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Tuesday, December 12, 2017

The opportunities and challenges of the maritime transportation of energy from Russia and Central Asia

A number of senior representatives of INTERTANKO members and associate members gathered in St. Petersburg this week to discuss the Challenges and Opportunities associated with the maritime transportation of energy from Russia and Central Asia. Organised by Mare Forum, the conference included sessions on the supply and demand of Russian oil and gas, shipping and pipeline developments, ice class rules and ship designs, operational and environmental issues, and financing challenges.

In the session on global energy needs, INTERTANKO’s Research and Projects Manager Erik Ranheim referred to today's tense oil market and to the recent events that prove that our oil supplies are actually vulnerable. He believes that the situation in Russia has been moving towards stronger control of domestic resources, and the great production expansion seen in previous years cannot be expected to continue in the years to come, partly due to a slower increase in oil production in the area and to pipeline capacity restrictions, and probably also to higher domestic consumption. Europe is dependent on Russia for about one third of its demand and the dependence is increasing with lower North Sea production.The strong expansion in the trade from Russia has prompted a great deal of ordering of ice-classed tankers. Ranheim showed statistics provided by Riverlake in Geneva showing that the market is heading for a surplus of ice-classed tankers - perhaps even already from this winter, depending on the severity of the winter. There may already be a surplus of ice classed tankers if you include the Ice Class 1C tankers that may not be able to serve the area in January/February when the ice is at its thickest; next winter the number of Ice Class 1A tankers available to serve the Primorsk area is likely to surpass demand by a large margin. It was stressed at the conference that navigation in ice requires a crew with long experience and not only tankers with sufficient specification. 

Ranheim’s presentation can be viewed on the INTERTANKO web site at: http://www.intertanko.com/about/presentations/ 

Mikhail Perfilov, from broker and analyst Fearnleys, said that Russia’s big oil development projects are aimed at reducing dependence on neighbouring states and achieving increased influence in new markets. The current Russian pipeline export capacity is 4.5 million barrels daily (mbd) or 450 million tonnes (m ts) per year with 5% excess (slack). Projected output capacity would require an extra 2 mbd of pipeline capacity by 2020. In addition, 0.6 mbd of extra pipeline capacity is needed to replace expensive rail and river transportation transits; another 0.4 mbd pipeline capacity is also needed to export Kazakh oil. Mr. Perfilov said that there are new pipeline projects that will cover the extra needs, both to the east and the north, and also to bypass the Turkish straits. The fourth phase of the pipeline to Primorsk will be completed in 2006 when it will be able to transport 62m tonnes per year.  

Christian Breinholt, Director of the Danish Maritime Authority, suggested that ships passing through the Danish Straits should use the IMO recommended pilot. The Danish maritime authorities have listed 46 groundings over the last 8 years, 13 of which involved tankers – the last of which was the 42,210 GT Fotini Lady in September 2004 with a draught of 11.2 metres. None of the tankers that grounded had a pilot on board.  

INTERTANKO Managing Director Dr. Peter Swift joined the Panel on Environmental Concerns and outlined the many environmental challenges facing tanker owners today, including the control of air emissions from engines and cargo, zero tolerance for illegal discharges to the ocean, and recycling, as well as specific challenges for Russian movements with Sulphur Emissions Control Areas (SECAs), ballast water management and the IMO Ballast Water Convention, ship selection, pilotage in the Danish and Bosporus straits, and ship-to-ship transfers.  

Speaking on “Shared Responsibilities” he said that while owners have the primary responsibility for safe management, they are also dependent on the services and solutions provided by many others, ranging from equipment manufacturers and bunker suppliers to pilots and port authorities.  

Referring to INTERTANKO’s Poseidon Challenge, Swift highlighted that commitment to continuous improvement will be paramount if we are to achieve our shared goals. 

Swift’s presentations can be viewed on the INTERTANKO web site at: http://www.intertanko.com/about/presentations/ 

Contacts: Peter SwiftErik Ranheim