The Stena Way
Part of the Gothenburg-based Stena Group, Stena Bulk is committed to “innovation and performance” in transporting petroleum and chemical products.
(Article originally published in Mar/Apr 2022 edition.)
“Innovation and performance are part of the Stena culture,” says Erik Hånell, Stena Bulk’s President & CEO. “Our motto, ‘Oil and gas should always travel first class,’ means oil and gas are always cared for to the highest degree. What that means for us today is our proactive development to make shipping safer, of course, and cleaner. And with sustainability factors coming more and more into focus, we want to be at the forefront of this movement as well.”
Unfortunately, the past two years saw the worst day rates in a generation. Average day rates for Suezmax tankers in 2021 were $11,000 per day. “We need $22,000-$23,000 per day to break even,” Hånell states. “To lose $11,000 a day per vessel, it takes really deep pockets to survive.”
COVID was the primary perpetrator, of course, leading to collapsing energy demand, contracts being cancelled and snarled supply chains. Then, just when it seemed that the COVID boot was coming off people’s necks, another international crisis erupted – the war in Ukraine. With supply chains still stressed and now an energy war with oil and gas suddenly in short supply, regulators and the market are desperate for sustainable alternatives – alternatives not just in production but also in transportation.
Fortunately, Stena Bulk has weathered the storm and is doing its part to throw global markets a lifeline.
“Five Milestones” Plan
The company has set an ambitious roadmap to become a net-zero emissions business by 2050 – far beyond IMO’s call for a fifty-percent reduction in greenhouse gasses by 2050 compared to 2008 levels. It’s building a modern fleet of fuel-efficient, cutting-edge-designed tankers, flexible and adaptive enough to meet industry’s changing demands.
It’s all part of Stena Bulk’s “5 Milestones” plan to achieve carbon-neutral operations, announced last year. The first milestone has already been achieved by offering customers low-carbon shipping options on any voyage with up to a 100 percent reduction of CO2 emissions (based on biofuels and an internal offsetting program). In addition, Stena is focusing on future fuels and pioneering clean technology.
Starting next month, through a joint venture with Proman, the world’s second-largest methanol producer, the first of three 49,900-DWT, medium range (MR) tankers, powered entirely by methanol, will be delivered. On a per annum tank-to-wake basis, compared to conventional marine fuels, the vessel will only consume 12,500 tons of methanol, thus reducing its CO2 levels by 2,200 tons. This methanol-fueled vessel will also be able to operate on VLSFO as well and will come into service 18 years ahead of Stena Bulk’s ambition to become one of the first carbon neutral vessel operators in the world by 2040.
The Proman collaboration will directly support the achievement of Stena Bulk’s second milestone, which will require every new ship in the Stena Bulk fleet from 2030 on to come with a roadmap to be upgraded to carbon-neutral status, either by retrofitting new technology or switching to carbon-neutral fuels.
The third milestone in Stena Bulk’s decarbonization journey comes hand-in-hand with the recently unveiled InfinityMAX vessel design concept, which is the company’s take on zero-emission, self-sufficient and flexible seaborne transportation. Stena Bulk aims to have a ship with a similar design to the InfinityMAX concept operating on the water by 2035 at the latest.
By 2040, Stena Bulk aims to achieve the fourth target in its decarbonization plan by becoming a fully carbon-neutral tanker operator. This will be achieved through a combination of measures: Some of the company’s vessels will be zero emissions; some will run on carbon-neutral fuels, and there will be carbon emissions offsetting programs in place to fully achieve the carbon-neutral goal.
The final milestone is slated for 2050 when the company anticipates becoming a fully net-zero-emissions business. This means Stena Bulk will not only take accountability for its operations and the indirect emissions connected to the business but also for the cargo carried by its vessels.
By 2050, all cargo carried by the Stena Bulk fleet will need to be climate-neutral, which will become a shared responsibility between Stena Bulk and its customers. This exemplifies the partnership approach that Stena Bulk embraces and believes is vital if the industry is to tackle the decarbonization challenge successfully.
“The shipping industry collectively faces a challenge where we must consider how we alter our entire energy needs,” Hånell stated in announcing the “5 Milestones” plan. “In order to decarbonize, the maritime community must take risks, push sustainability boundaries and embrace a partnership approach that enhances collaboration between industry partners and customers.”
“Helm Hard Right” to Green Shipping
Founded in 1982, Stena Bulk has played a pioneering role in providing safe and cost-efficient transportation of liquid cargoes for major oil and chemical companies. With an owned and managed fleet of between 70 and 120 ships, it maintains the following vessel types: Suezmax, IMOIIMAX, P-MAX, Ice-Aframax, Panamax, MR, LNG and shuttle tankers.
The company’s knack for innovation is exemplified in the IMOIIMAX, which is designed to carry IMO 2-classed cargoes as well as clean and dirty products. The vessels are all equipped with eighteen cargo tanks with a maximum 3,000 m³ capacity as well as a nitrogen-based inert gas system. The company describes its IMOIIMAX vessels as “an important step in our common pursuit to create a more sustainable shipping concept combined with a flexible design to offer our customers better business solutions at a competitive freight rate.”
Similarly and with an eye toward the safe carriage of products, the P-MAX features double systems for propulsion and maneuvering, just like an aircraft, and the 117,100-DWT, Super Ice-Classed Stena Ice-Aframax is optimally designed for safe carriage of oil in the Baltic Sea all year round.
Still in the design stage is the previously mentioned InfinityMAX concept to address future challenges of transporting energy from areas with abundant renewable supply to areas with greater demand. The modular, hybrid design would streamline loading and transportation through standardized wet- and dry-bulk cargo units (think swappable containers).
The modular units could decongest ports and reduce call times by dropping off and picking up cargo by tugs. The process could also lessen the number of empty tanks shipped. The sharkskin-hulled, semi-autonomous InfinityMAX would be powered by hydrogen, wind turbines and collapsible wing sails. The onboard crew would focus on monitoring and interacting with operators ashore with less hard labor – helping attract the next generation of seafarers.
Hånell knows how important that last point is – attracting the next generation of seafarers – since he began his career sailing onboard the Stena fleet before coming ashore and rising to CEO in 2012. At the helm, he has steered Stena’s “excellence strategy” of hiring the right people for the right position while constantly identifying opportunities to improve the fleet and build the most technically advanced and designed tankers.
To complement its decarbonization efforts and open a new source of added value, the organization began digitization efforts in 2016 by developing a spinoff, OrbitMI, a New York City-based software company with offices in Sweden, Norway, Greece and?Serbia and partners across the world.
OrbitMI’s mission is to unlock the hidden value in data generated by maritime to help the entire sector become more efficient, profitable and sustainable.?Orbit, its cloud-based Software-as-a-Service (SaaS) offering that debuted in 2017, helps people and organizations make better, faster decisions. It requires no hardware or software installations, which lets companies move fast to drive digital transformation without disrupting existing operations.
Orbit offers a suite of integrated maritime business solutions. Powered by artificial intelligence, data captured from vessels, terminals, ports and corporate can make precise market predictions with 90 percent accuracy up to two weeks in advance.
Based on the supply of competing vessel positions at a selected time and demand based on the number of cargos that will enter the market simultaneously, Stena Bulk can decline mediocre offers and reroute vessels to areas with greater return on investment (ROI) for clients and owners. Value-added performance has resulted in a 60 percent increase in productivity, equaling 30,000 MTs of fuel oil saved, 100,000 MTs of CO2 emissions reduced over two years and an annual ROI of up to $15 million.
“We’ve been a leader in shipping’s digital journey from the beginning,” says Hånell, “and have been at the forefront with partnerships and collaborations, depending on what the digital world is creating for us.”
Voyage to Decarbonization
Against the backdrop of a radically changing maritime sector, Stena Bulk pushes boundaries to innovate and champion multiple pathways while understanding that some attempts will not reach full market fruition. While others may see technological investment or future fuels trials as speculative and risky, Stena has made them part of its “5 Milestones” plan.
“In the Stena Group,” says Hånell, “we’ve had many concept ships to push development. We test and observe things to determine if we should adopt portions of the concepts for existing or newbuild vessels. They don’t all work out, but that’s how we achieve excellence.”
Sean Holt is a frequent contributor to The Maritime Executive.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.