Tanker Technology:A Look At The Yards
Japan and South Korea are the two major shipbuilding nations involved in building VLCCs, although Denmark's Odense Staalskibsvaerft is also a major player. The only other current orders are in Taiwan and Spain, both for domestic owners.
Japan has shown restraint in recent years with various governmentsponsored initiatives to reduce the number of ships being built in each yard, although very few yards have actually closed for business.
The majority of large Japanese shipyards are involved in the tanker market, all the latest orders including OPA 90-regulatory double hulls.
The most recent count of orders included Hitachi Zosen (8 large tankers), IHI (2), Kawasaki (1), Mitsubishi (7), Mitsui (1), Sasebo (2) and Sumitomo (2).
Meanwhile, South Korea has ignored recent pleas—especially from the OECD — for it to not increase shipbuilding capacity. The main contributors to the South Korean shipbuilding industry are Hyundai Heavy Industries (HHI), Samsung Heavy Industries (SHI), Daewoo Shipbuilding & Engineering and Hanjin Heavy Industries (formerly KSEC). New developments include Halla and Daedong.
The latest development in the South Korean shipbuilding industry is the construction of the large shipbuilding complex at Mokpo, which is being developed by Halla Engineering & Heavy Industries Ltd. (HE&HI). The Halla organization took over the newbuilding and repair yard operated by Inchon Engineering & Shipbuilding Corp. about two years ago, and since has been successful in various projects including a series of 40,600-dwt product tankers for Shell International, the last of which is due for delivery later this year.
Halla, restricted by space to develop the Inchon facility, decided that a new building complex should be built at Mokpo, which is a yard capable of building ships up to VLCC size. This new complex, named New Samho Shipyard, is nearing completion with two suezmax tankers being the first ships due for delivery during the early part of next year. Recently, the yard won an order for two double-hulled VLCCs to be built at this shipyard. All four ships are for Halla's shipowning wing, Halla Merchant Marine.
There has been mounting criticism from the world's shipbuilding authorities of this project, but it has been allowed to continue with the blessing of the South Korean Government, despite its likely effect upon prices.
Samsung is another expansionminded newbuilding company. Earlier this year the yard's building capacity was supplemented by the extension to an existing building dock to take VLCC tonnage, and now the yard is planning a third VLCC building dock.
As one of the world's leading tanker builders, South Korea has become involved in ships suitable to meet OPA 90 requirements. All four large shipyards (HHI, SHI, HE&HI and Daewoo) and the smaller Hanjin have designs available and ships on order.
The largest order placed for VLCCs was by Saudi Arabian-based Vela Corp., which contracted a series of six 280,000-dwt crude carriers from HHI at a price said to be in the region of $114 million each. All the large tankers ordered by Vela and the National Shipping Corp. of Saudi Arabia from Japan, South Korea and Denmark have double hull designs. During 1993 HHI won two orders from the Shipping Corp. of India for two double-hulled VLCCs at a cost of $60 million each; Samsung received a similar order. Norwegian owner Peder Smedvig ordered, during June 1993, two 95,000-dwt crude carriers from HHI at a price of $43 million each. Later in the year the order was increased to a series of four, although the price per ship increased to $48.5 million. HHI won the order for two double hull design ULCCs ($100 million per ship) from U.S. owner Overseas Shipping Group. The yard is also currently building a VLCC for another U.S. owner, Consolidated Maritime. Samsung has two double-hulled VLCCs building for Belgium's Bocimar, both ordered during mid- 1993 at a price of $43 million per ship. At about the same time, Samsung won an order from Eastern Mediterranean Maritime of Greece for two 97,000-dwt double bottom/double skin crude carriers ($43 million per ship) — the order, during May 1994, being increased by a 145,000-dwt vessel ($56 million) of similar design. Another Greek shipowner to utilize Samsung's designs is Thenamaris, which earlier this year ordered two 148,500-dwt crude carriers ($56 million per ship). Singapore-based Tanker Pacific Management is another independent owner who has ordered a double-hulled tanker (95,000 dwt) from Samsung ($43 million). U.K.-basedNSLemoshas two 95,500-dwt crude carriers ($47 million per ship) on order at Samsung. The Shell International order for five VLCCs at Daewoo is a very good indication of how many major oil companies may look to future ordering trends — obtaining financing outside normal channels and bareboating the vessels when delivered. Obviously Shell would adhere to the OPA 90 regulations; all five ships ($90 million per ship) are of double hull design.
The Middle East countries continue to build their tanker fleets.
The National Iranian Tanker Co. (NITC) ordered, during 1993, a series of five 300,000-dwt ULCCs, all with a double hull design and all to be built at Daewoo, Koje Island.
Daewoo has also been building VLCCs for Sweden's ICB, the ships once again including a double hull design.
Halla won an order during 1993 for three double-hulled 45,000-dwt tankers from France's Soflumar van Ommeren. This order's two-ship option was taken up in May 1994. However, one of the original order was subsequently taken over by Greece's Stelmar Tankers. Halla has also been building 40,600-dwt double hull design product tankers for Shell International.
Conversion One of the most lucrative markets for the conversion industry in recent years has been the tanker to FPSO (Floating Production and Storage Offloading units) segment. The most recent contract from this market sector was won by Singapore's Jurong Shipyard Ltd. (JSL), which was awarded the major contract to convert the 134,000-dwt tanker Mega Eagle into an FPSO, the first such conversion contract won by JSL from this specialized offshore market. The $20 million contract to convert the 1975-built tanker, which is to be renamedMm Hai Sheng Li, was awarded to the yard by MODEC Inc. of Japan. Work involves the life extension of the vessel for another 15 years and the installation of new equipment and systems.
Although JSL has won its first contract from this sector, Keppel has been involved with two such conversions in recent months. The yard recently delivered the Nan Hai Kai Tuo to Philips Petroleum for use off the mainland Chinese coast, and is currently working on the Cossack Pioneer, ex-Chevron London, for use off the Australian coast.
In Europe, the main player in this market has recently been Astilleros Espanoles SA (AESA), which completed the conversion of the conventional crude-carrying VLCC Good News for Bluewater Terminals, and is now working on a second vessel — the 99,800-dwt tanker Uisge Gorm, ex-Dirch Maersk — which is being converted, under a $30 million contract, into an FPSO for Bluewater Terminals.
This market sector is likely to remain buoyant for a number of years for the many specialized yards willing to bid for such a vast project. Amoco Hamilton and Shell are among a number of companies with long-term plans for such conversions, and Australia's Ampolex (Orient) Inc., which has headquarters in Perth and a regional office in Shen Zhen district near Hong Kong, is currently looking at possible shipbuilding/ship repairing companies to carry out a lengthy turnkey project for the design through conversion to hook-up of an FPSO for mainland China.
Another conversion sector from the tanker market is that of conventional tankers to specialized offshore shuttle tankers, especially those many such vessels required for the North Sea. Hamburg's Blohm + Voss (B+V) recently completed such a conversion involving Ugland'sSterca Savonita, ex-Savonita. Norwegian owner Knudsen OAS, Haugesund recently had two of its fleet of tankers converted to specialized shuttle tankers with the Submerged Turret Loading (STL) system: the Dicto Knudsen was converted at AESA and the Tove Knudsen converted at the owner's own shipyard, Haugesund Mekaniske Verksted. Meanwhile, another such project involves the 91,000-dwt tankerFutura, which is owned by Finland's Neste. She is to have a new $13.65 million STL bow loading arrangement fitted at Kvaerner Masa-Yards, Finland. The conversion work will be completed by the end of this year. Kvaerner Masa-Yards had already won a contract from Neste Shipping the previous year (1994) — a $17 million contract to convert the 16,420-dwt tanker Lunni for Arctic trading. The 1976-built vessel arrived in Helsinki at the end of last year and is expected to enter the former Valmet yard in Helsinki at the end of the year and leave in spring 1995. The same work was completed on her sistership, Uikku, earlier this year. When the recently-introduced OPA 90 regulations governing double-hulled tankers came into force this year, many believed that it would result in a number of conversion projects involving existing tankers. U.S.'s Avondale Industries is the first to be awarded such a contract involving Jones Act tankers by American shipowner, American Heavy Lift Shipping (AHL). The $160 million contract involves the forebody conversions, stern modifications and some house arrangements to the 34,723-dwt King and Knight and the 30,806- dwt Solar and Spray. The U.S. Maritime Administration (MarAd) has approved a $139.4 million loan-guarantee under its Title XI program.
