September 27, 2010
Norden partners with Glencore to convert bulker to ice class
Privately held, Swiss-based commodity giant Glencore is acting to ensure that it can continue to export coal cargoes from Russia to Europe via Baltic ports even in the harshest winters.
It has entered into five year joint venture with Danish shipowner Norden that will see the parties share the costs of preparing the 2006-built Panamax vessel Nord Neptune for sailing in ice and the gains from future chartering of the vessel.
"We built Glencore's reputation on performance and dependability and are delighted to join forces with Norden, who fully shares and delivers these values," says Angus Paul, Head of Freight, Coal Division, Glencore International AG. "Together, we have been able to secure year round reliable coal transportation, with full operational capability throughout the winter. We see this joint venture as the next logical step in the ongoing mutual co-operation between our two companies, and we are proud of our association together."
Nord Neptune was previously chartered by Norden on a longterm basis and the company has now declared a purchase option on the vessel.
Rebuilding a vessel for ice class takes approximately 6-8 weeks and involves, among other things, reinforcement of the hull and increasing engine power. In addition, the crew needs to be trained in sailing in icy waters.
Nord Neptune will be equipped with a new turbocharger with a variable nozzle ring, that is expectedd to reduce fuel consumption by approximately 3 percent.
Besides sharing the costs of rebuilding, the parties will also be sharing gains and risks on chartering of the vessel during the five years and the vessel will not necessarily be transporting Glencore cargo It might be transporting cargoes from third party companies depending on what is the most profitable for the joint venture.
Norden will typically be in charge of operating the vessels and cargoes, while commercial decisions are made jointly by consensus within the joint venture.