MGBW building new compact, robust yard tug

DECEMBER 16, 2016—Shipyards that build and repair oceangoing vessels often employ their own small yard-tug to maneuver in and around yard structures, reposition hulls in dry docks or to control newly launched

Leadership change at GD Bath Iron Works and NASSCO

NOVEMBER 21, 2016 — Frederick J. Harris is to retire as president of both General Dynamics (NYSE: GD) Bath Iron Works and NASSCO shipyards. Dirk A. Lesko has been elected a vice

GD NASSCO delivers fourth APT tanker in series

SEPTEMBER 28, 2016—Yesterday, General Dynamics NASSCO, San Diego, CA, delivered the 50,000 dwt Bay State, the fourth vessel in a series of five ECO Class product tankers under contract with American Petroleum

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.

Electric Boat gets Navy awards worth $38.2 million

MARCH 28, 2016 — General Dynamics Electric Boat Corp., Groton, CT, has been awarded three Navy contracts worth a total $38,235,934. Supervisor of Shipbuilding Conversion and Repair, Groton, Connecticut, is the contracting

NASSCO launches first SEA-Vista ECO tanker

SEA-Vista is a partnership between SEACOR Holdings Inc. and private equity firm Avista Capital Partners. Its ships will be operated by SEACOR subsidiary Seabulk Tankers, Inc.

The Independence is a 610-foot, 50,000 deadweight-ton, and LNG-conversion-ready Jones Act product tanker with a 330,000 barrel cargo capacity. Construction on the ship began in November 2014.

As part of the ceremony, the ship’s sponsor, Mrs. Allison Moran, CEO of RaceTrac Petroleum, christened the ship with a traditional champagne bottle break over the ship’s hull. Mrs. Jayne Rathburn, former CEO/owner of US Joiner, pulled the trigger to release the ship into the San Diego Bay.

“General Dynamics NASSCO shipbuilders are revolutionizing the future of American shipping with the concept and construction of innovative, cost-saving, and environmentally-sound vessels,” said Kevin Graney, vice president and general manager for General Dynamics NASSCO. “When delivered, these ECO Class, Jones Act-qualified tankers will be among the most fuel-efficient and environmentally-friendly tankers anywhere in the world.”

“We are pleased to complete this important milestone for the first in a series of three fuel-efficient, ECO Jones Act product tankers that will be delivering into the SEA-Vista fleet and operated by Seabulk Tankers, Inc,” said Daniel J. Thorogood, president and chief operating officer for Seabulk Tankers, Inc.

For its commercial work, NASSCO partners with South Korea’s Daewoo Shipbuilding & Marine Engineering (DSME), for access to state-of-the-art ship design and shipbuilding technologies.


NASSCO launches second LNG fueled TOTE containership

AUGUST 30, 2015 — General Dynamics NASSCO shipyard, San Diego, CA, yesterday launched  and christened the second of what will be the world’s first two LNG-fueled  containerships. The ship, the Perla del

Electric Boat gets submarine work contract

AUGUST 14, 2015—The U.S. Navy’s Supervisor of Shipbuilding Conversion and Repair has awarded General Dynamics Electric Boat Corp., Groton, CT, a $22.3 million not-to-exceed, undefinitized contract action against a previously awarded contract

NASSCO lays keel for first of five Jones Act ECO tankers

MARCH 9, 2015 —General Dynamics NASSCO shipyard, San Diego, CA hosted a keel laying ceremony Friday for the first Jones Act ECO tanker in a series of five for Kinder Morgan’s American

GD NASSCO wins another Navy MLP contract

DECEMBER 23, 2014—General Dynamics NASSCO, San Diego, CA, will build its fourth Mobile Landing Platform and second configured as an Afloat Forward Staging Base (AFSB) for mine countermeasure (MCM) helicopters and special operations