Friday, 01 August 2014 11:46

New grain handling measures now official

The Order in Council (OIC) relating to the implementation of the Fair Rail for Grain Farmers Act (Bill C-30) is now in force.  The measurs, which take immediate effect include: 

  • The passing of an OIC, which sets out the minimum grain volumes that Canadian National Railway Company (CN) and Canadian Pacific Railway Company (CP) are each required to move from August 3, 2014 to November 29, 2014.
  • Regulations requiring CN and CP to provide additional data on grain movement to better monitor the overall performance of the rail-based supply chain.
  • Regulations to clarify the operational terms in a service level agreement that can be arbitrated by the Canadian Transportation Agency, to support commercial negotiations between shippers and railways. These newly defined rail service obligations will increase predictability for all shippers.
  • An amendment to the Railway Interswitching Regulations extending the limit for rail interswitching from 30 kilometres to 160 kilometres in the provinces of Alberta, Saskatchewan and Manitoba for all commodities to increase competition among railway companies and give shippers access to alternative rail services.
  • Regulations to provide farmers with better protection through more accountability for grain companies in contracts.

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The Province of British Columbia has just invested $6.8 million to create 1,424 new training seats at various post-secondary institutions throughout BC.  This investments falls under the BC Skills for Jobs Blueprint initiative to increase training spaces and reduce wait times in trades critical to the LNG sector.  These additional seats are expected to reduce wait times by 37%.

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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:

  • Aurora LNG led by China National Offshore Oil Corp. through subsidiary Nexen EnergyInpex Corp.. and JGC Corp. of  Japan. The planned site of the liquefaction plant is Grassy Point, north of Prince Rupert.
  • Discovery LNG of Quicksilver Resources Canada at Campbell River.
  • Douglas Channel Energy:  The developers are Douglas Channel Gas Services, Haisla Nation, Golar LNG of Norway and LNG Partners LLC of Houston, Texas. Floating LNG plant planned for Kitimat.
  • Kitimat LNG involves US energy companies Apache Corp. and Chevron and the plant in Kitima
  • Kitsault Energy project is in Kitsault in northern BC.
  • LNG Canada involves Shell Canada and their co-venture partners Korea Gas Corp., Japan’s Mitsubishi Corp. and PetroChina.
  • Pacific Northwest LNG. It is led by Petronas of Malaysia and also involves Japan Petroleum Exploration Co. Plant is planned for Prince Rupert.
  • Prince Rupert LNG is led by BG Group of the UK, with possibly CNOOC as a shareholder.
  • Steelhead LNG is being planned by Steelhead LNG Corp. and the Huu‐ay‐aht First Nations. The plant is planned for Sarita Bay on Vancouver Island.
  • Stewart Energy LNG is owned by Canada Stewart Energy Group Ltd. with a site near Stewart BC.
  • Triton LNG Ltd. The proponents are AltaGas Ltd. and Idemitsu Corp., the Japanese refiner. No site has been chosen, but Kitimat and Prince Rupert are under consideration.
  • WCC LNG Ltd. is the company owned by ExxonMobil’s Canadian arm, Imperial Oil. No site has been chosen but an export application has been approved by the National Energy Board.
  • Watson Island LNG. The proponent is Watson Island LNG Corp. the planned location is Watson Island, Prince Rupert
  • WesPac LNG is led by WesPac Midstream of Vancouver
  • Woodfibre LNG. is being developed by Woodfibre Natural Gas Ltd. and will be located in Squamish
  • Woodside of Australia proposes a project at Grassy Point, north of Prince Rupert BC.
  • Tilbury LNG facility is owned by FortisBC on Tilbury Island in the Fraser River and will supply domestic market with fuel.
  • AltaGaswill build a small-scale LNG facility, or perhaps several, in BC.
  • Bear Head in Nova Scotia has seen the arrival of LNG Ltd of Australia to build an LNG export plant.
  • Goldboro LNG in Nova Scotia is owned by Calgary-based Pieridae Energy and has already signed supply agreements with German utility E.ON to export cargoes to Europe.
  • Melford in Nova Scotia has been chosen by H-Energy, an Indian company, as the site of an LNG export plant.
  • New Brunswick’s Canaport LNG is an import terminal with liquefaction potential being studied by owners Irving Oil and Spain’s Repsol.
  • Gaz Metro LNG is considering different solutions to increase the availability of LNG in Quebec, including adding liquefaction capacity to its small liquefaction, storage and regasification plant in Montreal.

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.

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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.

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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.

Friday, 01 August 2014 10:13

PMA / ILWU talks suspended until August 4

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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.

Friday, 01 August 2014 10:11

Costa Concordia completes her final trip

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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.

Friday, 01 August 2014 10:10

Harrowing testimony at Sewol trial

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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.

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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.

Friday, 01 August 2014 10:07

Hamburg Sud set to absorb CCNI

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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.

Friday, 01 August 2014 10:06

Qatar takes controlling stake in UASC

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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. 

Friday, 25 July 2014 09:43

South Portland opposes Line 9 reversal

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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.

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