Will AIDA Cruises LNG barge’s hurdles hinder cruise LNG take-up?

Image result for viking grace

Viking Grace Receives 1000th LNG Top-Up

by Rebecca Moore for http://www.passengership.info/ 

The regulatory challenges to launch LNG barge-based electricity supplies to cruise ships – initially to AIDA Cruises’ new ships ‒ at Port of Hamburg have been called a “total disaster”. But on the other side of the coin Viking Lines has proudly announced it has achieved 1,000 bunkerings of its ferry Viking Grace via LNG refuelling vessel Seagas.

The passenger ship industry is keen to implement the use of LNG as fuel or for coldironing, but could the struggles that Becker Marine Systems’ LNG-powered Hummel bunker barge has faced be a barrier to the greater take-up of LNG by this sector, in particular cruise ships?

German shipowner VDR marine director Wolfgang Hintzsche told the CWC LNG fuels summit in Amsterdam a few months ago that Hummel‘s regulatory struggles have proved to be “a total disaster, from the point of view of legislation for LNG bunkering”. He warned: “LNG-fuelled ships simply will not come to Hamburg if we cannot sort out our bunkering problem.”

The project has been dogged by in-port restrictions, the barge’s operating permit requiring it to have an expensive harbour tug on standby, engines running, during loading and for Hummel to return to a night-time berth outside Hafencity after every loading, which requires tug assistance.

And Bomin Linde has long-standing plans to launch a small-scale LNG terminal at Hamburg that could include ship-based LNG bunker supply services. It, too, says it has taken “much longer than expected” to secure approvals for its plans.

But passenger ship operators should take heart from Viking Line’s announcement last week that its trailblazing LNG dual-fuelled Viking Grace has reached a milestone after achieving 1,000 LNG bunkerings in partnership with Swedish company AGA Gas AB since it was launched in January 2013.

Seagas, which was specially built for ship-to-ship refuelling, supplies Viking Grace ‒ the first large passenger vessel to run on LNG ‒ with about 60 tonnes of LNG while the vessel is docked in the morning at Stadsgården in central Stockholm.

Viking Line highlights the smoothness of the bunkering procedure, saying that it met its needs for bunkering to occur as quickly as possible, with no interruptions, with assured deliveries and without affecting cargo handling on the quay.

Indeed, Jan Hanses, president and chief executive of Viking Line said “both the technical solution developed by AGA and the vessel’s operation have outperformed expectations”.

And Jonas Åkermark, who is in charge of the LNG marine market at AGA Gas AB, said: “There is still heavy interest in the Seagas, our ship-to-ship bunkering solution and LNG as marine fuel both in Sweden and internationally. We have a well-functioning infrastructure solution in place in Stockholm and the possibility of bunkering more vessels.”

Obviously the two are very different projects and Hummel and Seagas meet different needs, but they both underline the importance of smooth processes and infrastructure if LNG is to be successfully taken up on a wider scale by ferries and cruise ships, either as fuel or for coldironing. Hopefully the regulatory challenges thatHummel is facing will be ironed out, and passenger ship operators can take heart from the success of Viking Grace and its bunkering vessel Seagas.

Could LNG controls spell trouble ahead for Aida Cruises?

AidaPrima refueling in Hamburg

Aida Cruises faces LNG challenges due to local restrictions and regulations. Its LNG-fuelled AidaPrima cannot receive this fuel at Rotterdam port, while the LNG-power supply barge used by AidaSol for cold ironing is battling bureaucracy in Hamburg.

First LNG dual-fuel cruise ship AidaPrima can use LNG in all its ports of call except for Rotterdam, where it is still awaiting approval from regulatory authorities.

Carnival (Aida Cruises’ parent company) senior vice president for maritime affairs Tom Strang, told PST at a small press gathering after a recent Cruise Lines International Association regulatory briefing: “That is a little bit more challenging, mainly because Rotterdam has a different set of regulatory requirements, as the port is right in the centre of the city.”

However, he seemed optimistic that this obstacle would soon be overcome, and pointed out that while there were a number of steps to go through to reach approval, Carnival has “a great relationship” with the Port of Rotterdam.

But challenges are also afoot in Hamburg. AidaSol is supplied with electricity when in port from an LNG power supply: Becker Marine Systems (BMS) offers electric power generated using LNG-fuelled diesel engines mounted on an unpowered barge at Hamburg’s HafenCity cruise terminal. AidaPrima is also equipped for this cold ironing.

BMS’ barge Hummel has been contributing to improved air quality in Hamburg for more than a year, BMS managing director Dirk Lehmann said in a statement.

But he said: “Due to some restrictions making the work more difficult, we are continuing to seek a mutual solution together with the relevant authorities.”

Mr Lehmann told PST’s sister publication LNG World Shipping that the most severe restrictions are due to the conditions set out in the barge’s operating permit, notably “the condition to have an expensive harbour tug with running engines on standby during energy supply for cruise ships, and the condition to move the barge back to a night-time berth outside the Hafencity area after every energy supply operation”. This last also requires tug operations.

BMS is negotiating with the authorities to try to improve this situation and Mr Lehmann’s statement showed a very clear warning and emphasised just how crucial these talks were: “This would then enable Hummel to supply environmentally friendly power to cruise ships during their layovers at port beyond the current year.”

These teething difficulties will no doubt get solved – but the cruise sector will be watching with interest as Carnival and its company Aida Cruises pioneer the use of LNG both as a fuel and for cold ironing.

World’s Top Three Shipyards Submit Plans to Raise $7.3 Billion in Revamp

Hyundai Heavy Industries shipyard in Ulsan, about 410 km (255 miles) southeast of Seoul. REUTERS/Lee Jae-Won

Hyundai Heavy Industries shipyard in Ulsan, about 410 km (255 miles) southeast of Seoul. REUTERS/Lee Jae-Won

(Bloomberg) — The world’s three biggest shipyards plan to raise a combined 8.41 trillion won ($7.3 billion) selling assets as part of a restructuring following losses last year.

Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co. have submitted their fund-raising plans to their creditors, including state-run Korea Development Bank and KEB Hana Bank, South Korea’s government said in a statement Wednesday. The banks and regulators will meet twice a month to review the progress of the plans, according to the statement.

A slump in crude oil prices, which halved in the past two years, has roiled the nation’s shipbuilding industry as delivery delays and cancellations of projects translated into losses, while shrinking orders for new vessels have heightened concerns their cash may dwindle further. The South Korean government told the shipyards to submit their plans to help them better manage their financials and minimize the impact on the economy.

Turning Around

The government, on its part, said it will bolster capital of state lenders by creating a 11 trillion won fund to help cushion losses as banks aid the restructuring, it said in a statement separately. The steps may be coming amid nascent signs of a recovery. Vessel deliveries in terms of deadweight tons increased 39 percent in May from a year earlier, said Park Moo Hyun, a Seoul-based analyst at Hana Daetoo Securities Co.

“Things are starting to turn around for the shipyards as more vessels and offshore projects are delivered to clients,” Park said. “The focus now should be on providing funds to help them win new orders.”

Hyundai Heavy, whose first-quarter net income beat estimates, plans to raise 3.5 trillion won selling shares in other companies such as KCC Corp. and Hyundai Motor Co., as well as its three financial units, the Ulsan-based company said in a separate statement. It will also seek to save 900 billion won from job and pay cuts. The shipyard plans to cut its debt-to-equity ratio to 80 percent from the current 134 percent.

Jobs, Wages

Daewoo Shipbuilding, which counts Korea Development Bank as its biggest shareholder, will seek to raise 3.45 trillion won from sale of its 14 subsidiaries, two floating docks and the spin-off its specialty shipbuilding business, the company said in a separate statement. It will also reduce jobs and salaries to save money, it said.

The latest plan is in addition to the 1.85 trillion won the shipyard said it will seek to raise in October last year. Daewoo Shipbuilding reported a net income in the first quarter versus a loss a year earlier.

Samsung Heavy plans to sell assets through bond sales and reduce jobs to raise 1.46 trillion won, the company said separately. It also plans to sell new shares if more cash is needed, it said. Brent crude traded at $51.51 a barrel on Wednesday, compared with about $115 two years ago, according to data compiled by Bloomberg.

South Korea has urged the companies to restructure and improve efficiency, while pledging more steps to help them reduce debt and weather the global slump.