DNV GL adds Fishing Project to U.S. Activities

Paal Johansen, DNV GL’s head of maritime business in the Americas, has a new project underway. He says that DNV GL is the first classification society to develop a rule set specifically for the local U.S. fishing fleet. These vessels experience an unacceptably high accident rate and the U.S. government is developing regulations that will see all fishing vessels over 50 feet long needing to be classed. 

DNV GL has adapted the classification rules from their experience with the European and international fishing vessel experience. “The challenge is that the industry may see this as a way their costs will increase, but the consequential cost of not having a safe ship is much higher. The cost for classification is incremental in comparison. We are working very closely with the U.S. Coast Guard on this, and the draft rules are currently going through a phase of consultation with the fishing industry.”

Presence in the Americas

There are almost 3,000 people providing a DNV GL presence in Chile, Brazil, Argentina, Trinidad and Tobago, Panama, Columbia, Mexico, the U.S. and Canada. About 440 of them are under Johansen’s command in maritime; the others are involved with oil and gas, business certification, conventional and renewable energy advisory and software services

Not surprisingly, the shipping scene across the two continents is quite different. The U.S. hosts a lot of international players engaged with the “blue water” fleet, Brazil is more focused on local markets related to the oil and gas developments (however attracting a huge international engagement for operations in Brazil) and Chile and Canada have some big container ship interests with the likes of clients such as CSVA and Seaspan.  Additionally, in Canada there is Fednav, one of the most experienced Arctic operators, and Teekay Shipping which is headquartered in Vancouver.

Senior oil and gas professionals expected the U.S. and Brazil to be the two most favorable investment destinations in 2014, according to DNV GL analysis. “The US labor market related to the oil and gas business has been much overheated in the first three quarters of 2014, and with our focus to employ and develop local talents, this has proven to be a continuous challenge.  However, we see now that this is “cooling” down, and we will continue to focus on our local talent development in order to help our clients grow through their service deliveries,” Johansen says.

LNG

Johansen expects the uptake of LNG bunkering to be a few years away for South America (although the first LNG fuelled high speed ferry is now operating in Argentina), but the U.S. scene is really taking off. Working in this area has been one of DNV GL’s greatest achievements for the year.

To meet the rapidly growing demand for a wide variety of LNG related services, DNV GL established a group of LNG experts in North America. In addition to deep LNG expertise, the Houston-based “LNG Solutions Group - Americas” is also experienced in all business risk and regulatory matters specific to the North American market.

Several owners have made the commitment to switching to LNG, in anticipation of the strictly limited emissions to air allowed under both the North American Emission Control Area (ECA) requirements and Phase II of California’s Ocean Going Vessel (OGV) Clean Fuel Regulation. 

Two owners have decided to work with DNV GL as they make their first forays into this new chapter of shipping. Fuelled by the environmental benefits of LNG, DNV GL has been asked by Crowley Maritime to provide classification services for its two new LNG-powered ConRo ships to be built at VT Halter Marine. The ConRo’s will transport both vehicles and containers between the US and Puerto Rico. The 219.5 meter long vessels will have space for 2400TEU and 400 vehicles, and will meet the DNV GL Green Passport and CLEAN class notation environmental standards. 
  
Another ship owner, Matson has also decided to move forward with the construction of two new Aloha class 3600TEU containerships at Aker Philadelphia Shipyard with DNV GL as its partner for classification. Designed for service between Hawaii and the West Coast, the 260.3 meter long vessels will be the largest containership constructed in the US and feature dual fuel engines and hull forms optimized for energy efficient operations.

Houston-based GTT North America, the U.S. subsidiary of French engineering and technology company GTT (Gaztransport & Technigaz SA), has received an Approval in Principle from DNV GL for the design of a 2,200 cubic meter LNG bunker barge. The distinctive design incorporates GTT’s proven membrane system that allows for better volumetric efficiency, which is a concern for ship types where sacrificing revenue earning space for bunker.

“These projects have been great achievements for us,” says Johansen. “We are very well recognized by the U.S. Coast Guard on all aspects of shipping, and there is a lot of new development on LNG bunkering where we have been very successful in merging our expertise into the developing industry.”

Ongoing research is also helping to lay a solid foundation for the burgeoning industry, where DNV GL won a grant from the US Department of Transportation's Maritime Administration (MARAD) to analyze the issues and challenges associated with LNG bunkering, and the landside infrastructure needed to store and distribute LNG. 

DNV GL also recently launched a recommended practice for authorities, LNG bunker suppliers and ship operators to provide guidance on how LNG bunkering can be undertaken in a safe and efficient manner. This is the product of extensive experience of LNG bunkering-related projects over the past decade, including from the large-scale LNG industry.

“Through our interfaces with the US Coast Guard, both formal and informal, we know that they are now finalizing the remaining regulatory requirements on a detailed level. They are doing so in an open and consultative manner that involves the industry and prevents surprises and misunderstandings. Naturally there could be additional state, county and municipal regulations. But with a national regulatory framework designed to prevent major hazards using a risk based approach, particular local variations can be addressed through risk assessments, allowing for a consistent and predictable national regulatory framework,” he says.

A selection of DNV GL’s recently completed LNG projects in North America include: 
• A Feasibility Study on the use of LNG as fuel in North America for IMO. 
• Waterway Suitability Assessments for several planned North American LNG export terminals 
• A comprehensive risk assessment study on LNG bunkering for MARAD, the US Government’s Maritime Administration. 
• Security and Risk assessment study for Washington State Ferries 
• Market feasibility study for LNG America 
• Hosted visits from the U.S. Coast Guard and Transport Canada for familiarization with LNG as a fuel in Norway 
• Technology qualification for flashing liquid expanders 
• Quantitative risk assessment studies for North American export terminals 
• Termpol 3.15 risk assessments for all planned LNG export terminals in Canada 

DNV GL has published several widely referenced industry documents such as Rules for Classification: Gas Fuelled Ship Installations (last update Jan 2014), Recommended Practice for Development and operation of liquefied natural gas bunkering facilities (Jan 2014) and Competence Related to the On Board Use of LNG as Fuel (April 2003).

Offshore

DNV GL has 30 people in St Johns, Canada. They are primarily involved with supporting the offshore industry in Canada’s north east. “It is a growth area,” says Johansen. “New units are moving in that have our class, and we have to be present. Marine warranty services are also growing.” Regulations are strict in Canada, and quite different to those of the North Sea as a result of a different risk picture, he says. Canadian waters have more ice than similar latitudes in the North Sea.

Further south, in the first comprehensive overview of its kind, DNV GL has mapped out what is necessary to be in compliance with U.S. Coast Guard requirements to operate FOIs, FSOs and FPSOs in U.S. waters.

The roadmap document called “Verification for compliance with United States regulations on the outer continental shelf” follows from the US Coast Guard’s policy letter last year, accepting approval plans and inspections from the class societies DNV GL, Lloyd’s Register, and ABS as basis of U.S. Coast Guard approval. However, differences in the accepted rules and standards, and the subsequent variety in the complementing requirements from the CFRs (Code of Federal Regulations) led to uncertainties among operators, both about requirements and final approvals.

“This roadmap removes the uncertainty factor and by including all the relevant information in a single document it is a clear path for compliance,” says Johansen. “It is an example of how we act as a bridge between the industry and the regulators.”

FOIs, FSOs and FPSOs in compliance with this document will be given an U.S. class notation indicating compliance with both the DNV GL class standards and the additional U.S. Coast Guard requirements. 

“Many operators and owners have welcomed the roadmap,” says Johansen. “Owners have expressed a strong desire to freely choose classification society for floating offshore installations in American waters, and we know there are many owners, designers, operators and yards that would prefer to work with DNV GL. This document is further proof that they can do so and be confident in the entire regulatory process.”

In 2008, DNV was the classification society for the first FPSO (BW Pioneer) in the U.S. Gulf of Mexico, for the Cascade and Chinook field and is currently engaged with LLOG for the classification work of the Delta House which came on stream earlier this autumn. 

DNV GL has an extensive track record in verification and independent analysis for many GoM floaters throughout the past 20 years, says Johansen, including many high profile failure and accident investigations. 

2015

A year into the merger between DNV and GL, the internal changes have been made. “We have integrated all offices now in the Americas. We’ve been able to add to our competence as separate entities through greater service provision for example with Noble Denton marine warranty services, and we’ve broadened our container ship expertise,” says Johansen.

He is positive about DNV GL’s future, despite the drags that vessel oversupply and falling oil prices are having on the industry. “Moving forward, the Panama Canal will have a positive effect on our business. It should, in theory, increase trade volumes through the canals and into U.S. ports which are working hard to build capacity.”

That capacity will be for container ships, but it could also be for gas carriers as the U.S. ramps up its homegrown industry. “This may not immediately translate into more newbuild orders. We see a contraction in the market in the sense of less new tonnage ordered globally. We’ve seen this already in 2014 for both ships and mobile offshore units. This contraction will probably continue for one or two years, but at the same time, there is an expected increase in trade volume globally next year of around four percent. So, we look forward to a good year ahead with continued and increased focus on our customers, helping them to secure a safe and sustainable business without any downtime in their operations.”