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Tuesday, October 23, 2018

The never ending phase-out saga

The discrepancies in the figures circulating on the single hull tanker tonnage that has to be phased out have not passed unnoticed.

INTERTANKO has tried to get to the bottom of this question but this is not easy, partly due to unwillingness to share information.

INTERTANKO has on its website a list of single hull tankers, including tables and graphs, that have to be phased out according to EU, MARPOL and OPA90 for various tanker size segments. This information can be found at the following link

The list is based on the list used by the IMO group of experts that was set up to look at the consequences of the latest MARPOL phase-out scheme. From that list INTERTANKO has removed FPSOs, FSOs, tankers sold for demolition, tankers converted and lost and a few other tankers that have not been found in the market.

However, we do not think the list is completely correct, as we continuously receive information on discrepancies. Last week we did a review of the older Aframax tankers and removed a few ships that did not seem to be in the market. However, we think that the overall level is right and that it is not necessary to make any large adjustments. However, there are several issues that need to be taken into account when considering how much tonnage has to be phased out.

According to INTERTANKO records, 524 tankers or 21.3 m dwt have to be phased out by 2005 according to MARPOL:

  • 14 VLCCs
  • 14 Suezmaxes
  • 54 Aframaxes
  • 49 Panamaxes
  • 163 tankers 20-49,999 dwt
  • 230 tankers 5-19,999 dwt

However, 169 tankers totalling 2.5 m dwt should already have left the market in 2003. This includes one VLCC used for storage, one U.S. Aframax, 4 Panamaxes, 28 tankers 20,000 - 50,000 dwt and 135 tankers 5,000 – 20,000 dwt. The reason why they are still in the market could be:

  • Some trade in the U.S. under the Jones Act and OPA has a different phase out schedule than MARPOL.
  • Some tankers are flagged by countries that are not signatories to MARPOL. The INTERTANKO records contain 4.4 m dwt flagged by non-MARPOL signatories, including the U.S., which has not ratified MARPOL regulation 13 G regulating phase out.
  • About 0.4 m dwt of this tonnage is below 6,000 dwt and could have been re-measured to below 5,000 and thus not subject to phase out.
  • Other tankers could be trading in vegoils, chemicals or other non-petroleum liquids not subject to phase out.

Only 353 tankers totalling 13.2 m dwt have to be phased out according to MARPOL during the period 2006-2009, including:

  • 4 VLCCs,
  • 9 Suezmaxes
  • 29 Aframaxes
  • 49 Panamaxes
  • 100 tankers 20-49,999 dwt
  • 162 tankers 5-19,999 dwt

Between 7.9 (150 tankers) and 66.6 million dwt (703 tankers) have to be phased out in 2010, the first figure if a sufficient number of port and flag administrations allow single hull tankers to trade after 2010 (until maximum 25 years old), the second figure if the world follows the EU policy of refusing to allow single hull tankers to trade after 2010. The EU – MARPOL range is:

  • 6 - 153 VLCCs,
  • 3 – 46 Suezmaxes
  • 21 - 86 Aframaxes
  • 22 - 44 Panamaxes
  • 39 - 94 tankers 20-49,999 dwt
  • 59 - 280 tankers 5-19,999 dwt

Some uncertainties with regard to the above figures are:

  • PL/SBT status: It is category 1 tankers that have to be phased out by 2005 plus Category 2 (PL/SBT) tankers delivered in 1978 and earlier. PL/SBT was mandatory from mid-1982, but some tankers were built with PL/SBT before 1982 and others have been converted. Databases have proved to be unreliable with regard to the individual tanker’s PL/SBT status.
  • FSO/FPSOs are not subject to phase out but there may be some uncertainty with regard to whether an actual conversion has taken place.
  • There have also been a few converted to double hulls, but these appear to be of marginal importance (INTERTANKO has recorded two DS Aframaxes that have been converted). A patent on conversion to double hull has also been taken by one owner.
  • There is 2.2 m dwt of combination carriers built in 1982 and earlier not included in the above figures, but most of these reportedly have SBT, and if PL/SBT in accordance with MARPOL, they will not be due for phase-out until after 2005. Probably some of these mainly trade dry as old combination carriers tend to experience difficulties obtaining oil cargoes.

Contact: Erik Ranheim  or Jan Svenne