Brokers Poten & Partners European demand estimates have been revised dramatically upward by events in Ukraine with European consumers scrambling to reduce their dependence on gas from Russia. Poten’s forecasters have increased their views of European imports from around 85 million tonnes per annum (mta) in the mid – late 2020’s up to 110 mta, with some 18 mta – more than half of this growth, tied to consumption in Germany, predominantly, and Poland.

These countries, along with other European cargo receivers, are lacking the required facilities for receiving cargoes and there is a major role FSRUs to plug the gap.

Speaking on an LNG webinar Poten analyst Kristen Holmquist said: “In Germany alone, there are eight potential new projects, with two of those being onshore projects- but the rest are FSRUs.”

In talking about Europe more broadly, she said, “There’s a lot of activity, a lot of FSRUs being looked at…they are easier to start up, especially if you already have a port. It’s easier to ramp those up, and that’s what the region is looking for.” Noting the bigger decarbonisation trends on the horizon, she said, “It doesn’t have to be permanent; it’s easier to remove if renewables start to pick up more rapidly.”

Answering a question about what the future in Northwest Europe holds for FSRUs versus not yet constructed regasification terminals, Holmquist responded: “Not all these FSRU’s exist; we would be constructed new ones.” She said that in the longer term, out to 2032, there would be a need for onshore regas facilities.

However, turning again to what she called a “push pull with decarbonization” she asked, rhetorically, “Do you want to build an onshore regas terminal onshore if by 2040 you are not supposed to be using it anymore?” She said, “That’s why FSRUs are more attractive; when the contract is over, they can pull up their anchor and sail away…” to another engagement.

Recent concerns about reduced supplies from Gazprom have driven gas prices higher; however, short term cargo movements depend on price differentials between regions- also known as “arbitrage”. Greater price disparities enable vessel charterers to pay more for vessel hires.

Jefferies stock analyst Omar Nokta wrote, in a late July commentary to investors, that: “Higher prices are supportive of overall LNG shipping movements with liquefaction plants operating at high capacity, but tightened regional arbitrages have reduced spot shipping requirements following the latest price surge. Spot TFDE shipping rates are assessed around $44,000 per day as compared to 12-month time charter rates above $100,000 per day.”

Source: https://www.seatrade-maritime.com/offshore/european-lng-import-growth-set-drive-fsru-demand

Italian shipbuilding group Fincantieri continues to recover from the effects of the pandemic reporting record-high production volumes while the production increases and associated costs in part due to the war in Ukraine drove the company to a financial loss in the first half of 2022. Management however expressed confidence that they will be able to lower their ballooning debt while also re-focusing on core businesses to drive future growth.

“Second quarter results are negatively affected by the impacts of a strategic review of the non-core business portfolio, by the surge in raw materials prices caused by the Russian-Ukrainian conflict, and by other non-recurring items,” said Pierroberto Folgiero, the newly appointed chief executive and managing director for the group. He assumed his role on June 30 replacing long-term chief executive Giuseppe Bono.

Folgiero assumed the leadership as the shipyard group continues to be in a period of transition. Recent deliveries included two new cruise ships, Discovery Princess and Viking Mars, and a multipurpose offshore patrol boat for the Italian Navy, as well as the first patrol boat and second corvette for the Qatari Ministry of Defense. A total of eight ships from five shipyards were delivered in the first half of 2022, contributing to a 16 percent increase in net revenues to more than $3.5 billion.

The company, however, also reported declines in EBITDA, adjusted, and net income with a net loss of $237 million, driven in part by the record production and increasing costs. It also contributed to a more than $1.1 billion increase in the group’s debt since the end of 2021, reaching a total debt of more than $3.3 billion. Debt, they, however, forecasted as peaking and expected to improve at least slightly by year’s end.

“In the upcoming months, we will be fully committed in the core business, benefitting from the expected growth in defense and the resumption of the cruise market,” said Folgiero. Furthermore, we will pursue with great dedication those industrial projects fostering operational excellence both in Italy and abroad, while investing in our human capital.”

He predicted that the company’s results would improve in part as they deliver five additional cruise ships in the second half of 2022. He pointed to the increased production for those ships as well as the rescheduling of payments from the cruise company provided during the pandemic as impacting the short-term performance of the company. He also highlighted a rescheduled delivery from July to December and the associated financial costs.

All of the shipyard group’s segments are however reportedly showing positive trends. The group’s committed backlog stands at 93 vessels with deliveries scheduled to 2029 with a value of more than $24 billion. In addition, they have pending commitments for 20 additional vessels, including the first commitments in years for new cruise ships, with the potential for more than $10.5 billion in additional revenues. Other new orders included a third vessel for the U.S. Navy to be built by Fincantieri Marinette Marine in Wisconsin as well as two offshore vessels to be built by VARD in Norway.

The conflict in Ukraine was highlighted as a key driver of costs as it affected the steel supply chain and caused increased energy and natural gas costs. It also negatively influenced transportation and insurance costs for the group which builds sections in Romania and transferred them through the Black Sea to Italy where the yards complete ship assembly.

With the cruise industry continuing its comeback, management expressed confidence that with their focus on their core businesses the financial performance will improve. With the continuing delivery of cruise ships, they however are now the smallest segment of the orderbook, with 27 ships, versus 34 in naval orders and 32 for offshore and specialized vessels.

Source: https://www.maritime-executive.com/article/fincantieri-reports-financial-loss-as-production-reaches-new-record

Luxury yacht ION FEDRA ran aground or touched bottom in Gulf of Ornos, Mykonos island, Greece, in the afternoon Jul 26. Yacht’s hull in fore part was breached, she started taking on water and developed fore tilt. She was secured somehow, either berthed or by other means, with water ingress taken under control. Accident reportedly was caused by crew mishandling. Yacht AIS is either off or she’s registered under other name. Yacht LONE WOLF was mentioned, but judging from photos and video, it’s not the distressed yacht ION FEDRA.
Luxury yacht ION FEDRA, GT 214, length 33 meters, built 1999, flag UK, 10guests/5 crew, owner G. Kampanis.

The nationwide challenges for hiring and staffing have reached Alaska, where the Alaska Marine Highway System is working hard to fill positions – and has had to suspend at least one sailing due to a manning shortage.

The ferry Tustumena, which serves on the run out to the Aleutian Chain, has had to berth at Homer until at least Saturday. She had just returned to service July 16 after an extended yard period. According to AMHS, “a critical crew shortage required the vessel to stay in port for safety reasons.”

The ship had been running with a small crew since mid-July, but because AMHS cannot find enough replacement staff to cover “essential positions that are vacant due to illness or other qualifying needs,” it has fallen below the manning level needed. The agency said that staffing shortages have been a concern throughout the AMHS, as in the rest of the country.

To fill seagoing positions, AMHS has launched an “aggressive hiring campaign.” It has hired headhunters, attended job fairs in the Northwest, and even offered signing bonuses of $5,000, comparable to the current bonus amounts in the trucking industry. According to its site, it is focused on hiring for unlicensed positions in the deck and engine department, as well as support staff and stewards.

According to local KUCB News, the Tustumena is important for small fishing ports like Akutan and False Pass, which can’t accommodate the larger ferry Kennicott, the only other vessel on the route.

Tustumena is 58 years old, and the State of Alaska hopes to replace her within about five years’ time. However, no shipyards bid on the recent request for proposals for the construction of a replacement, according to Alaska House Speaker Rep. Louise Stutes.

The hiring and contracting difficulties compound the line’s challenges with financial stability. AMHS operates underserved remote communities with support from the state, and it has had to fend off intense budget pressure from the office of Alaska’s governor in recent years. A $30 million budget cut forced it to curtail service in Southeast Alaska in 2019, including suspension of winter service to Cordova.  It had to cancel plans for a refit for the ferry Malaspina, and it considered reefing her instead to save costs; she was ultimately sold to a private party for use as an attraction. In 2020, AMHS sold off two high-speed ferries to a Spanish operator at a discount. This year its budget was fully funded, thanks in large part to federal assistance, but it faces an uncertain political climate going forward.

Source: https://www.maritime-executive.com/article/staffing-challenges-loom-for-alaska-marine-highway-system