Torm returns to the newbuilding market

Today it entered into an agreement to purchase four fuel-efficient LR2 newbuildings from Chinese shipbuilder Guangzhou Shipyard International (GSI) with expected delivery in the period between the fourth quarter of 2017 and the second quarter of 2018. The agreement includes the option to purchase up to six additional vessels within the LR2, LR1 or MR segment with expected delivery in 2018 and 2019.

Torm expects to have a total CAPEX relating to the four firm vessels of approximately $200 million, including extra costs related to Torm’s design requirements and supervision. It says it is in advanced dialogue with potential lenders obtain financing for the newbuildings.

With today’s agreement, Torm has CAPEX commitments of $273 million, covering the remaining CAPEX on its remaining three MR newbuildings, one second-hand MR vessel and the four new LR2 vessels. Torm has a liquidity position of approximately $280 million including available debt facilities of $97 million.

Torm says it has utilized its long-term relationship with GSI and China State Shipbuilding Corporation to source today’s contract. Torm already has 16 GSI vessels in the current fleet and has good technical and commercial experience with them. The new vessels will be constructed according to Torm’s specifications in order to optimize trading.

Canadian shipbuilders in spat over interim oiler contract

NOVEMBER 24, 2015 — Canadian shipbuilders are embroiled in a spat over the Resolve-Class AOR interim fleet oiler being created by Chantier Davie Canada Inc. by converting a 183 m containership to

Donjon Shipbuilding makes major lighting upgrade

Located on the Lake Erie shore, the over 200,000 sq. ft. shipyard facility has a 92-foot ceiling height on the main floor, plus a 125-foot high ceiling over a portion of the massive graving dock, one of only two on the Great Lakes able to accommodate 1,000-foot self-unloading vessels for construction, repair, conversion, repowering and maintenance.

With conventional metal halide fixtures, lighting maintenance was a major headache. Even with no fewer than 266 metal halide fixtures in place, fewer than 60 of the 1,000 W lights were typically in operation at any given time.

In addition to the notoriously short life of the metal halide lamps, the damp, harsh, high-vibration environment inside the open air facility took a major toll on both bulbs and ballasts. And the exceptional ceiling height was a major obstacle to easily changing bulbs and fixtures.

Without proper lighting, the sheer size of Donjon’s facilities made them appear cavernous and dark even on the brightest, sunny days. The lackluster color rendering of the metal halides even contributed to visibility issues with their unnatural orange glow. And, when it came time to turn on the lights at the start of their 24-hour, 5 day-a-week operation, the metal halides took nearly 20 minutes to come up to full output.

“The lighting was not sufficient enough to fully light the facility. There were places in the building where we had to use a flashlight, even when we weren’t inside a ballast tank,” said Caleb Hoffman, Electrical Lead Man. “A flashlight was on everyone’s required tool list. It was difficult to read a tape measure without one, and accuracy in measurement is very important in our work.”

The Solution: Dialight 60,000 Lumen LED

Aiming to end its lighting woes with an upgrade, Donjon began looking at vendor proposals. It didn’t take long to realize that LED was the way to go and Donjon opted to replace the metal halide fixtures with  60,000 lumen Vigilant High Bay LED fixtures from Dialight plc, an international market leader in LED lighting with North American headquarters in Farmingdale, NJ.

“We assumed LED is the latest and greatest technology, giving us the best bang for the buck,” Mr. Hoffman said. “We chose Dialight because it best suited our application, and the warranty was a huge factor.”

Dialight’s 60,000 lumen Vigilant High Bay is the first LED fixture of its kind to offer a true one-to-one replacement for conventional 1,000W high output fixtures. Delivering 115 lumens per Watt with the 480 V top hat transformer at half the power consumption of the existing metal halides, the high-output Vigilant provided more than enough light to meet Donjon’s needs, while also drastically reducing per-fixture electricity costs.

The new Vigilants are so bright thar Donjon was able to eliminate two-thirds of the fixtures in the facility, replacing 266 metal halides with  79 Dialight 60,000 lumen Vigilants.

At roughly half the weight of conventional fixtures, the Dialight Vigilants were easy for Donjon’s in-house electrical crew to install on the existing circuits. With an ambient temperature rating of -40°F to + 149°F and high-durability fixture design, the new Vigilants can easily tolerate the harsh Lake Erie weather.

The entire fixture is backed by Dialight’s 10-year, full-performance warranty, so Donjon is now guaranteed to have ample lighting with zero maintenance for a decade or more.

The clear, bright white output of the Dialight LEDs makes a difference in visibility that is like “night and day” compared to the old fixtures, according to Donjon staff. Flashlights are no longer required on the shop floor, even in the graving dock where the lights are 125-feet off the ground. The high-performance optics deliver directional light exactly where it’s needed, with no dark spots or harsh glare.

“We compared three different manufacturers, and Dialight was hands-down the best fit for our application,” Mr. Hoffman said. “One other company promised more hours on the fixtures, but couldn’t back it with a warranty. The 10-year warranty, ease of installation and energy efficiency―Dialight offered the whole package that was better for our situation.”

New U.K. defense plan adds ships, costs more

Notably, the buy of advanced Type 26 Global Combat Ships will be cut to eight ships from the previously announced 13. 

The Type 36 ships are intended to replace the Royal Navy’s current Type 23 frigates in their anti-submarine role and the cuts to the program aren’t going down well in Scottish shipbuilding circles.

Overall, though, the plan adds to the number of ships in the fleet.

“We will maintain our fleet of 19 frigates and destroyers,” says the review. “We will also launch a concept study and then design and build a new class of lighter, flexible general purpose frigates so that by the 2030s we can further increase the total number of frigates and destroyers. These general purpose frigates are also likely to offer increased export potential. We will buy two further new offshore patrol vessels, increasing the Royal Navy’s ability to defend U.K. interests at home and abroad.”

The two new Queen Elizabeth Class aircraft carriers, the largest warships ever built for the Royal Navy, that will enter service from 2018, will also get added punch with an increase the number of F35 Lightning aircraft being bought. And one of the two carriers will be enhanced to support the amphibious capabilities of Royal Marines 3 Commando Brigade.

Three new logistic ships will be built to support the fleet, in addition to four tankers that will enter service from 2016.

BALLISTIC MISSILE SUBS WILL COST MORE

Not too surprisingly, Britain’s 20 year plan to replace the Vanguard Class of nuclear-armed submarines with a new class of four submarines, currently known as Successor, is starting to look a lot more expensive, going up from a previously estimated ›£25 billion to £31 billion, with a further £10 billion being budgeted for contingency.”The revised cost and schedule reflect the greater understanding we now have about the detailed design of the submarines and their manufacture,” says the review.

Download the National Security Strategy and Strategic Defense and Security Review HERE

Australian shipbuilding acquisition in the works

Today, Civmec revealed that it is poised to acquire the Forgacs shipbuilding business.

Forgacs is Australia’s largest privately-owned engineering and shipbuilding company and part of the team building the Hobart Class Air Warfare Destroyers (AWD) for the Royal Australian Navy, manufacturing 37 of 93 AWD blocks at its indoor modular shipbuilding facilities.
Singapore listed line with Civmec said today that it has agreed to enter into a due diligence phase for the acquisition of certain Forgacs assets and the Forgacs name.

The proposed acquisition includes a purpose-built shipbuilding site. Forgacs Shipyard – Tomago is located 14 km from the Port ofNewcastle, NSW on the Hunter River. The 17 hectare site has 535 meters of river frontage with two ship basins. The acquisition also includes plant and equipment currently located at the Forgacs Hexham heavy engineering workshop and at the Forgacs Gladstone heavy engineering workshop.

Forgacs’ products’ business, Forgacs-Broens Pty Limited, does not form part of the sale and will continue to operate from its Ingleburn, NSW and Elizabeth, SA facilities.

Civmec says it believes that “the considerable opportunities in the infrastructure sectors on the east coast as well as the long-term outlook within the defense, oil & gas and metals & minerals sectors justifies the investment.”

Civmec CEO Pat Tallon said, “This is a very exciting opportunity for our company to extend our multi-disciplinary operations to the east coast of Australia and to gain a long established foothold in the defense shipbuilding industry. It will also give us the opportunity to acquire in-house submarine building and technical expertise. We will be well positioned to capitalize on the significant infrastructure expenditure planned for the east coast and our increased capacity will allow Civmec to deepen our relationship with existing blue chip clients nationally, as well as bringing on board new regional clients.”

Peter Burgess, Chairman of the Forgacs Group commented, “Forgacs has more than 50 years’ experience in the heavy engineering and projects business and entered the naval ship repair business in 1990. It has grown its naval involvement progressively, undertaking major naval programs including the conversion of HMAS Manoora and HMAS Kanimbla into Amphibious Helicopter support ships; hull modules for the ANZAC frigates and most recently the AWD program. The Tomago shipyard has built some of Australia’s iconic ships such as ice breaker Aurora Australis, HMAS Tobruk and hull sections of Collins Class submarines. Our shipyard is ideally positioned for Civmec’s future plans.”

Subject to satisfactory due diligence, necessary stakeholder approval and the finalization of the sale and purchase agreement, Civmec expects to complete the transaction in December 2015.

Quite how, if at all, this fits in with Civmec’s submarine building ambitions remains to be seen. When it unveiled those plans it said that it had the capability to be the in-country builder for whoever won the submarine contract and that it would add a new dedicated facility for building submarines at its Henderson, Western Australia, facility — which is quite some ways distant from the Forgacs shipyard.

Just to add to the confusion, Australian media reported today that the Australian Government has yet to decide whether to build eight or twelve boats and that the French, German and Japanese bidders for the program had agreed to build them at the ASC facility in South Australia.

Ingalls Shipbuilding christens NSC 6

NOVEMBER 15, 2015 — Huntington Ingalls Industries’ (NYSE:HII) Ingalls Shipbuilding division christened the company’s sixth U.S. Coast Guard National Security Cutter (NSC), Munro (WMSL 755), November 14 in front of nearly 600

NSRP looks at shipbuilding cost management software

NSRP is an industry-led, Navy-sponsored collaboration of U.S. shipyards working together to reduce the cost of building, operating and repairing Navy ships by improving productivity and quality through advanced technology and processes. Its various panels strive for the discussion of best practices and overlapping challenges.

The CostFact software that will be in the spot light at next month’s San Diego has been developed in close cooperation with naval shipyards such as ThyssenKrupp Marine Systems and incorporates a number of best-practice methods.

The meeting in San Diego offers the opportunity to look at selected CostFact features. Case studies will demonstrate the application of CostFact at naval shipyards. The integration of CostFact with the CAD software ShipConstructor will also be shown.

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HHI sees Saudi Aramco MOU as a turning point

The MOU follows discussions on strategic collaboration that were initiated when Saudi Aramco’s Board of Directors visited HHI’s Ulsan, South Korea, complex in April 2015.

Mr. Chung, who represented HHI for all relations with Saudi Arabia and Saudi Aramco, led the efforts that culminated with a signing ceremony presided over by Saudi Aramco President and CEO Mr. Amin H. Nasser at Saudi Aramco’s Dhahran, Saudi Arabia, headquarters.

According to Mr. Chung, the partnership is “a great opportunity to enhance Korea’s shipbuilding and EPC businesses” and continues a contribution to the Kingdom by HHI that goes back to the 1970s when it was awarded a contract to undertake development of the Jubail port (King Fahd industrial port) project.

“This signing is significant as it provides the potential for the creation of another Jubail that creates tremendous growth opportunities for HHI,” said Mr. Chung.

Saudi Aramco has been looking to develop a yard at Ras Al-Khair, 60 km north of Jubail, in coordination with the National Shipping Company of Saudi Arabia (Bahri) and HHI as potential partners.

The yard would leverage the partners’ offshore business to accelerate localization efforts of Saudi Arabia’s young and promising maritime industry, and its associated supply chain. HHI’s role would include winning shipbuilding vessels while participating in construction and operation of the shipyard and gaining opportunities to provide various value added services.

The project would enable the partners to cater to growing Middle East vessel demand and to build vessel types that it is no longer profitable to build in Korean shipyards.

Also being eyed is a future engine building joint venture that would allow the HHI-developed HiMSEN engine to expand its share of both the marine and power plant sectors in the region.

Another strategic partnership under development relates to HHI’s Middle East EPC business, seen as the seed for a joint cooperation through which a regional EPC champion could be created.

DSME told to halt work on LPG ships following deadly fire

NOVEMBER 11, 2015 — South Korea’s Ministry of Employment and Labor has ordered a halt  to work on five LPG ships under construction at Daewoo Shipbuilding and Marine Engineering’s Okpo shipyard following

Vard: One new order, a lot more red ink

First the good news: It’s an order for an offshore vessel of undisclosed type or size, for an undisclosed owner, at an undisclosed price. Designed by Vard Design in Ålesund, Norway, the vessel’s hull will come from the Vard Braila shipyard in Romania, with outfitting and delivery scheduled from Vard Langsten in Norway in 2017.

Now to the mounting losses. Vard recorded a net loss of NOK 845 million ($1($98.4 million) and NOK 1.1 ($128 million) for 3Q2015 and 9M2015, against a loss of NOK 160 million ($18.6 million) and profit of NOK 30 million ($3.5 million) respectively in the corresponding 2014 periods. The third quarter loss attributable to equity holders came at NOK 486 million ($56.5 million), as compared to a loss of NOK 37 million ($3.4 million) in 3Q2014.

Over the first nine months of the year, cash holdings declined from NOK 2.0 billion ($232 million) to NOK 906 million ($105 million) as at 30 September 2015 on the back of capital-intensive projects requiring a significant amount of working capital, and the cash impact of losses in Brazil. However, cash holdings remained stable in the third quarter compared to the balance of NOK 904 million at the end of 2Q2015.

Although orders picked up in the third quarter, with four new vessel contracts secured, total order book value at September 30 was NOK 14.01 billion ($1.6 billion) — a 30% decrease from the third quarter 2014 figure.

Currently, Vard has an order book of 31 vessels, of which 18, or 58%, will be of its own design.

Vard is winning some work outside of its traditional North Sea market and in non-offshore related specialized vessels. Still, that’s not been enough to offset the impact of continuing offshore weakness in its European shipyards and of lower utilization and cost overruns at its Brazilian shipyards, where “additional loss provisions were required to account for unsatisfactory progress.”

“In particular,” says the company, “the scope and complexity of the series of LPG carriers under construction at [50.5% owned subsidiary] Vard Promar exceeds original assumptions, while the efficiency and operational stability at the new yard is still lower than anticipated.”

Downsizing continues at Vard’s Niterói Brazil yard in line with a declining workload.

Activity levels at Vard’s shipyards in Romania and Norway continue to decline on the back of a shortfall of sizeable new orders and postponement of deliveries in the current order book.

In Vard Tulcea, the larger of its two shipyards in Romania, a restructuring process is underway and a number of engineering resources have been subcontracted to Vard’s parent group Fincantieri in order to retain highly skilled staff in the organization. Vard Tulcea has also delivered first steel sections to Fincantieri cruise shipbuilding projects, and opportunities are being evaluated how the yard can carry out a larger share of such project.

In Norway, temporary layoffs are being imposed.

Operations and yard utilization at the Vietnam shipyard, Vard Vung Tau, are said to “remain robust.”

Vard says that work is underway on a comprehensive strategy overhaul and development of a new business plan which it will unveil when it releases its full year figures.

It says a key element of that plan will likely be a diversification of production, with synergies with the Fincantieri parent group expected to play a major role.

Vard says its “exposure to the Brazilian market is under review.”

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