Make in India- A fine example from the Indian Automobile Industry

The Leading global automobile manufacturers; Suzuki- Maruti, Hyundai, Honda, Toyota, Volkswagen, Ford, General Motors, Nissan etc. have set up production facilities in India and are catering to both the Indian market and the export markets. Cars are now being exported to diverse markets in Africa, South- East Asia and Europe.

Leading Indian manufacturers; Tata Motors, Mahindra & Mahindra etc. are similarly catering to both the Indian market and the export markets.

The Indian automobile industry is thus amongst the top manufacturers in the world catering to the growing Indian and export markets.

Automobile exports (passenger vehicles) from India have grown from 4.5lakhs in 2009/2010 to 6.2lakhs in 2014/2015 an average annual growth rate of about 8% and the trend is continuing.

Transportation of automobiles for the export market is done by Pure Car and Truck Carriers (PCTC’s) of over 5000 cars (CEUs) capacity. This is the most economic and efficient way for sea transportation of automobiles.

Large PCTC’s of various leading international shipping lines, such as, Hoegh Autoliners, NYK, MOL, Wallenius Wilhelmsen, etc. make regular calls at Indian ports to load and transport automobiles by Ro-Ro concept.

It would be observed from the foregoing that the manufacture of automobiles in India by leading international and Indian manufacturers is one of the best examples of the “Make in India”, concept. Taking a lead from here, perhaps it can be replicated in a number of other industries too.

Then, what about the shipbuilding industry, will it be possible? Perhaps yes, at a later date, when we are able to overcome the constraints and numerous problems. The demand for RoRo PCTC’s is likely to increase with the increase in exports and this would provide a good opportunity to Indian shipping lines to consider diversifying and acquiring a few PCTC’s.

Read More

US Ethane Exports – a welcome development

Ethane is a chemical compound with chemical formula C2H6. At standard temperature and pressure, ethane is a colourless, odourless gas. It is an alkane (single-bond hydrocarbon), second in the series with two carbon atoms, after methane and before propane and butane. Ethane is produced on an industrial scale from natural gas, and as a by-product of petroleum refining.

Ethane is typically transported in gaseous form by pipeline, but can be liquefied by cooling to minus 89°C (boiling point temperature at atmospheric pressure).

The primary use of ethane is in the chemical industry in the production of ethylene by steam cracking; alternative feed stocks are naphtha and liquefied petroleum gases (propane and butane). Ethylene is arguably the most important organic chemical. It is converted to polyethylene; to PVC (via ethylene dichloride and vinyl chloride monomer); to ethylene glycol (via ethylene oxide); and styrene (via ethyl benzene). Ethane is also used as an energy fuel.

The recent rise in US shale gas and oil output has been one of the most significant developments in the oil and gas sectors, transforming the global landscape in terms of production economics and trade.

Shale gas includes methane and higher hydrocarbons collectively known as natural gas liquids (or NGLs). The US Energy Information Administration (EIA), a widely recognized source of data on US energy production, defines NGLs as pentanes and LPG (ethane, propane and butane). According to the American Chemistry Council, “Growth in domestic shale gas production is helping to reduce US natural gas prices and create a more stable supply of natural gas for fuel and power. In addition, it is also leading to more affordable supplies of ethane”

Difficulties in storing ethane have created a glut, resulting in a ‘use it or lose it’ situation. Currently, 200,000 barrels per day are being ‘rejected’ – that is, left in the natural gas stream. Rejected ethane represents a potential surplus to drive increased domestic demand or exports. When domestic demand is insufficient there currently is no mechanism to export the surplus to balance the market. Ethane has historically accounted for more than 40% of the raw unfractionated NGL mix.

The prospects for US ethane exports reflect three key factors: infrastructure, price dynamics and timing

Over all, US ethane production capability is under-used, with approximately 0.2 Mn barrels per day (or 4 MnT per year) rejected in 2013. This under-used capacity to produce ethane will grow in the short term as potential production will rise faster than near-term domestic US demand.

The ‘surplus’ could rise to as much as 6 MnT per year in 2017 and perhaps 12 MnT by 2020.

Annual shipments of 1 MnT of ethane could provide employment for 0.18 Mn CuM of shipping capacity, assuming it is shipped to North Europe, 0.32 Mn CuM if shipped to South Asia and a similar amount to China if the Panama Canal is used.

The window of opportunity to tie up ethane exports and secure tonnage to serve this trade is now open to feed potential markets in Europe and Asia.

The Sheer volumes of US Ethane becoming available and economy of scale considerations have prompted a number of new liquefied gas carrier ship building designs. Contracts have been placed for semi- pressurized refrigerated ethane carriers of 27,500 – 36000 m3 capacity and fully refrigerated large ethane carriers of 80000 m3. The former are for transatlantic service and the latter for shipments to East and South West Asia.

Reliance Industries has signed a long-term agreement with Japan's biggest shipping company Mitsui OSK Lines for transportation of liquefied ethane from North America to India.

Mitsui will manage six very large ethane carriers (ships) that the Indian conglomerate is building at Samsung Heavy Industries. It will supervise the construction of 87,000 cubic meter ships and upon vessel delivery, manage the ships. The vessels are expected to be delivered in the last quarter of 2016. Each ship is priced at around $120 Million.

RIL plans to ship 1.5 million tonnes a year of ethane from its US shale joint ventures to its chemical complex in Gujarat.

India is also geared up for import of Ethane from US. This would benefit the energy and shipping sectors and provide one more source of energy import in the much needed oil and gas sectors.

Read More

Development of Chabahar Port

The Port of Chabahar (or Chah Bahar) is a seaport in Chah Bahar in southeastern Iran. Its location lies in the Gulf of Oman. It is the only Iranian port with direct access to the ocean. The port was partially built by India in the 1990s to provide access to Afghanistan and Central Asia.

It is located in the south of Sistan and Baluchistan Province. Because of its establishments and ease of access to Oman Sea and Persian Gulf, long ago it was the center of business, trade and navigation.

The Iranian government has signed a MOU with the government of India to develop Chabahar port. India will get direct access to Afghanistan through this sea route after the completion of the project.  In Sept 2015, India announced development of an Urea production plant and Iran's associated infrastructure. Indian minister of transport pledged to invest around $1 billion for the development.  The port will be used to ship crude oil and urea.

India intends to lease two berths at Chabahar for 10 years. The port will be developed through a special purpose vehicle (SPV) which will invest USD 85.21 million to convert the berths into a container terminal and a multi-purpose cargo terminal.

The cargo terminals at Chabahar Port would provide Afghanistan’s garland road network system alternate access to a sea port, significantly enhancing Afghanistan’s overall connectivity to regional and global markets.

Touching upon Iran and India's ancient and historical relations, Iranian President in his meeting with Indian minister of transport, underscored that undoubtedly the level of mutual cooperation could be expanded day by day.

Pointing to Iran's transit position for connecting east to west and north to south, he stressed that the Islamic Republic could play a pivotal role in connecting India to Central Asia, the Caucasus and Eastern Europe via railway.

Noting the importance of North-South Transport Corridor and development of Iranian ports, the Iranian president stressed that Iran fully welcomes the Indian investors to make investment in construction of roads, railways and development of Chabahar port and other southern ports in Iran. Referring to the cordial relations between the two countries, the Indian minister of transport said New Delhi is fully ready to cooperate with Tehran on development of Chabahar port.

From Chahbahar port using the existing Iranian road network, a link up to Zaranj in Afghanistan and then using the Zaranj-Delaram road constructed by India in 2009, access to Afghanistan's Garland Highway can be made. This would establish road access to four of the major cities of Afghanistan - Herat, Kandahar, Kabul and Mazar-e-Sharif.

The port would open up new routes to Central Asia and the Gulf.

We are looking forward to the development of Chabahar port as it would provide an interface between sea and land routes between Iran, Afghanistan and India, and further north to the central Asian countries for trade and commerce, and mutual benefits.

Read More

SEAFARERS - Providing a yeoman’s service

The shipping industry handles over 90% of world trade. This has led to a high growth in demand for the world fleet which currently stands at over 85,000 ships of nearly 1.2billion gross tonnage. Seafarers play the most important role in the manning and operations of the world fleet. They brave the seas, encounter the harsh elements, rough weather, long durations away from home and family, put in long hours of hard work and thus provide a yeoman’s service.

A key highlight of the STCW Conference 2010 was the IMO designated, “Year of the Seafarer,” which aimed at providing the maritime community with an opportunity to pay tribute to seafarers from all over the world for their unique contribution to society and in recognition of the facilitation of global trade in a hazardous environment.

The conference further designated 25th June as the “Day of the Seafarer” Thereafter, this day is being observed every year. This year whilst observing the day of the seafarer, IMO has also encouraged young people to consider a career at sea as a viable, attractive and enticing career option. A central plank of the campaign message was that seafaring offers unique opportunities to navigate the seas of the globe and encounter the wonders of the ocean, as well as the opportunity to experience a world of real adventure and interact with people from all over the world.

IMO Secretary General Sekimizu called on active and past seafarers to inspire the next generation by sharing their experience on social media. He encouraged officials who are already engaged in this vital professional world to reach out to the new generation; share their life and work experiences; inspire and encourage them to explore for themselves a career at sea or elsewhere in the maritime industries.

Seafaring opens the door to decent work and unique and enriching experiences.  Moreover, in running today’s modern, high-tech vessels, seafarers acquire skills and technical expertise that make them very well qualified for work in many shore based industries once their sea-going days are over.

The BIMCO/ISF Manpower Update provides the most comprehensive assessment of the global supply and demand for seafarers that are currently available. In accordance with their study of 2010, they have estimated a total global supply of 1371 thousand seafarers (624,000 officers and 747,000 ratings).

The 2010 Manpower Update suggested that while the supply and demand for ratings are more or less balanced there are still some shortages for officers, particularly for certain grades and for ship types such as tankers and offshore support vessels. We are now waiting for the 2015 Manpower Update.

The current situation in India is that there is enough encouragement and a large number of educated youth are eager to take up seafaring as a career. Unfortunately, although there are enough training berths in pre-sea institutions, but not enough berths are available for on-board training thus leading to a mismatch between training and placements. We can draw a parallel with medical professionals as a candidate training to become a doctor needs to complete an internship program in a hospital in order to attain an MBBS degree. Similarly, a cadet training to become a sea going officer has to complete the requisite on board training prior to certificate of competency course and examination.

Further, there is a surplus of ratings and junior officers, and a shortage of senior officers. Thus, some mechanism needs to be developed to balance the situation.

Read More

“Complimenting DNV GL on their development of an Unmanned FLNG Concept”

Natural gas is a major source of energy. In recent years its demand is increasing because it is less polluting to the environment as compared to oil. Its transportation by sea is done by cooling it down to  -162 degrees C (Boiling point temperature at atmospheric pressure), when it becomes a liquefied gas and occupies 600 times less volume, thus making it economically viable for sea transportation.

It is transported by specially designed and constructed vessels called Liquefied Natural Gas (LNG) carriers. Presently there are about 440 LNG carriers in the world fleet and this number is growing to keep pace with demand.

 Energy is vital to daily life – it keeps our world moving and provides access to essentials like clean water, food and health care. Over the coming decades, populations and living standards for many will rise – and so will the need for energy, whereas demand for oil has leveled off, demand for natural gas is growing as it is next best after renewable sources of energy (solar, wind, tidal, waves, geothermal, etc.)

Bulk transportation of LNG is generally done using ocean-going LNG Carriers. This allows transport from the LNG loading terminal to the LNG receiving terminal. The receiving terminals have storage and regasification systems to allow Natural Gas to be fed into the local gas pipeline distribution system as required, according to consumption

As natural gas liquefies at cryogenic temperatures, i.e. temperatures well below -100°C, there is continuous boil-off of a small portion of the liquefied natural gas during transportation and storage. This is termed natural boil-off gas (NBOG). Specialized equipment is required in order to handle this boil-off which limits the pressure increase in the tanks. On ocean-going LNG carriers, this NBOG is frequently used to provide a source of fuel for the vessel propulsion, using boilers feeding steam turbines, or feeding directly to dual fuel diesel engines coupled to electric propulsion units. In case additional fuel is required, additional cargo is vaporized to make up the shortfall.

Floating LNG technology is developing rapidly as part of the industry’s quest for resources in more remote waters and also because of safety and environmental considerations to keep them away from highly populated areas.

Foreseeing the need for more remote projects to be able to overcome even more challenging cost barriers, whilst still meeting increasingly stringent safety and environmental standards, DNV GL embarked on an Extraordinary Innovation Project to explore the future of LNG technology.

The unique feature of the DNV GL FLNG concept is that it would be unmanned.

 As there will be no one living on board or working on the FLNG terminal during normal operation, the associated personal safety risks are eliminated. When personnel do enter for maintenance requirements, it would be prepared for a safe working environment. A new support and accommodation vessel concept and its associated docking system to the FLNG terminal would further boost safety considerations.

Existing frontier oil and gas projects have already resulted in tremendous technological developments, particularly in the subsea area. Operators are already controlling subsea installations and simple, fixed offshore installations remotely from shore. Given the on-going advances in autonomous systems and remote operations, unmanned offshore installations are a natural development over the next decade.

We look forward to the development and implementation of an ‘Unmanned FLNG’ terminal for its benefits, particularly in remote areas and compliment DNV GL for their contribution in this new innovation.

Read More