Industry heavyweights applaud Hapag-Lloyd and UASC merger move

News that Hapag-Lloyd will move ahead with a merger with United Arab Shipping Co (UASC) has been greeted with approval by analysts and experts contacted by Splash.

UASC announced yesterday that its six shareholding states has approved a merger deal with the German line at an extraordinary general meeting on Wednesday.

The deal would see Hapag-Lloyd (which merged with CSAV 18 months ago) have a 72% holding of the new company with UASC holding the rest.

Lars Jensen from SeaIntelligence Consulting noted how this latest merger served to heighten the stratification between large and small carriers amongst the global players.

“Should the merger be approved, Hapag-Lloyd will become the fifth carrier to have a fleet exceeding 1m teu of nominal capacity, and in essence be almost on par with COSCO in terms of global scale,” he said. (See graph)
Industry heavyweights applaud Hapag-Lloyd and UASC merger move
“The merger will be another step in what can be seen as both a consolidation and a globalisation in the industry,” Jensen continued, adding: “Six carriers are now becoming significantly larger than their competitors, a development which is sure to change the market dynamics and the strategic choices for the carriers involved in the coming years.”

He also pointed out that all the changes in the industry mean we will look at carriers differently going forward, as the national connotations for the carriers will become blurred. This is the same too for CMA CGM, which has just bought out Singapore’s flag carrier, Neptune Orient Lines (NOL).

Even though Hapag Lloyd will remain headquartered in Hamburg, it will have a much more diversified background in its ownership base, with now both strong Chilean and Arab ownership stakes – a diversification which Jensen said can be a significant asset if harnessed correctly, but also a risk if there is not consensus amongst the owners with regards to the long-term strategy.

“The merger of Hapag-Lloyd and UASC confirms that only by having the scale, a modern container carrier can survive the expected prolonged weakness of the container shipping market,” said Kris Kosmala, a Splash columnist and vice president for Quintiq Asia Pacific. “The true value of that merger, and its value in context of the realigned alliances, will be severely tested over the next 24 months,” Kosmala added. “I hope that the combination of Hapag-Lloyd and UASC will be sufficiently resilient to survive what is shaping to be the most challenging period of this industry in modern times.”

UASC tying the knot with Hapag-Lloyd will likely mean UASC will be absorbed into the new container grouping, THE Alliance, which also features NYK, MOL, K Line, Hanjin and Yang Ming.

Tobias Koenig from Lexington Maritime and another Splash columnist, commented: “The merger of Hapag-Lloyd and UASC creates a significantly stronger container line in an environment where both size and strong shareholders matter. I am happy to see Hapag-Lloyd growing and strengthening its position.”

Dagfinn Lunde from Dagmar Navigation told Splash the merger was “finally something sensible happening in the container industry”. He said it was a good follow-up to CMA CGM’s pursuit of NOL.

“UASC and Hapag-Lloyd have nice complimentary strengths. I hope the cultures can work nicely together,” Lunde concluded.

Qatargas Inks 20-Year LNG Supply Deal in Pakistan

LNG producer Qatargas has entered into a long-term Sale and Purchase Agreement (SPA) with Global Energy Infrastructure Limited (GEIL) to supply 1.3 tonnes of LNG per year to Pakistan for 20 years, with a possibility to increase this volume to 2.3 million tonnes.

The LNG will be supplied from Qatargas 2, a joint venture between Qatar Petroleum, ExxonMobil and Total which started production in 2009.

The first cargo is expected to be delivered in 2018 by Qatargas-chartered Q-Flex vessels.

“We are proud to support countries in their desire to enhance their energy security. This new agreement reinforces our confidence in Pakistan as an energy market and in its potential,” Saad Sherida Al-Kaabi, Chairman of Qatargas Board of Directors, said.

In April 2015, the company sold its first cargo of LNG to Pakistan State Oil Company (PSO), representing the first LNG agreement between Qatar and Pakistan and the first ever LNG import deal for any entity in Pakistan.

“I am particularly pleased to strengthen our relationship with Pakistan, which continues to grow as an important market in the LNG industry,” Khalid Bin Khalifa Al-Thani, Chief Executive Officer of Qatargas, said.

Gallery: Expanded Panama Canal Opens Its Locks

news1
With the first commercial transit of the USD 5.25 billion Expanded Panama Canal the Neopanamax containership COSCO Shipping Panama launched the long-awaited inauguration of the waterway.

The inaugural transit began with the passage of Neopanamax vessel COSCO Shipping Panama through the Agua Clara Locks on the Atlantic side of the country and concluded with its transit through the Cocoli Locks on the Pacific side. The ship, which left the Greek Port of Piraeus on June 11, is en route to Asia.

Originally named Andronikos, the vessel was renamed by China COSCO Shipping as it was selected during a draw for the inaugural transit through the expanded waterway.

The Expanded Panama Canal is now officially open for business, and the regular schedule of transits through the canal is expected to start on June 27.

“More than 100 years ago, the Panama Canal connected two oceans. Today, we connect the present and the future,” Panama Canal Administrator and CEO Jorge L. Quijano, said, adding that “this is the beginning of a new era.”

Quijano further said that there are currently “170 reservations for Neopanamax ships, commitments of two new liner services to the Expanded Canal, and a reservation for the first LNG vessel, which will transit in late July.”

The Expansion Program is the canal’s largest enhancement project. It included the construction of a new set of locks on the Atlantic and Pacific sides of the waterway and the excavation of more than 150 million cubic meters of material, creating a second lane of traffic and doubling the cargo capacity of the waterway.

While the expanded locks are 70 feet wider and 18 feet deeper than those in the original canal, they use less water due to water-savings basins that recycle 60 percent of the water used per transit.

The expanded canal is expected to reshape global shipping routes, increasing shipping traffic to the U.S. East Coast.

World Maritime News earlier spoke to a representative from the Panama Canal Authority (ACP), Argelis Moreno De Ducreux, Executive Vice-President for Planning and Business Development, Liner Segment, to find out more on the expected impact of the new canal on the shipping industry.

De Ducreux said that the expansion of the Panama Canal is already having an impact on the maritime industry, and it is expected to shift the trade patterns of entire nations.

“Shipping lines, port facilities, rails and distribution centers from different regions are getting ready to take advantage of the larger and more efficient ships. Shipping lines are getting bigger in their fleet composition and the canal expansion will allow them to deploy those larger vessels through the waterway. Furthermore, ports in the East and Gulf Coast of the United States, some of which serve vessels up to 9,000 TEU, are adapting their infrastructure to allow even larger ships to come ashore,”she said.

“Ports in the East and West Coasts of Central and South America are preparing to also increase their share of the commercial trade by taking advantage of the widening of the Panama Canal,” De Ducreux added.

At the beginning of June, the Panama Canal’s contracted vessel, the 2011-built Neopanamax dry bulk carrier MN Baroque, started performing lockages through the expanded locks for testing and training purposes, scheduled to last for 30 days.

The lockages are testing the integration of the gates, their opening and closing capabilities as well as the valve opening and closing through the controls system.

The Panama Canal Expansion Inauguration ceremony will serve as the official inauguration of the two new lock complexes, Agua Clara (Atlantic side) and Cocoli (Pacific side), and their access channels.

McDermott lands contract from Pemex for new Abkatun platform

Houston-based oil industry service provider McDermott International has landed a $454m contract from Mexico’s state oil firm Pemex to work on a platform project in the Gulf of Mexico.

NYSE-listed McDermott will provide engineering, procurement, construction and installation (EPCI) services on the Abkatun-A2 platform to be located in the Bay of Campeche and it will be the company’s largest project yet for Pemex.

McDermott, which saw off rival bids from Spain’s Dragados Offshore and Mexico’s Cisco, expects to use its Altamira fabrication yard in Mexico.

Abkatun-A2 is needed to replace a platform that was destroyed in a catastrophic fatal fire last April. The blaze on the Abkatun-A Permanente platform killed seven workers (although the bodies of three of them were never recovered).

This is the latest in a series of commissions McDermott has won from Pemex.

The platform is scheduled to be completed and handed over to Pemex by the fourth quarter of 2018.
Source: Splash247.com

Great Eastern buys cape

Brokers report that Japan’s Libera Corp has sold its capesize Cape Althea (179,300 dwt, built 2011) to Great Eastern Shipping of India.

The Korean-build cape was sold for $24m and is on long-term charter to K Line, brokers say.

Earlier this week, a report from shipbroker Galbraith’s said five parties inspected the five-year-old vessel in Singapore recently.

The unit was originally contracted by K Line but resold to clients of Libera and combined with a long-term charter to K Line, Galbraith’s said.

The vessel’s owners and charterers have mutually agreed to the sale, the report added.

The reported price is a slight advance on the price of three five-year-old, Korean-built capes sold in late May.

Turkey’s Besiktas Likid Tasimacilik sold sisterships Besiktas and Besiktas Turkmenistan (both 179,800 dwt) to Winning Alliance for $23.75m each.

HMM received $22.2m for Hyundai Trust (179,000 dwt, built 2011), which was sold to Greece’s Marmaras Navigation.
Source: Splash247.com

POSH wins support contract for Shell’s Prelude

news
PACC Offshore Services Holdings (POSH) has won a contract from Technip Oceania to deploy its semi-submersible accommodation vessel POSH Arcadia to support Shell’s floating LNG facility Prelude.

POSH Arcadia will provide accommodation support for up to 750 people during the hook-up and commissioning phase of the Shell Prelude FLNG Project in the Browse Basin, off the north-west coast of Western Australia.

In January, POSH’s joint venture with Singapore’s Terasea was appointed to provide towage and positioning services at the Prelude facility (pictured).

SapuraKencana awarded host of new contracts

SapuraKencana has announced that subsidiaries within the SapuraKencana Group have been awarded new contracts and extensions with a combined value of around $125m.

SapuraKencana Drilling Tioman has been awarded a contract by JX Nippon Oil & Gas Exploration for the provision of semi-submersible drilling rig SKD Berani for a drilling campaign offshore Malaysia with total duration of 150 days as minimum. The contract is expected to commence by July 2016.

SapuraKencana Drilling Jaya has accepted an extension to its contract with BP Trinidad & Tobago to extend its drilling rig SKD Jaya for an additional one well for approximately 45 days and additional work on an existing well for approximately 60 days.

SapuraKencana HL has been awarded a contract by BASF Petronas Chemicals for the procurement, fabrication, construction, installation and pre-commissioning work for infrastructure and utility upgrading projects. It has been awarded a contract by Selex ES Malaysia for the provision of front end engineering design (FEED) & engineering, procurement, construction, installation and commissioning (EPCIC) of the radio shortwave support system (RS3) Project for Petronas Offshore Facilities off the West Coast of Sabah.

Lastly, SapuraKencana Australia has been awarded a contract by Woodside Energy Julimar for phases of the Balnaves Decommissioning project in the Balnaves field which is located offshore North-West Australia, and it also has been awarded a light well intervention contract on call-off basis by Shell Australia.

Jinhui Shipping offloads supramax to Al Khalejia Aggregates

Jinhui Shipping and Transportation Limited has confirmed the sale of 2000-built supramax Jin An to UAE-based Al Khalejia Aggregates for $3.4m.

Delivery of the 50,786dwt vessel is scheduled for between July 15 and and August 31, with Jinhui expecting to book in a loss of around $4m on the sale.

Jinhui cited the prevailing market conditions as the reason for the sale, which will help enhance its working capital position and strengthen liquidity. Last month the company revealed it had initiated restructuring arrangement discussions with lenders, with an update due this month.

The Hong Kong-headquartered company owns a fleet of over 30 bulkers, mostly supramaxes.

V.Ships Offshore to manage Milaha liftboat

V.Ships Offshore has been awarded a new contract by Qatar’s Milaha Offshore to manage self-propelled jack-up liftboat Milaha Explorer.

V.Ships will provide, via its Bibby Ship Management office in Singapore, full technical and crew management services for the liftboat which can accommodate 300 people.

Arvind Mohan, general manager V.Ships Offshore Singapore operation said: “This is the first liftboat owned by Milaha Offshore and we are pleased that our previous experience of managing these types of specialised vessels has been recognised.”

Milaha Explorer will be deployed with an initial crew of 15 in support of field maintenance efforts.

Egypt seeks a third FSRU

Egyptian Natural Gas Holdings (EGAS) will launch a global tender this week to charter for five years a third FSRU with a capacity of 750m cu ft of gas per day as the nation fights severe power shortages.

Hoegh and BW are already contracted to supply two FSRUs to the country.

The third FSRU will join the existing two moored at Ain Sokhna.
Source: Splash247.com