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Tanker Shipping & Trade

Tanker Shipping & Trade

Shuttle tankers: fleet evolves to meet Arctic challenges

Mon 10 Dec 2018 by Craig Jallal, tankers and markets editor

Shuttle tankers: fleet evolves to meet Arctic challenges
Shuttle tankers at a naming ceremony in Stavanger, Norway (Source: Teekay)

Shuttle tankers are being made safer and better suited to operating in treacherous waters, expanding their reach and operational value

The shuttle tanker fleet consists of 102 live vessels, with another 14 on order or due to be launched. The fleet operates in several distinct locations; the SCF (Sovcomflot) fleet operates in the Arctic circle; the Teekay fleet operates off the east coast of Canada, and a slew of operators ply the North Sea. A scattering of shuttle tanker operations also exist between these busy zones and the dense activity off Latin America.

From a geo-political perspective, a concern involves the USA becoming a major crude oil exporter, while at the same time imposing sanctions on its rival Russia. The latter has made a concerted effort to finance and construct its oil and gas exports infrastructure, including shuttle tankers, outside the influence of US sanctions. The latest stage of this development took place on 12 September 2018 during the 4th Eastern Economic Forum, when a signing ceremony was held for a trilateral agreement on co-operation between Sovcomflot (aka SCF Group), the Bank for Development and Foreign Economic Affairs (Vnesheconombank) and VEB Leasing. The agreement includes financing shipbuilding projects at Russian shipyards, the designs of which are based on the experience accumulated by Sovcomflot and its operations of tankers in the Arctic.

This includes the construction of two Arctic shuttle tankers (Mikhail Ulyanov and Kirill Lavrov) built to order for Sovcomflot Group, at the Admiralty Shipyards in St. Petersburg.

These are operated under the national flag of the Russian Federation within the Prirazlomnoye offshore project operated by Gazprom Neft.

Elsewhere, in 2015, Teekay Offshore Partners LP announced it had entered into a new long-term shuttle contract with Canada Hibernia Holding Corporation, Chevron Canada, ExxonMobil Canada, Husky Energy, Mosbacher Operating Ltd, Murphy Oil, Nalcor Energy, Statoil, and Suncor Energy. Teekay Offshore was to provide shuttle tanker services for loading crude at Hibernia, Terra Nova, White Rose and Hebron offshore oil fields, located in St. John’s, Newfoundland and Labrador.

“From a geo-political perspective, a concern involves the USA becoming a major crude oil exporter, while at the same time imposing sanctions on its rival Russia"

These 15-year contracts, plus extension options, were initially serviced by one of Teekay Offshore’s existing shuttle tankers, Navion Hispania, and two to three third party-owned shuttle tankers operating in east coast Canada.

These east coast Canada operating tankers have been replaced by three Suezmax-size, DP2 shuttle tankers Dorset SpiritBeothuk Spirit and Norse Spirit on the shuttle run between Newfoundland and the offshore oil fields in the Atlantic. According to Teekay, these vessels are purpose-built to serve in the harsh environment on oil fields offshore the east coast of Canada at a cost of US$365M en bloc.

Beothuk Spirit: One of three Suezmax DP2 shuttle tankers Teekay Offshore is operating off the east coast of Canada
Teekay is also active in the North Sea, which is where its new, as yet unnamed (although Spirit will feature), two plus options E-Shuttle tanker series will operate, joining other shuttle tankers in the region including the Teekay trio (Peary SpiritScott Spirit and Nansen Spirit).

Regarding the aforementioned E-Shuttle tanker series, there are two firm orders, but VesselsValue lists options for a further four of these innovative 130,000-dwt tankers under construction at Samsung Heavy Industries. The E-Shuttle tankers will operate on both liquefied natural gas (LNG) as the primary fuel, and a mixture of LNG and recovered volatile organic compounds as secondary fuel. 

The project is being managed by Wärtsilä Marine Solutions and features a low-loss hybrid system, using batteries to leverage fuel savings, peak load shaving and added overall system redundancy. According to Wärtsilä, the annual emissions reduction potential is estimated at up to 42%, with fuel consumption reduced by up to 22% compared to traditional shuttle tankers. Wärtsilä subsidiary Eniram will supply vessel performance management systems and data will be streamed to shore managers for analytics and reports. The E-shuttle concept was the recipient of the Environmental Award at the 2018 Tanker Shipping and Trade Conference, Exhibition and Awards in London.

This year’s Tanker Shipping & Trade Industry Leader Award went to AET's president and chief executive officer Capt Rajalingam Subramaniam. Earlier in 2018, he announced that AET had agreed its first contract with Shell Shipping and Trading subsidiary Brazil Shipping Limited 1, to timecharter one newbuild dynamic positioning (DP) shuttle tanker in Brazil. The 152,700 DWT DP2 tanker will be compliant to IMO NOx Tier 3 requirements and equipped with high-power thrusters, generators and the latest position reference system, fully capable of operating in harsh weather conditions.

On signing the contract, Capt Subramaniam emphasised the spread of AET’s shuttle tanker business in Brazil and worldwide: “We have two DP tankers (DPSTs) already operating in the Brazilian Basin for Petrobras and another two operating in the North and Barents Seas for Equinor (formerly Statoil). A further two DPSTs are being built for Equinor to operate in oilfields on the Norwegian Continental Shelf of the North Sea, Norwegian Sea and the southern Barents Sea, as well as on the UK Continental Shelf. Our two modular capture vessels in the Gulf of Mexico also have DP capability. In addition, we have a further four DP vessels currently being built to take-up long-term charters for Petrobras."


Capt Subramaniam (AET): Has a global presence in the shuttle tanker market
 

Capt Rajalingam Subramaniam:
Winner of 2018 Tanker Shipping & Trade Industry Leader Award

November 2009: appointed Honorary Commander in the Royal Malaysian Navy, in recognition of his role as Patron of MISC’s Naval Reservist

As head of the shipmanagement division of MISC he led the team that transformed MISC into a global leader in energy transportation

Served as a fleet superintendent and operations manager, before heading up shipmanagement in AET and latterly MISC

Began his career as a cadet at MISC’s training academy, ALAM, and progressed through the ranks to Master Mariner

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