Remontowa to build LNG-fueled ferries for BC Ferries

JULY 4, 2014—Canada’s BC Ferries has awarded contracts worth $165 million to Remontowa Shipbuilding S.A., Gdansk, Poland, to build three new dual-fuel intermediate class vessels. The three 105 meter, 145-vehicle, 600-passenger vessels will be able to burn Liquefied Natural Gas (LNG), as well as marine diesel oil.

Remontowa won the contract against stiff international competition from shipyards in Germany, Norway and Turkey. The only Canadian shipyard in the RFP process, Seaspan Marine, withdrew from the competition because of its commitments to the Canadian Government’s National Shipbuilding and Procurement Strategy and an order for a new BC cable ferry.

BC Ferries selected Remontowa based on its design and construction plan, recent experience building intermediate ferries, capability of introducing new technology such as LNG, customer satisfaction (references from other customers), delivery schedule, price and payment terms, financial stability and ability to provide guarantees.

The total budget for the newbuilding project is $252 million, which includes financing and project management costs and $51 million for Canadian taxes and federal import duties.

“These are design-build, fixed-price contracts that provide BC Ferries with substantial guarantees related to delivery dates, performance criteria, cost certainty and quality construction,” says Mark Wilson, BC Ferries’ Vice President of Engineering.

 Other highlights of the contracts include:

• Remontowa assumes all design, construction and delivery risk

• Guarantees are in place for vessel completion dates

• Favorable payment terms with 80 per cent payment upon vessel completion

• Vessel performance guarantees related to speed, carrying capacity, maneuverability and fuel consumption

• Warranties above industry standard

• Penalties for late delivery

• Refund guarantee

 “As we begin the next phase of our newbuild program, a key objective is to achieve capital and operating cost savings and efficiencies through an overall class and standardization strategy,” says Wilson. “Standardization offers greater interoperability and lower crew training and maintenance costs, and also enhances safety. This is a significant step forward in taking BC Ferries from 17 classes of ships to five classes.”

The new intermediate class vessels will be the first vessels in BC Ferries’ fleet to operate as dual-fuel capable using Liquefied Natural Gas (LNG) or diesel fuel for propulsion and power generation. “This is an exciting initiative for BC Ferries that can reduce upward pressure on fare due to lower fuel costs for LNG, and reduce the environmental emissions substantially since LNG is a cleaner and greener fuel compared to current alternatives,” adds Wilson.

Two of the new ships will replace the 49-year-old Queen of Burnaby, which sails between Comox and Powell River and the 50-year-old Queen of Nanaimo, which services the Tsawwassen–Southern Gulf Islands route. The third vessel will augment peak and shoulder season service on the Southern Gulf Islands route, plus provide refit relief around the fleet.

The first new intermediate class vessel is scheduled to arrive in British Columbia in August 2016, the second in October 2016 and the third in February 2017. Remontowa is responsible for delivering the vessels to Victoria. The first vessel is expected to be in service in the fall of 2016, following extensive crew training and familiarization.

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