How AET secured two long-term charters with Repsol
The entry into service of the 157,512 dwt AET-owned Suezmax twins Eagle San Francisco and Eagle San Jose marks the first time AET has had two Suezmax vessels on long-term charter. The landmark can be explained both as a natural blossoming of the company’s long term working relationship with Spanish charterer Repsol and eight highly changeable months in 2017.
Back in January 2017, Repsol signed a five-year time charter with a Greek owner for delivery of two Suezmax vessels in August 2017. However, as Repsol trading’s chartering director Alberto Hernández Bilbao explained to me when Tanker Shipping & Trade attended the launch of Eagle San Francisco and Eagle San Jose in January, things then went awry.
“At the point the vessels were due to deliver, the Greek owner sold his company to another Greek owner. The new owners were unable to take delivery of the vessels, so the vessels were then sold on to another Greek owner, Polemis.
“Polemis, famously, operates on the spot market so had no interest in entering into a long-term charter with us. In eight short months we went from having two vessels lined up to being without a vessel.”
At this point AET entered the frame. The two parties had worked together over the years, mostly on contracts of affreightment. “AET showed me the plans for Eagle San Francisco and we entered into a 4 + 1 year charter agreement on that vessel,” explained Mr Bilbao. “During the negotiations, and after running all sorts of numbers, we confirmed our interest in the sister vessel, Eagle San Jose.” Subjects on Eagle San Jose were closed three days after Mr Bilbao had returned to Spain following the delivery of both vessels.
The central appeal of these two vessels was that as Suezmaxes they are a natural fit with the company’s present trading patterns.
Repsol has five refineries in Spain and one in Peru. The refinery in Peru cannot accommodate VLCCs. The five refineries in Spain are served by four terminals. Three of the terminals can accommodate all vessel sizes. But the fourth, in A Coruña, can handle vessels up to Suezmax size. “Because of this, and because of our refinery system, we want to have flexibility – and for now this means mainly chartering Suezmaxes or Aframaxes,” explained Mr Bilbao. This policy may change in “three or four years’ time” when a new terminal comes on stream in A Coruña that can accommodate VLCCs. “At this point,” said Mr Bilbao, “we will probably start fixing VLCCs more frequently.”
So what of the vessel designs themselves? Though both are of standard design, Eagle San Francisco and Eagle San Jose reflect a number of modifications designed to improve operational, and especially environmental, performance.
As AET president and chief executive Captain Rajalingam Subramaniam told Tanker Shipping & Trade at the naming ceremony, what guided this approach was a strategic decision that the company took in 2015 to future-proof its fleet for the trading and regulatory requirements of the mid-21st century.
“In the second half of 2015 we reviewed our portfolio and concluded that to keep one step ahead we had to ensure that we had a young fleet, so set about a programme of fleet rejuvenation.” Certainly, the approach appears to be working. According to figures provided by industry analysts VesselsValue on 23 February 2018, AET’s fleet stands at 71, including newbuilding contracts. The total value of AET’s live fleet, says VesselsValue, stands at US$2.03Bn, with a further five vessels valued at US$331M left to be delivered. This gives a total fleet value of US$2.36Bn. Four of the newbuildings are Aframax tankers, two of which will have an LNG dual-fuel option.
A key pillar in this approach is long-term collaboration with preferred yards. In Korea, AET works with Samsung Heavy Industries, Hyundai Heavy Industries and DSME. The week before Eagle San Francisco and Eagle San Jose were delivered, Captain Rajalingam had been at Samsung Heavy Industries’ Geoje yard, taking delivery of the 113,400 dwt Aframax tankers Eagle Barcelona and Eagle Brisbane.
Renewing the fleet would also allow AET to draw on what Captain Rajalingam referred to as the company’s rich operating experience to drive up safety and efficiency on its vessels.
Here he emphasised the additional requirements AET specified around personnel transfer as one of the ways the company enhanced Eagle San Francisco and Eagle San Jose’s basic design. “We also asked for the engineroom layout to be rearranged to support more user-friendly maintenance. No more clutter!” Crew training and especially crew familiarisation and re-familiarisation with technology is emphasised.
“As well as long-term partnerships with yards, we enter into long-term partnerships with vendors and service providers. There is rigorous training before the crew board the vessels, and refresher training for those who already have experience. We of course have our preferred equipment and preferred suppliers. And one of the benefits of having deep and collaborative relationships with yards is that it is possible to negotiate changes to their preferred suppliers’ list,” Captain Rajalingam explained.
Of immediate interest, of course, is the choice of ballast water treatment plant on board. “We went for the Hyundai Hi-Blast,” explained Eaglestar director of technical services Sothiraj Jayaraj. “This system has already been certified as an alternative management system, and the expectation is that full United States Coast Guard approval will be granted in the second quarter of this year.” The fact that it is an electrolysis-based system also won favour because its power requirement is lower in comparison with other systems on the market. An ozone-based system made the shortlist, but it was felt that it would have had too large a footprint. Chemical-based systems were seen as a non-starter. “While they are legally acceptable, we weren’t comfortable with putting chemicals into the sea.”
Both vessels’ environmental credentials are underscored by the installation of a BMT ship-performance monitoring system and a Kongsberg engine-monitoring system that allows the back office to monitor vessel performance over the internet.
Having toured both vessels as a guest of AET at the naming ceremony, Tanker Shipping & Trade can report first-hand on their features, fixtures and fittings.
The vessels are 277.23 m long, have a 48 m breadth and a design draught of 16 m. Each has a total cargo tank capacity of 171,000 m3 and ballast tanks of 39,498 m3.
Eagle San Francisco and Eagle San Jose have integrated Kongsberg bridge systems that allow access to all essential navigation information from centralised workstations. System components include three radars, two ECDIS, conning display, two gyro compasses, autopilot, two DGPS, Navtex, speed log, AIS and echo sounder.
The deck area is neatly laid out. For mooring equipment, the company opted for Flutek Kawasaki windlasses mooring winches. The (Ram type) steering gear is from the same supplier, and the provision and hose-handling cranes were supplied by DMC. The hose-handling cranes are configured for US operations and are certified for personnel transfer.
On deck, lifesaving equipment includes two Hyundai Lifeboat Co motor-propelled, totally enclosed FRP-type davit-launched lifeboats and Viking inflatable liferafts. High-expansion foam fire protection is supplied by NK-Korea, as is the deck foam fire-fighting system. The water-based local fire extinguishing system has been supplied by Tanktech.
Other modifications to the standard design include the ability to burn ultra-low sulphur fuel (there are no plans to fit a scrubber) installation of an engineroom-integrated bilge treatment system, improved cargo-handling equipment, provision for a grey water handling unit, and onboard water disposal systems.
The cargo tank arrangement utilises a single longitudinal bulkhead together with transverse bulkheads, creating six pairs of cargo oil tanks and one pair of slop tanks. Water ballast tanks complete the wing and double-bottom tank arrangement. A bulbous bow has been included in the hull construction, with the design optimised for both fully loaded and ballast draft conditions.
The vessel is equipped with Shinko cargo pumps. The majority of the vessels in the AET fleet use these pumps. AET has found them flexible across a range of densities, especially when carrying higher-density product. What is more, using Shinko pumps across the fleet makes getting spare parts and exchanging them much easier.
An Emerson Marine cargo-tank level gauge (radar-beam type) monitors the tank levels. To inert the spaces, Alfa Laval plant has been installed. Both vessels are equipped with Scanjet machines for tank cleaning. Residue tank cleaning is housed in a dedicated 300 m3 ‘cargo-less’ fuel tank. Ordinarily they would be deposited in the slop tanks, but given their size this was not felt to be their best use.
In the engineroom, a Hyundai-Wartsila 6 x 72 drives a Hyundai propeller. The vessel runs on medium heavy fuel oil, marine diesel oil and marine gasoil. The engine meets all IMO NOx Tier II requirements, having been specified ahead of the IMO Tier III deadline.
Engineroom machinery includes a steam-generating plant consisting of Alfa Laval marine auxiliary boilers and an exhaust gas economiser from the same manufacturer that has been specified with increased capacity. This is to improve efficiency and minimise starts/stops of the Aux Boilers during sailing. The incinerator is an IMO-approved Hyundai-Atlas unit.
Hyundai Himsen generator engines have been specified, along with a GPC-Doosan Emergency Generator.
A Kashiwa high-expansion foam system protects the engineroom, and the cargo area is protected by an NK Fire foam system. An Alfa Laval composite boiler provides all the tanker’s heating requirements and reduces the amount of oil needed to heat the accommodation.
The hull and cargo tank coatings have been supplied by International Paint. Other auxiliary machinery installed includes Hi-Air (Korea) air conditioning, and a Samgong-Mitsubishi purifier.
The accommodation areas are spacious and well equipped. Each vessel has a large fully equipped gym. There are segregated working areas for senior onboard management, and internet facilities were installed on board for the complement of 30.
Later this year the AET fleet will see the addition of two of the world's first LNG dual-fuel Aframax tankers. Two DP2 shuttle tankers will follow in 2019/202. The company has been working on a green sustainability agenda to control the emission of particulate matter, sulphur oxides, nitrogen oxides and carbon dioxide. AET is confident that these LNG dual-fuel ships are the sustainable solution, both in the mid and long term. The two DP2 shuttle tankers scheduled to join AET in 2019 will also be LNG dual-fuelled. When in operation from 2019, these two ships are expected to be the world’s first LNG dual-fuel dynamic positioning shuttle tankers and the most energy efficient.
|EAGLE SAN FRANCISO/EAGLE SAN JOSE
||HHI Ulsan Shipyard
||Hyundai-Wartsila 6 x72 (NOx Tier II) developing 14,200 kW x 69.8 rpm (Low Speed Electronically Controlled ECO)