It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Friday, August 09, 2024
Phoenix Completes Critical Subsea Cable Repair Project for EXWC
WETS project-Cable to Shore. (Image credit: Phoenix)
In October of 2023, Phoenix was contacted by the Ocean Cables and Unmanned Systems Division of the Naval Facilities Engineering and Expeditionary Warfare Center (EXWC) to develop an innovative approach to repair the Kaneohe Wave Energy Test Site (WETS) 60M Berth Electro-Opto-Mechanical Cable. Due to the dynamic shoreline environment, the cable had sustained damage along the shore landing riprap. This time sensitive repair was critical to support Wave Energy Converter (WEC) deployment schedules and other site initiatives.
The WETS deep water system contains two cables. One servicing the 80M Berth and the second servicing the 60M Berth. WETS Kaneohe was the first grid connected wave energy test site installed in U.S. waters.
In March 2024, Phoenix received approval to commence the repair and mobilization was initiated. The star asset of this project was a 50-ft by 60-ft modular jack up barge. This barge was outfitted with a Phoenix Palfinger crane, custom cable chutes, 10k winches, a shallow water dive spread and other miscellaneous repair support equipment. The jack up barge provided a stable and reliable work platform on a site known for unfavorable nearshore working conditions.
Once the barge was on site operations commenced. The shore end of the damaged cable was repaired by way of splicing in a new section of cable to the existing offshore leg from the jack up barge positioned offshore in 17-feet of salt water. Approximately 1089-linear feet of cable was pulled offshore with the barge mounted winch. The new cable was spooled off the flatbed mounted power reel to a stand on shore. Cable floats were added at the mean high-water mark as the pull progressed. Both the existing offshore cable and new shore end were jointed in a submersible splice box provided and accomplished by Marmon Utility (Cable OEM). Once jointing and initial testing was complete, the splice box was deployed, and both the cable omega loops, and splice box were fastened to the seabed. The shore end was routed, connected at the beach vault, and final testing satisfactorily completed.
Commenting on the successful completion of the project, Travis Niederhauser, Phoenix Hawaii Area Manager stated, “We are humbled that EXWC entrusted Phoenix to plan and execute this highly visible project. Phoenix personnel, consultants, subcontractors, and suppliers all performed to the highest standard. We are grateful for their support.”
The products and services herein described in this press release are not endorsed by The Maritime Executive.
Austal Launches The Very Last Littoral Combat Ship
Australian-owned shipbuilder Austal USA has launched the last Independence-class Littoral Combat Ship, USS Pierre. The yard emphasized that the final transporter-to-barge-to-drydock launch sequence went like clockwork, giving the aluminum-hulled trimaran a smooth departure. Pierre will undergo testing and preparation, then transit to her new home with Pacific Fleet.
The second-to-last hull, USS Kingsville, was launched in March. After both events, Austal emphasized that the complex launch procedure demonstrates commitment to better operations, through partnerships that allow the firm to "continually examine our process, identify opportunities for improvement, and more effectively achieve these major ship milestones."
Austal's next facility will have a shiplift adjacent to the assembly shed, which will be able to lower completed hulls directly into the water.
Launch operations do not always go smoothly: At the side-launch of the final Freedom-class LCS, USS Cleveland, the newbuild made contact with the stern of an assist tug during the dynamic process of sliding down the ways. The shipbuilder, Marinette Marine, is investing in a ship-lift for gentler launch operations.
The LCS program is winding down so that the Navy can refocus on high-end warships, like the Constellation-class frigate, which is in an early construction and detail design phase at Marinette Marine. The Navy truncated the LCS program by not exercising options for the final three planned Freedom-class hulls, and it has asked Congress to decommission multiple ships years ahead of schedule, including the first two Independence-class LCS hulls and all of the first 10 Freedom-class ships.
WWIII
CNOOC Confirms Major Gas Discovery in South China Sea
Chinese state oil company CNOOC has made a remarkable natural gas discovery in the South China Sea, and it could be a game changer for the region's energy politics.
CNOOC believes that the new Lingshui 36-1 reservoir contains more than 100 billion cubic meters (3.5 trillion cubic feet) of natural gas in an ultra-shallow field in ultra-deep water - the first field of this kind in the world. The gas layer lies just 200 meters below the seabed in 1,500 meters of water.
According to CNOOC, the odds of a commercially-viable gas field at such a shallow depth below the seabed was believed to be impossible. This one, however, should be capable of producing an abundant 10 million cubic meters a day of natural gas.
CNOOC first announced the find in June, and it has now been confirmed by state regulators. Taken together with its previous finds, the new field brings the regional total to more than a trillion cubic meters of reserves. For comparison, this is approximately 1/60th the size of Norway's Troll field.
CNOOC has not released the location of the field. China's neighbors have not issued protests about its development, suggesting that it may lie within China's legitimate and internationally-recognized EEZ off Hainan Island.
China also claims the vast majority of the South China Sea as its own, including international waters and segments of its neighbors' EEZs. It has previously sparred with Vietnam over energy E&P projects, repeatedly shadowing and harassing rig activity in Vietnamese-sponsored oil leases within Vietnam's EEZ. In 2014 and again in 2016, China deployed a rig of its own into disputed waters off Vietnam in an attempt to drill, leading to a diplomatic standoff.
WWIII Manila Secures New Partnerships for Defense of its Maritime Rights
The aging outpost aboard a tank landing ship at Second Thomas Shoal. The AFP has repaired it to last for many more years, four sources told Bloomberg (file image courtesy Jay Tarriela / PCG)
Just weeks after reaching a de-escalation agreement with the Chinese government, the Philippines has announced a flurry of defense partnerships, drills and supply operations in the South China Sea, all favoring the defense of Manila's exclusive economic zone.
First, four security sources have confirmed to Bloomberg that the Armed Forces of the Philippines (AFP) has managed to repair its rusting outpost on Second Thomas Shoal, where Chinese forces have been attempting to deny access and push Philippine troops out. The repairs have been so successful that they should be sufficient to keep the outpost going for up to ten years, the sources told Bloomberg.
The news of the successful repair work is positive for the AFP, which has warned that the structure - a grounded WWII tank landing ship that is now eight decades old - was so decayed that it might have to be abandoned within a few years' time. China vigorously opposes the presence of the garrison within the Philippine exclusive economic zone, and has attempted to block resupply missions with force. Last week, after the announcement of a confidential de-escalation agreement with Beijing, AFP forces carried out a resupply mission to the reef without interference from Chinese forces.
Partnership patrols with Vietnam, Japan and U.S.
On August 5, the Vietnam Coast Guard cutter CSB 8002 called in Manila for the start of joint exercises with the Philippine Coast Guard. Though Hanoi and Manila have competing views of their respective maritime boundaries in the South China Sea, they have committed to a peaceful resolution process centered on international law and negotiation - drawing an unspoken contrast with China's unilateral expansion.
Beijing claims sovereignty over almost all of the South China Sea, including international waters and neighboring states' exclusive economic zones. Beijing continues to reject a 2016 international arbitral ruling that affirmed the Philippines' EEZ boundaries, adopting an official policy of "non-acceptance, non-participation, and non-recognition" of the Permanent Court of Arbitration in the Hague and the rules-based implementation of the UN Convention on the Law of the Sea. In pursuit of its own interpretation of regional maritime boundaries, China has authorized the use of force against Philippine servicemembers inside of the Philippine exclusive economic zone. Multiple Philippine nationals have been injured in clashes with the China Coast Guard since the start of 2024, when the CCG adopted tougher rules of engagement; no CCG personnel have been harmed in response.
Vietnam has had similar run-ins with Chinese forces in the past, all centered on oil and gas E&P. China claims a large swathe of the Vietnamese EEZ, and has attempted to lay claim to its subsea resources as well. In 2014-16 a Chinese state oil firm attempted to carry out drilling in disputed waters of the Gulf of Tonkin, backed up by gray-zone forces of the Chinese maritime militia. Chinese vessels have also conducted unauthorized subsea surveys in Vietnamese waters, and have regularly harassed foreign-operated drilling rigs on Vietnamese license blocks, prompting several international partners to pull out.
In addition to the partnership-building drills with Vietnam's coast guard, the Philippine Navy held its first bilateral drills with the Japan Maritime Self Defense Force in the South China Sea last week, the service announced Friday. It also held a rare drill with the U.S. Navy littoral combat ship USS Mobile, near a contested reef within the western Philippine EEZ; most U.S. gray-hull patrols with the Philippine Navy have been conducted in less sensitive locations, outside of the contested area where China's unilateral claims overlap with Philippine waters.
On Sunday, Manila also announced talks on a new defense partnership with Germany, coinciding with the first-ever visit of a German defense minister to Manila. The planned agreement covers training and weapons exports, said German minister Boris Pistorius, and is part of Germany's commitment to "maintaining rules-based order, securing freedom of navigation and protecting trade routes."
Chinese state-owned opinion outlet Global Times objected to Pistorius' remarks. Citing an anonymous expert on Chinese foreign affairs, GT called the German minister's public support for Philippine maritime rights "a blatant provocation against China that exacerbates tensions."
"Support for the Philippines at the cost of damaging ties with China brings no benefits to Berlin," warned GT. "There is great potential and space for rational and pragmatic cooperation between China and Germany, which is mutually beneficial and win-win."
Four Nations Make a Show of Force in Philippine EEZ
The HMCS Montreal and the USS Lake Erie follow the BRP Jose Rizal (AFP)
On Wednesday, three allied nations joined the Philippines for a two-day exercise in the South China Sea, demonstrating international support for freedom of navigation in a region contested by China.
BRP Ramon Alcaraz, BRP Jose Rizal, HMCS Montréal and cruiser USS Lake Erie made a joint transit in the Philippine EEZ on Wednesday, joined by a Royal Australian Air Force patrol plane. It is the second time in three months that a four-nation task force made a show of force off the coast of the Philippines. In June, the navies of Canada, Japan, Australia and the Philippines made a similar transit.
"We stand together to address common maritime challenges and underscore our shared dedication to upholding international law and the rules-based order," said representatives of the four allied militaries in a joint statement. "Our four nations reaffirm the 2016 South China Sea Arbitral Tribunal Award as a final and legally binding decision on the parties to the dispute."
China claims a broad swath of the Philippine EEZ under its sweeping "nine-dash line" policy, which asserts sovereignty over the vast majority of the South China Sea, including international waters. China refuses to recognize the 2016 decision of the Permanent Court of Arbitration in the Hague, which found that Beijing's historically-based claims were inconsistent with the UN Convention on the Law of the Sea.
In a statement, the Southern Theater Command of the People’s Liberation Army said that it conducted a simultaneous naval drill near Chinese-occupied Scarborough Shoal, a reef within the Philippine EEZ. Three Chinese warships shadowed Wednesday's multilateral patrol, according to USNI.
China has repeatedly attempted to block Philippine navigation within the Philippine EEZ, particularly near Second Thomas Shoal, where the Armed Forces of the Philippines maintains an outpost. Since the start of 2024, Chinese forces have used violent methods to interdict Philippine supply convoys, including ramming and high-pressure water-cannoning - injuring multiple Philippine servicemembers. A recent de-escalation agreement between Manila and Beijing sought to dial back China's use of force and prevent further injuries to Philippine personnel. (No Chinese servicemembers have been reported injured in any of the encounters to date, nor has China claimed any physical damage to its vessels.)
While the most recent convoy to Second Thomas Shoal proceeded without interference from the China Coast Guard, Chinese white-hull assets have been accumulating near Sabina Shoal, just 30 nautical miles to the east. These include a survey ship - believed to be engaged in unauthorized operations - and the world's largest coast guard cutter, the CCG 5901.
WWIII
Chinese Survey Vessel Loiters Near Sabina Shoal, Raising Suspicions
A Chinese survey vessel is conducting unauthorized operations in the Philippine exclusive economic zone (EEZ), just 20 nautical miles off a contested reef.
The survey ship Ke Xue San Hao has been operating about 20 nautical miles off Sabina Shoal for about 10 days, according to Philippine Navy spokesman Rear Adm. Roy Trinidad. "It has been doing a zigzag pattern close to Sabina and the southern part of Sabina Shoal," Trinidad said at a press conference Tuesday. Survey vessels typically operate on a linear back-and-forth trackline, "mowing the lawn" as they acquire seabed data.
China did not ask for permission to conduct survey operations, he added. The Chinese government lays claim to a large swath of the western Philippine EEZ, along with the vast majority of the South China Sea, despite the 2016 arbitral ruling that found its claims invalid under UNCLOS.
The survey ship's presence has attracted extra attention because the Philippine Coast Guard previously found evidence of small-scale land reclamation at Sabina Shoal. The discovery raised alarm bells: ten years ago, China dredged and covered thousands of acres of coral reef in the Spratly Islands in order to construct a string of strategic military bases, and the Philippine government is watching closely for signs of further expansion.
The Philippine cutter BRP Teresa Magbanua has been stationed at Sabina Shoal for months in order to closely monitor Chinese movements. Last month, the China Coast Guard dispatched the world's largest cutter, the cruiser-sized CCG 5901, to anchor at a position within 800 yards of the Magbanua. As of August 5, satellite imagery showed that the 5901 was still holding the same position, according to Ray Powell, director of maritime transparency think tank SeaLight.
China regularly deploys survey vessels to operate without authorization in waters claimed by its neighbors, including Taiwan, the Philippines and Vietnam. In June, the government of Vietnam vigorously protested the operations of a new Chinese survey vessel in the Gulf of Tonkin, alleging that the ship was engaged in "illegal" activities in the Vietnamese exclusive economic zone.
Coast Guard Leads Removal of Abandoned Fishing Boat off Maine
The U.S. Coast Guard is leading an operation to raise and remove a sunken fishing vessel from the harbor in Harpswell, Maine, in order to fix an ongoing source of pollution.
The 1949-built sardine boat Jacob Pike went down in January after a series of winter storms battered the Maine coast. The wreck has been leaking fuel into the marine environment, and the Coast Guard estimates that it could contain up to 1,000 gallons of diesel.
Coast Guard Sector Northern New England attempted to get the owner to take action to clean up the wreck, but found that the individual "was unwilling or unable." In order to address the hazard to the environment, the Coast Guard federalized the response and tapped the Oil Spill Liability Trust Fund to pay for the cost of cleanup. It hired a pollution response contractor, who boomed off the vessel and pumped off 400 gallons of oily water mixture; however, the work stopped short of completion because sending a diver inside the tight confines of the vessel would be too risky. To get at the last potential sources of pollution, the wreck will have to be refloated.
The owner, identified as Cyrus Cleary, has been summoned by the town authorities on the charge of abandoning a watercraft. If found responsible, he could be fined up to 150 percent of the cost of removal. Separately, the administrators of the Oil Spill Liability Trust Fund will pursue recoupment of all federal costs after the wreck removal is complete.
Jacob Pike was an 83-foot wooden fishing vessel built for the sardine trade. Later in life, it worked in the lobster fishery. It ceased commercial operations in 2022, and like many defunct vessels, it changed hands several times in succession. Cleary, the current owner, told the Bangor Daily News that he disagrees with the Coast Guard over the removal method and does not believe he should be responsible for the full cost, which will be in the low six figures.
Operations to remove the vessel are under way. The plan is to set rigging, raise the Pike to the surface, and prepare it for a tow to its next destination. The Coast Guard has determined that the owner is not in a position to take possession of it, so it will be removed to South Portland for safe disposal.
Gearbox Failure, Pilot Error Caused V-22 Crash off Japan
The U.S. Navy salvage ship USNS Salvor searches the wreckage off Yakushima, December 2023 (USN)
A disintegrating metal gearbox was responsible for the crash of an Air Force CV-22 Osprey tilt-rotor aircraft off Japan last November, which killed eight servicemembers and prompted a large-scale subsea salvage response, according to the Air Force.
On the afternoon of November 29, the Japan Coast Guard received a call from a fisherman who reported that an aircraft was in trouble off the island of Yakushima. One of the aircraft's two engines appeared to be on fire, the good Samaritan reported. Five minutes after the call, the plane disappeared off tracking radar, prompting a SAR response.
The aircraft was a V-22 Osprey tiltrotor, transiting from Iwakuni to Kadena Air Base, Okinawa on a training flight with eight servicemembers on board. All members of the aircrew were killed in the accident; seven bodies were recovered in an exhaustive 43-day search. The U.S. Navy's salvage experts recovered key parts of the plane's wreckage, including its engines and rotor nacelles.
After the crash, the Pentagon issued a military-wide standdown to examine the safety of the Osprey, which had had serious mishaps before. The Air Force launched a major investigation to examine all aspects related to the crash, from human factors to materials to design and engineering. They assembled a sequence of events and determined a probable cause: gear box failure, aided by pilot error.
On the day of the casualty, the aircraft took off from Marine Corps Air Station Iwakuni, bound for Yakushima. About 40 minutes after takeoff, the cockpit warning panel flashed an alert for a chip detected in the left side proprotor gearbox. (This alert system monitors for metal chips in the gearbox lubricant oil, along with a burn-off system designed to eliminate loose chips.) About 30 seconds later, the alarm sounded again. The main pilot began looking for airfields to divert to on an electronic chart system in case they needed to land.
12 minutes later, the alarm sounded a third time, activating a "Land as Soon as Practical" guidance for safety. This protocol required the pilot to consider diverting to the nearest safe landing place, but did not require it. The nearest airfield was Kanoya Air Base, 10 miles behind them, but the main pilot did not discuss this option. Instead, he radioed the other aircraft in the formation and said that he planned to continue the mission route.
A fourth chip-detected alarm sounded five minutes later, and a fifth ten minutes after that. Shortly afterwards, the alarm sounded for a chip so large that it could not be burnt off. This triggered a more urgent land-quickly protocol, and the pilot diverted towards Yakushima, 11 minutes away. Multiple emergency landing possibilities were closer, but Yakushima was the only one in the aircrew's planning.
On arriving at Yakushima, air traffic control instructed the Osprey to wait for a commercial plane to clear the runway. After the other plane took off, the aircrew approached for a landing. Half a mile away from touching down, and 49 minutes after the first alarm, the left side gearbox failed catastrophically, immediately causing two left-hand uncontrolled barrel rolls and an 800-foot drop into the water.
After an extensive search and recovery operation, seven bodies were recovered, along with the wreckage of the aircraft. The gearbox was shipped to Marine Corps Air Station Cherry Point, where it was stripped down and examined. One pinion gear was shattered, and the bull gear's drive teeth were all stripped off, indicating that it had stopped transferring power to the prop. The gearbox was filled with large metal fragments.
The investigators found that the likely root cause was a "catastrophic failure of the left-hand prop rotor gear box," leading to a cascading drive system failure. This instantly cut off lift on the left hand proprotor while the right hand side remained at full power, sending the aircraft into an unrecoverable hard left roll.
They also faulted the aircrew for continuing the mission as planned for so long after alarms began to sound, and for failing to consider closer options than Yakushima. "The [crew] did not consider any other landing locations, such as islands with helipads, suitable landing terrain on other islands, or runways," the investigators found. "The [pilot's] decisions were casual, as they prolonged the mishap sequence and removed any consideration of an earlier landing."
The chief investigator also laid a share of the blame on the Osprey program office. "Inadequate action at the program level and inadequate coordination between the program office and the services prevented comprehensive awareness of [gearbox] risks, and substantially contributed to the mishap," wrote Lt. Gen. Michael E. Conley, head of Air Force Special Operations Command.
Additional documents obtained by the AP suggest that the pinion gear failed first, gradually shedding metal chips as it cracked and then ultimately broke apart. The supplemental documents indicated that there were multiple inclusions in the special metal alloy of the pinion gear, and while within acceptable size limits, any larger inclusions could have created opportunities for fatigue cracking.
AP also found that there had been at least 60 gearbox failures in the V-22 fleet over the past five years, including 41 involving chip warnings.
Investigation Underway into Ultra Galaxy Casualty off South Africa
Bad weather broke the vessel and ripped off the deckhouse/accommodations as well as the cargo hatch covers (SAMSA)
While bad weather continues to hamper the salvage efforts of the broken bulker Ultra Galaxy, officials from the South African Maritime Safety Authority (SAMSA) report the investigation process into the cause of casualty is underway. Under maritime law, Panama as the flag state of the vessel is leading the investigation while South Africa because it was affected by the wreck is assisting in the efforts.
SAMSA reports that a team consisting of a surveyor and a technical expert from Panama is arriving in the country and will be meeting with SAMSA. This comes after the investigators from Panama flew to the Philippines for interviews with the crew of the Ultra Galaxy which have already been repatriated after they were rescued from the ship a month ago.
There are several working theories that SAMSA said will be part of the investigation while they also declined to speculate on the cause of the casualty. Officials however shared a few details based on their review of information and initial interviews with the crew. They were seeking to end some of the speculation in the South African media.
Speaking to the media, SAMSA Chief Operations Officer Sobantu Tilayi said there is “nothing to suggest it (Ultra Galaxy) had broken any laws.” Some of the speculation has centered on whether the cargo shifted before the storm and was later exasperated by the high seas as well as possible mistakes in navigation by the vessel before or during the storm.
Tilayi said the list seemed to indicate the cargo had shifted but the investigation would be looking into the cause of the cargo shifting. However, he said when the South African authorities received the distress call the storm was already underway that ultimately claimed the Ultra Galaxy. He said a review of the logs showed the crew tried to alter course before the casualty of the vessel which had been sailing eastbound toward Tanzania.
South African officials coordinated the rescue of the 18 Filipino crewmembers and conducted interviews before they left the country. Those interviews are being shared with the investigators from Panama.
The salvage team they said has been able to determine the location of the remaining oil aboard the Ultra Galaxy. However, they require a window of a week of calm weather to proceed with the operation which will include heating the oil and siphoning it from the tanks. A platform supply vessel continues to stand by with the necessary equipment for the oil removal process. In the meantime, the shore cleanup continues, but they did not say if the vessel continues to leak oil.
Representatives of the P&I Club are also on scene assisting in the salvage operation. They noted the focus currently is on the oil and environmental impact. A plan for the removal of the hulk will be determined in the second stage of the salvage operation.
Gasum and Equinor Collaborate on Bio-LNG Operations for OSV
Island Crusader operating under charter to Equinor is pioneering in the use of Bio-LNG (Gasum)
Gasum, the Nordic energy company owned by the State of Finland, is collaborating with Equinor on a series of liquefied biomethane (bio-LNG) bunkering operations in the Port of Dusavik, in Stavanger, Norway. The latest bunker, which was carried out in mid-July, expands on the earlier tests in 2021 which made the OSV Island Crusader the first offshore supply vessel operating on the Norwegian shelf running on biofuel.
The first bio-LNG delivery was successfully carried out in mid-July. Gasum reports it will continue to supply the Island Crusader with two to three truckloads of bio-LNG approximately every other week. Each truckload contains about 22 tons of bio-LNG.
Built in 2012 by Vard, the Island Crusader (4,750 dwt) is a pioneer using an innovative LNG hybrid battery technology. The vessel is fueled by pure LNG but also features an 896 kWh battery pack, which further improves its environmental performance. Owned by Island Offshore, it is operating under charter to Equinor to support its offshore operations.
Engine manufacturer Bergen Engines initially conducted tests on land to certify the engines for a switch to biofuel. A pilot project in October 2021 then confirmed that biogas can be used on LNG engines without any modifications.
Gasum highlights that biogas can be used in all the same applications as natural gas, including as a road and maritime transport fuel and as energy for industry. The biogas is a fully renewable and environmentally friendly fuel with life-cycle greenhouse gas emissions that are, on average, 90 percent lower when compared with fossil fuel use. It is produced from waste feedstocks such as biowaste, sewage sludge, manure, and other industrial and agricultural side streams and the by-product of biogas production is also high in nutrient content that can be used in industry and agriculture.
The operation is a pioneering step said Gasum as it works to procure more renewable gas to satisfy the increasing demand for sustainable energy. Gasum’s goal is to offer 7 TWh of renewable gas to its customers yearly by 2027, including biomethane and e-methane. A large portion of this volume relies on establishing long-term partnerships with certified biogas producers throughout Europe. Achieving this goal would mean a combined carbon dioxide reduction of 1.8 million tons per year for Gasum’s customers.
GFI LNG and Pilot LNG Form Joint Venture to Develop Salina Cruz LNG
The Salina Cruz LNG JV will develop, construct and operate an LNG bunkering and transshipment terminal in Salinas del Márquez, Salina Cruz, Oaxaca, Mexico. Strategically located on the Pacific side of the Panama Canal, the project is ideally positioned to
GFI LNG LP (GFI), a diversified energy solutions company, and Pilot LNG LLC (Pilot), a Houston-based clean energy infrastructure developer, today announced that they have formed a partnership to develop, construct, and operate a small-scale LNG terminal in Salina Cruz, Mexico.
At full build-out, the facility is anticipated to produce 600,000 gallons of liquified natural gas (LNG) per day, or roughly 0.34 million metric tonnes per annum (MTPA). The partners anticipate operations to commence in mid-to-late 2027.
With speed-to-market in mind, the project is being designed to include modular, land-based liquefaction equipment and an optimized storage solution. The project will deploy a floating storage unit (FSU) with an estimated capacity ranging from 50,000 – 140,000 m3 to be moored inside the newly expanded breakwater in the Port of Salina Cruz.
Salina Cruz will use domestic Mexican gas supply from the Veracruz gulf region to access new high-value markets along the Pacific Coast. These premium markets include: LNG marine fuel deliveries at the Pacific entry of the Panama Canal and into Southern California (the Ports of Long Beach & Los Angeles), sales into Central American power markets, and trucked volumes in the local region of southwestern Mexico. Salina Cruz customers can expect to benefit from competitively priced, Henry Hub-linked LNG sales.
GFI, a Houston-based energy company, has over 20 years of continuous commodity sales of natural gas, refined products, and electricity into Mexico.
“The infrastructure planned in Salina Cruz will not only provide LNG to growing markets seeking cleaner fuel, but will also bring millions in direct community investment to the region” said Gomez. “We are pleased to be adding the LNG and marine expertise of Pilot to the development team. Thanks to our new partnership with Pilot, we look forward to bringing this facility to Salina Cruz.”
Led by LNG veterans with extensive experience in project development, Pilot aims to deliver LNG to new and existing markets across the world and develop a global portfolio of projects. “With long personal ties to the region, the GFI team is dedicated to helping bring infrastructure development to Salina Cruz and brings a critically necessary understanding and appreciation for the local community and government,” said Jonathan Cook, CEO of Pilot. “We are pleased to be working with GFI to help progress this project.”
GFI and Pilot plan to commence front-end engineering and design development for the project this quarter. The partners anticipate a 12-18 month development and permitting timeline and anticipate announcing a Final Investment Decision (FID) in the second half of 2025.
The products and services herein described in this press release are not endorsed by The Maritime Executive.
Maersk Cautiously Optimistic as It Plans Fleet Renewal Including Bio-LNG
Maersk's newest ship passing the older fleet as the company plans to accelerate its fleet renewal (Maersk)
Maersk provided investors with additional details on its outlook while reporting a better-than-expected second quarter and sounding optimistic while emphasizing continued market uncertainty. After starting 2024 with a cautious note, the second largest container shipper reports higher than expected volumes and rates led it to raise its forecast to an operating profit of between $3 and $5 billion for the year. It made $1.1 billion in the first half of 2024.
Making the rounds through the major media outlets, CEO Vincent Clerc said the company had been surprised by the resilience of the container market moving from the pandemic to the decline in rates and volume in 2023, and now the disruptions in the Red Sea. He said the second quarter for Maersk was fueled by strong market demand and volume growth across all its segments and stabilization as the market absorbs the ongoing disruptions in the Red Sea region.
Maersk said profitability was building back in its ocean shipping operations largely driven by higher freight rates which helped them to achieve a 5.6 percent margin despite higher operating costs. The added distances of sailing around Africa drove fuel consumption and costs to an all-time high. Shippers Maersk also believes have accelerated their business fearing a range of issues from further disruptions to port congestion due to the impact on schedules. They also pointed to the potential for a trade war between the U.S. and China as the U.S. moves to raise tariffs and the further impact of the U.S. presidential election.
Moving into the third quarter, Clerc said they would benefit from the full effect of the higher rates. With a significant contract business, he said the full rate impact was yet to come for Maersk.
“Our results this quarter confirm that performance in all our businesses is trending in the right direction. Market demand has been strong, and as we have all seen, the situation in the Red Sea remains entrenched, which leads to continued pressure on global supply chains. These conditions are now expected to continue for the remainder of the year,” said Clerc.
Speak on CNBC he said the company did not see signs of a potential U.S. recession, noting the strong growth in Chinese exports. He predicted that the global container market will grow between 4 and 6 percent up from their earlier force of 2.5 to 4.5 percent growth. However, Maersk is also uncertain if there will be a further rush to move Christmas merchandise or if shippers have already built inventories for the year-end sales. Clerc said he believes freight rates have peaked with the easing of congestion and new capacity into the segment.
Maersk, unlike many other large carriers, has been slow on new orders with Alphaliner highlighting that five of the top 10 carriers now have larger orderbooks. CMA CGM is forecast by many to be set to surpass Maersk moving into the second position behind MSC Mediterranean Shipping. Maersk has also avoided the rush to the 24,000-plus TEU mega-ships.
Clerc said today however the company is set to accelerate a fleet renewal program. Maersk told investors it is increasing its capital forecast by $1 billion annually to $10 to $11 billion due to its continuous fleet renewal program.
While it is not finalized, the company said it is close to orders for 50 to 60 new containerships. Clerc however emphasized it is a fleet renewal saying the target is to execute with the existing fleet size of 4.1 to 4.3 million TEU. The company plans a renewal pace of 160,000 TEU annually and said it would have orders for 800,000 TEU this year for delivery in 2026 to 2030. They expect to build owned vessels with 300,000 TEU capacity and charter the additional 500,000 TEU of capacity.
The company has been adamant that its strategy for new orders was to only order new, owned vessels that come with a green fuel option. Clerc however admitted today that multiple fuel technologies are likely as the sector moves forward with Maersk saying “The exact split of propulsion technologies will be determined considering the future regulatory framework and green fuel supply.”
Maersk would not rule out orders for LNG-fueled ships and told investors it has commenced the work of securing offtake agreements for liquified bio-methane (bio-LNG). The company said its goal with the renewal program is to increase to 25 percent of its fleet equipped with dual-fuel engines.
Maersk has also raised its 2024 estimate saying it should provide at least $2 billion in free cash flow from its operations. While Clerc confirmed they had withdrawn from the bidding for DB Schenker, he said they continue to actively explore acquisitions for the land side of the business. The strategy remains a diversified logistics company balancing the ocean business with growth in the logistics sectors.
Environmentalist Groups Call for Return of “Toxic Cargo” on Two Boxships
Environmentalists contend over 800 tonnes of toxic waste is in containers aboard two containerships and should be returned to the shipper (file photo)
A group of NGOs focusing on the environment issued a call for two underway boxships to be intercepted and forced to return containers loaded with toxic materials to their shipper. The groups allege that the containers currently aboard two vessels chartered to Maersk have more than 800 metric tons of hazardous waste. Maersk responds that while the claims are based on false information, it will share the concerns about the cargo with the authorities.
The issue is being raised by the U.S.-based Basel Action Network along with groundWork (Friends of the Earth South Africa) and Ecological Alert and Recovery – Thailand (EARTH) and alleges that 160 suspect containers were loaded between the two ships. They contend the containers are loaded with toxic steel furnace dust collected from pollution control filters.
The groups highlight that the transportation of hazardous wastes is highly regulated under the UN’s Basel Convention. The international treaty requires approval of the exporting country, in this case Albania, as well as notification to in-transit countries, and the scheduled importing country. The groups contend that proper paperwork was not filed in Albania or the destination which they contend is Thailand as well as South Africa where the two containerships they said will stop for bunkering and supplies.
“If confirmed to be hazardous waste, by the provisions of the Basel Convention, the United Nations Treaty governing the trade in hazardous and other wastes, the containers could be seized and repatriated back to Albania,” the groups wrote in their joint statement.
One group of containers that they are targeting are loaded aboard the Maersk Campton (15,400 TEU), a 175,000 dwt vessel owned and managed by Zodiac Maritime and under charter to Maersk. The ship is registered in the UK.
The groups say the ship has 100 containers with 327 tonnes of material that they believe is hazardous waste. The ship’s AIS currently shows as “out of range” while the groups said the vessel turned off its AIS and is overdue for a scheduled stop in Cape Town. The last AIS signal however shows it is due on August 11 in South Africa. The groups further contend the boxes are bound for Thailand although the Maersk tracking system shows the vessel is bound for Singapore.
"We demand that this renegade ship and the next one, be intercepted, the containers analyzed here to ensure no other Southern country or ocean be at risk of the dumping of this toxic waste,” said Musa Chamane, Waste Campaigner for groundWork, (Friends of the Earth South Africa). “If they are found to contain toxic waste, they must be returned directly to the sender at their own cost and never be allowed to remain in Africa or dumped in Thailand."
The second targeted vessel is a sister ship also under charter from Zodiac to Maersk, the Maersk Candor. It is currently rounding South Africa according to its AIS signal. It also shows a destination of Singapore. The groups allege it has 60 containers that should be inspected for toxic material.
The groups point out that a similar shipment sent earlier this year to China was stopped after Chinese authorities found that the shipment contained more than eight percent toxic lead. They are calling on South Africa to stop the two current shipments if the vessels make calls in the country’s port so that the containers can be halted and returned to Albania at the cost of the shipper.
Maersk says that the claims are based on false information pointing out that all goods from shippers loaded on vessels are cleared by customs. In these cases, Maersk also notes that the vessels did not call in Albania and are not going to Thailand. However, it says it will cooperate as needed with the local authorities.
