The deal requires ships to reduce the sulphur content of their fuels by close to 90%. Photo: Danish EPA

The EU Wednesday announced an informal agreement requiring, by law, that all ships operating in EU waters meet mandatory sulphur content limits of marine fuels in an effort to reduce harmful emissions from ships.

Under the provisional agreement and in line with Annex VI of the MARPOL Convention, ships operating in the EU’s “sulphur emission control areas”, including Baltic Sea, the North Sea and the English Channel, will have to lower the amount of sulfur used in marine fuel from 1% to 0.1% by 2015.  Meanwhile, ships operating in other EU waters will have to lower the amount of sulfur used to a less onerous 0.5% by 2020.

The agreement is based on international regulations adopted by the International Maritime Organization (IMO) in 2008. However, a key result of the new agreement is that the limits will now become mandatory under EU law, and ships failing to meet the new limits will face fines high enough to cancel out any savings of not complying with the rules.  A formal EU decision on the agreement is expected this summer.

While environmentalists and health advocates are applauding the drastic actions, critics, including some of the Nordic region’s biggest companies, are saying that the new rule will largely have a negative effect on shipping costs and distort competitiveness in the region.

The European Commission estimated that meeting the new limits will cost the shipping industry between 2.6 billion and 11 billion euros ($3.3 billion-$14 billion), reports Reuters, however that number is far outweighed by the estimated public health savings of up to about 30 billion euros.

Air pollution produced by ships in Europe leads to an estimated 50,000 premature deaths each year says the European Council.

HOA Pirate Activity, 17– 23 May

Weekly Incidents By Region: May 17-23

RED SEA

General cargo vessel MAERSK TEXAS fired upon while underway on 23 May at position 25:29 N – 057:16 E, approximately 28 nm west-southwest of Bandar-e-Jask, Iran. Duty Officer onboard the cargo ship noticed a group of 10 skiffs at a distance of 2 nm from the ship on the starboard side. The forward skiff broke off from the group and approached the ship at a speed of 20-25 knots. The vessel’s Master and security team were both informed. The alarm was raised, fire hoses and SSAS activated. UKMTO and the Iranian Navy were informed. The ship increased its speed and commenced maneuvering away from the skiffs. As the skiffs closed to 500 meters, the embarked armed security team fired warning shots. The skiffs ignored the warning shots and continued to approach aggressively and weapons were sighted on the skiffs. As the skiffs closed to 300 meters the security team once again fired at the skiffs and noticed that the skiffs returned fire towards the ship. Eleven additional skiffs were sighted on the port side advancing towards the ship. As the security team fired warning shots the skiffs stopped and moved away. The skiffs on the starboard side continued to chase the ship. After 12 minutes from the initial approach, the skiffs moved away towards a dhow in the vicinity. No damage or injuries to crew were reported. While the large number of skiffs involved resembles fishermen firing upon a merchant vessel transiting through their fishing area, vessel’s master reported to authorities that assailants’ observed physical features resembled those of Somali pirates. (IMB, Open Press)

SOUTH AMERICA

COSTA RICA: Container Ship attempted boarded on 17 May at 09:58 N – 083:00 W, Puerto Limon Anchorage, Costa Rica. Five pirates in a boat were noticed by alert deck watchmen alongside their container ship with boat hooks in an attempt to board. The duty officer raised the alarm and reported the incident to port authorities. Seeing the alerted crew, the pirates aborted the attempt and moved away. (IMB)

SOUTHEAST ASIA

INDONESIA: Tanker robbed on 18 May at 03:42 S – 114:26 E, Taboneo Anchorage, Banjarmasin, Indonesia. The duty A/B on roving deck patrol noticed five pirates in the forward store. Two of the pirates threatened him with a knife and the A/B escaped and informed the D/O who raised alarm and alerted the ship’s crew. By the time the crew members went forward the robbers had escaped with stolen ship’s stores. (IMB)

INDONESIA: Barge was boarded on 12 May at 01:14 N – 104:08 E, 4nm North North East of Pulau Batam, Indonesia. The barge was under tow enroute from Singapore to Kelanis, Banjarmasin, Indonesia and was boarded by robbers using a wooden tug. VTIS Singapore informed the vessels Master that a tug was following his barge. Upon investigation, the Master saw a wooden tug moving away from the barge. The crew boarded the barge and found 13 containers opened. The incident was reported to MPA Singapore. (IMB)

Piracy Data

Piracy Weather Forecast: May 24-31

Pirate Skiff Capability (Graphic courtesy of the Naval Oceanographic Office Warfighting Support Center)

GULF OF ADEN: East-northeasterly winds 4 – 6 knots and seas of 1 – 3 feet. EXTENDED FORECAST: Expect variable winds of 4 – 6 knots and seas of 1 – 3 feet.

SOMALI COAST: South-southwesterly winds 15 -20 knots and seas of 3 – 5 feet. EXTENDED FORECAST: Expect south-southwesterly winds 20 – 25 knots, gusting to 35 knots in or near thunderstorms and seas of 5 – 7 feet, with occasional swells of 7 – 9 feet.

ARABIAN SEA: The monsoon transitional season pattern continues to influence the entire region, with west-southwesterly winds of 15 – 20 knots and seas of 5 – 7 feet. EXTENDED FORECAST: Expect west-southwesterly winds of 15 – 20 knots and seas of 4 – 6 feet.

CENTRAL AFRICAN COAST/INDIAN OCEAN: Rain showers and isolated thunderstorms continue to impact the Tanzania and Kenyan coastal regions with southerly winds of 18 – 22 knots, gusting to 35 knots in or near thunderstorms, with seas of 4 – 6 feet. EXTENDED FORECAST: Expect south-southeasterly winds of 15 – 20 knots, gusting to 35 knots in or near thunderstorms, with seas of 5 – 7 feet.

MOZAMBIQUE CHANNEL: Marginal to significant impacts in the Mozambique Channel from swell waves moving into the area from the southern Indian Ocean produced by the normal high and low pressure system interactions occurring around degrees South. Expect south-southeasterly winds in the northern channel of 10 – 15 knots, with seas of 6 – 9 feet. In the southern channel winds, expect south-southwesterly winds of 8 – 12 knots and seas of 6 – 9 feet. EXTENDED FORECAST: In the northern channel, expect east-southeasterly winds of 15 – 20 knots and seas of 3 – 5 feet. In the southern channel, expect south-easterly winds of 8 – 12 knots and seas of 5 – 7 feet, with occasional swells of 7 – 9 feet.

SURFACE CURRENTS: Currents within the Somalia Basin, Gulf of Aden, and into the Indian Ocean remain variable with most areas having average speeds of less than 1 knot. Currents speeds along the Somali coast, continuing south off the northern Kenya coastline until about 10 degrees south will average around 2 – 3 knots. The Mozambique Channel has an average current of 1 – 2 knots but the current speed along the northwestern portion of the channel will average 2 – 3 knots.

gCaptain’s Weekly Piracy Report is brought to you by the U.S. Navy’s Office of Naval Intelligence Maritime OPINTEL Report

U.S. Coast Guard of the MSC Idil taken May 12.

The MSC containership idled since suffering an onboard explosion eleven days ago off the coast of Puerto Rico has been cleared to move on, the U.S. Coast Guard says.

The ship, MSC Idil, was cleared Tuesday after salvors from DonJon-Smit finalized temporary repairs to the ship’s hull.

The 900-foot container ship had suffered the explosion on May 11 approximately 60 nautical miles north of Puerto Rico while on its way to Barcelona, Spain.  The ship’s crew sprung into action and were able maintain full control of the cargo and prevent any discharges of the reported 588,000 gallons of fuel oil and 62,000 gallons of diesel onboard at the time.

The initial report indicated that the explosion occurred in the vessels #5  starboard fuel tank and was possibly caused by hot work. No injuries were reported and an investigation in the accident is ongoing.

Following the initial report the USCG and others involved showed a quick and organized response effort and sent a number of assets to the scene.

“The key to the success of this response was the combined effort from the U.S. Coast Guard, MSC, DonJon-Smit, Atlantic Diving, Borinquen Towing, and San Juan Towing,” said Lt. Kristen Preble, Sector San Juan Incident Management Division chief. “Their ability to quickly and effectively work together to address the safety of the crew, the ship, and the environment under demanding conditions was phenomenal.”

The Coast Guard adds that Panamanian-flagged MSC Idil has continued its transit to Freeport, Bahamas, where Mediterranean Shipping Company (MSC) will have to conduct further assessments of the ship.

Here is an aerial shot of New York harbor during the “Parade of Sail”, an event that officially marks the start of Fleet Week in New York.

This years event, which goes from May 23-30, is taking on special significance as it commemorates the bicentennial of the War of 1812. During the parade, six Navy ships, three Coast Guard cutters, 12 coalition ships from around the world sailed under the Verrazano Bridge and into New York harbor.

This photo was taken Mass Communication Specialist 2nd Class Leona Mynes and can be viewed in Hi-Res HERE.

USS Miami arrives for overhaul at PNSY on March 1st. NAVSEA image

USS Miami, an American Los Angeles-class “improved” fast attack submarine was undergoing a routine maintenance shipyard availability at Portsmouth Naval Shipyard when she caught fire at 5:41 PM Wednesday evening.

The blaze continued for a full 13 hours until finally extinguished this morning at 6:45 EST.

Rear Admiral Rick Breckenridge, Commander, of Submarine Group Two in Groton, Connecticut commented,

“Portsmouth Naval Shipyard Fire Department and Ship’s force, along with mutual assistance from several other area fire departments, immediately responded and successfully extinguished the fire on USS MIAMI.

“The fire and subsequent damage was limited to the forward compartment spaces only which includes crew living and command and control spaces. The nuclear propulsion spaces were physically isolated from the Forward Compartment early during initial response.

Admiral Breckenridge gave high praise of the heroic actions by the firefighters involved, and acknowledged that minor injuries were sustained by seven response personnel.

“The injured personnel included three Portsmouth Naval Shipyard fire-fighters; two ships force crew members; and two civilian fire-fighters providing support. These personnel were either treated on-scene or transported to a local medical facility for further treatment and all have been released. So all injured personnel have been released and are in good shape. There were no casualties in this fire.

During the firefighting response, the reactor spaces, found in the aft end of the boat, “remained in a safe and stable condition throughout the event.” and shipboard reactor watch standers maintained a reactor room presence throughout the ordeal.

There were no weapons on board and full investigation has begun to determine the cause of the fire.

USS Miami on March 15th:

The USS Miami on March 15th as it enters dry dock to begin an engineered overhaul at Portsmouth Naval Shipyard. (U.S. Navy photo by Jim Cleveland/Released)

Image courtesy Ship Finance International

(Dow Jones) Ship Finance International Ltd.’s (SFL) first-quarter profit rose 21% on a stronger performance in the tanker market.

The company, which operates large vessels for the transport of crude oil, had seen a weaker tanker market and higher expenses weigh on profits in recent months. But the spot tanker market rebounded at the end of the fourth quarter of 2011, and the latest quarter outperformed the preceding two quarters.

Ship Finance recently agreed to end its chartering agreements with Horizon Lines Inc. (HRZL) under an agreement that makes Ship Finance a large stakeholder in the ocean shipping company.

Following the deal, Ship Finance now has seven container vessels in the spot market, said Chief Executive Ole B. Hjertaker. Given the changed profile of its container business, the company is evaluating structural alternatives to maximize its value, he said, including carving out the container business into a separate entity.

Ship Finance said in March that Chief Financial Officer Eirik Eide would leave in the second quarter after a two-year stint to join another shipping company. He will be replaced by Senior Vice President Harald Gurvin.

For the latest period, Ship Finance posted a profit of $39 million, or 49 cents a basic share, up from $32.1 million, or 41 cents a share, a year earlier.

Operating revenue increased 17% to $84.1 million.

Analysts polled by Thomson Reuters recently expected per-share earnings of 40 cents on revenue of $116 million.

Operating expenses rose 11% to $38.1 million.

Shares closed Wednesday at $13.83 and were mostly inactive premarket. The stock is up 48% so far this year.

-By Kristin Jones; Dow Jones Newswires

SS Badger, Image courtesy Lake Michigan Carfery, Inc.

Via K&L Gates

Lake Michigan Carferry, Inc., the operator of the SS Badger today filed the first ever individual permit application to authorize routine discharges from the vessel under the federal Clean Water Act. The SS Badger is the last coal fired vessel passenger ferry operating in the United States. It ferries thousands of passengers and equipment between Ludington, Michigan and Manitowoc, Wisconsin. As a coal fired vessel, ash from the boilers must be discharged while the vessel is underway.

The Clean Water Act requires that all discharges into waters of the United States be authorized by a permit under the National Pollution Discharge Elimination System (“NPDES”).  Until 2008 discharges incidental to the normal operations of vessels were exempt from the permit requirement.  In 2008 EPA established a nationwide permit program that regulated 26 incidental discharges from normal operations of vessels.   While the coal ash discharge was included in the 2008 nationwide permit, because the Badger is a ‘one of a kind’ vessel, EPA determined that any future permit for the discharge of coal ash should be considered through an individual NPDES permit. Historically this discharge was exempt by regulation because it is a discharge incidental to the normal operation of a vessel.But that regulation was eliminated.

Preparing the individual permit application was challenging and unprecedented. First the EPA required that the company ask permission to file the application. We think this is the first time in the history of the Clean Water Act that a company that wanted to apply for a permit which the law requires, first had to ask permission to do so. We don’t know if this is a position that EPA will take with just the maritime industry, or whether it will apply to others as well. Fortunately EPA granted us permission in late February.

Second,  unlike other industries that must have NPDES permits, there is no established federal program for individual NPDES permits for the maritime industry. EPA has been relying on the nationwide “vessel general permit”  to cover the industry. Third, unlike all other entities those are required to have NPDES permits, the Badger moves and does not have single fixed discharge location  which makes testing and other issues a particular challenge. Fortunately, EPA determined back in 2008 that allowing this discharge to continue was appropriate and we think that remains the case, despite effort to develop an alternative technology.”

Testing shows that given how the coal ash discharge occurs, it does not violate applicable water quality standards and policies, and does not create risk to human health and the environment.

The 1,000+ page application describes how permitting the continued discharge of the coal ash under certain conditions is the “Best Available Technology” which is the legal standard that must be met to obtain an NPDES permit to discharge any pollutant, including dirt and even hot water.  The company is currently working toward conversion of the ferry to liquid natural gas, which would eliminate this discharge and the need for a permit to authorize it, but those systems are not technologically feasible or economically realistic for the Badger.  The current permit expires on December 19, 2012. This application was filed over a month before the June 29, 2012 deadline set by EPA Region 5.  The application also pointed out the significant  reduction in air pollution and other issues as a result of thousands  of cars and trucks not having to drive hundreds of miles around Lake Michigan to get to Wisconsin.

Mark Ruge, Barry Hartman and Christine Joachim Boote in the Washington office of K&L Gates assisted the company in preparing the application materials, working with Kathryn Hall, an environmental scientist with Limnotech in Ann Arbor, MI.

Image: StealthGas

STX Offshore and Shipbuilding announced this week a signed $120 million Letter of Intent (LOI) with an unnamed Greek owner to build two 6,500-CBM LPG vessels in Busan, Korea.  Delivery is anticipated in the second quarter of 2014.

According to analyst firm Clarksons, global demand for LPG carriers has been on the rise this year.   In fact, Greek owner StealthGas announced this week a 400% rise in earnings for the first quarter.  CEO Harry Vafias commented in their earning’s report:

We are now in a position to expand and renew our fleet and continue to look at opportunities for modern vessels.

In a chat with StealthGas this morning, the “unnamed Greek owner” is a member of the Vafias Group, but no further details were given.

In addition, STX notes that it is engaging in last-minute talks with a Middle East client over an extremely sophisticated, and expensive, liquefied ethylene carrier.  The two deals are valued at roughly $430 million.

Earlier this year, STX announced their intentions to sell a controlling stake in their Norway-based STX OSV, a builder of highly specialized offshore supply vessels.  18 companies were on the list of potential investors.  Singapore-based Keppel and Sembcorp both mentioned earlier this year that they were not planning on making bids, although the option is still on the table.

Asia Maritime Pacific's Eastern Opal, a 6400 DWT bulker. Image: AMP

Asia Maritime Pacific Ltd and OSL Holdings Ltd announced that as of 17 May 2012 the two companies have merged their Hong Kong-based operations. The new merged company will operate under the name “Asia Maritime Pacific” (AMP) in both the Handysize and minibulker/multipurpose sectors (6,000-40,000 dwt), with a fleet of 21 modern drybulk vessels operating worldwide, with special focus on the Asia-Australia regions and China-West African routes.

The legacy company Asia Maritime Pacific was a leading owner and operator of minibulker/multipurpose vessels, operating across intra-Asia and Australasia trade. Through its Japanese operations and its association with Rhumb Maritime in Melbourne, Asia Maritime Pacific developed a solid base of international customers and built a strong brand not only in Japan and Australia but across the Asia-Pacific region, focussing on excellence of service and reliability for its end users.

The merger with OSL, a Handysize business with successful and established operations worldwide, but especially on the China-West Africa and China-Australia trade routes, has offered an ideal solution for both companies in terms of their expansion strategies. AMP’s established brand name and large and sophisticated operating platform provides OSL with the ability to expand as an owner, while OSL’s cargo base, experience in Handysize operation, owned Handysize fleet and upcoming newbuilding deliveries offers AMP access to Handysize operations and in turn the ability to offer more diversified shipping services to its customers.

The management and key shareholders of Asia Maritime Pacific are seasoned shipping veterans with experience in both Handysize and minibulker/multipurpose operations. The newly merged entity has over 60 employees based in Hong Kong, Shanghai, Beijing, Tokyo, London, Luanda and (through Rhumb Maritime) in Melbourne.

According to newly appointed COO Rita Jia, “the merger affords exciting opportunities from a business perspective, in terms of cross selling our expanded services to the existing clients of both OSL and AMP. We are excited about the opportunities this will bring to both the new company AMP, and to our customers, many of whom have been customers since the beginning of the operations of both legacy companies. Our goal is for AMP to be a ‘one-stop’ shop for our customers’ dry bulk shipping needs.”

The merger brings the obvious benefit of economies of scale, while at the same time allowing the new Asia Maritime Pacific to offer its customers a larger fleet with more diversified shipping solutions.

Mark Young, CEO and shareholder of the new Asia Maritime Pacific, adds “the merger is really a perfect marriage for these two companies, where the combined business will be greater than the sum of its parts: the newly merged Asia Maritime Pacific will have the platform from which to build a significant Asian presence in the Handysize and minibulker/multipurpose sectors, while at the same
time having the financial firepower to emerge as a leader as the shipping markets improve.”Christopher Buttery, co-founder of Pacific Basin, will remain on the Board of Directors of the new Asia Maritime Pacific, with his co-founder Paul Over continuing his involvement as a senior advisor to the Company. Chris Buttery commented “I am pleased to be involved with the newly merged Asia Maritime Pacific and I am enthusiastic about the Company’s prospects in the coming years as the shipping markets recover and further opportunities develop for Asian shipping players”.

Asia Maritime Pacific will continue to be headquartered in Hong Kong.

“FleetBroadband Multi-voice is a unique integrated solution that maintains Inmarsat’s well-earned reputation for high-quality voice,” said Frank Coles, president, Inmarsat Maritime.

“It offers a far superior service to internet calling solutions, and is more cost-effective than accessing multiple voice calls on a standard VSAT.”

“This new capability increases the value of FleetBroadband, and ensures that the service is future-proofed for a vessel’s growing communications needs.”

Thrane & Thrane has already announced that the Multi-voice service will be available across its entire SAILOR FleetBroadband portfolio as standard, and is accessible on existing terminals with a software update.

SAILOR 500 FleetBroadband will offer the full nine simultaneous voice lines available through Multi-voice, while a SAILOR 250 FleetBroadband will offer up to six concurrent calls and a SAILOR 150 FleetBroadband up to four concurrent calls.

Once existing SAILOR users have the software update in place, all that is required is to configure their FleetBroadband terminal via the web-interface and attach the required number of handsets, or if desired connect an existing PBX.

Thrane is offering its own model of handset for use with the service, though third party equipment can also be used.

With the Thrane handsets a dedicated BGAN menu is available via the integrated screen, where value-added supplementary voice services, such as a phone book and call forwarding, can be operated from the handset itself.

“With multiple handsets integrated to a single terminal, facility for dedicated voice lines can be made anywhere on board, from the engine room or canteen on a merchant vessel and the public areas on a passenger vessel, to the saloon and staterooms aboard a luxury vessel,” said Casper Jensen, VP maritime business unit, Thrane & Thrane.

“Additionally, we have ensured that the SAILOR 3771 Alarm Panel FleetBroadband works alongside the Multi-voice service, ensuring that distress alarms can be sent, regardless of how many voice lines are being used.”

“Multi-voice will enable operators to offer even better crew and passenger welfare services, by increasing the number of telephone lines available on board. The design of SAILOR FleetBroadband allows Multi-voice functionality to be introduced without the need for engineers or hardware changes to the BDU, making it extremely straightforward to add extra voice lines.”

For FleetBroadband terminals other than the SAILOR range, Vocality has developed new PBX hardware that can be used alongside the terminal to access the additional telephone lines.

The extra phone lines will be charged by Inmarsat at the same per-minute tariff for both pre-paid and post-paid calls. The lines will also all support the free-of-charge ‘505’ FleetBroadband emergency calling capability that connects a vessel immediately to a Maritime Rescue Centre.