PUBLISHED AUG 13, 2021 4:00 PM BY THE MARITIME EXECUTIVE

The Port of Corpus Christi in Texas is working to become of the first in the energy transition and drive decarbonization through plans to convert the Howard Javelina refinery services facility to carbon-neutral hydrogen production. The port and Howard Midstream Energy Partners executed a memorandum of understanding  to convert the facility as part of commitments to delivering clean and reliable energy.The Port of Corpus Christi and Howard hope to scale hydrogen production for exports to overseas demand centers.

Howard acquired the treating and fractionation Javelina plant that extracts olefins, hydrogen and natural gas liquids (NGLs) from the gas streams produced by local refineries in February from a subsidiary of MPLX LP. The Javelina facility is connected to all six refineries in the Corpus Christi area by pipeline and controls approximately 60 million cubic feet per day (MMcf/d) of hydrogen production through a combination of hydrogen entrained in the refineries’ waste gas that the facility processes, and hydrogen produced through a steam methane reformer process. This hydrogen is currently sold back to refineries and other industries where it is used to remove impurities like sulfur during the refining process.

“Our future as the ‘Energy Port of the Americas’ starts with building a scalable carbon capture and storage solution to serve the needs of our existing customers and convert more Texas gas into carbon neutral hydrogen for the global markets,” said Sean Strawbridge, Port of Corpus Christi CEO.

According to the MoU, Howard intends to capture its carbon emissions at Javelina thus avoiding atmospheric release and in the process playing a less role in global warming. The companies will collaborate to identify uses for the residual CO2 as well as capture and storage options. Captured CO2 can be directed to industries that require it for production, such as steel, or that assimilate it, like cement.

“With this exciting project and progressive partnership with the Port of Corpus Christi, we are demonstrating yet again our commitment to delivering clean, reliable energy that powers communities and business around the world,” said Mike Howard, HEP CEO.

Javelina joins a growing list of refineries being converted into renewable energy producing facilities in response to the world’s growing energy needs and push towards reducing carbon emissions.

Researchers have mapped the geology of the Texas Gulf Coast and concluded that it is uniquely suited for injection and storage of pressurized CO2, a development that has prompted the Port of Corpus Christi to commit to develop the infrastructure to collect and pressurize CO2 for injection in permanent geological storage formations offshore in the Gulf of Mexico.

“To the extent that our identity as the leading export gateway for U.S. produced hydrocarbons has been solidified, we see an elegant symmetry in the prospect of becoming the nation’s premier hub for carbon management,” said Jeff Pollack, Port of Corpus Christi Chief Strategy and Sustainability Officer.

The move by the Port of Corpus Christi and Howard to convert the facility follows the release of the Sixth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC) that calls for immediate, unified and aggressive action to tackle climate change. The report defines the imperative for elimination of all CO2 emissions by 2050 and for the development of infrastructure to capture and permanently store carbon.

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PUBLISHED AUG 13, 2021 5:08 PM BY THE MARITIME EXECUTIVE

As part of its economic recovery and to lay the foundation for future growth, the government of Canada announced two projects designed to enhance its industrial ports. Canada’s Transport Minister, Omar Alghabra, announced the projects saying that Canada is investing in its economy by making improvements to its trade and transportation corridors.

The investments in the ports will include Vancouver, Canada’s busiest port and a key gateway for Asian trade and on the east coast the Saguenay Port, which serves the industrial region of Saguenay-Lac-St-Jean at the head of the Saguenay fjord. Other investments are planned in airports and the Canadian rail system.

As Canada’s largest port, the port of Vancouver provides a strategic gateway for the country’s imports and exports, handling a third of Canada’s trade in goods transiting outside North America. Last year, overall cargo throughput at the port remained largely flat due to COVID-19 disruptions, which resulted in just a one percent increase to 145.5 million metric tons and two percent growth of 3.5 million TEUs in the container trade. The port however annual accounts for almost C$240 billion in goods and more than 2,700 foreign vessel calls.

The Minister announced plans to improve marine vessel traffic flow at the Port of Vancouver and in Southern British Columbia. With the support of Transport Canada, the Vancouver Fraser Port Authority will work with partners to design a new collaborative system to manage marine vessel traffic and optimize the supply chain flow for this strategic gateway. To be completed by March 31, 2022, the new plan includes approaches to policies, procedures, practices, incentives, technologies, information, and data sharing needed to deliver a traffic management system that creates benefits for all partners.

Earlier this summer the port experienced an unprecedented container backlog after devastating wildfires disrupted rail transport. Investment in the new system comes at a time when the Port of Vancouver is investing more than C$1 billion in infrastructure projects, including two container terminal projects and several road and rail projects to enhance its long-term competitive position and prepare it to handle growth as well as manage future issues such as those experienced this summer.

Once implemented, the system is expected to strengthen maritime safety by reducing congestion and actively managing traffic to improve the efficiency and reliability of the flow of goods for importers and exporters.

Minister Alghabra also announced an investment of over C$33 million for the Saguenay Port. A regional port, it is an import business for the local industry. The deep-water port is capable of handling vessels up to 100,000 dwt and is ice-free remaining open year-round.

The project targets the installation of an electric mechanized transport system to transport materials at the Saguenay Port site. The conveyor system will be used to move materials back and forth between the industrial port zone and ships docked at the Grande- Anse Marine Terminal. Additionally, the system will also be accessible for loading and unloading of materials for port users who may build processing plants on the Saguenay Port property.

The funding will be done through the National Trade Corridors Fund, a merit-based program providing funding for investment in critical infrastructure assets in Quebec and across Canada. This project funding aims to enhance the performance and functions of facilities at the port, helping increase handling capacity and reduce bottlenecks in daily operations.

In announcing the two projects, the minister noted that the quality of Canada’s transportation infrastructure and the efficiency of its trade corridors are key to the success of companies in the global marketplace. As such, the Government of Canada continues to invest in infrastructure projects that create quality middle-class jobs and support economic growth.

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PUBLISHED AUG 13, 2021 4:08 PM BY PAUL BENECKI

(Article originally published in Mar/Apr 2021 edition.)

(Article originally published in March/April 2021 edition.) 

When battery-hybrid power first arrived in the maritime industry in the early 2010s, it was billed as a great way to make diesel ferries and workboats more fuel-efficient. The value proposition was straightforward with fuel savings of 10-20 percent, depending on the application.

That’s still an important advantage, but hybrid power has turned out to be much more than an efficiency-booster for existing technology. For the evolution beyond diesel, hybrid is an essential tool for electrification, fuel cell power and the transition to zero-carbon shipping.

Stop-and-Go Operations

Battery-hybrid propulsion is ideal for stop-and-go operating cycles, and ferries are strong candidates.

Ferry operators in Europe, North America and Asia have been testing and deploying hybrid propulsion systems for nearly a decade, beginning with the Scottish ro/pax ferry Hallaig in 2013. The technology has caught on for passenger vessels of all sizes, all the way up to the 3,200-dwt Color Hybrid, a ro/pax ferry operated by Color Line between Norway and Sweden.

Scandinavian ferry operators led the way, but the North Americans are quickly catching up. Washington State Ferries has plans to use plug-in hybrid vessels on most routes by 2040, and the state has ordered a series of new battery-hybrid ferries from Vigor Industrial with power systems provided by ABB. It’s also converting one of its largest existing ferries from diesel-electric to battery-hybrid with financial support from the U.S. Maritime Administration.

Casco Bay Lines, a non-profit ferry operator in Portland, Maine, recently finalized the design for a new battery-hybrid ferry for its route to Peaks Island, a small community just east of the downtown waterfront. The current ferry is nearing the end of its useful commercial life, and the operator worked with Elliott Bay Design Group (EBDG) on the best option for a replacement. They picked a plug-in hybrid propulsion system that will charge up while at the pier on the Portland side of the route.

Ferries are ideal for plug-in hybrid technology, according to EBDG principal John Waterhouse, the longtime dean of American ferry design. These vessels have a predictable duty cycle, and their regular routes and fixed terminals are perfect for installing charging infrastructure.

“Hybrid is well past the early adopter stage for ferry applications, and we owe thanks to our friends over in Norway who have taken the lead in developing and deploying it,” says Waterhouse. “Operators can think of this as a mature technology and a viable option for their fleets. Perhaps the real question is whether you want to be the last adopter.”

Decarbonizing Domestic Vessels

According to the Getting to Zero Coalition, domestic vessels like ferries, tugs and OSVs have an important early role in the effort to reduce shipping’s carbon emissions.

Cutting domestic vessel emissions by just 15 percent could reduce the entire shipping industry’s greenhouse gas footprint by three percent by 2030. That may not sound like much, but the coalition says early steps (even small ones) are essential to get the process of decarbonization started.

Hybrid propulsion is a great option for these vessel classes, and it’s a bigger step than one might think towards getting to zero. Any hybrid vessel has a big battery pack, and if that pack is big enough the vessel can be converted to run all-electric with a diesel engine as ballast. “You can order a hybrid vessel today and it will reduce your fuel consumption immediately,” Waterhouse explains. “Then you can build shoreside charging infrastructure and run the same vessel on plug-in electric power in the future.”

For Casco Bay Lines’ new plug-in hybrid, grid power will be the primary energy supply from day one, blurring the line between battery-hybrid and battery-electric. “They intend to operate almost 100 percent of the time on batteries,” says Bruce Strupp, Senior Account Manager with ABB Marine & Ports, the systems integrator for the Casco Bay project. “They do have generator sets on board in case they lose power at the dock or need to go to a shipyard.”

On routes that are tough to electrify because of their length or limited grid capacity, hydrogen fuel cells may have an important edge over battery-electric designs. The higher energy density of hydrogen fuel means the designer can fit more of it on board for a long trip. However, fuel cells have a drawback: It takes a while to move the throttle, particularly for the solid-oxide fuel cells that work well with ammonia and other hydrogen-based fuels.

A battery pack can smooth over that throttle lag by delivering power instantly when it’s needed for maneuvering, giving the fuel cell time to catch up. With this synergy between battery power and fuel cell power, today’s battery-hybrid vessels are great candidates for a fuel cell retrofit down the road, and many are being designed with this upgrade in mind. Stay tuned, says Strupp, as fuel cells will likely be an accessible commercial option within the next five years.

Decarbonizing the Supply Chain

In the offshore wind vessel sector, the charterers are wind farm developers, and they work every day on decarbonizing the world’s power supply. So it’s no surprise they’re actively interested in decarbonizing their own supply chain including their service vessel fleets. As a transition solution, battery-hybrid propulsion fits that need well: The engines give enough range for transits to and from the site, and stored battery power can be used for station-keeping and loitering, saving fuel and reducing wear and tear.

This combination is an attractive solution for U.K.-based crew transfer vessel operator CWind, a division of Global Marine Group. Working with wind farm developer Ørsted and naval architect ESNA, CWind set out to make a super-fast, super-efficient, first-of-its-kind vessel.

Its new crew transfer vessel (CTV) CWind Pioneer combines a hybrid powertrain with the design of a surface effect ship (SES), a hovercraft built with catamaran hulls instead of a rubber skirt. CWind Pioneer looks like a standard catamaran at first glance, but when her electric lift fan turns on she rises up out of the water for a cruising speed of 40-plus knots.

CWind Pioneer is the only SES vessel in the world with a hybrid powerplant, and Global Marine Group CEO Ian Douglas says that a hybrid-SES combination is ideal for offshore wind: “The vessel can operate at slow speed on and off cushion using only the battery, which is a game-changer for emissions reduction when waiting for wind tower technicians offshore. We no longer have idling engines, nor do we incur the maintenance challenges of engines working at low power. The results have been extremely positive. What’s not to like about a CTV that goes more than 40 knots using less fuel than a conventional vessel?”

The extra speed and fuel economy translate into increased operational range, and CWind hopes that vessels like CWind Pioneer will be able to compete head-to-head with larger and costlier service operation vessels (SOVs), which are the industry standard for sites far from shore. Hybrid power is making big inroads with SOV operators as well. The Wilhelmsen/Østensjø-owned company Edda Wind has ordered a fleet of six hybrid-powered SOVs with plans to convert them to hydrogen power down the road.

In the budding U.S. offshore wind segment, a shipbuilding boom is just starting, and rumors suggest that hybrid power may become something of a standard feature. With an expected market size of 200-plus vessels of all sizes, it’s a rare opportunity to bake new technology into an entire fleet. “I think with these new offshore wind support vessels,” says ABB’s Strupp, “you’ll see some form of hybridization and energy storage on every single one.”

Jacksonville-based Crowley Maritime is one of the most active U.S. shipowners in this sector, and it’s seeing soaring interest from wind farm developers for hybrid options. “On every request for proposal that we see for an offshore wind vessel, the developer wants to understand how we’re going to reduce emissions, including options for hybrid, battery and fuel cell power,” says Coulston Van Gundy, Director of Commercial Operations. “They’re looking to future-proof as much as they can with containerized or modular solutions that can be changed out later on as technology evolves.”

While offshore oil and gas has been a quiet sector for newbuilding the last few years, the OSV market has been receptive to battery-hybrid retrofits, and hybrid power is ideally suited to the cyclical operations of an offshore vessel. Energy stored up during a transit can be used for maneuvering or station-keeping, reducing the amount of time that the engines have to run on low load – their least efficient and highest-wear running condition.

Eidesvik began the hybrid OSV trend with the Viking Queen in 2015 and has converted seven vessels so far. Last year, Harvey Gulf retrofitted a Wärtsilä battery-power system onto its LNG dual-fuel OSV Harvey Energy, creating the world’s first LNG battery-hybrid offshore vessel.

Tugs present more challenges when it comes to the space and cooling requirements for batteries, but hybrid solutions are in operation on several larger tugboats today – many of them designed by the tug experts at Robert Allan Ltd. – and interest is growing. In the U.S. tugboat market, “hybrid” can also mean a vessel with a diesel main engine, diesel generators and an electric-assisted final drive.

Examples include the Rolls-Royce-powered harbor tug Delta Theresa, the Cat-powered harbor tug Ralph and the Canal Marine-designed tug Michigan. Though not fitted with batteries, all three are designed to use the most efficient combination of engines for the task at hand, reducing fuel consumption and maintenance costs in the process.

Evolving Role

“Hybrid” has an evolving significance, but it’s playing an essential role in getting to zero emissions – a role that looks set to grow as green power goes mainstream. If there’s a flexible transition technology for vessels on the working waterfront, this might just be it.

The takeaway for owners? “Don’t be afraid to consider it, and ask lots of questions,” says EBDG’s Waterhouse. “That’s how you can adjust the vessel design and the operation to fit together.” – MarEx

Paul Benecki is the News Editor.for The Maritime Executive

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PUBLISHED AUG 13, 2021 5:37 PM BY THE MARITIME EXECUTIVE

As China seeks to increase its influence over Myanmar including its ports and key infrastructure projects, a new report highlights China’s Belt and Road Initiative (BRI) projects impact in developing countries while citing the extensive lists of alleged human rights abuses lined to Chinese business operations. The report comes days after Myanmar’s military junta decided to expedite China’s funded Kyaukphyu Special Economic Zone (KPSEZ) and the deep-Sea Port project.

The report launched by the Business and Human Rights Resource Centre (BHRRC) highlights what the watchdog organization says are the increase in social, environmental and human rights violations, especially “in countries with weaker governance and where Chinese investments are dominant.” Between 2013 and 2020, there were allegedly 679 human rights abuse allegations linked to Chinese business operations abroad.

The London-based group, which monitors human rights violations in more than 10,000 companies worldwide, highlighted in the report that Myanmar had the highest number of recorded allegations, leading with 97 cases. South East Asia, Africa and Latin America also featured prominently in the alleged abuses. The Chinese businesses that had high risks for human rights abuse are in construction, fossil fuel energy and mining.

“The Junta has recently invited bids to provide legal services to the KPSEZ and deep-sea port project in Myanmar’s western Rakhine State, a key strategic component of China’s Belt and Road Initiative,” reported The Economic Times, India.

This project is vital to BRI, as it will give China a direct access to the Indian Ocean, significantly enabling the China trade to bypass the congested Strait of Malacca near Singapore. The BHRRC report also notes, “Many projects in Myanmar had human rights concerns prior to the February 2021 military coup.”

In 2017, a report from the Myanmar-China Pipeline Watch Committee (MCPWC), responding to operations of China National Petroleum Corporation (CNPC), indicated that gaps remain in building clear communication and accountability mechanisms, to facilitate dialogue with the affected communities and address public concerns effectively.

CNPC operates Myanmar- China pipelines that transport crude oil and natural gas from some offshore blocks in Myanmar.

In May 2019, Adani Ports announced plans to set up a container terminal at Yangon, Myanmar investing as much as $290 million in the project as part of the overall development in Myanmar. Adani recently said it believed it could proceed with the project without being in violation of U.S. sanctions. The Chinese government has been pushing for the broader development, with an initial estimated that the projects would cost between US$9-10 billion. Myanmar raised concerns over the amount of debt it would incur leading to an agreement for the first phase of the port development cost around $1.5 billion, according to the NLD government.

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PUBLISHED AUG 13, 2021 9:32 PM BY THE MARITIME EXECUTIVE

A decade after the U.S. Coast Guard took delivery on its first Sentinel-Class Fast Response Cutter, the vessel has become a centerpiece of the Coast Guard’s Deepwater strategy with the announcement this week that they have exercised a contract option for four additional vessels to be built at the Bollinger Shipyards in Louisiana. What began as an off-the-shelf solution for the Coast Guard’s urgent need for more modern equipment has grown to a current fleet of 43 commissioned FRCs with an additional 21 now on order.

The program began in 2007 using existing technology and based on a design from Damen Group as an urgent replacement to a previously failed program that the Coast Guard was withdrawing from and seeking a quick alternative. The first contract was signed in 2008 with the first FRC delivered in 2011 and commissioned in 2012 to begin a program replacing 1980s vintage vessels.

According to Bollinger the U.S Coast Guard considers the FRC an operational “game changer” due to its performance, expanded operational reach, capabilities, and ability to transform and adapt to the mission. Measuring in at 154-feet, FRCs have a flank speed of 28 knots, a state of the art C4ISR suite (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance), and a stern launch and recovery ramp for a 26-foot, over-the-horizon interceptor cutter boat.

Since commissioning, the FRCs have been deployed in support of a full range of missions within the Coast Guard and other branches of the armed services. This includes search and rescue, national defense, ports, waterways and coastal security, drug and migrant interdiction, and fisheries patrols. They have conducted operations as far as the Marshall Islands—a 4,400 nautical mile trip from their homeport. They have been stationed from Florida and San Juan in the Atlantic to California, Hawaii, and Alaska on the Pacific. In 2020, the US Coast Guard even stationed them in Guam and Bahrain.

The four new FRCs will be built at Bollinger’s Lockport, Louisiana facility and are scheduled for delivery in 2024 and 2025.

“Our unique experience building for the Coast Guard is unparalleled and has shown time and time again that we can successfully deliver the highest quality vessels on a reliable, aggressive production schedule and cost, even in the most challenging circumstances, including the global pandemic and record hurricane season experienced over the past year,” said Ben Bordelon, Bollinger Shipyards CEO.

The shipyard reports that the FRC program has had a total economic impact of $1.7 billion since inception in spending and directly supports more than 650 jobs in Southeast Louisiana. It has indirectly created 1,690 new jobs from operations and capital investment and has an annual economic impact on gross domestic product of $202 million, according to U.S. Maritime Administration data.

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Reefer container freight rates have risen sharply through 2021, but in contrast to dry cargo rates, are forecast to rise further in 2022, driven by catch up on North-South routes, according to Drewry’s recently published Reefer Shipping Annual Review and Forecast 2021/22 report.

Drewry’s Global Reefer Container Freight Rate Index, a weighted average of rates across the top 15 reefer intensive deepsea trade routes, rose 32% over the year to 2Q21 and by the end of 3Q21 these gains are expected to reach as much as 50% (see chart). But these advances are dwarfed by the recent surge in dry container freight rates which have seen average container carrier unit revenues more than double over the same period.

The resurgence in reefer freight rates has not been uniform across all trades. Pricing recovery has been particularly strong on the main East-West routes, where vessel capacity conditions have been noticeably tight. But North-South trades have generally seen less price inflation, particularly on export routes from WCSA, Central America and Southern Africa.

“In contrast to dry container freight rates which are expected to decline in 2022 as trade conditions normalise, reefer container freight rates are forecast to continue rising as price inflation feeds into North-South routes when long term contract rates are renewed,” said Drewry’s head of reefer shipping research Philip Gray. “Most reefer cargo on these trades moves on long term contracts.”

The key driver of reefer freight rate inflation has been capacity related, as perishables shippers have competed with higher paying dry freight BCOs for scarce containership slots, despite ample reefer plug capacity provision. Meanwhile, continued disruption across container supply chains has led to acute shortages of reefer container equipment, already challenged by the particularly imbalanced nature of reefer trades.

“We believe that these conditions are short term and will self-correct as trade normalises from mid-2022,” added Gray. “However, we expect reefer container equipment availability to remain an issue for certain trades during their peak seasons, as the global fleet is not expected to keep pace with rising cargo demand, despite record output of newbuild containers.”

These conditions have provided short term reprieve to specialised reefer vessels, as some BCOs have returned to the mode seeking relief from congested container supply chains. But despite these developments Drewry estimates that the specialised reefer vessel’s share of the perishables trade fell to 12% in 2020 and is expected to decline further into single figures over the next few years.

Hence, despite a 0.4% decline in global seaborne perishables trade in 2020 to 132 million tonnes, containership reefer liftings advanced 0.3% to 5.4 million teu. Further modal share gains and buoyant cargo demand will see containerised reefer traffic expand at a faster pace than dry cargo trade from 2022.

The contraction in overall seaborne perishables trade in 2020 was much milder than for dry cargo, demonstrating the stronger resilience of reefer trades to economic shock. The trade was particularly impacted by a shuttered hospitality sector which reduced demand for deciduous fruit, fresh vegetables and frozen potatoes, while Covid-19 containment measures cut crop production and fish catches. Meanwhile, an outbreak of fusarium TR4 disease in the Philippines weakened growth in banana trades. But cargo demand was supported by a booming pork trade, owing to African Swine Fever driven imports into China.

Seaborne reefer traffic picked up through 1H21, expanding 4.8% YoY, led by meat, citrus and exotics trades but is not expected to expand at the same pace as dry cargo through the remainder of the year as it is not recovering from as deep a contraction in 2020.

“A combination of buoyant cargo growth and tight capacity conditions will continue to support reefer container freight rates and specialised vessel charter earnings,” concluded Gray. “However, charter rates for larger reefer vessels that have been in particularly high demand of late are expected to wane as capacity conditions ease.”
Source: Drewry

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Reefer container freight rates to outgun dry cargo rates in 2022