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.

Indian Shipping Seeks Road Fund for Development of Waterways

The Shipping Ministry of India has mooted a proposal to utilize part of the fuel cess collected for building national highways for expansion of National Waterways as well.

The Union Minister for Shipping, Road Transport & Highways, Nitin Gadkari said his Ministry has sent a proposal seeking allocation of 5% of the Central Road Fund for development of Inland Waterways.

“My Ministry has prepared the proposal, but the final decision will be taken by the Ministry of Finance. I am pursuing the matter” Gadkari added.

Central Road Fund is a non-lapsable fund created under the Central Road Fund Act 2000 out of a cess imposed on petrol and high-speed diesel.

The funds are meant to be used to develop and maintain national highways, state roads and railway over and under bridges.

The move to seek a pie in the CRF follows government’s ambitious plan to tap India’s vast network of rivers and canals stretching 14,500 kms for moving goods.

Gadkari said “It is far more cheaper to transport goods by water as compared to road or rail. “Currently cargo movement along the five existing national waterways is paltry 3% of all cargo movement in India. We want to raise the share of waterways in overall cargo movements to 15%” he said.

Under the National Waterways Act 2016, 111 inland waterways have been declared as National Waterways.

Out of these, Allahabad-Haldia Ganga Waterway (NW1), Brahmaputra (NW2), West Coast Canal in Kerala (NW3), Mandovi river in Goa (NW 68), Sundarbans Waterway in West Bengal (NW97) and Zurari River (NW 111) are presently operational. Six more waterways are likely to be commissioned during this financial year.

Aqua Diving Services orders jackup pontoon at Damen Shipyards

Damen Shipyards has won a contract via its Shajah yard in the United Arab Emirates to build a self-propelled jack-up pontoon for the UAE-based contractor Aqua Diving Services.

The pontoon, to be named Aqua Rise III, will be used primarily to deliver offshore support services, including the provision of accommodation facilities for personnel as well as operating as a work platform with crane facilities. Delivery is scheduled in early 2018.

Aqua Diving Services provides a wide range of subsea services to offshore oil and gas operators in the region. The company already owns and operates a fleet of two jack up pontoons.

“This order is fitting in with Damen’s strategy to become more active in the lift-boat market and to build vessels outside the standard Damen portfolio. This is a further sign that local clients value Damen’s strong track record and reputation as a shipbuilder delivering superior quality at the right price,” commented Pascal Slingerland, sales manager Middle East for Damen Shipyards Group.

QMS orders six jackups at CSIC

UAE offshore driller Quality Marine Services (QMS), a subsidiary of Abu Dhabi based Zakher Marine International, has signed contracts with CSIC-affiliated Wuhan Marine Machinery (WMM) for the construction of six jackup platforms.

The total value of the contract is around RMB1.2bn ($180m) with deliveries scheduled to commence from the first half of 2017. The rigs will be deployed in fields in the Gulf region.