India to Inject More Financial Aid in Ports

India’s Ministry of Shipping has increased the scope of the Sagarmala project to provide financial support to its ports and state governments for the creation of infrastructure for movement of cargo and passengers by sea or national waterways in an effort to promote coastal shipping in the country.

Under the scheme, projects which will be considered for assistance include construction and upgrading of coastal berths for coastal cargo and berths for passenger ferries, mechanization of coastal berths, capital dredging for operating non-major ports, construction of breakwaters for existing and greenfield non-major ports, construction of berths and jetties in national waterways and islands, and construction of platforms and jetties for hovercrafts and seaplanes.

Financial assistance under the revised scheme would be given up to 50% of the total cost of the project, while the balance cost would be borne by respective ports or concerned state governments from their internal resources.

Under the scheme, the creation of exclusive berths for coastal shipping and its mechanization will reduce waiting time for coastal vessels resulting in reduced cost. The capital dredging and construction of breakwaters would help in smoother navigation of large vessels into the ports and thus facilitate development of existing and greenfield ports.

New container freight station opened at India’s Vishakhapatnam Port

A new container freight station with a 100,000 twenty foot equivalent unit (TEU) capacity has been opened at the Vishakhapatnam port, India.

Developed by Visakha Container Terminal (VCTPL) with an investment of INR1bn ($15m), the new container freight station covers an area of 34ac.

Along with the new station, 6.25MW out of 10MW solar power plant has also been commissioned at the port.

The power generated from the newly commissioned plant meets the captive consumption of the port, and surplus power is proposed to be sold by third party agreements.

Additionally, a liquid cargo berth, EQ-10, developed by AVR Infra with an investment of INR553.8m ($8m), has also been inaugurated at the Vishakhapatnam port. EQ-10 has a capacity of 1.84 million tonnes per annum.

A multi cargo berth with a 2.08 million tonnes per annum capacity, WQ-6, developed by ABG Infra Logistics at a cost of INR1.14bn ($17m), has also been opened at the port.

Apart from inaugurating these facilities, India’s shipping, road transport and highways minister Nitin Gadkari also laid the foundation stone for the project ‘reconstruction of old EQ-2,3,4 & 5 berths into two new berths of 530m quay in the inner harbour’ at the port. The project, with a six million tonnes of capacity, will require an investment of INR1.82bn ($27m).

Currently, two berths, WQ-7 and 8, with a 6.39 million tonnes of capacity, are under construction at the port at a cost of INR2.43bn ($36m).

During his visit to the port, Gadkari reviewed the dredging projects executed by the port with an investment of INR4bn ($59m). He suggested installing a sewage treatment plant at the port for treating the city sewage before letting it into the port limits, to avoid water pollution.

Keppel Shipyard to deliver FPSO vessel to Armada Kraken

Keppel Shipyard, a subsidiary of Keppel Offshore & Marine (Keppel O&M), is set to deliver a floating production storage and offloading (FPSO) vessel to Armada Kraken, a subsidiary of Malaysia-based offshore energy facilities and services provider Bumi Armada.

Once delivered, the new FPSO, with a lifespan of 25 years without dry-docking, will be used to produce the heavy oil found in the Kraken field, in the UK sector of the North Sea.

Keppel O&M marine and technology managing director Michael Chia said: “The Armada Kraken project has further strengthened our track record in converting sophisticated FPSOs that are designed to operate under harsh-environment conditions. With Armada Kraken, Keppel and Bumi Armada would have completed our 15th conversion / upgrading project together.”

Under the deal with Armada Kraken, Keppel Shipyard will provide renovation and life extension works, installation of an internal turret mooring system, as well as installation and integration of topside process modules.

Keppel Shipyard will also improve Armada Kraken’s living quarters, which will be able to accommodate 90 personnel.

Bumi Armada CEO Leon Harland said: “Armada Kraken marks Bumi Armada’s entry into the North Sea and it underscores our commitment to deliver a high quality bespoke FPSO, that is designed to meet the challenges posed by the North Sea’s harsh environment using proven technology, and incorporates a number of unique features to ensure a safe, reliable and economical operation. The FPSO is built in compliance with the strict regulatory guidelines as defined by the UK Health and Safety Executive and Department of Energy and Climate Change regulations and is classed by DNV GL.”

Currently, Armada Kraken can handle a peak fluid rate of 460,000 barrels per day and 80,000 barrels of oil per day.

With a storage capacity of 600,000 barrels, it is also capable of handling 75,000 barrels per day of water injection, and 20 million standard cubic feet of gas.

Mitsubishi Heavy seeks alliance with three other Japanese yards

Four major Japanese shipbuilders are in discussions to form an alliance to ride out the downturn.

Mitsubishi Heavy Industries (MHI) said it is in discussions with Imabari Shipbuilding, Oshima Shipbuilding and Namura Shipbuilding to form a grouping that would “collectively provide Japan’s commercial ship industry with robust global competitive strength”, MHI said in a release.

“The move toward forming these alliances targets the integration of MHI’s strengths in shipbuilding technology and engineering with the three prospective partners’ manufacturing capabilities and cost competitiveness. By combining these strengths, the alliances would boost ship development capabilities, enhance negotiation response, and enable further cost reductions, thereby accelerating the buildup of competitive strength in the global market,” MHI said.

MHI has split its shipbuilding capabilities between cruise and merchant shipbuilding in recent years.

MHI said it is also looking at establishing a technology center to undertake advanced technology development and education in shipbuilding technologies and skills. It will seek other yards to join in the new center.

A strong Yen and very limited appetite for new tonnage has pushed Japanese shipyards into a dangerous position. New orders in the first half plunged 82%, the worst performance seen since 2008. Japanese yards currently have a 19% global share of shipbuilding output and face severe competition from neighbors China and South Korea.

Abu Dhabi Ports unveils plan to expand Khalifa Port

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Contract signing between Abu Dhabi Ports and National Marine Dredging Company representatives

UAE-based Abu Dhabi Ports has unveiled an expansion plan for its deepwater Khalifa Port in order to handle more cargo.

As part of the plan, 1,000m of quay wall will be added to the port, deepening its main channel and basin to 18m from the existing 16m.

With the addition of the new quay, the terminal will get another 600,000m² for cargo handling.

As part of this expansion, Abu Dhabi Ports has signed a contract with National Marine Dredging Company (NMDC) for dredging the channels and to build the new quay wall as well as the adjacent yard behind it.

The expansion is scheduled for completion by mid-2018.

Abu Dhabi Ports CEO Mohamed Juma Al Shamisi said: “This ambitious expansion is crucial to ensuring Abu Dhabi remains a global trade and investment hub as well as supporting our local industries. Building on recent growth at Khalifa Port, we are future proofing our operations to ensure we can continue to attract the world’s leading operators to use our world-class facilities that will see Capesize vessels, the largest in the cargo industry, come directly into an Abu Dhabi port for the very first time. Over the past few years we have invested in building an integrated, technology enabled platform and physical infrastructure for our customers to become an enabler for key business sectors in line with the Abu Dhabi Plan and Vision 2030. Today sees us take this to the next level as a maritime centre and as the gateway to the world’s fastest growing economies.”

The expansion at the terminal, which currently handles bulk cargo and roll-on roll-off vehicle transportations, will also enable it to handle the world’s largest ships.

Once completed, the port will help increase the country’s competiveness in the logistics and maritime sector, as well as serve major industries across the UAE.

European Yards Rack Up Cruise Ship Orders

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In a historically weak contracting environment the cruise sector has seen a strong level of newbuild ordering and investment in the year to date, according to Clarksons’ Shipping Intelligence Network.
Cruise lines have continued to expand their fleets, with new markets such as China in their sights. While a number of yards have benefitted from this firm level of newbuilding activity, they have all been European and the region remains dominant in the cruise sector.

In the first seven months of 2016, 17 cruise ships of a total 45,420 passenger berths have been reported contracted, already surpassing the 11 ships (33,788 berths) ordered in full year 2015.

Following low levels of ordering in 2008 and 2009, cruise investment has increased and an estimated USD 10.4 billion of orders have been reported in 2016 so far.

Generally, owners have been ordering larger cruise ships in recent years and over half of the vessels ordered in 2016 so far have a capacity of between 3,000 and 5,000 berths. Additionally, interest in smaller cruise ships of 1,000 berths or fewer increased and seven of these vessels have been reported ordered in 2016 so far.
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In terms of capacity, European yards account for 98% of the global cruise orderbook with 54 ships of a combined 143,722 berths. Three German yards’, Italy’s Fincantieri Group’s and STX France’s shares of the orderbook total 35%, 31% and 19%, respectively, in passenger berth terms. However, the recent joint venture between Fincantieri, China State Shipbuilding Corporation and US group Carnival may see Chinese shipyards take a share of future orders, according to Clarksons.

“Year to date ordering in the cruise sector is already nearing full year records. Cruise lines have been investing heavily, many seeking to expand their operations in the Chinese market. In an otherwise challenging shipbuilding market, this has provided some good news for a number of European cruise shipbuilders,” Clarksons’ Christopher Pearce said.

Sembcorp Marine Purchases Norwegian Ship Design Firm

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Sembcorp Marine Integrated Yard, a subsidiary of Singapore-based marine and offshore engineering group Sembcorp Marine, has entered into a sale and purchase agreement to acquire a 100% equity stake in Norwegian ship design and engineering company LMG Marin AS for USD 20 million.

The consideration for the acquisition, to be fully paid in cash by internally generated funds, was arrived at on a willing-buyer willing-seller basis, after taking into account the estimated net tangible asset value of USD 3.8 million as at July 31, 2016, and intellectual property and patents of LMG.

Following the acquisition, LMG becomes an indirect wholly-owned subsidiary of Sembcorp Marine.

“Through the strategic acquisition of LMG, Sembcorp Marine further strengthens its intellectual property and knowledge to execute leading-edge design and engineering solutions for the global offshore and marine sectors,” said Sembcorp Marine President and CEO Wong Weng Sun.

The acquisition is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of the company for the year ending December 31, 2016.

LMG Marin’s design and engineering portfolio includes floating structures, platforms and a wide variety of ship types, such as drillships, floating production, storage and offloading vessels (FPSO), floating storage and offloading vessels (FSO), offshore support vessels (OSV), LNG carriers, LNG-powered ships, car ferries, and cruise ships.

Semco Maritime makes room for pair of Maersk Drilling jack-ups

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Two jack-up drilling rigs owned by the offshore drilling contractor Maersk Drilling recently arrived at Semco Maritime’s Invergordon shipyard facility.

Semco Maritime informed that the 2009-built jack-up rig Maersk Reacher will be berthed in Semco’s Queens Dock facility for an undisclosed duration, carrying out necessary upgrades and modifications.

The rig up until recently worked for BP under a contract that is set to expire in September 2016. Earlier this year, the drilling contractor decided to lay off 70 employees in relation to the Maersk Reacher going off contract thus adjusting to a lower level of activity.

The second rig, the recently constructed jack-up rig Maersk Highlander, from Sembcorp Marine’s Jurong Shipyard in Singapore, will be at Semco Maritime’s quayside for a short time. Prior to the naming ceremony, Semco carried out various commissioning tasks and it also provided support for various disciplines, including electrical, mechanical and construction.

The rig, of a Friede & Goldman JU2000E design, will soon mobilize to the Culzean development in the UK sector of the North Sea under a long-term contract with Maersk Oil.

Maersk Highlander is categorized as a 400ft rig, with 30,000ft drilling depth and HPHT capabilities. The rig has accommodation capacity for up to 150 personnel.

Semco Maritime also added it is nearing completion of a number of scopes of work for the Paragon Offshore’s semi-submersible rig, Paragon MSS1, prior to the rig’s departure Cromarty Firth on a drilling contract.

Malaysia: MMHE/EPIC in repair services joint venture

Malaysian offshore facilities builder Malaysia Marine and Heavy Engineering (MMHE) has teamed up with Eastern Pacific Industrial Corporation, (“EPIC”) forming a joint venture company known as MMHE EPIC Marine & Services Sdn Bhd.

The purpose of the company, MMHE said, is to provide repair services for marine vessels which include dry-docking repair, refit, refurbishment, maintenance and technical solutions at the ship repair facilities located in Kemaman, Terengganu.

MMHE is the majority shareholder with 70% shares and EPIC with 30% shares in the joint venture company. MMHE said the JV would benefit from a combination of MMHE’s existing expertise in marine and oil & gas services and EPIC’s integrated facilities in Kemaman.

“MMHE has the capability in ship repairs, dry docking upgrading, conversions, modifications and other shipyard-related business activities and able to provide full engineering, procurement, construction, installation and commissioning (“EPCIC”) for the offshore oil & gas industry. Meanwhile, EPIC is in the business of service and facilities provider for the marine and oil & gas industries, comprising of an integrated customs bonded supply base, fabrication, threading, shut-down and maintenance services,” MMHE said in a statement on Monday.

Eastern Pacific Industrial Corporation Berhad (‘EPIC’) is a Terengganu State Government linked corporation. EPIC’s business is principally supporting the oil and gas services industry. Its core businesses are supply base services catering to the oil and gas offshore industry, port management as well as pipe threading, and fabrication work.

En Noor Fadzil Mohamed Nor, Group Managing Director and Chief Executive Officer of EPIC said, “This is EPIC’s first Joint Venture agreement since its establishment 35 years ago. We feel
honored to collaborate with MMHE and hope for this networking to continuously spread, possibly to a global scale, particularly in terms of investment in oil and gas sector.”

GE O&G scores three-year deal with ONGC

GE Oil & Gas has entered into a frame agreement by Oil and Natural Gas Corporation Limited (ONGC) India for 55 subsea wellheads for the company’s drilling campaign offshore India.
GE said on Monday that the contract further expands a long cooperation between the two companies spanning for more than 30 years. GE has supplied ONGC with large-sized conductors, subsea wellheads and subsea trees for its offshore drilling and completion projects.
Ashish Bhandari, CEO-South Asia at GE Oil & Gas, said: “With India’s new energy policy and gas pricing policy in place we are seeing an uptick in ONGC’s exploration and development activity. This latest award will enable GE to support ONGC as its technical partner, collaborating to improve the region’s energy supply capabilities through the discovery of new fields offshore.”
The company stated that the first wellhead under the ‘multi-million dollar’ contract would be delivered in the fourth quarter of 2016. GE will be manufacturing part of the scope in India for the first time. That part of the work will be done in Kakinada, with engineering and project management support from regional teams in Singapore. This is all to support ONGC’s three-year offshore drilling campaign, in shallow to medium waters offshore India.
GE also added that it has a multi-modal facility in Pune, created to support India’s vision of self-sufficiency in manufacturing under the country’s ‘Make in India’ plan.
Bhandari said: “We have a long history with ONGC and are proud to be partnering with them to support their ambition of driving local oil and gas production. As well as the collaborative effort that will be involved, what is particularly exciting for us is that this Frame Agreement provides us with the opportunity to further develop a local talent pipeline and in-country supply base, through a steady and predictable volume.”
This deal comes off the back of a deal awarded to GE Oil & Gas last year, for the supply of subsea production systems to ONGC’s Vashishta and S-1 fields, located off India’s Amalapuram coast in the KG Basin, what was ONGC’s first foray into deepwater development in India. Also, earlier this month, GE teamed up with India’s L&T Hydrocarbon Engineering Limited to manufacture subsea manifolds destined for future deepwater projects in the Krishna-Godavari basin on the east coast of India.