As Royal Dutch Shell makes final investment decision on the world's first LNG-FPSO, South Korea's Samsung Heavy Industries embarked on the construction of the facility in earnest.
The Prelude FLNG is the largest of its kind and is to start producing LNG from 2016.
Samsung back on July 29th 2009 signed a basic contract with Royal Dutch Shell to construct LNG-FPSOs, together with France’s Technip, its consortium partner.
Under the agreement, Samsung will exclusively supply LNG-FPSOs to Shell for the next 15 years.
Industry insiders expect Shell to order up to 10 LNG-FPSOs worth $50 billion in total.
Samsung on March 9th 2010 held a signing ceremony for a contract with Royal Dutch Shell to build the 1st LNG-FPSO. Samsung, France’s Technip and Royal Dutch Shell signed a formal contract to build the LNG-FPSO, which is just the beginning of what would be the world’s largest newbuilding contract ever.
The LNF-FPSO, which has a length of 456 m, a width of 74 m and a height of 100 m, is expected to cost $5 billion.
The unit’s LNG storage capacity comes to 450,000 ㎥ and it will produce 3.6 million tons of natural gas per year at the gas field northwest Australia since 2016.
Brazil seeks to triple the number of ships and deepwater drilling rigs it needs to meet its ambitious oil and gas production targets set for 2020.
Dismissing widespread concern about structural overcapacity in the tanker sector, Petrobras chief executive Jose Sergio Gabrielli and Transpetro chief executive Sergio Machado have both been briefing shipowners, offshore executives and potential government partners in Norway this week, as part of a strategic plan to boost investment and ramp up shipping capacity.
Announcing that Petrobras plans to double total output to 5.4m barrels of oil equivalent per day by the end of the decade from 2.5m boe today, Mr Gabrielli told offshore operators Brazil would need five new shipyards, an additional 38 deepwater rigs and more than 280 supply and special vessels by 2020 in order to hit its capacity projections.
Mr Machado separately told shipowners Petrobras’ transport arm, Transpetro, would need to increase the size of its fleet from 53 tankers totalling 3m dwt to 120 tankers by 2015.
“We have a big challenge ahead of us to add sufficient capacity and this expansion is going to require hundreds of vessels; this opens a big avenue of opportunities for the shipping industry,” said Mr Gabrielli, addressing the Nor-Shipping conference.
Brazil lays claim to being the fourth-largest buyer of ships worldwide and its shipbuilding sector alone has managed rapidly to swell its ranks from 2,000 people employed a decade ago to more than 56,000 by 2010. The Brazilian delegation was keen to point out there was still considerable money to be spent on their ambitious expansion plans.
The Brazilian government is planning to invest $1bn in maritime training and research over the next three years and estimates it will need to train 208,000 people in Brazil by 2020 to meet demands across the maritime and logistics sector.
China’s Ministry of Transport and Ministry of Railways signed an agreement on Tuesday to jointly promote the development of China’s combined rail-and-waterway transportation network.
The agreement, regarded by the Chinese government as a concrete step in the establishment of a fully integrated transportation system, will increase efficiency, cut costs and contribute to China’s efforts to save energy and reduce carbon emissions, said Li Shenglin, China’s minister of transportation.
According to the agreement, the two ministries will work to optimize China’s existing rail-and-waterway transportation network, increase the construction of needed infrastructure and create supportive policies and regulations for the network, said Weng Mengyong, vice minister of transportation.
The ministries will also work together to strengthen the management of the network and work with ports and shipping and railway companies to develop related businesses, Weng said.
Weng said that the number of shipping containers handled through China’s combined rail-and-waterway transportation network is less than 2 percent of the total amount of containers handled at the country’s ports.
Yangzijiang Shipbuilding (Holdings) is set to own the largest dry dock in China as the Singapore-listed company, which holds a 60% stake in Yangzi Xinfu Shipbuilding, is building a 543-metre-by-147-metre dock that will be ready from 2013.
Industry watchers says the new dock will overtake Hong Kong-listed Rongsheng Heavy Industries’s No 4 dry dock, which measures 530 metres by 135 metres and is currently the largest of its kind in the country.
The move has raised concerns that it will further aggravate the excess capacity the Chinese shipbuilding industry is currently facing. However, some market players reckon it is necessary for Yangzijiang to own a large dock in order to exercise flexibility and adapt to market changes.
“Yangzijiang is building this mega-size dry dock so that it can construct large vessels as well as offshore units,” said one industry pundit.
Industry players say Yangzijiang will be using the dock to construct the 10,000-teu containerships that Seaspan Corp is intending to book.
“Another reason for building the dry dock is that Yangzijiang did not succeed in taking over oil-rig maker PPL Shipyard. As a result, it is investing in Yangzi Xinfu to enter the offshore sector,” said one shipbuilding player.
Italian shipowners are urging China to take responsibility for the crippling effects overcapacity is having on chartering markets, particularly the dry sector, by introducing a system that for every ship its yards build another is scrapped, in bid to tackle rocketing fleet growth.
Giuseppe Bottiglieri and other owners present at the Mare Forum Italy event in Sorrento said they would like to see China go one step further than the incentive scheme introduced last year aimed at getting domestic owners to scrap unsafe vessels, and balance out new ships entering service with the same number exiting the fleet.
A major concern are elderly ships of around 25-30 years of age bought in the secondhand market over the last two years while prices have been cheap, and which are serving the Chinese coastal trade. Many are thought to be at risk of breakdown or accidents.
“It is very dangerous for shipowners. Those with old ships should be warned that they are running huge risks,” Mr Bottiglieri told the forum, talking about China but also the wider shipowning community. “They should be replaced with new ships.”
Privately-owned Chinese shipyards are not under threat from closure, and, just like state-owned facilities, are receiving support from the country’s government to keep employment high and the economy moving.
In contrast to the widely held view in the maritime industry that as newbuilding orders dry up, private yards will struggle to find business, Keen Maritime Services managing director John Su says the Chinese government is so concerned about unemployment it will not let these facilities fail.
As a Chinese-born broker and consultant that is based in Athens, he is the middle man for a number of foreign deals taking place but is also is heavily involved with China’s domestic market and says its banks are so influenced by central government they will continue to lend to shipbuilding yards and owners to sustain a robust economy.
“The government doesn’t care about owners and overcapacity, they care more about jobs and the economic fallout from a yard collapsing and so even the private yards will get support,” he told the Mare Forum Italy in Sorrento.
Added to this, Mr Su says there is more domestic newbuilding ordering activity taking place in China than the rest of the world realises.
“It’s scary to think but there are a lot of orders that are not known to brokers,” he said, making reference to a contract reported by brokers such as Clarksons last week for an order of two confirmed 205,000 bulk carriers, and options for six more, at Qingdao Yangfan Shipbuilding for owner HongXiang Shipping.
“This order was already placed last year and is just one example,” highlighting the extent to which the shipping industry does not know the true size of the global orderbook.
Croatian Register of Shipping is the latest organisation to join the International Association of Classification Societies.
IACS chairman Noboru Ueda accepted the registry’s application for membership.
Ueda said that he looked forward to the registry’s “active participation in and contribution to” the organisation’s work.
CRS’ membership follows that of the Indian Register of Shipping, which became the first new member of IACS last year since new membership criteria came into effect in 2009.
Bulk freighters will be able to avoid congestion around Shanghai and sail up China's Yangtze River as far as Nanjing under a $2.7 billion plan to deepen the navigation channel by 2015, Xinhua News Agency reported.
The river would be navigable for ships up to 50,000 tonnes, which means handymax and supramax dry bulk carriers will be able to unload their cargoes further upstream in Jiangsu province, giving more manufacturers direct access to imported commodities, as well as easing logistics for exports, it said.
Nanjing is already a major destination for commodities shipments, chiefly iron ore. Its customs office handled imports of 17.5 million tonnes of iron ore in the first three months of this year, the third-highest in the country, after Qingdao and Shijiazhuang.
Huge supply bottlenecks have affected imports of coal, grains and other dry bulk goods into China, which has turned into the principle buyer for many raw materials thanks to rapid economic growth.
The 18 billion yuan ($2.7 billion) project to deepen the navigation channel would be funded by the Ministry of Transport and the government of Jiangsu province, Xinhua said.
Cosco (Dalian) Shipyard Co. Ltd. has awarded a contract to Inocean to develop and produce a basic design for a new compact, ultra-deepwater drillship. The design is being introduced for the first time in Houston at the Offshore Technology Conference.
The design, tagged INO-80, is dynamically positioned with a large, free deck space designed for year-around operations.
“Cosco and Inocean have during the years worked closely in several projects including heavy-lift vessels, FPSOs, and drillships,” said Jon Erik Borgen, CEO of Inocean AS. “The approach will be the same for INO-80, where Inocean will contribute with its high-end engineering and design expertise, and Cosco with its strong execution ability. Depending upon the response from the market, we believe the first unit will be delivered in 1Q 2014.”
Responding to the increased technical sophistication of drillships and other mobile offshore drilling units and with the greater regulatory oversight of offshore drilling, ABS has developed new classification standards and notations intended to provide MODU operators with increased confidence that their operations are being conducted to the highest demonstrable standards.
"ABS is the leading provider of classification services to the offshore sector," said ABS President and CEO Christopher J. Wiernicki. "We have been talking with the industry, regulators and others with related interests. This has helped us to clearly define existing standards that can be improved, and to also identify those new areas that would benefit from having an independent, third party set of standards that properly address the new technologies that are being incorporated into the latest designs of drillships, semis and jackups."
That research has indicated a broad range of both design and operational aspects that warrant additional guidance, according to Ken Richardson, ABS Vice President, Energy Development. "Obviously enhanced standards for the classification of drilling systems are key components," he noted, "but operators are also looking for a more holistic approach to the maintenance of their assets and we have developed new notations that can be used by an operator to demonstrate the effectiveness of their maintenance programs."
Richardson also emphasized the need, expressed by many of the ABS MODU operators, for an effective independent standard that addresses the integration of the ubiquitous, and increasingly complex, software programs that are essential for the operation of the unit as a whole. "The offshore sector has always been a leader in developing and adopting new technologies and novel concepts," Richardson added. "There is a lot of innovative thinking that goes into the development of the individual components that are brought together in the modern drillship. The key to the safe and seamless operation of the unit is the ability of all these components to function together in a manner that can be controlled by the operational team on board. That is the basis of a lot of our research and the development of our new software notations."
New notations that have been developed by ABS for the drilling sector include Integrated Software Quality Management (ISQM), Systems Verification (SV), DRILLSHIP, Asset Integrity Management (AIM) and Rapid Response Damage Assessment (RRDA). Existing notations that have been enhanced include Classification of Drilling Systems (CDS), Hull Inspection and Maintenance Program (HIMP), Reliability Centered Maintenance (RCM), and Environmental Protection (ENVIRO-OS).
ISQM is a risk-based software development and maintenance process built on internationally recognized standards. The ISQM process validates the software installation on the unit and then monitors for consistency when there are software updates or a change in hardware. ISQM provides a process to manage software over the offshore unit's life.
"There is growing recognition within industry that organizations will need to institute a change management process for software," says Bret Montaruli, ABS Vice President, Offshore Technology. "Industry has traditionally focused on structures and equipment. However, software has become such an important component in the operational phase particularly since control systems for offshore installations and units become more complex. Successful implementation relies heavily on the integration of software developed by multiple vendors."
The ABS ISQM Guide places emphasis on the verification and validation of the multiple software packages. The benefit to owners and operators is an increased level of confidence in software reliability with the goal of decreasing downtime and reducing the risk of software related incidents."
The SV notation allows operators to benefit from verifying that the software has been developed in a recognized process that meets the operator's needs and performs as expected. Upgrades and new releases that are routinely made by vendors and which may introduce errors into the system and increase downtime or cause other operating problems are also subject to verification prior to installation.
Award of the DRILLSHIP notation indicates that the vessel has been designed and constructed to the standards contained in the Guide for Drillships. As the principal classification society for drillships, ABS is taking the lessons learned and is clarifying the criteria for these specialized vessels.
Asset Integrity Management is a concept that is well established within the offshore sector and has received renewed attention. "Operators are looking for third party confirmation that the day to day maintenance and management of their units conforms to a clear, industry accepted standard and the new ABS AIM notation provides them with such verification," says Richardson. "It builds on the existing Hull Inspection and maintenance Program (HIMP) requirements that several operators have adopted, taking a more holistic approach to the overall management of the MODU." A key element of this is the addition of a state-of-the-art loads and configuration approach that provides the operator with a tool to better understand the operational loads to which the unit is subject.
While HIMP is directed at the inspection and maintenance of the unit's structure, the companion Reliability Centered Maintenance (RCM) notation addresses the manner in which the machinery and equipment on board the unit is maintained, including replacement and repair strategies that are pre-emptive in their approach.
The ABS RRDA program and notation is a well established offering within the shipping industry and has now been enhanced and made available to offshore operators. "The technical assessment of an offshore structure can be much more complex than for a ship such as a tanker," explains ABS Chief Technology Officer Todd Grove. "Many offshore units are unique in their architecture so that the necessary modeling of the unit is similarly complex and the programs must be specifically tailored to the unit. Incidents affecting offshore units over the recent past have highlighted the importance of having the ability to quickly evaluate the unit in the damaged condition so that pro-active response strategies can be implemented that may be able to stabilize the situation preventing or minimizing the possibility of loss of life or ensuing pollution."
ABS has offered the voluntary CDS notation for many years. ABS has revisited the standards with industry and other interested parties to identify those areas that should be strengthened or clarified. The newly issued Guide for the Classification of Drilling Systems includes these enhanced standards and takes a more holistic approach to the entire drilling system from the drill floor to the wellhead including the blow out preventer.
The ENVIRO-OS or ENVIRO-OS+ denotes adherence to enhanced standards for environmental protection. The notation takes into account procedures and requirements for ballast water and sewage management, anti-fouling applications, airborne pollutant discharges, fuel oil and the use of exhaust gas cleaning systems, refrigerants and the Green Passport for ship recycling.