Posted by: cesmiconference | August 5, 2015

Did the World Actually Need a New Suez Canal?

A cargo ship is seen crossing through the New Suez Canal in a 'test run' held July 25, 2015. REUTERS/Stringer
A cargo ship is seen crossing through the New Suez Canal in a ‘test run’ held July 25, 2015. REUTERS/Stringer

By Ahmed Feteha

(Bloomberg) — The Suez Canal took 10 years to build and cost thousands of workers their lives. When planners suggested three years for a second one, Egypt’s president balked.

“Not three years, just one,” he ordered.

Twelve months later, Abdel-Fattah El-Sisi is hosting a party to celebrate the biggest expansion of the canal since it first opened in 1869. For the former army chief seeking to bolster his rule, the symbolism is impossible to miss.

Less clear are the economic benefits of what billboards in Cairo and New York’s Times Square dub “Egypt’s gift to the world,” which will raise capacity and shorten the time it takes to sail the 193-kilometer (120-mile) link between the Red Sea and the Mediterranean. Thursday’s ceremony, to be attended by dignitaries from French President Francois Hollande to North Korea’s deputy leader Kim Yong Nam, comes amid sluggish global trade growth to which the canal’s fortunes are linked.

“From a shipping industry point of view, this initiative to expand the Suez canal was a bit of a surprise,” said Ralph Leszczynski, Singapore-based head of research at Genoese shipbroker Banchero Costa & Co. “There was no pressing need or requests for this as far as I’m aware.”

Suez has yet to fully recover since the global financial crisis caused shipping to plummet in 2009. Though total tonnage has increased, the number of vessels using the canal remains 20 percent below its 2008 level and just 2 percent higher than a decade ago, data compiled by Bloomberg show.

Rather than a bottleneck, analysts say those statistics reflect slower global trade growth, which the International Monetary Fund expects to average 3.4 percent in the period 2007-2016, compared with 7 percent over the previous decade.

The Baltic Dry Index, which measures rates for shipping iron ore, coal and grain and is viewed as a bellwether for the global economy, slumped to a record low 509 points in February. It remains about 90 percent below its all-time high of 11,793 reached in 2008.

Lacking Details

“At the moment, speed is not a key factor for container shipping, the shipping sector which most utilizes the canal,” said Michelle Berman, the head of operational risk at BMI Research, a unit of Fitch Group. A bigger issue is a “surplus of ships” relative to demand, with ever-larger vessels built for the Asia-Europe route compounding the problem, she said.

The government hasn’t made public viability studies to show how it will gain a return on its 64 billion Egyptian pound ($8.2 billion) investment. The expansion will meet future demand, with traffic expected to double to 97 vessels a day by 2023, said Mohab Mameesh, head of the Suez Canal Authority.

“By creating a second lane of the canal we are able to reduce waiting times, which reduces fuel expenditures and costs, with no increase in our toll fees,” he said in an e-mailed response to questions.

Global trade volume would need to rise by around 9 percent a year for Suez to reach its traffic goal, Capital Economics said in a report on Monday, describing the target as “unlikely to say the least.”

Canal Distraction

That hasn’t stopped El-Sisi and his government from talking up the new canal amid political challenges to its rule.

Hundreds of Egyptians, most of them supporters of the deposed Muslim Brotherhood, have been killed and thousands imprisoned since El-Sisi, as army chief, pushed his Islamist predecessor from office in 2013 after mass protests. El-Sisi was elected president last year.

The political turmoil has polarized Egyptians. El-Sisi supporters say it saved the country from the deadly strife affecting much of the Middle East, while opponents criticize the government’s human rights record and what they regard as brutality used to restore stability.

French Connection

Thursday’s party, with an estimated price tag of $30 million, is a chance for the government to send a more positive message by harking back to the events marking the canal’s 1869 completion. French empress Eugenie attended — her husband Napoleon III was deposed a year later — and a performance of Giuseppe Verdi’s ’Rigoletto’ opened Cairo’s new opera house.

The canal has since transformed global trade.

About 8 percent of the world’s cargo now passes through the canal, according to the Suez Canal Authority. Traveling from Singapore to New York through Suez reduces the distance by 19 percent compared with the route via the Pacific and the Panama Canal. From the Persian Gulf to Rotterdam, Suez saves 42 percent by removing the detour around the Cape of Good Hope.

“Even without any improvements, the canal would always be attractive,” said Neil Atkinson, head of analysis at Lloyd’s List Intelligence.

Wider, Deeper

The second canal — actually a new 35-kilometer channel and 37 kilometers of widening and deepening of the original — allows two-way traffic and reduces transit time to 11 hours from 18, according to the canal operator. The expansion won’t allow larger vessels to use the route.

New ports and logistical services are expected to follow, and the project includes six tunnels under the canal. The authority expects revenue to grow to more than $13 billion by 2023, up from $5.5 billion in 2014.

“‘Build it and they will come’ is not enough,” said Simon Kitchen, a strategist with Cairo-Based investment bank EFG- Hermes, adding that companies will require incentives to build factories and other facilities. “The government needs to give ships a reason to sail through the canal,” he said.

Others are more positive. Egypt’s economy grew at over four percent in the nine months to March for the first time since 2010, mainly due to infrastructure spending related to the canal upgrade, according to investment bank Pharos Holding for Financial Investments.

Saving Money

A shorter transit may save up to 4 percent of journey costs depending on the length, the Napoli-based economic research center SRM estimates.

The project “was a necessity to maintain the attractiveness of the Suez Canal,” said Michael Storgaard, a spokesman for Maersk Line, the world’s biggest container shipping company. Even so, it’s too early to say whether Maersk will route more vessels through Suez, he said.

Still, any future economic payoff is trumped by the political implications for the government from building confidence in El-Sisi’s leadership, according to Amr Adly, a scholar with the Carnegie Middle East Center in Beirut.

“El-Sisi is trying to gain legitimacy through his government’s achievements,” Adly said. His thinking is that Suez “shows the government can deliver, it can commit to something and get it done,” he said.

©2015 Bloomberg News

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Posted by: cesmiconference | August 2, 2015

Costa Cruises to Get Record-Breaking LNG Powered Cruise Ships

costa cruise ship
File Photo: Vytautas Kielaitis /

Costa Cruises has been revealed as the brand that will get two new LNG-fueled cruise ships ordered by Carnival Corporation that will also set the record for guest capacity.

Costa Cruises announced Tuesday the order to build the two new next-generation cruise ships at the Meyer Werft shipyard in Turku, Finland.

The ships, which will be powered by liquified natural gas, are part of a multi-million contract first announced in June between Carnival Corporation and Meyer Werft calling for the construction of four similar cruise ships at the Meyer Werft’s yards in Papenburg, Germany and Turku, Finland.

In what is a first for the cruise ship industry, the four ships are to be equipped with dual fuel engines that will use clean burning LNG to produce 100% of the power needed at sea. The ships also set the world record for guest capacity, with a total capacity for a staggering 6,600 guests in 2,600 passenger cabins with more than 5,000 lower berths. At 180,000 gross tons, the vessels will also be the largest in the Carnival Corp. fleet, which currently spans nine brands and more than 100 ships.

At the time of the June announcement, it was revealed that two of the ships will be manufactured for Carnival’s AIDA Cruises brand, with details about the remaining two ships to be revealed at a later date.

Costa Group says that the new ships represent an environmental breakthrough for the cruise ship industry and will help the company build on its leadership position in the continental European cruise market.

Delivery of the two vessels for Costa Cruises are scheduled for 2019 and 2020.

Carnival Corp., the world’s largest cruise company, said that the order is the result of strategic partnerships established in March between Carnival and leading shipbuilders Meyer Werft, Meyer Turku and Fincantieri S.p.A. for nine new ships between 2019 and 2022.

Family-owned Meyer Werft Shipyard became the sole owner of the Turku shipyard, now known as Meyer Turku Shipyard Oy, in April after buying out the Finnish Government from its 30% stake. Meyer Werft and the Finnish state originally purchased the yard. then part of STX Finland, from STX Europe in September 2014. Since the acquisition, Meyer Werft has helped the shipyard complete deliveries within its existing orderbook and also attract new business to the yard.

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Posted by: cesmiconference | July 9, 2015

Rolls-Royce: unmanned ships could set sail within three years

Photo Credit: Rolls-RoyceRemote-control vessels with no captain or crew on board could be the next step in the evolution of the maritime industry.

According to Oskar Levander, vice president of maritime innovation, engineering and technology at Rolls-Royce, ships piloted from ashore will mean cheaper, safer sea transportation, and could be a reality within three years.

Speaking at the EmTech Singapore conference, Levander said unmanned ships will save on crew wages as well as fuel costs.

Savings of 15 percent could be achieved through the removal of certain parts of the ship, such as the deckhouse and crew quarters, which would also allow for more space to pack cargo on board.

Significant cost savings

While ship owners would be the main beneficiaries of cost savings, Levander believes these high-tech vehicles will also drive down the cost of freight and logistics. “Anyone who is going to transport something will benefit from lower costs,” he said.

According to the International Maritime Organization (IMO), around 90 percent of world trade is carried out by the shipping industry. In 2010, 8.4 billion tons of goods were transported by sea.

Levander believes much of the technology required to operate crewless ships is already in place, but the biggest barrier will be maritime regulations. “The main challenge will be international regulatory obstacles. The IMO would have to approve it, which could take time.”

In 2024, the IMO will issue an update of the SOLAS convention – the international treaty that governs safety at sea. Levander hopes the new rules will take into consideration unmanned ships.

Trials within three years

Crewless ships are likely, however, to set sail sooner than that. The first foray is expected to be in local waters, and would involve ferries or coastal cargo vessels rather than large container ships.

Levander said Rolls-Royce is in discussions with a number of flag states that would allow them to trial such a vessel in their waters. “We are working in Northern Europe, but there are also other possibilities. As we prove and demonstrate the technology, it will evolve into big ocean-going ships.”

And for Rolls-Royce and its partners, the wind appears to be blowing in the right direction. Since 2012, the European Union has been funding a research project called MUNIN (Maritime Unmanned Navigation through Intelligence in Networks), which aims to develop a concept for an autonomous ship – something it hails as “a key element for a competitive and sustainable European shipping industry in the future”.

Protecting against piracy

Crewless ships could also be a boon in the fight against piracy, which, according to a report by the World Bank, costs the global economy around US$18 billion a year in increased trade costs. Without potential hostages on board, a ship is not as interesting for pirates, Levander said.

“When the pirates board, you can shut it down and it’s easier to take the ship back. The problem with crewed ships is that it’s hard for the military to intervene.” He noted, however, that high levels of IT security would be required to ensure a ship could not be hijacked remotely.

But despite excitement from ship owners and their customers, the development of unmanned ships is likely to be met with resistance from the estimated 1.2 million seafarers serving on internationally trading merchant ships.

According to shipping industry consultant Moore Stephens, the crew represents 44 percent of total operating costs for a large container ship. The International Transport Workers’ Federation, a union that represents around 600,000 seafarers, has already voiced its opposition to the development.

Levander, however, claims many sailors would jump at the opportunity to work onshore, operating a ship from an office, rather than spending months at sea.

Automation transforming a range of sectors

Shipping is one of many industries being transformed by the process of automation. Remotely operated vehicles (ROVs) are already used in the fields of defence, mining and offshore oil and gas, relieving humans from some of the most dangerous tasks.

The use of autonomous trucks is currently underway in Western Australia’s Pilbara region. Mining companies Rio Tinto and BHP Billiton are using the technology to haul iron ore.

Rio Tinto, the largest owner and operator of autonomous trucks in the world, currently has 53 autonomous trucks operating across its mine sites. They respond to GPS directions to deliver loads 24 hours a day and are supervised by remote operators.

Rio Tinto also expects to launch the world’s first fully autonomous heavy-haul, long-distance railway system in 2015. The US$518 million investment in the Pilbara rail network is designed to improve productivity and safety.

Meanwhile, in the logistics sector, e-commerce giant Amazon last year tested delivery drones – small, remotely operated aircraft that would be used to drop parcels at customers’ homes.

Rolls-Royce says it is working closely with ship owners as well as ship-to-shore communications specialists, radar technology companies, major universities and research institutions to develop ‘ship intelligence’ that will power these automated vessels.

“Those who miss out will be the late movers,” said Levander. “They will have higher running costs, higher crew costs and higher fuel costs.”

Edited by Claire Slattery and Stanley Tang

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China National Offshore Oil Corporation (CNOOC) has taken delivery of Asia’s first tugboat Hai Yang Shi You 525, designed to operate solely on liquefied natural gas..

Hai Yang Shi You 525 is the first of two tugs built by the Zhenjiang shipyard for CNOOC. The vessel features a propulsion package based on twin Rolls-Royce Bergen C26:33L9PG engines and a pair of highly reliable Rolls-Royce US 205 CP azimuth thrusters for maneuvering and strong bollard pull.

“This order marks a new era for tugboat propulsion technology in China,” commented Richard Wang, Rolls-Royce, Senior Vice President – Commercial Marine. “As its shipbuilding industry shifts focus from standard designs to more sophisticated tonnage, more owners and operators will see the benefit of using cleaner, more efficient fueling solutions for their vessels.”


John Knudsen, Rolls-Royce, President of Commercial Marine, said: “We congratulate CNOOC and the Zhenjiang shipyard on the completion of Asia’s first gas-powered tug. China is one of the world’s largest importers of natural gas and already has the LNG infrastructure in place. This is a pioneering project in Asia and its success has been dependent on the excellent cooperation between CNOOC, Shanghai Bestway Engineering, Zhenjiang Shipyard and Rolls-Royce.”

The decision to operate on LNG follows the Chinese government’s 2011 plan to strengthen its maritime base with the manufacture of high-end, ecologically-efficient ships and technology.

The Bergen C26:33 gas engines reduce CO2 emissions by 25 percent and NOx emissions by up to 90 per cent. Oxides of sulphur and particulate are also removed, minimizing emissions along coasts and inland waterways.


For Rolls-Royce, delivery of Hai Yang Shi You 525 follows the successful delivery of Borgøy, the world’s first LNG-powered tug, to Norwegian owner Buksèr og Berging. The MV Borgøy was constructed by Sanmar Shipyard in Turkey.

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Here’s the latest update from Shell on its massive Prelude FLNG (floating liquefied natural gas) facility currently under construction at Samsung Heavy Industries’ shipyard in Geoje, South Korea.

At 488 meters long and 600,000 tons fully loaded, the facility will be the largest floating object ever constructed. And now as the last of the topside modules now safely installed, the full scale of the project becomes clear.

Shell plans to moor the Prelude FLNG some 200 kilometers off western Australia at the Prelude gas field for 25 years, where it is expected to produce the equivalent of 110,000 BOE per day.

gCaptain’s full coverage of this behemoth can be found HERE.

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Posted by: cesmiconference | May 12, 2015

U.S. Approves LNG Exports from Cove Point Terminal

LNG storage tanks

The U.S. Energy Department announced Thursday today that it given final authorization for LNG exports from the Dominion Cove Point LNG Terminal located on the Chesapeake Bay in Lusby, Maryland.

The authorization allows for the export of up to 770 million standard cubic feet per day of domestically produced natural gas from the terminal to countries that do not have a Free Trade Agreement (FTA) with the United States for a period of 20 years.

The Department said that it granted the authorization after it was determined that exports from the terminal “was not inconsistent with the public interest”.

Dominion says that the Cove Point LNG Export project is estimated to cost between $3.4 billion and $3.8 billion, representing one of the largest private investments ever in Maryland. The export facility will be at the site of the existing LNG import terminal, with no new pipelines or storage tanks needed.

The company has already fully subscribed the marketed capacity of the project with 20-year service agreements with companies in Japan and India.

The export facility is expected to become operational in late 2017.

Dominion estimates that the facility will generate an addition $40 million in annual tax revenue to Calvert County, Maryland.  The county today receives $15.7 million a year from the existing import facility.

The DOE has now approved exports to non-FTA countries from a total of nine facilities in the lower 48 states.

– See more at:

qatar gas ras laffan

Qatar, via its Ras Laffan Industrial Complex, is the world’s largest exporter of liquefied natural gas (LNG) having delivered about 70 billion cubic meters of natural gas last year, or roughly 32 percent of the world’s supply. In the process of loading this super cooled product on to ships however, some of it is boiled off and subsequently flared into the atmosphere as there has never been a means to capture it.

In reflection of Qatar’s commitment to environmental sustainability, Qatargas has inaugurated this week the $1 billion Jetty Boil Off Gas (JBOG) Project aimed at capturing this gas and either re-liquefying it or utilizing it as a fuel gas.  Saad Sherida Al-Kaabi, President and CEO of Qatar Petroleum and Chairman of Qatargas, said the JBOG Project is not only the biggest environmental project in the world, but also one of the largest investments of its kind.

The JBOG Project, which has been under construction since 2010, will result in a 90% reduction in flaring at the six LNG loading berths at Ras Laffan, according to Qatargas.  This is equivalent to annual Green House Gas (GHG) savings of 1.6 million tonnes of CO2.

At the same time, the project will help recover 29 billion standard cubic feet (bscf) of gas every year, enough gas to produce 750 MW of power or to power 300,000 homes.

Qatargas says the JBOG project is very unique in that it had to be designed to recover the boil off gas from multiple ships loading simultaneously. To solve the issue, the company partnered with General Electric (GE) to build the world’s largest Low Pressure (LP) Gas Compressors.

Since the start of the first recovery of jetty boil-off gas in October 2014, jetty boil-off gas has been recovered from over 500 ships

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Posted by: cesmiconference | May 7, 2015

DEME Orders LNG-Powered Dredgers from Royal IHC

royal ihc dredger

Dutch shipbuilder Royal IHC announced today the receipt of a contract for the design, construction and delivery of two unique LNG-powered dredging vessels to DEME Group in Belgium. The 7,950 m3 and 3,000 m3 (expandable to 3500m3) trailing suction hopper dredgers (TSHDs) are the first to be provided with a liquefied natural gas (LNG) – fueled main engine which ensures they are complaint with IMO tier III emissions requirements.

No further details are yet available on these vessels. gCaptain has reached out to DEME for further comment.

royal ihc dredger

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Posted by: cesmiconference | May 4, 2015

AltaSea – A new Model for the 21st Century

AltaSea is a public-private partnership redeveloping 35 acres of land at the Port of Los Angeles into a unique ocean-based campus where science, business and education come together to generate innovative solutions to global sustainability issues. We are so grateful that AltaSea gave the participants at the Cesmi conference 2015 a guided tour around the area where they plan to develop and build their innovative campus. To read more about this exiting project, visit:

Skjermbilde 2015-05-03 kl. 19.51.08

Posted by: cesmiconference | May 1, 2015

EnviroNor – We Care About Our Environment

One of the Norwegian companies that was present at the Cesmi 2015 conference continues to receive positive review in the news around the world.
EnviroNor, founded by the Sigmund Larsen, is a startup focusing on using water-processing technology to convert secondhand oil barges into floating desalination and wastewater treatment plants. This is a very interesting project that can work as a solution to drought problems, lack of water supply during natural disasters etc. To read more about the company, visit EnviroNors home page:

Skjermbilde 2015-05-01 kl. 14.46.54

Also, these are the two most recent articles mentioning the company and the project:…/norwegian-company-aims-to-end-wat…/ and…/every-drop-can-be-used-at-least…/

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