The Australian government has confirmed plans to repeal a carbon tax introduced by the previous Labour government which requires about 350 major Australian companies to pay just over $20 for every ton of carbon emissions they produce. From the outset, the Australian LNG industry has pointed out that it was the only LNG nation exporting into the Asia-Pacific region that was saddled with a carbon tax when LNG is seen as one of the cleanest fuels in the world. The tax so far has been at a fixedprice but there is a transition to a market-based emissions trading scheme in two more years if the tax is still in place.
A review of LNG carrier new build activity for the first half of this year reveals that approximately $4.6 billion has been invested in 23 new vessels. With 398 LNG carriers in operation, the global order book now stands at 128 ships averaging $200m each. There are 26 new LNG carriers scheduled for delivery this year, 39 in 2015, 36 in 2016, 24 in 2017 and so far two in 2018 and one in 2019. Amongst a flurry of LNG new build news this week involving Teekay, it was also announced that Mitsui O.S.K. Lines is to team up with the China Shipping (Group) Co. to operate the world's first regular LNG service through the Arctic (see map above right). The plan is to ship LNG from Russia's Yamal LNG project to markets in Europe and Asia using three ice class LNG carriers to be built by South Korea's Daewoo Shipbuilding & Marine Engineering (DSME) at cost of $990 million.
Confounding all of you doubters, the government of Nicaragua has approved plans for a new $40bn canal linking the Pacific and Atlantic. The plan $40 billion plan is being developed by HK Nicaragua Canal Development Investment (HKND Group), headed by Mr. Wang Jing of the Xinwei Telecom Enterprise Group. The proposed 278 kms long canal which would pass through Lake Nicaragua, Central America's largest lake, would be between 230 and 520 m wide and 27.6 m deep. Under current planning time-lines ground will be broken this year, construction would complete in 2019 and the new canal will begin operations in 2020. Nicaraguan officials say their waterway would "complement" the Panama Canal rather than be in direct rivalry to it. Nicaraguan President Daniel Ortega together with Mr. Wang Jing is pictured above right with signed agreements.
The EU has opened what it calls an “in depth investigation” to determine whether tax breaks for publicly owned Dutch ports, including Rotterdam, breach EU state aid rules by exempting them from payment of corporate tax on the basis that they are publicly owned. Earlier this year, Rotterdam which is the EU’s busiest biggest container port, claimed it is losing almost one million containers a year to its rivals, led by second- and third-ranked Hamburg and Antwerp, who receive “ unfair” subsidies from the German and Belgian governments respectively. The EU Commission said it has also told France and Belgium that it has concerns over the taxation regimes for their ports and has asked Germany to provide further information The Port of Rotterdam’s tax bill would increase by around €50 million ($68 million) if it is subject to corporate taxation.
West Coast Reduction has completed Phase 2 of its Rail Unloading Improvement Project, increasing the number of railcars that can be unloaded simultaneously from 16 to 24. It is estimated that West Coast Reduction's canola oil handling capacity will increase by 50 per cent and this represents potentially an additional $270 million in exports. The remaining phase involves upgrading the piping system between the pump house and the marine vessel berths and is scheduled for completion by March 2015.
Marking the occasion were (pictured above) Transport Canada’s Parliamentary Secretary Jeff Watson, joined by West Coast Reduction President and CEO Barry Glotman, Director of Technical and Environmental Services, Ken Ingram and Director of Sales and Marketing Rob Jones, at West Coast Reduction.
Transport Canada has published the long-awaited amendments to the Marine Transportation Security Regulations in the Canada Gazette Part II, Vol. 148, No. 14 - July 2, 2014. These amendments will bring greater clarity and consistency for marine operators and include recent changes made to the International Convention on Standards of Training, Certification and Watchkeeping (STCW) for Seafarers.
Big news this week from BC Ferries with the announcement of the award of a $165 million fixed price contract to build three intermediate class vessels in Poland. The contract has been awarded to Remontowa Shipbuilding S.A. of Gdansk and the vessels themselves will be dual fuel capable LNG or diesel for both main propulsion and generators. Two of the vessels are designated to replace the 49 year old Queen of Burnaby which services the Comox – Powell River route and the 50 year old Queen of Nanaimo which services the Tsawassen – Southern Gulf Islands route. The third vessel will supplement peak and shoulder season demand on the Southern Gulf Islands route in addition to providing refit relief across the fleet. Deliveries are scheduled from August 2016 to February 2017.The new vessels will be LOA 105 meters and will each accommodate 145 vehicles and 600 passengers. Well done BCF.
The BC Ferry and Marine Workers’ Union has failed in its bid to prevent BC Ferries from ordering a cable ferry to connect Denman and Hornby islands to Vancouver Island. BC Ferries has awarded a $15 million contract to Seaspan Shipyard for a 50 car and 150 passenger vessel for delivery in 2015. The Union had expressed concern to the BC Court of Appeal that the move would result in a loss of 15 jobs. The cable ferry will cut fuel expenses by about $2m per year on the 1.9km crossing which will be the longest such service in the world.
After a break of nearly 40 years, Port Metro Vancouver (PMV) is to resume management of Granville Island from the federal government’s Canada Mortgage and Housing Corporation (CMHC). Since 1972 CMHC oversaw the redevelopment of Granville Island from derelict industrial lands into the thriving arts, cultural and tourist trap that it is today. However, many of the island’s buildings and facilities are in need of upgrading and its largest tenant, Emily Carr University of Arts & Design, is scheduled to relocate to a newly constructed campus at False Creek Flats in 2016. Back in the 1880s, the island was a major hotbed for industrial activity but after World War II a series of fires and a changing economy put the island into disrepair until rejuvenation began under CMHC.
****Correction to this story has been made *****
Please note that we have received a correction from Port Metro Vancouver (PMV) on the July 4 article related to change of management at Granville Island. The article was based on information received however that source appears to be inaccurate.
Please see the below correction from PMV
I just wanted to reach out in regards to a story we noted in the Chamber of Shipping newsletter today that requires correction (the newsletter is fantastic by the way!). The story notes PMV is to take over management of Granville Island. This is not true – the Canada Mortgage and Housing Corporation (CMHC) is considering different options for the management of Granville Island. This process is with the CMHC, and no decision has been made.
Our apologies for the inaccuracy go to all concerned.
Dr. Mike Henderson has taken his leave as the Regional Director General for Transport Canada and has transferred to Natural Resources Canada as the Head of Major Project Management Office-West with immediate effect. Dr. Henderson’s Acting replacement at TC is Mr. Trevor Heryet, previous Regional Director of Civil Aviation. On behalf of our members, the Chamber would like to wish Dr. Henderson every success in his new role and bid a warm welcome to Mr. Heryet (picture above).
Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) contract talks which began on May 12 have continued beyond expiration of the previous contract on June 30 without too much fuss. “While there will be no contract extension, cargo will keep moving and normal operations will continue at the ports until an agreement can be reached between the PMA and the ILWU,” the parties said in a joint release.“Both sides understand the strategic importance of the ports to the local, regional and U.S. economies, and are mindful of the need to finalize a new coastwide contract as soon as possible to ensure continuing confidence in the West Coast ports and avoid any disruption to the jobs and commerce they support,” the release added.Expiration of the previous contract also means that the no-strike clause contained in contract has expired. However, by stating that “cargo will keep moving,” both parties were sending a message to the shipper community that neither a strike nor a lockout is anticipated as a way to influence negotiations.
It was denied by the ILWU that the work to rule this week at the Mitsui O.S.K. Lines owned TraPac terminal at the Port of Los Angeles is connected to contract negotiations. TraPac is the first container terminal on the West Coast to automate some areas of cargo handling processing, a right granted under an earlier ILWU contract.
It is evident that the US Environmental Protection Agency (EPA) is stepping up ECA enforcement as we approach the tighter 2015 standards. A number of shipping companies have been subpoenaed to submit further information following submission of several Fuel Oil Non-Availability Reports (FONAR). In the subpoenaes, all were asked to provide copies of their corporate policies and procedures related to MARPOL Annex VI compliance, as well as fuel procurement policies and contracts relating to any vessel for which they filed a FONAR. For each filed FONAR, they were told to provide a list of "each bunker supplier that does business at the port of call the vessel visited prior to entering the North American ECA, as well as at each port the vessel visited since receiving orders to proceed to a destination in the North American ECA” and to provide copies of all correspondence with each bunker supplier listed. All were also asked to fill in an electronic spreadsheet with detailed information for each FONAR filed by the company, essentially filling in gaps in information required in a FONAR that was previously not submitted. On top of that, they were asked to document the distance travelled inside the US portion of the North American ECA during which the vessels were burning non-compliant fuel, and the amount of fuel burned.
Canada is set to implement Administrative Monetary Penalties (AMPs) later this year for ECA non compliance.
Holland America’s popular Alaska cruise ship Westerdam returned to Seattle on Saturday evening after a small boiler room fire. The vessel was carrying around 2,900 passengers and crew at the time but there was no significant damage or injuries according to the U.S. Coast Guard and she was cleared to sail for a slightly shortened cruise on Sunday morning.
News has emerged related to the 2014 built Norwegian cruise ferry Bergensfjord which was involved in a minor LNG bunker spill two months ago. Bunker supplier Skangass has confirmed that a leak of an estimated 130 kilograms of LNG occurred during the truck-to-ship bunkering of Fjord Line’s 1500-passenger Bergensfjord at Risavika near Stavanger on May 9. The cause of the incident has been initially attributed to a test of the ship's stability system taking place at the same time as bunkering which put a strain to the hose connection to the bunker station. The Norwegian Directorate for Civil Protection (DSB), has committed to producing a publicly available report on the incident.
There were also a couple of announcements this week on the provision of what is anticipated to be the world's first sea-going LNG bunkering vessel which is set to be introduced at the Belgian port of Zeebrugge by 2016. Shell has also agreed to buy LNG imported to their neighboring Rotterdam Gate terminal for distribution to LNG fuelled vessels with a similar timeline. The port of Gothenburg (Sweden) has meanwhile announced that eco-friendly LNG powered ships will be granted a discount of up to 30% on harbor dues for the next four years.
In the UK, an unusual case involving cross-Channel ferry traffic has been underway for some time and has resulted in rail operator Eurotunnel has been banned by the country’s Competition and Marketing Authority (CMA) from operating a ferry service known as MyFerryLink which it started up two years ago. The case involves three ferries previously owned by SeaFrance, a company that was bankrupted following several suspensions of service due to strikes by French unions. In explaining its judgment, the CMA concluded that Eurotunnel's purchase of the ferries meant it had more than 50% of the cross channel business and therefore too much market power. CMA has given Eurotunnel six months to wrap up the service and seek a buyer for the ferries which together with shoreside support and management staff employ 600 people. Eurotunnel has advised that it will appeal the judgment for a second time.
The loss of the container ship MOL Comfort which broke in half in the Indian Ocean one year ago continues to generate an immense legal wrangle. Cargo interests have now been given leave by a Japanese court to join Mitsui OSK Lines in its lawsuit against Mitsubishi Heavy Industries, the vessel’s builder for damages from the sinking in which all 4,372 containers onboard the vessel were lost. MOL is also reported to be seeking at least ¥13.8bn ($131.6m) from Mitsubishi for damages and costs related to the cost of strengthening sister-ships with much hanging on ClassNK’s investigation report which is due to be released in August.
For its part, classification society DNV GL has disclosed that it previously rejected designs similar to that of MOL Comfort ”for not meeting the organization’s classification requirements”. Responding to the implied criticism, CLASSNK Executive vice-president Yasushi Nakamura commented whilst in London this week that his classification society “will revise standards for the structural stability of post-panamax containerships if investigations into the MOL Comfort casualty demonstrate the need to do so”.