CHILE
BHP and workers reach deal to end strike at Escondida

Staff Writer | August 16, 2024 | 

Escondida is forecast to produce about 1.1 million tonnes of copper in the 12 months to June 30, or 5% of the world’s total copper production. (Image courtesy of Rio Tinto, which has a 30% interest in the mine, run by BHP.)

BHP (ASX, LON, NYSE: BHP) and union leaders in Chile reached a preliminary wage agreement on Friday to end a strike at Escondida, the world’s largest copper mine.


The union, representing about 2,400 workers, initiated the strike on Tuesday after failing to reach a pay deal.

A central point in the negotiations was the union’s demand for 1% of shareholder dividends from the mine, or about $35,000 per worker. The company had offered a bonus of $28,900 before the strike.

“BHP and Union No. 1 have come to an agreement for a collective contract proposal. Along with that, it was agreed to suspend the strike underway as of this Friday, Aug. 16, at 8 a.m.,” BHP said in a statement.

The new deal could be signed on Sunday after union leadership meets with members.

Escondida accounts for about 5% of the world’s mined copper, producing more than 1 million metric tonnes of the metal a year.

Based on data from the state-run Chilean Copper Commission (Cochilco), Escondida accounted for 23.7% of the country’s copper production during the first half of the year. This is almost the same amount produced by Chile’s Codelco, the world’s largest copper producer, during the same period.

The mine produced 614,400 tonnes of copper in the first six months of 2024, according to Cochilco. Chile’s total production of the red metal during this period amounted to 2.6 million tonnes.

Copper for delivery in September fell 1.2% from Thursday’s settlement after the news, touching $4.10 per pound ($9,020 per tonne) on Friday morning on the Comex market in New York.

“Strikes usually don’t tend to be long-lasting in Chile, and so the market may have been reluctant to react to it too much in the early stages,” Michael Widmer, head of metals research at Bank of America, told Bloomberg.

“The bigger issue right now is how we’re doing on the demand side, and that’s probably why the market hasn’t focused on it so much.”

The last significant strike at Escondida occurred in 2017, lasting 44 days. The stoppage hurt production, drove global copper prices up, and became the longest private-sector mining strike in Chile’s history. It is estimated that Escondida failed to produce more than 120,000 tonnes of the red metal due to that strike.

Miners down tools at two Chilean copper mines, as majors struggle to maintain production levels


August 16, 2024 (Investorideas.com Newswire)

The copper market continues to be challenged by supply issues, with two large mines in Chile hit by strikes.



The copper market continues to be challenged by supply issues, with two large mines in Chile hit by strikes.

On Monday, Lundin Mining (TSX:LUN) said it will gradually cut down activities at the Caserones copper mine after a small part of its workforce in Chile took action over a failed collective bargaining agreement.

The Canadian miner had tried to reach an agreement with one of three unions representing approximately 30% of Caserones employees, or 5% of the total workforce at the Caserones, prior to the strike…

The company recently upped its stake in Caserones to 70% after exercising an option with Japan's JX Nippon Mining & Metals. The mine represents one of Lundin's trio of key assets in or around northern Chile, the other two being the 80%-owned Candelaria mine in the Atacama region and the Josemaría project in Argentina. (via Mining.com)

No word yet on how the strike could impact production.

Chile is the largest producer of mined copper in the world, followed by the Democratic Republic of Congo and Peru.


Source: US Geological Survey

Labor strife is also evident at BHP's huge Escondida mine, with a strike starting on Tuesday. Reuters reported "a powerful workers union… is looking to snarl production at the site as it pushes for a bigger share of profits."

Readers may recall a 44-day strike at Escondida in 2017 which caused copper prices to spike when the mega-miner declared "force majeure".

The same thing happened in 2016 after a 26-day strike, and in 2011 the union halted operations for two weeks.

In Africa, the export of copper has been interrupted for a different reason. On Aug. 11, Zambia temporarily sealed its border with Congo after the DRC government banned certain beverage imports, including beer, from Zambia, local media said.

Landlocked Congo only has one way to access ports, and that is through Zambia. The latter resumed trade with the DRC on Tuesday.

Copper market

Benchmark Mineral Intelligence (BMI) forecasts global copper consumption to grow 3.5% to 28 million tonnes in 2024, and for demand to increase from 27 million tonnes in 2023 to 38 million tonnes in 2032, averaging 3.9% yearly growth.

Yet the US Geological Survey reports supply from copper mines in 2023 amounted to only 22 million tonnes. If the copper supply doesn't grow this year, we are possibly looking at a 6Mt deficit.

BHP strike in Chile enters third day, buoying global copper price

Reuters | August 15, 2024 |

BHP’s Escondida copper mine in Chile. (Image: Wikimedia Commons)

A strike at mining giant BHP’s huge Escondida mine in Chile entered its third day on Thursday, bolstering global copper prices as an ongoing standoff between the company and workers starts to spread worries about supply of the red metal.


BHP and the worker union held an initial meeting on Wednesday in a bid to defuse the strike but failed to make a breakthrough that would allow the restart of formal talks, with miners digging in as they seek a larger share of profits.

Benchmark three-month copper on the London Metal Exchange was up over 2.2% to $9,169 per metric ton on Thursday, and various mining shares like Rio Tinto, Southern Copper and Freeport-McMoRan rose as well.

Escondida is the world’s largest copper mine, accounting for nearly 5% of global supply in 2023, and the union on strike has in past years forced the firm to halt operations and declare force majeure, meaning it can’t fulfill its contracts.

On Wednesday, BHP said operations were continuing under a contingency plan while the union said the strike was keeping the Los Colorados concentration and electrowinning plants offline.

The two sides have both signaled a willingness to returning to formal talks but remain at loggerheads over the conditions. BHP had asked the union to pause its strike to resume negotiations, a demand the union refused.

Hundreds of workers have also set up camp at Puerto Coloso, BHP’s exclusive port, which also houses its desalination plants.

(By Fabian Cambero and Alexander Villegas; Editing by Jonathan Oatis)

UK provides $17.3 million to protect Tata Steel’s Port Talbot workers

Reuters | August 14, 2024 |

Tata Steel workers in Port Talbot. Credit: Tata Steel UK

Britain will grant 13.5 million pounds ($17.31 million) in funding to support Tata Steel’s workers and supply chain businesses at Port Talbot in South Wales facing job losses, the government said on Thursday.


Workers suspended a planned all-out strike after Britain’s biggest steel producer warned that it would bring forward the planned closure of its two blast furnaces at Port Talbot if the walkouts went ahead. The closure would cut up to 2,800 jobs.

“Negotiations with Tata Steel on the future of the site will continue separately. But this government will not wait for a crisis to overtake us before acting,” Welsh Secretary Jo Stevens said in a statement.

The closures were announced in January as part of the Indian company’s plan to turn around its loss-making UK business by switching to lower carbon electric arc furnaces, a proposal backed by 500 million pounds ($632 million) of government money.

($1 = 0.7797 pounds)

(By Disha Mishra; Editing by Sonali Paul)

Naval Architecture: The Decarbonization Challenge

The design is the easy part. What to design is the challenge.

Glosten is developing the designs for a hydrogen-hybrid coastal-class research vessel

Published Aug 16, 2024 4:57 PM by Allan E. Jordan

 

(Article originally published in May/June 2024 edition.)

 

While much of the discussion about the future of shipping is centered on big concepts like increasing efficiency, alternate fuel sources and decarbonization, naval architects say there is no one solution to the emerging challenges. 

The field is having to respond as technologies rapidly mature and regulatory requirements remain a moving target as they continue to evolve and react to public sentiment.

“Operators are asking which alternative fuel they should consider or if batteries or hybrid solutions are an option,” says Sam Waterhouse, Technical Manager for Naval Architecture at Elliott Bay Design Group. “Our advice is always to start with an analysis of their operation. Every vessel is unique.”

A full-service marine engineering and naval architecture firm with a broad portfolio ranging from fishing boats, barges and tugs to passenger vessels and ferries, Elliott Bay knows the future of ship design will evolve to accommodate the future variety of fuel options. Ten years ago the future vision was to convert more ships to liquified natural gas (LNG). Now it will require a more holistic and inclusive approach. 

“One of the biggest challenges is the impact specialization has had on naval architecture,” says Donald MacPherson, Technical Director at HydroComp, a developer of software applications that optimize vessel efficiency, including their propellers. He notes that naval architects want to retain control of the system design in areas such as propeller design, driving significant growth for their focused propeller design tools. 

“Successful naval architecture requires a vision of the whole project supported by specific staff providing very focused specialized deliverables,” MacPherson adds.

TrueProp Software, a spin-off and now partner company of HydroComp, offers just such a tool for propeller inspections and tuning to maximize performance. “Customers demand more performance and higher efficiencies,” states Adam Kaplan, TruProp’s Chief Technical Officer. “Fuel and emissions are slowly transforming the way we power (and repower) vessels.”

No One Solution

Decarbonization is one of the biggest challenges. 

Glosten, a full-service naval architecture and marine engineering consultancy working on innovative projects such as the first hydrogen-hybrid coastal-class research vessel and battery-hybrid pilot boats for San Francisco, says naval architecture involves a consulting role requiring a complete understanding of the options for clients. It requires they educate their own teams as well as clients and sometimes the entire industry. Today, projects involve working with clients to figure out what will be best for the individual situation. 

Whether it be methanol, ammonia, hydrogen or a synthetic fuel, vessel designs require adaptation to accommodate alternate fuels. Many of the fuels come with a lower energy density and some have health and safety concerns. 

“As a sector, we’re getting smarter about choosing between alternative fuels and electricity,” says Glosten. “Many of our clients are seeking decarbonization, and there isn’t currently a one-size-fits-all solution.”

Decarbonizing a vessel involves more than simply finding the right energy source and adapting the vessel’s structure and systems to accommodate the necessary equipment. The availability of fuel supply or energy sources, the maturity of the technologies and systems that will process it and the infrastructure needed to deliver it are often harder to guarantee than whether or not the solution will work.

“Everything comes back to a good analysis of the operational profile,” says Elliott Bay’s Waterhouse. The industry is optimistic about batteries but the challenge is for them to become more energy dense. 

“Currently, battery designs are limited to roughly two to four hours of operation max before recharging or around 10 to 40 miles depending on the size of the vessels,” he adds, saying for the time being batteries will be the solution for ferries and short-sea shipping. Elliott Bay designed a 599-passenger, 15-vehicle, double-ended hybrid-electric ferry for Casco Bay Lines that’s due to start service this year on a 30-minute run between Portland and Peaks Island, Maine.

Cost Considerations

The transition, however, comes at a cost. 

Glosten notes that new fuels, technologies and regulations are cost drivers that are particularly challenging for shipowners and operators “who are trying to balance decarbonization with running a business or marine operation.” 

Similarly, Elliott Bay’s Waterhouse notes, “The cost of vessel construction has increased drastically over the last five years, making it very difficult for operators to finance new construction.” He says operators now also face the major challenge of meeting future emissions reduction goals. 

As new construction costs mount, Elliott Bay has integrated efficiency and economy as core aspects of its vessel designs. Waterhouse expects there will be a “refocusing on other methods to reduce fuel needs. Options include reducing transit speeds, hull optimization and diversifying the fleet so that smaller vessels are used when there’s less cargo to move.”

Glosten says inflation in the cost of building new ships may make owners less likely to build new vessels in favor of keeping existing vessels in service longer. This, however, comes with the challenge of keeping older vessels in compliance with new regulations.

Owners are also looking to tools such as TrueProp, which is seeing increased demand as a solution to improving the operations of in-service vessels. Kaplan points out that “Even a perfectly manufactured, high-tolerance propeller may need to be adjusted to dial in the performance for a vessel. This means that propeller inspection and tuning tools are a critical part of vessel post-design delivery.”

As shipowners work to respond to the emerging constraints from regulatory agencies, HydroComp’s MacPherson says it becomes attractive to look at adding, modifying or replacing components such as propellers, ducts, bulbs, flow-alerting devices or flow-adapted appendages. 

“However, from our perspective, everything is a system problem first and a component problem second,” he adds. “Isolating design considerations to individual components can omit reaching meaningful solutions.” He cites, as an example, that modification to the propeller to reduce noise can require additional power and fuel consumption, meaning it has to be reviewed from a systems’ perspective.

Moving Target

Naval architects are also continuing to learn and refine designs and approaches in response to regulatory challenges. 

“The dynamic regulatory environment is a simple fact of naval architecture, but because of the many new fuels and technologies that are emerging, changes are occurring at a faster rate,” says Glosten. They note that in the current fluid environment, there can be unintended consequences, such as when previous regulations have come under more scrutiny and are being interpreted differently, making it more difficult to ensure designs work the first time. 

“We’ve spent a lot of time figuring out how our decarb projects are going to be approved,” says Tim Leach, a Glosten principal. “It’s not a well-worn path. Every novel design must go through the regulatory approval process, and even when you start the conversation early, when the rubber meets the road and people have to sign off, things can change.”

Among the examples Glosten highlights are design efforts to develop the world’s first hydrogen-hybrid coastal-class research vessel for Scripps Institution of Oceanography. They note that investigatory studies were critical along with the time required to navigate the relatively uncharted regulatory environment around hydrogen use for a research vessel. 

Similarly, for the San Francisco Bar Pilots, they recommended a battery-hybrid system that exceeds California’s current emissions requirements because they recognized the likelihood that California’s emissions restrictions could become stricter in the future.

“We also try to future-proof our designs, thinking through what could be coming and making decisions knowing certain regulations may become more stringent.” Glosten says this is hard for obvious reasons but critical to prevent a vessel design from quickly becoming obsolete.

In a related development, a project to develop the first hydrogen-powered towboat in the U.S., a design developed by Elliott Bay, recently reached a Design Basis Agreement with the U.S. Coast Guard establishing a framework to help speed the review, inspection and eventual certification of the vessel.

More to Come

The industry appears to be on the edge of a big change that goes beyond how vessels are powered. Many are speculating about how emerging technologies such as artificial intelligence (AI) and the early exploration of autonomous operations will impact future designs.

As with any major shift, there are growing pains, says Glosten. “All we can do is educate ourselves on emerging technologies and regulations, continue honing our design processes and learn as much as we can about our clients and their needs so we can deliver a vessel that will serve them well and be able to adapt to the changing regulatory landscape.” – MarEx 

 

Allan Jordan is the magazine’s Associate Editor
 

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.

  

Giant Wind Turbine Installation Vessel Delivered to Cadeler

Wind Peak is designed to handle the largest turbines in the most challenging environments (COSCO)

Published Aug 16, 2024 6:03 PM by The Maritime Executive

 

Cadeler, which already attests to being the world’s largest operator in offshore wind installation, operations, and maintenance services, took delivery today, August 16, on the first of its new larger installation vessels. It comes just three months after the company claimed a first for lifting a giant offshore wind turbine into position and is the next step after the acquisition of Eneti which positioned the company including an orderbook of now seven vessels.

The first of the vessels from the orderbook, Wind Peak, was delivered from the COSCO Shipping Heavy Industry shipyard in Qidong, China. The company has a second sistership, Wind Pace, scheduled for delivery in the second quarter of 2025 as its two P-Class jack-up installation vessels. Cadeler highlights that the vessels are designed for the growing needs and demands of future wind farms in terms of size, scope, and complexity and will be the largest in its fleet.

"Our customers are constantly pushing the boundaries in terms of size and complexity of the wind turbines being installed offshore,” said Mikkel Gleerup, CEO of Cadeler. “Wind Peak is a representation of this, and we owe our ability to set new standards in the industry to the hardworking Cadeler team, our excellent shipyard, and trusted strategic partners.”

 

 

First time giant 14.7 MW wind turbine and blades were lifted into position by a Cadeler vessel

 

The ships are engineered to operate at some of the most challenging offshore installation sites worldwide and have the capability to install the largest wind turbines currently being deployed across the globe. The ships will each have 5,600 square meters of deck space with a payload capacity of over 17,600 tons. The main crane is capable of lifting more than 2,500 tons at 53 meters. The size and capacity mean the vessels have the ability to transport and install seven complete 15 MW turbine sets or five sets of 20+ MW turbines per load. Each vessel can accommodate up to 130 crew members and installation technicians.

Liang Yanfeng, Chairman of COSCO SHIPPING Heavy Industry called the vessels among the most advanced offshore wind turbine installation vessels globally. In addition to the load capacity, he said they are also pioneers in the use of hybrid oil-electric power technology.

Designs for the vessels were developed in partnership with COSCO, GustoMSC NOV, Kongsberg, Huisman, and MAN Energy.

The vessel expands on Cadeler’s current capacity. This spring one of the company’s current vessels installed the first 14.7 MW Siemens Gamesa offshore wind turbine, complete with the 108-meter (354 foot) blades, at OW Ocean Winds' Moray West Wind Farm in Scotland. 

In addition to the two P-class vessels, Cadeler has two M-class and now three A-class all on order from COSCO Heavy Industries. The company recently placed the order for the third A-Class vessel and when they are all delivered by 2027, Cadeler will have a fleet of 11 installation vessels. They will all be operating under the Danish flag.

BOEM Approves Environmental Analysis for Oregon Offshore Wind Leasing

The original "call areas" for offshore wind development off Oregon. The final lease areas are a fraction of the size (BOEM)

Published Aug 14, 2024 10:03 PM by The Maritime Executive

 

The U.S. Bureau of Ocean Energy Management (BOEM) has finalized its environmental review process for the auction of wind lease areas off the coast of Southern Oregon, finding that the development activity will have no significant impact to people or to the environment.

"Working with Tribes, government partners, ocean users, and the public, we gathered a wealth of data, diverse perspectives, and valuable insights that shaped our environmental analysis," said BOEM director Elizabeth Klein. "We remain committed to continuing this close coordination to ensure potential offshore wind energy leasing and any future development in Oregon is done in a way that avoids, reduces, or mitigates potential impacts to ocean users and the marine environment."

Local tribes and fishermen oppose wind development off the Oregon coast, and BOEM's review process is locally controversial. This month, commissioners in both affected Oregon counties decided to put referenda on the November ballot to ask residents whether they should formally oppose offshore wind. While federal regulators will make the final decision on leasing and permitting, and the wind lease auctions will likely take place before the ballot, the referenda will provide a measurement of local sentiment. 

"We had a town hall on this subject and it was it was attended by a broad base of people — both conservatives and liberals," Coos County commissioner Rod Taylor told local station KGW. "I don't recall hearing one person at that town hall who was in favor of this wind energy project."

BOEM's wind lease areas cover about 195,000 acres - about 11 percent smaller than originally proposed - and have about 2.4 GW of generation potential. The areas were selected with local fishing interests in mind, but trawl and longline fishermen are concerned that the long mooring chains of floating offshore wind farms would effectively close off large sections of ocean to fishing activity. 

"We’re moving to a place now where we are considering coming out and just saying no to offshore wind rather than being willing to work through a process, because that process is stalled," said Heather Mann, executive director of the Midwater Trawlers Cooperative, speaking to Jefferson Public Radio. "BOEM is moving forward regardless."

The environmental analysis that BOEM approved Tuesday is a preliminary review. The full environmental impact assessment for a U.S. offshore wind development comes during the project permitting phase, after the developer has invested in a lease area and formulated a construction and operations plan. Any specific project off the West Coast would still have to undergo further environmental review before construction; to date, BOEM has approved a final environmental impact statement for nine projects and rejected none. 

BOEM's regulatory decisions may not necessarily be the controlling factor for the timing of commercial development. The U.S. East Coast offshore wind industry has encountered setbacks due to high interest rates and supply chain delays, which have raised costs. Development on the U.S. West Coast will be even more costly, because the region's deep water will require more expensive floating offshore wind platforms and moorings.

Dominion and Equinor Win Central Atlantic Wind Leases Paying Total of $93M

Dominion was one of the winner looking to expand on its first project now under construction (Dominion Energy)

Published Aug 14, 2024 3:03 PM by The Maritime Executive

 

The U.S. Department of the Interior is reporting strong interest in its latest offshore wind auction completed yesterday for sites off the Central Atlantic states. A total of six companies participated in the auction for the two sites offered with the winning bids of $92.65 million from Dominion Energy and Equinor.

The Bureau of Ocean Energy Management conducted the auction which was scheduled in June for sites located offshore from Delaware, Maryland, and Virginia. They highlighted that it was the first offshore sale in the region in a decade. Combined the two sites have the potential for an additional 2.2 million homes or the capacity for approximately 6.3 GW according to the Department of the Interior.

Equinor Wind provisionally won a lease for 101,443 acres located approximately 26 nautical miles from Delaware Bay. The company’s winning bid was just over $75 million. Equinor highlights the potential for around 2 GW of power from the lease area.

The second parcel consists of 176,505 acres and is located approximately 35 nautical miles from the entrance of Chesapeake Bay. The winner is Virginia Electric and Power Company (Dominion Energy) but it drew just $17.65 million. BOEM estimates the area could provide between 2.1 and 4 GW of power. The lease area is adjacent and to the east of where the company's 2.6-gigawatt Coastal Virginia Offshore Wind project. Dominion also agreed in July to acquire from Avangrid the 40,000-acre Kitty Hawk Wind North offshore wind lease area, to be renamed CVOW South. It could provide an additional 800 MW.

“Today’s lease sale represents a major milestone in meeting the demand for clean renewable energy along the East Coast,” said Bureau of Ocean Energy Management (BOEM) Director Elizabeth Klein. The bureau is reporting that the sale resulted in over $23 million in bidding credits, including over $11 in investments for workforce training and domestic supply chain, and an additional $11 million for fisheries compensatory mitigation. The terms of the bidding include stipulations for buying U.S. materials and seeking project labor agreements.

They are also highlighting that the federal government has already approved nine commercial-scale offshore wind projects and held five offshore wind lease auctions under the Biden-Harris administration. BOEM also released a schedule for future auctions through 2028 and reports it will continue to work with the Central Atlantic Intergovernmental Renewable Energy Task Force to explore and identify potential additional areas for future wind leasing. Trump, however, has vowed to stop offshore wind energy development if re-elected president.

Today’s auction announcement starts a long-term process for planning and review for the sites. Equinor said in its statement that it would be post-2035 before the site could become operational as part of its long-term commitments.

Work is underway on Equinor’s Empire Wind 1 project for New York, while Dominion Energy highlighted this week that it has completed the installation of 54 monopiles for its Coastal Virginia Offshore Wind project while targeting between 70 and 100 before work pauses at the end of October. 

The industry has come under renewed scrutiny in the weeks since one of the blades fractured at the Vineyard Wind 1 project off the coast of Massachusetts. Work is proceeding on the recovery at the site and the Bureau of Safety and Environmental Enforcement (BSEE) yesterday revised its Suspension Order to enable Vineyard Wind to resume activities including the installation of towers and nacelles, but further blade installation or power production remains suspended at this time while the investigation and inspection of the blades continues.

 

US Follows Israel with Sanctions Against Tankers Iran Used to Fund Proxies

U.S. sanctions targeted LPG carriers and shipments used to fund Iran's Middle East proxies (file photo)

Published Aug 15, 2024 5:50 PM by The Maritime Executive

Seeking to find a new means of cutting off the aid provided to Iran’s proxies in the Middle East including both the Houthis and now Hezbollah, the U.S. Department of the Treasury’s Office of Foreign Assets Control added a swath of tankers and gas carriers as well as shipping companies and individuals all participating in efforts to fund the proxies. While the U.S. has frequently used financial sanctions, reports said Israel launched a similar effort in recent days going after as many as 18 tankers used by Iran and its proxies.

At the heart of the scheme targeted by the U.S. OFAC, is the Islamic Revolutionary Guard Corps-Qods as well as a Houthi financial official Sa’id al-Jamal. The U.S. asserts that revenue from al-Jamal’s network helps finance the Houthis’ targeting of commercial shipping in the Red Sea. The sanctions also targeted shipping companies based in Hong Kong and the registered owners of vessels based in the Marshall Islands and elsewhere.

“Today’s action underscores our continued commitment to disrupting Iran’s primary source of funding to its regional terrorist proxies like Lebanese Hezbollah and the Houthis,” said Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence Bradley T. Smith. “Our message is clear: those who seek to finance these groups’ destabilizing activities will be held to account.”

One of the companies targeted based in Hong Kong OFAC assets has shipped Iranian LPG worth tens of millions of dollars funneling the proceeds to the Lebanese Hezbollah militants. Four vessels controlled by the Hong Kong-based company are among those being listed as blocked property. The vessels include an LPG tanker Fengshun Eswatini-flagged, two tankers flagged in São Tomé and Principe, Victoria and Lady Liberty, and another Parvati flagged in Panama, all of which the U.S. says transported Iranian LPG.

The U.S. included a long list of vessels including the Palau-flagged LPG tanker LPG OM and the Palau-flagged LPG tanker Raha Gas. Arafat Shipping which operates the Raha Gas they report shipped millions of dollars of LPG to Yemen falsely identifying it as having loaded in the UAE. The captain of the vessel, an Indian national Arif Ibrahim Knot they said facilitated illicit payments.

Another vessel, the Palau-flagged products tanker Divine Power the U.S. reports engaged in a ship-to-ship transfer with another sanctioned tanker, the Mehle, to facilitate the sale of fuel on behalf of the network.  A U.S.-sanctioned tanker named Dawn II they report used forged papers provided by a shipping company in Malaysia to falsely show the commodities were Malaysian rather than Iranian. The same Malaysian company transported Iranian fuel aboard another U.S.-sanctioned vessel. 

Israel is also reported to have launched sanctions seeking to interrupt Iran’s funding of its enemies. It is the first time Israel has attempted sanctions against tankers. Reports indicate it listed 18 tankers representing 1.88 million dwt. S&P said five of the tankers were previously listed by the West.

Israel’s counter-terrorism operation told S&P the plan is to partner with the U.S. and Europe seeking to interrupt the bunkering, supplying, and managers from servicing the vessels.

The efforts come as Israel remains on high alert for a retaliatory attack from Iran and its proxies. The U.S. and its Western allies have been pushing for a de-escalation and hoping a ceasefire in Gaza might help. The U.S. has positioned extensive resources to help in the defense of Israel. 

 

Maersk Joins with LR and CORE to Study Nuclear-Powered Container Shipping

Maersk which pioneered with the methanol-fueled feeder Laura Maersk joints the collaboration exploring a nuclear-powered feeder container ship (Maersk)

Published Aug 15, 2024 3:39 PM by The Maritime Executive

 

Maersk is joining in with a collaboration between Lloyd’s Register and CORE Power that could provide the long-term pathway for nuclear-powered commercial shipping. Using a feeder containership operating in a European port, the collaboration will determine the safety and regulatory considerations and necessary framework for nuclear-powered commercial shipping based on a fourth-generation nuclear reactor.

“The initiation of this joint study marks the beginning of an exciting journey towards unlocking the potential of nuclear power in the maritime industry, paving the way for emissions-free operations, more agile service networks, and greater efficiency through the supply chain,” said Nick Brown, CEO of Lloyd’s Register.

Lloyd’s Register has been at the forefront of the ongoing discussion on the potential of nuclear power in the future of commercial shipping. There was excitement about the potential for nuclear power in the 1950s with the United States leading the way by developing the cargo-passenger ship NS Savannah as a prototype to demonstrate the potential. Then as now, however, public perception and fears of nuclear power held back the development as well as rumored opposition from the U.S. Navy that feared commercial initiatives might interfere with its developing nuclear programs. Only a handful of nuclear merchant ships were built with Russia the only one to still have a merchant ship and nuclear-powered icebreakers in service.

Exploring the potential of nuclear-powered vessels, Lloyd’s Register in its Fuel for Thought series highlighted the rise of small modular reactors as a “step change” for nuclear application. The success of naval applications and new technologies LR says are laying the groundwork for nuclear-powered shipping. Its study highlights the role of small modular reactors in bringing to market suitable low-maintenance reactors. 

To reflect the growing maritime industry focus, LR in its latest edition of its Zero-Carbon Fuel Monitor evaluated five nuclear technology categories up from three in 2023. It added to the assessment in 2024 high-temperature gas reactors and liquid metal cooled reactors joining pressurized water reactors (PWRS) micro-reactors (heat pipes), and molten salt reactors.

“Nuclear power holds a number of challenges related to for example safety, waste management, and regulatory acceptance across regions, and so far, the downsides have clearly outweighed the benefits of the technology,” commented Ole Graa Jakobsen, Head of Fleet Technology at A.P. Moller – Maersk. “If these challenges can be addressed by development of the new so-called fourth-generation reactor designs, nuclear power could potentially mature into another possible decarbonization pathway for the logistics industry 10 to 15 years in the future.”

CORE Power which has been leading in the development of the new technologies asserts that “There is no net-zero without nuclear.” They highlight the applications for floating nuclear power plants and nuclear-powered ships.

The collaboration which will also include a port authority will work on a joint study that will investigate the requirements for updated safety rules along with the improved operational and regulatory understanding that is needed for the application of nuclear power in container shipping. In addition, the study will provide insight for members of the maritime value chain who are exploring the business case for nuclear power to help shape their fleet strategy towards achieving net-zero greenhouse gas emissions.

This is the latest in a series of projects each looking at the potential of nuclear power for merchant shipping. In 2022, the U.S. Department of Energy commissioned ABS to conduct a study exploring the potential and challenges of nuclear-powered shipping.

 

Trafigura: Red Sea Diversions Increase Fuel Burn By 500,000 Barrels a Day

Freestock.ca / CC BY SA 3.0

Published Aug 15, 2024 8:15 PM by The Maritime Executive

 

Yemen's Houthi rebels have been attacking merchant shipping in the Red Sea for months, and while the world's attention is rightly focused on the risk to life and property, the group's aggression also has a substantial environmental impact. According to energy trading house Trafigura, tankers alone will consume an additional 200,000 barrels per day of fuel oil this year because of diversions around the Cape of Good Hope. This is enough fuel to increase the tanker fleet's annual emissions by 4.5 percent. 

Many vessel operators continue to use the Red Sea route between the Indian Ocean and the Mediterranean, as it is much shorter and (usually) less expensive. The industry has developed best practices for security for Red Sea voyages, but shipmanagers recommend avoiding the risk altogether and switching to the long route around Africa's southernmost tip.

The majority of the container ship fleet has made the switch, along with a substantial share of the tanker and gas carrier fleets. The diversion adds about 2,000-3,000 nautical miles to an Asia-Europe or Asia-USEC voyage. Consultancy Vespucci Maritime estimates that the extra distance sailed by boxships on the Cape route each week exceeds the distance from the Earth to the Moon. Many ships speed up to make up some of the time difference for the longer voyage, increasing fuel consumption. According to Trafigura, when container ships and other vessels are included in the calculation, an additional 500,000 barrels per day of fuel oil will be consumed by the shipping industry this year.

The International Energy Agency (IEA) agrees that global bunkering demand will increase because of Red Sea diversions, though by a lesser amount - about 200,000 barrels per day. IEA predicts that the increase will be especially noticeable for bunker suppliers in Singapore, the primary hub for bunker fuel on east-west routes (and one of the ports most affected by Red Sea-driven congestion).  

Top image: Freestock.ca / CC BY SA 3.0

Three Injured in Fire on Chinese-Owned Cruise Ship

Handout image courtesy Jeju Fire Department

Published Aug 15, 2024 10:58 PM by The Maritime Executive

On Wednesday, three crewmembers were injured in a fire aboard a Chinese-owned cruise ship at the South Korean port of Jeju, according to local authorities. 

At about 0830 hours on Wednesday morning, the Korea Coast Guard station at Jeju received a report of smoke emanating from the starboard side of the cruise ship Adora Mediterranea. The vessel had just arrived in port earlier in the morning, and had 3,166 people on board. 

The fire was located in a mechanical space, and it burned through an area of about 500 square feet, including damage to the overhead. Three crewmembers were treated for smoke inhalation, but no passengers were affected. The ship's departure was delayed for an inspection and an investigation into the cause, and passengers received a complimentary extra day's stay in Jeju. 

According to an explanatory letter obtained by cruise media, the fire may have started due to an air conditioning system failure. 

The Mediterranea was given the all-clear for departure and got under way once more on August 15, skipping a call in Fukuoka and heading to her homeport in Tianjin instead. 

Adora Mediterranea was built in 2003 as the Costa Mediterranea, and after a thorough refit for the Chinese market, she began operations for Chinese line Adora Cruises in 2023.

 

German LNG Terminal Operator Sues EU Over Competitor's Subsidy

FSRU dockedi n Stade where construction has begun on the first onshore LNG import terminal (Deutsche Energy Terminal)

Published Aug 16, 2024 1:48 PM by The Maritime Executive

 

 

Two years after Germany rushed to launch its first onshore LNG import terminals, the operators are struggling to gain the upper hand in the market as they move from temporary operations toward the future energy markets. The operator of the first terminal opened at Stade confirmed on Thursday that it has filed suit against the European Commission in a move to block government subsidies to one of its competitors.

After the Russian invasion of Ukraine, Germany launched an ambitious plan to gain energy independence ending its massive gas imports from Russia. The government led the efforts and formed partnerships with private companies to develop floating storage and regasification facilities. They entered into multiyear charters with the owners of FSRUs that could be docked in major German ports and linked to the existing gas infrastructure. The government reportedly committed up to €740 million for the development of the LNG import infrastructure and operations.

The first of the terminals was established in Wilhelmshaven with the FSRU Hoegh Esperanza and the FSRU Hoegh Gannet which was placed in Brunsbüttel. The partnership Deutsche Energy Terminal was established with the goal of building a permanent facility in Brunsbüttel with financial support through the German industrial bank KfW. The German federal government has a 50 percent stake in the company along with Dutch pipeline operator Gasunie (40 percent) and German energy group RWE (10 percent).

Another one of the onshore import terminals was started nearby in Stade, Germany as part of the Hanseatic Energy Hub. Participants include Buss Gruppe, a Hamburg port logistics company, Swiss investment firm Partners Group, Spain’s Enagas, and US chemical company Dow. The FSRU Energos Force was stationed in Stade.

Separately, Deutsche Regas also established LNG terminal operations in Lubmin and Mukran in eastern Germany. These projects were privately financed by Deutsche Regas. Deutsche Energy Terminal is also scheduled to position another FSRU, Excelsior from Excelerate Energy at a floating terminal on the Jade at Wilhelmshaven later this year.

The long-term plans called for the construction of permanent facilities both in Brunsbüttel and Stade. Work began in June 2024 in Stade to build what is being billed as Germany's first land-based terminal for liquefied gases. The design includes Europe's two largest LNG tanks, each with a capacity of 240,000 cubic meters, which critically are also being built ready for ammonia. The facility is scheduled to be online in 2027.

RWE developed the infrastructure at Brunsbüttel and as planned transitioned it as of the beginning of 2024 to Deutsche Energy Terminals. The plan calls for the construction of a permanent facility at the site which like its nearby rival in Stade is designed to handle a form of hydrogen derivates.

The German government filed with the European Commission and won approval in 2023 to provide a state subsidy for the development of the Brunsbüttel terminal. The European Commission approved an initial amount of €40 million and under certain circumstances, it could increase to a total of €125 million.

HEH is now seeking to block the subsidy arguing that the work at Brunsbüttel could and should proceed without government support. They contend the subsidy encourages the operators to be less economically efficient. They also said a normal business would have raised prices to customers to pay for its expansion.

 

Freighter Reports Approach from Vessel Saying it is Eritrean Navy

Freighter was approached by a vessel identifying as Eritrean Navy (UKMTO)

Published Aug 16, 2024 12:16 PM by The Maritime Executive

 

 

The situation in the Red Sea and around the Bab al-Mandeb remains complicated and sometimes confusing with the latest incident raising more questions. A vessel that identified itself as the Eritrean Navy approached a coastal cargo ship.

The UK Maritime Trade Operations confirmed the report of the approach and said the authorities were continuing to investigate. Only brief details were released.

The merchant ship which was only identified as a “small coastal freighter” was operating approximately 95 nautical miles northeast of Massawa, Eritrea. It was significantly north of the Bal al-Mandeb and close to the Eritrean coast.

A small boat approached with several armed people aboard. UKMTO only says that it was in “close proximity” but unconfirmed reports are saying that there was also small arms fire. The vessel reportedly identified as the Eritrean Navy. There was no further involvement between it and the freighter.

Eritrea is known to maintain a small navy having ordered high-speed patrol boats in the last decade. The navy was formed with assets taken from Ethiopia in the late 1980s and after Eritrea gained official recognition of its independence in 1993. By 2015, reports said Eritrea had only one larger vessel operational and several small inshore patrol boats. Modern patrol boats were on display this spring when Russian warships paid an official visit to Eritrea.

Vessels operated by Houthi fighters have made many approaches toward merchant ships in the region but this is the first report of Eritreans approach a ship.  Yesterday, August 15, there were also reports of two approaches with one sighting reported to be boats flying the Houthi flag. Two small boats approached but did not interact with an accommodations barge. There were also reports that a Chinese floating armory reported firing shots to ward off a vessel identifying as “the navy,” with EUNAVFOR Aspides sending an Italian warship to investigate. 

U.S. Centcom continues to provide daily updates from the region on the number of Houthi vessels, drones, and missiles destroyed, but the pace has slowed. Aspides is also maintaining its presence highlighting this week that a French destroyer had joined its operation as the vessels of different nations take rotations as part of the operation.