Construction work is getting back into the swing this week after the Panama Canal Authority (ACP) and the consortium GUPC entered a new agreement that will involve each injecting $100m into the project . Both sides have apparently agreed to continue disputing the $1.6bn in extra costs through international arbitration.The work was originally due to finish this year on budget but cost over-runs are certain to push the final tab from $5.2bn to nearly $7bn. ACP is requiring that all work be completed by December 2015.
It has been revealed this week that what was feared to be a piracy attack on the Japanese owned VLCC Tateyama took place in the Strait of Hormuz last month. A well coordinated response was set into motion which involved naval ships and aircraft from several countries including in a very short space of time the Australian frigate HMAS Darwin and a Pakistan Navy maritime patrol aircraft. Ultimately the suspected attackers were released since there was no evidence of an intended attack despite their high speed manoeuvres around the Tateyama. The vessel was not carrying armed guards.
As tensions between Russia and Ukraine continue to simmer, Russia has scuttled a Kara-class cruiser Ochakov (above left in happier times) in the narrow channel at the entrance to the port of Novoozerne in order to blockade the Ukrainian Navy ships in port. The Russian ships towed the Ochakov into position and sank her in 9-11 meters of water (above center). Overall, Ukraines’s commercial ports are managing to function normally.
In a related move, the House of Representatives Energy and Commerce Committee has introduced bipartisan legislation to help speed up the export of US LNG to Ukraine and other East European nations, as the LNG industry becomes caught up in the international crisis over Crimea and global uncertainty related to Russian supply. The legislation is grandly titled The Domestic Prosperity and Global Freedom Act.
It has been revealed that the US Environmental Protection Agency (EPA) has now issued subpoenas to four companies requesting additional information as part of its investigation to determine ECA compliance. It appears that the subpoenas on an analysis of vessels that have "consistently filed fuel oil non-availability reports” (FONAR). The US Coast Guard routinely forwards all incidents of non-compliance with Annex VI to EPA for adjudication since it is the EPA that holds the big stick of enforcement.
Congressional leaders this week heard from Mr. Rod Jones, President and CEO of the CSL Group, and Mr. Bill Terry, President of Eagle Rock Aggregates who both testified in person and via written statement to describe “the well-intentioned new shipping fuel requirement from the Environmental Protection Agency (EPA), set to take effect in 2015, whose flawed design may actually spur increased onshore air pollution and higher shipping costs, as well as increased shipping prices for companies reliant on the short sea shipping industry”. Both also suggested that the EPA failed to consider the short sea shipping industry, whose vessels travel almost entirely within the ECA, when crafting the policy. The new fuel’s price tag, they said, is so expensive that it is likely to displace cargo shipments onto substantially less environmentally-sound shipping modes, particularly trucks and trains. For the public, that means more onshore air emissions and crowded roadways. CSL estimates that they are likely instead to see a 35% increase in fuel costs which is many times higher than the numbers provided to Congress by EPA.
The NOAA Great Lakes Environmental Research Laboratoryis reporting that the Great Lakes are almost completely frozen over. In early March, ice coverage was estimated at around 90%, by far the greatest percentage seen in 30 years and potentially set to break records for all time. The previous record was set in 1979 when nearly 95% of the Great Lakes were frozen.The above map shows the situation where shades of blue indicate ice concentration, with the darkest shade of blue indicating areas where 0-10 percent of the water’s surface is frozen and white indicating areas where the water is entirely frozen over.Lakes Superior, Erie, Huron, and St. Clair were 90-100% ice covered, while Lakes Michigan and Ontario were 82% and 43% ice covered, respectively.
HMCS Protecteur USS Chosin USNS Sioux
Following the engine room fire on board HMCS Protecteur last week, the ship was left disabled with 20 crew members suffering minor injuries. Over the weekend, the guided missile cruiser USS Chosin tried towing the Protecteur back to Hawaii but after the tow line broke in heavy weather, the U.S. fleet ocean tug USNS Sioux assumed the task. The forty-five year old ship is one of two auxiliary oil replenishment ships in the Canadian navy and was due to be retired in 2015 along with sister ship HMCS Preserver. Construction of replacement ships is expected to begin in late 2016, with a target of having them in operational service by 2019-20.It is unclear if Protecteur can be adequately repaired to return to Esquimalt under her own power.
The other issue which continues to cause severe problems for our ports is that of CN rail service. Speaking this week at the TPM Conference in Long Beach, CN Rail CEO and President Claude Mongeau said the company is looking at ways to build more resiliency into its network as it grapples with a system wide slow down caused by the severest winter in decades across most of the continent. Rail service delays have dealt a severe blow to the reputation of BC’s ports this winter both in the container and bulk sectors thereby exposing the fragility of our supply chains. Canadian Agriculture Minster Gerry Ritz is understood to be considering new regulations aimed at ensuring improved reliability to rail shipments.
The Honourable Lisa Raitt, Minister of Transport announced on Thursday the appointment of Mr. Vince Ready (above right) to conduct an independent review directed at resolving issues that have contributed to disruption of trucking operations at PMV. Mr. Ready, together with Ms. Corinn Bell, will conduct a detailed review of the PMV trucking industry and will provide recommendations to the provincial and federal governments by May 30, 2014. Later in the day following a meeting between the provincial and federal governments with the Unifor and the United Truckers Association (UTA) both parties confirmed they will be recommending acceptance of the agreement to their members. UTA will be voting on the agreement on Saturday March 8. Until the vote, Unifor members will go back to work while UTA members will continue to protest but not picket. PMV’s injunction remains in place.
Canada Stewart Energy Group Ltd. has just submitted a natural gas export license application with the National Energy Board. Stewart Energy LNG, will be comprised of floating and land-based natural gas liquefaction plants, LNG storage and marine loading facilities. Targeted annual capacity is 5 million tonnes on the floating vessel and 25 million tonnes a year from five land-based facilities. A joint venture company is expected to build a new 800 kilometer long pipeline to support he project. There are currently seven approved export licenses for LNG projects in British Columbia and four under review, including this application.
Chamber of Shipping's Board of Directors for 2014
(photo courtesy of Dave Roels Photography)
At last week's Annual General Meeting, the membership confirmed the re-appointment of four director with expiring terms. Richard Chappell, Kim Christensen, Dave Bedwell and Gary Paulson were each elected for a further two-year term. Following the AGM, we are pleased to announce that at the directors meeting held on March 5th that the following officers were appointed:
Chair - Bruce Rothdram (Empire Shipping Agency)
Vice Chair - Dave Bedwell (COSCO Canada)
Treasurer - Dave Hill (Compass Marine Services)
The Transportation Safety Board has released it investigation report on the Cape Apricot incident at Westshore Terminals in December 2012. The report cites that the pilot's approach to the terminal combined with the ineffective communication on the bridge and with the tugs resulted in the collision with the trestle at Westshore.
BC Ferries announced last week that Seaspan’s Vancouver Shipyards has been awarded a $15 million contract for the construction of a new cable ferry to service the Buckley Bay – Denman Island route. A Request for Proposals was issued in September 2013 to three shortlisted shipyards; two in Vancouver and one in Seattle. Bids were received in late October 2013 and reviewed by the BC Ferries’ project evaluation team. The cable ferry provides cost savings of around $2 million per year compared to the current conventional service. Key contract features:
• Guaranteed delivery date
• Milestone installation payments secured by refund guarantee
Seaspan has meanwhile withdrawn from the running to construct three intermediate sized BC Ferries leaving the work open to yards in Germany, Turkey, Norway and Poland. The workload and timescales involved in meeting NSPS related projects on behalf of the government means that Seaspan would have been unable to meet the deliverytime-lines sought by BC Ferries.
Chamber of Shipping member company Xanatos Marine of North Vancouver was successful at the Small Business BC Awards last week in being awarded Best International Trade recognition. Winners were required to prove their excellence among a group of 417 nominated businesses in nine different award categories. The majority of Xanatos Marine’s sales are international and involve providing solutions in the maritime field to governments of Indonesia, Thailand, Philippines, Nigeria, Mexico, USA, and the World Bank as well as private organizations within those countries. Recently, Xanatos Marine has been recognized as one of BC’s Top 100 Fastest Growing Companies by Business in Vancouver, was given ‘honorable mention’ by the 2013 BC Export Awards and was the recipient of Innovator of the Year by the North Vancouver Chamber of Commerce.
Several crew members have suffered minor injuries from an engine room fire aboard the Canadian naval vessel HMCS Protecteur off Hawaii. The 44-year-old supply ship was returning to its home port of Esquimalt, British Columbia when the blaze broke out Thursday night 340 nautical miles northeast of Pearl Harbour. The crew managed to put out the flames and now there is limited power on the vessel. The US destroyer USS Michael Murphy has been sent to assist Protecteur, and the Canadian vessel is expected to return to Pearl Harbor for an assessment of the damage.
The ship was carrying 279 crew, 17 family members and two civilian contractors returning to B.C. from extended operations in the mid-Pacific. Last fall the HMCS Protecteur was in a collision with the HMCS Algonquin en route to Hawaii. The HMCS Protecteur, an auxiliary oil replenishment ship, one of two such vessels in the navy that were launched in 1969, is expected to be retired in 2015.
Port Metro Vancouver this week released official cargo statistics for 2013 with new records set in overall tonnage of cargo, as well as in container and bulk cargoes. The total tonnage handled was 135 million tons, a 9% increase of over 2012, evenly split between imports and exports. Bulk cargo exports increased by nearly 11% thanks to increased coal and grain shipments whilst container volumes grew by 4% to a record 2.83million TEU. Cruise traffic increased by 22% to 812,398 passengers spread over 29 vessels. On the down side, crude oil exports were down by 5% and auto volumes decreased by 1%.
Unfortunately the first two months of 2014 have been difficult on account of the well documented weather problems in central and eastern Canada, a surge of container imports ahead of the Chinese New Year and now disruption to trucking services spearheaded by the United Truckers Associations (UTA).
A partial judgment has now been handed down in the case of the Cape Apricot which was involved in the December 2012 incident at Westshore Terminals. A federal judge has ruled against the argument presented by the parties acting for the vessel’s owner to place full liability on the marine pilot having con of the vessel at the time. Westshore Terminals is said to be pursuing $54.4 million in claims against various entities involved in the significant damage incurred to terminal infrastructure and for consequential financial losses. The pilot involved has already admitted partial liability.
Qatargas’ Q-Flex class LNG carrier Al-Gharrafa delivers a
commissioning cargo to Tangshan Caofeidian LNG Terminal
China’s LNG imports have risen by a staggering 77% year on year to January 2014 and are now running at an annualized 2.7 million tons. One reason for this is the increase in the sheer number of LNG import terminals commissioned over the past 12 months. Most recently, PetroChina initiated its Tangshan LNG plant on December 11 and China National Offshore Oil Corp.’s Tianjin floating LNG terminal received its first cargo on January 22.