Waiting for the Goldrush
Things appear to be moving fast on the ballast front with MRPC 70 in October looking increasingly likely as the stage for Finland to ratify the treaty following the vote in late June by the Finnish Government to instruct their President to do so. Finland is estimated to have the required 0.13% of gross tonnage of the world fleet necessary to put the IMO convention into place and that would mean it coming into full effect in late 2017 assuming of course that the make-up of the world fleet by flag does not change materially from the position in June this year. The fact that the Marshall Islands’ is apparently the world’s fastest growing register could also be a factor in the ballast story because of the three major registers, it along with Liberia are signatories whilst Panama is still not. The entry into force of the convention will spark one of the most extensive and expensive retrofit programmes ever to have affected shipping. The cost of meeting requirements such as GMDSS stations, flotation suits, GPS, AIS, VDRs and ECDIS that have universal application to ships, pales into insignificance against the estimated $500,000 to $5m of installing a ballast treatment system. Some ships may yet escape the expense by virtue of operating exclusively in a region where species transfer is not an issue but to date no such area has been declared and there is no guarantee that any will. Leaving aside the unresolved issues surrounding ballast water treatment and the testing and approval process, it is almost certain that the tipping point will come shortly and with it a scramble to research, wrangle over prices and arrange a repair yard to carry out the retrofit. This could prove a frustrating process for all concerned as system makers will need to ramp up production, yards may not have space and owners need to arrange financing and co-ordinate delivery and installation. Compounding the problems for around one tenth of the world fleet is that they will need to install systems acceptable to the US authorities. Although several systems with IMO type approval have been granted AMS status allowing their use for a limited period, some owners may want the long term comfort of having a US Coast Guard (USCG) type approved system. Currently their search for such a system would be in vain as the USCG has not yet approved any system. around 20 systems undergoing or planned to undergo testing for US type approval with a number reported to be near completion. Although it is possible that the USCG will issue type approvals as individual systems complete testing and submit documentation, some observers believe that the USCG will initially hold back announcing approval until a number of systems have made successful applications. One of those well advanced in the process of testing for US type approval is Norwegian maker Optimarin which reported at the end of June that it had completed all shore and ship testing for its system using the CMFDA/FDA method sometimes referred to as the vital stain method. Optimarin CEO, Tore Andersen told ShipInsight that the company will be depositing the application for type approval with the USCG soon and is hoping for certification before the end of the year. In anticipation of a break in the logjam in the retrofit market, Andersen said that Optimarin would also begin testing for the same system with different filter models to ensure that capacity could be ramped up if necessary. The company is hoping that an early US type approval for the system will allow it to take a significant stake in the sectors it has targeted. Meanwhile, another manufacturer, Alfa Laval, said in early July that it too was on track to submit a USCG type approval application for its PureBallast 3.1 system within weeks. The company has successfully completed all required land-based tests using the current system design and to the vital stain testing method. All testing was conducted at DHI in Denmark using the same hardware, power consumption and flow as the already IMO-approved version of the system. Alfa Laval was one of several system makers that were involved in a legal action after the USCG rejected the testing method employed when the systems were given IMO type approval. The makers involved have been putting their systems through the US approved process while their appeal was in process, which is probably just as well for them because despite some scientific support, the USCG once again rejected the alternative testing method in July this year. Thus, several system makers are a little behind where they would ideally like to be at the present time with both IMO and US type approval so the continual delays in the IMO convention coming into force has probably helped them in this regard. Another possible delay to the IMO convention also came in July when the IMO announced it had abandoned the monthly recalculation of the world fleet covered by ratifying signatures after Panama had objected to the process at the IMO Council meeting in July. The figures will now only be recalculated each time a new ratifying signature is added. Assuming that the convention is ratified towards the end of this year and comes into force in late 2017, there will be an undignified rush for systems by owners and much more importantly a need for sufficient drydock and repair capacity to install the systems. As things stand nobody is even sure of the number of ships involved. The IMO convention applies to ships of 400gt and above engaged on international voyages but there are potential regional exemptions for some ships if they can be agreed and implemented in time. To complicate matters even further, the growing number of ships scheduled for demolition will reduce the eventual total and many shipowners have opted to carry out the renewal survey of their ships’ IOPP Certificates in order to delay the final deadline for installing a ballast water system. It is accepted that this will put tremendous strain on the world’s drydock capacity if an extension cannot be agreed by the IMO. At the last MEPC meeting, Liberia presented a number of papers detailing its view of the problem. Liberia believes that the capacity of the world’s existing docks available for retrofitting would accommodate just 4800 ships annually based on the total number of drydockings for intermediate and renewal surveys in 2015. The papers submitted by Liberia suggest that with better utilisation of capacity and some pre-planning the capacity could be lifted to around 6000 ships annually. However, after taking into account potential exemptions, Liberia estimates that approximately 34,000 ships will be required to install ballast treatment systems. Given that the timetable approved by the IMO expires in 2020, it is clear that even with an early start to the retrofitting needed, there will be insufficient space drydocks all vessels to meet their deadlines. Liberia believes that as many as 9,500 ships could be looking to do the work in 2020. That is possibly a worst-case scenario because many system makers believe that with careful planning the time needed to install a system will not be the several weeks that some have implied that could be accomplished in as little as four days assuming surveys have been done and pipework prefabricated. This is certainly the view of Optimarin’s Andersen who says that his company in a tie up with engineering specialist Goltens offers a preliminary laser survey which accurately details all necessary pipe measurements. As a consequence during installation there is no need for alterations and adjustments to pipes which may have been fabricated as there would be without such an accurate survey having taken place. Alfa Laval says that its experience in retrofit installations shows that carefully made project preparations are essential for a good end result. It believes that it is critical that shipowners that are not already preparing their fleets for installations start doing so, giving the parties involved in executing the project the possibility to deliver a successful end result. Among the efforts it has made is to partner with and educate engineering and installation companies in the Alfa Laval PureBallast technology. Many system makers have made similar arrangements with engineering and drydock operators that they believe will give their customers an edge in reducing the amount of time needed for a retrofit. For many this is necessary because while some components will be manufactured in-house, many others such as pipe work, pumps, filters and control systems will be subcontracted. System makers that do not do this may have difficulties in meeting all orders. French system maker, BIO-SEA told ShipInsight that it is ready to meet demand from its own resources and is not impacted by any potential subcontractors which it says differentiates it from its competitors and adds its logistic department will be able to ship systems worldwide quite rapidly. In anticipation of future important demands level, BIO SEA has partnered to provide ship-owners turnkey projects with at least two companies. With Damen it has access to a repair yards network of more than 15 yards globally and a technical team trained to ensure a good installation and ships compliance. The company has another strong partnership with Radio Holland Marine which is able to provide worldwide turnkey projects thanks to their flying squads and an extensive service network for maintenance and spare parts. Damen has also been chosen as a partner by Evoqua for its SeaCURE system but not on an exclusive basis. Evoqua is also forming partnerships in key geographies including Singapore, where 20% of the world drydockings occur and also in the Middle East. To aid in parts manufacture it has with local manufacturers such as Krosys in South Korea and is growing its support network. GEA told ShipInsight that it is working with several companies worldwide including repair-yards, engineering companies and 3D laser scan providers. It does not have an exclusive agreement in place since the variety and preference of treatment technologies varies project to project. As well as its own system, GEA also co-operates with Trojan Marinex which is one of three systems that the Damen Group is offering for retrofit projects. Damen’s relationship with different makers is not confined to retrofit systems alone as it has developed its own port and emergency use systems under the InvaSave name that will employ one or other of the three systems it is marketing. The fully containerised ‘plug & play’ unit which can be barge or truck-mounted provides ship owners with a mobile and cost-effective alternative to retrofitting fixed systems. This will also give port authorities the versatility to improve the services that they can offer ship owners. South Korean maker Techcross is another system supplier that has multiple partnerships and is looking for more. It signed agreements with Keppel Shipyard in Singapore in 2013, Drydocks World in Dubai and Cochin Shipyard in India in 2015, and Astilleros Canarios, in Spain this year and a contract with a major Turkish ship repair yard is expected in the near future. While many system makers will be looking to the coming into force of the IMO convention as a once only opportunity, not all are planning on large numbers of contracts. UK-based Coldharbour Marine which specialises in systems for VLCCs told ShipInsight that it is planning on no more than 50 systems per year and is confident of its place in a niche market. Unlike most systems on the market the Coldharbour GLD is an in-tank treatment rather than in line. An inert gas generator that can be mounted in any suitable location on or under deck, pumps gas to the gas lift diffusion unit in the ballast tank where the lack of oxygen induces hypoxia and a condition known as hypercapnia in marine life. These conditions are fatal to both aerobic and anaerobic organisms. In addition the GLD produces ultrasonic shockwaves that destroy bacteria. Installation of the system is not complex and can be done easily within the time usually allowed for a scheduled drydocking. Having waited so long and so patiently for the ballast bonanza to begin, system makers attempts to cajole reluctant owners into being early adopters might be understandable. But if there truly is a lack of yard capacity as is being discussed and with a potential second massive outlay for owners on the cards if the global SOx cap changes in 2020, then perhaps there is some sense in being at the front of the queue.