to be paid for. The first ship of the order, Vladivostok, which is already paid for and due for delivery in October this year, will however be delivered as per contract. France has come under considerable international pressure to cancel or at least delay or cancel the delivery of the Mistral class ships after Russia annexed the Crimea and decided to arm separatist uprisings in eastern Ukraine. The Mistral Class is a powerful multipurpose warship capable of carrying as many as 700 combat troops, 16 helicopters and 60 armored vehicles. It is built by state-owned military contractor DCNS and the shipbuilder STX in Saint-Nazaire where 400 Russian crew arrived last month to train on the Vladivostok.
The NYK owned cruise operator Crystal Cruises has announced plans to become the world’s first luxury cruise line to sail the Arctic Ocean via the Northwest Passage. In August 2016, the 1070 passenger 6 star vessel will sail from Seward (Anchorage) in Alaska for what is being described as a 32 day expedition style voyage terminating in New York. The Crystal Serenity will be accompanied by an escort vessel that will carry additional safety and environmental protection equipment, as well as specifically-trained personnel, and also serve as a platform for a helicopter and zodiacs. Both the escort vessel and cruise ship will run on low sulphur fuel, thereby exceeding current environmental regulations. The itinerary which has been two years in planning includes calls at Kodiak, Alaska, the Northwest Territories, Nunavut in Canada and Greenland, as well as several ship and shore excursions.
On the evening of July 18 the crew of the Seaspan “Hawk” assisted the Royal Canadian Marine Search and Rescue (RCM-SAR) vessel in recovering five people from an overturned boat east of Lonsdale Quay. All five casualties were rescued, treated and later released from hospital. Great joint effort by Seaspan RCM-SAR.