VIDEO: VT Halter launches Crowley ConRo

MARCH 21, 2017 — Shipbuilder VT Halter Marine has released video showing the launch of, El Coqui the first of two liquefied natural gas (LNG)-powered, combination container – Roll-On/Roll-Off (ConRo) ships under

VIDEO: Crowley builds LNG bunkering terminal

MARCH 9, 2017 — Crowley Maritime Corp. and Eagle LNG Partners recently began construction of a new shore-side, liquefied natural gas (LNG) facility on Crowley-leased property at JAXPORT’s Talleyrand Marine Terminal in

Orders for new ships down dramatically

 As we pointed out in our Annual Yearbook & Maritime Review back in June, shipyards are struggling amid the downturn in the market, with newbuilding orders at their lowest levels since the 1980s. As further evidence, during the first half of 2016, orders for new ships worldwide dropped 65 percent as compared with the first half of last year, according to VesselsValue.

The leading ship valuation provider says that 689 newbuilds were ordered in the first half of 2015 as compared with a mere 239 this year.

As we mark the midway part of this year, VesselsValue also points out that $28.4 billion worth of vessels have been delivered this year, with another $43.8 billion worth still on the orderbooks and due for delivery in 2016. VesselsValue says that there a total of 2,518 vessels to be built in 2016, with 1,613 as yet undelivered by mid-year. Almost a third of the undelivered vessels are bulkers.

LPG tanker deliveries are on track for the year, with 50% of the 2016 orderbook having been delivered (worth $3.0 billion). However there is still 80% of the Offshore Support Vessel (OSV) orderbook still undelivered, valued at $5.5 billion. Overall, only 93 of the 500 OSVs on order were delivered to the fleet this year. VesselsValue Valuation Analysts say many of the undelivered vessels in underperforming markets are candidates for slippage: the vessel’s delivery date may be pushed back into the next few years.

The tanker outlook
Updating its Mid-Year Tanker Market Outlook, McQuilling Services says that 49 uncoated tankers were delivered at the end of July, representing “36% of our full-year expectations and supporting our original thoughts of a second half skew of tanker deliveries.” McQuilling Services sees the supply outlook over the next five years as a “tale of two halves.”  It says the present year along with 2017 are projected to increase the DPP fleet as a whole by 3.6% and 5.7% on an average inventory basis.  In total, we project 62 coated Aframaxes (LR2) and 46 coated Panamaxes (LR1) to join the fleet over 2016 and 2017, of which 27 have delivered as of August.

McQuilling Services says, “We anticipate that LR2 inventory will expand 10.7% and 9.9% in 2016 and 2017, respectively amid high deliveries and minimal deletions, while the MR product segment is to average only 1.0% growth through 2020.  Overall, Clean Petroleum Products (CPP) growth will average 3.5% in 2016 before trending lower over the forecast period.  The net fleet growth of the chemical fleet (IMO 2) is projected to expand by 13.5% in 2016, reducing to 3.4% in 2018 and below 2.0% in 2019 and 2020.

“We project spot rates for Dirty Petroleum Products (DPP) voyages to exhibit weakness in 2017 amid accelerating supply growth.  TD3 freight rates will average WS 57 in 2017 before increasing to WS 71 by 2020.  Floating storage economics may help stabilize the recent downturn in the market.  Correspondingly, we anticipate VLCC TCE levels to average $33,800/day in 2017.  Suezmax rates on TD20 are projected to average WS 66 in 2017, returning owners $15,300/day during the year.  Aframax rates are likely to be elevated in the East with TD8 returning owners $19,600/day in 2017, following $22,300/day in 2016.”

According to McQuilling, CPP rates are likely to remain stable in 2017 due to increasing demand and decelerating supply. TC1 rates will average WS 108 in 2017, returning owners $19,200/day, while the LR1 trading the same voyage will generate earnings of $13,800/day.  Gradually increasing freight rates through 2020 are projected.  For MR owners, it is projected that vessels positioned in Asia will earn more than those in the West amid expanding refinery capacity in the East and slowing demand in the West.  The TC2/TC14 triangulation will return owners $11,806/day in 2017.

Asset prices for secondhand DPP tankers will see losses continue into 2017 amid a weakening rate environment, while CPP values may see a slight uptick amid a more stable earnings outlook.  Declining shipyard capacity and higher commodity prices may lead to a slight increase in newbuilding values next year.

Cruise market booming
The cruise ship market is booming, with orders for more than 60 cruise vessels valued at over $44 billion, including two 100-passenger coastal cruise ships being built at Nichols Brothers Boat Builders, Whidbey Island, WA, and two overnight cruise ships at Chesapeake Shipbuilding in Salisbury, MD. Chesapeake delivered the 185-passenger America to its sister company American Cruise Line in the first quarter of this year.

Matson orders two CONROs
In the U.S., orders for the first half of 2016 for new oceangoing ships for Jones Act trade have slowed, with shipyards working off their existing backlogs. The second half of the year started off with a bang as Matson Navigation awarded a $511 million contract to General Dynamics NASSCO, San Diego, CA, last month for two new LNG-Ready Container Roll-on/Roll-Off (CONRO) vessels that will have a capacity of 3,500 TEU. The two CONROs would be the 30th and 31st LNG-powered or LNG-Ready ships built, in operation, under construction or conversion for Jones Act service.

Crowley’s Michael Roberts gives Senate testimony

APRIL 29, 2016 — With U.S. lawmakers focusing on potential solutions to stabilize Puerto Rico’s economy, Crowley Maritime Corporation’s Michael Roberts, senior vice president and general counsel, testified last week before the

VIDEO: Crowley sets engine on LNG fueled ConRO

MARCH 29, 2016 — Crowley Maritime Corporation has marked another critical milestone in construction of its two LNG fueled ConRO ships with the setting of the MAN Diesel & Turbo 8S70ME-C8.2-GI main

Eagle LNG to be fuel provider for Crowley ConRo duo

To support Crowley’s LNG needs, Eagle LNG will build a natural gas liquefaction plant (LNG plant) offering a capacity of 200,000 gallons per day (87,000 gallons per day initially) in Jacksonville, FL. The state-of-the-art facility is slated to be operational by early 2017.

The decision to partner with Eagle LNG was made by Crowley in part because of the two companies’ shared commitment to the environment.

“Crowley is proud to take a leadership position in the industry’s shift to cleaner-burning, natural gas fuel solutions,” said Crowley’s John Hourihan, senior vice president and general manager, Puerto Rico services. “The partnership with Eagle LNG is an important first step in developing sustainable supply infrastructure to ensure these highly technical, environmentally friendly vessels operate to their full capability.”

“The marine sector represents a significant opportunity for LNG fueling in the U.S., and Eagle LNG is well-positioned to build the necessary infrastructure and provide the specialized logistics to facilitate this energy transformation,” said Dick Brown, CEO, Eagle LNG “It takes companies like Crowley to lead that wave of change. Eagle LNG is proud to work with such a pioneering organization.”

“This project is an important investment in our community from both economic and environmental perspectives,” said Jacksonville Mayor Lenny Curry. “It clearly demonstrates the leadership role our region is playing in LNG development and progression, while strengthening our commitment to leaving a smaller footprint through cleaner-burning fuel.”

The supply agreement between Eagle LNG and Crowley will provide LNG fuel for the El Conqui and Taino, which are expected to be in service in the second quarter and fourth quarter of 2017 respectively. 

The Jones Act ships will replace Crowley’s towed triple-deck barge fleet, which has served the trade continuously  since the early 1970s.  The new ships, will offer customers fast ocean transit times, while accommodating the company’s diverse equipment selection and cargo handling flexibility.  

The LNG  liquefaction plant is separate from the previously announced Eagle LNG Federal Energy Regulatory Commission (FERC) export terminal located along the St. Johns River in Jacksonville, which will continue to focus on export markets in the Caribbean and Atlantic Basin.

LNG fuel tanks installed in first Crowley ConRo

Another important milestone was marked last week, with the installation of three LNG fuel tanks in the first ship.

The double-walled, stainless steel tanks – which are 110 feet in length and 20.6 feet in diameter – weigh 225 metric tons and will hold more than enough LNG fuel for two round-trip voyages between the vessel’s future ports of call, Jacksonville, FL, and San Juan, Puerto Rico.

“While we are all excitedly watching these ships take shape, we are particularly proud of the role we, as a company, are playing to bring the most modern, technologically advanced and environmentally friendly ConRo ships in the world to the Jones Act market of Puerto Rico,” said Tom Crowley, company chairman and CEO. “There are no other ships of their kind being built anywhere else in the world today, and they are being constructed right here at home – in the United States of America. Having that shipbuilding capability here is essential to our national defense and an important reason we as a country need the Jones Act to be maintained and strengthened.”

Crowley’s two Jones Act ConRo ships, which will be named El Coquí (ko-kee) and Taíno (tahy-noh), are are scheduled for delivery second and fourth quarter 2017 respectively.

“It’s very impressive to see these new state-of-the-art Commitment Class ships take shape,” said John Hourihan, senior vice president and general manager, Puerto Rico services. “Seeing those LNG tanks being placed into El Coquí really resonates with me because we are setting a new standard for environmentally responsible shipping.”

The Commitment Class ships have been designed to maximize the carriage of 53-foot, 102-inch-wide containers, which offer the most cubic cargo capacity in the trade.

The ships will be 219.5 meters long, 32.3 meters wide , have a deep draft of 10 meters, and an approximate deadweight capacity of 26,500 metric tonnes. Cargo capacity will be approximately 2,400 TEUs (20-foot-equivalent-units), with additional space for nearly 400 vehicles in an enclosed Ro/Ro garage.

Each ship will be powered by an MAN B&W 8S70ME-GI8.2 main engine and three MAN 9L28/32DF auxiliary engines, all fueled by LNG .

The ship design is provided by Wartsila Ship Design in conjunction with Crowley subsidiary Jensen Maritime.

ceowleyLNG vert

ME-GI for first Crowley ConRo passes milestone test

The engine is the first of two 8S70ME-C8.2-GI units for delivery to VT Halter Marine, Pascagoula, MS, for installation in the two 2,400 TEU ConRo ships it is building for Crowley Maritime Corporation.

The vessels will be two of the world’s first LNG-powered ConRo ships, with container Lift-on/Lift-off (LO/LO) and vehicle Roll-on/Roll-off (RO/RO) loading. Designed to travel at speeds up to 22 knots, they will be 219.5 m long, 32.3 m wide and have a deep draft of 10 m. In addition to carrying 2,400 TEU of containers they will be able to carry nearly 400 vehicles in an enclosed Roll-on/Roll-off garage.

Crowley ordered the ME-GI engines, along with three MAN 9L28/32DF auxiliary engines for each vessel, in early-2014. The company selected the high-pressure, Diesel-cycle ME-GI engines because of their high efficiency and power concentration. The ME-GI’s ability to avoid derating, and its negligible methane slip, also contributed to its selection.

Crowley reports that the newbuildings will reduce the amount of CO2 emissions attributable to each container by approximately 38%.

The ships will meet or exceed all regulatory requirements and will have the CLEAN notation, which requires limitation of operational emissions and discharges, as well as the Green Passport, both issued by DNV GL.

The ME-GI engine

The ME-GI engine is the culmination of many years’ work, and gives shipowners and operators the option of utilizing fuel or gas depending on relative price and availability, as well as environmental considerations.

The ME-GI uses high-pressure gas injection that allows it to maintain the numerous positive attributes of MAN B&W low-speed engines that have made them the default choice of the maritime community. The ME-GI is not affected by the multiple de-ratings, fuel-quality adjustments or large methane-slip issues that have been seen with other dual-fuel solutions.

MAN Diesel & Turbo sees significant opportunities ahead for gas-fueled tonnage as fuel prices rise and exhaust emission limits tighten. Research indicates that the ME-GI engine delivers significant reductions in CO2, NOx and SOx emissions. Its negligible methane slip makes it even more environmentally friendly

An ME-LGI counterpart that uses LPG, methanol and other liquid gases is also available, and has already been ordered.
Factory Acceptance Test attendees pictured in front of the ME-GI engine at MES’s Tamano Works

VT Halter lays keel for second LNG fueled Crowley ConRo

AUGUST 25, 2015 — VT Halter Marine, Inc.’s Pascagoula, MS, shipyard yesteday laid the keel for the second of two Commitment Class LNG-fueld combination container – Roll-On/Roll-Off (ConRo) ships for Crowley Maritime

Crowley invests in new Puerto Rico pier for newbuild duo

MAY 11, 2015 — Crowley Puerto Rico Services, Inc. has executed a $48.5 million construction contract for a new pier at its Isla Grande Terminal in San Juan, Puerto Rico. In conjunction