What’s on the horizon for tankers?

Oct 29 2021


The complex demands from regulators, financial institutions, charterers, and other industry partners, “creates a puzzle for every tanker operator,” said Vassilios Kroustallis, Europe Regional Business Development Vice President, ABS, speaking at a summer webinar organised by ABS, “What’s on the Horizon for Tankers”.

“There is no obvious choice yet on which fuel will prevail in the future. Practical carbon free solutions are not yet readily available.”

 

“New technologies are being developed to supplement or replace traditional generators onboard. Some forgotten technologies are being revisited with a fresh approach, for example wind assisted propulsion. We're participating in several projects relating to batteries and fuel cells, and how renewable sources of power such as wind and solar could be utilised on board vessels.”

 

Much work is going into improving tanker designs for higher efficiency, with a secondary goal of making a design as flexible as possible, since the dominant fuel of the future is not yet known.

 

Tanker operators are looking at improving hull coatings; using under-hull air lubrication; optimising the hull, rudder and propeller; improving the aerodynamics of the superstructure; and finding ways to recover waste heat.

 

Operators of larger tankers (suezmax / VLCC) are looking at a "fuller forward" hull form with a straight, bulb-less stem profile, Mr Kroustallis said.

 

Tanker operators are looking at increased use of higher strength steels, to reduce steel weight. They are looking at full spade rudders, which convert a higher proportion of propeller thrust into "lift" than a conventional semi-spade rudder.

 

We have already seen the first ever ammonia ready suezmax. There is already a VLCC compliant to EEDI phase 3 under construction, he said. Phase 3 is expected to come into force Apr 2022. We have already seen dual fuel VLCCs, which can run on either conventional fuel or LNG. “These are examples of what we can expect in the future,” he said.

 

IMO plans to evaluate its sustainable goals in five years’ time (2026). “No-one can precisely predict how the market will develop in years to come,” he said.

 

“Tankers will not only use alternative fuels for propulsion, they will also carry them as cargo. A new need will appear for tankers suitable for carriage and distribution of alternative fuels around the world,” he said.

 

Commercial horizon

“It is a tall order for anyone to stay on top of commercial activities while handling all of these [climate] challenges,” said Peter Sand, Chief Shipping Analyst with shipowner association BIMCO, speaking in the ABS webinar.

 

Tanker earnings in the crude oil spot market are at loss making levels. In product tankers, there is a “somewhat similar picture,” he said. “Our expectation for 2021 is loss making freight rates on average, a seasonal uptake in the later part of the year.”

 

In coming years, the crude oil tanker fleet is expected to continue growing at 1-2 per cent a year, and “a little less than that” for product tankers.

 

“VLCCs are taking up the lion’s share of orders being placed, about two thirds of all tanker orders by million dwt.”

 

Exports of crude oil from the US, which have been happening since late 2015, is a “mainstay in the [tanker] market,” because it “delivers the longest tonne miles,” he said.

 

There is a re-emergence of Chinese imports from the US, which is “a much welcome development” for tanker operators. “That trade was coming to a halt during the peak of the trade war between the US and China. We need those trade routes to keep VLCCs busy.”

 

In 2020 we saw a rise in Russian exports, such as from the Black Sea and Baltic Sea towards China, much of it going through the Suez Canal, but some of it going around the Cape of Good Hope (South Africa).

 

China also has a desire to use its own vessels for import. “That is constantly putting pressure on independent owners and operators,” he said.



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