Polish shipyard to convert Jones Act product tanker

May 01 2014

OSG Ship Management (OSG), has passed the first hurdle with the USCG National Vessel Documentation Center’s (NVDC) determination, in its plan to convert the Jones Act Veteran Class MT-46 product tanker Overseas Tampa, at a Polish shipyard, writes Brian Kershaw.

The letter saying that modifications in Poland will not jeopardise its eligibility to engage in US coastwise trades was issued in early March.

The 46,666 dwt Overseas Tampa was built at the Aker Philadelphia Shipyard as a Jones Act vessel and delivered to the American Shipping Co (AMSC) in April 2011. She was then leased to OSG. She has six pairs of cargo tanks with a combined capacity of 52,650 cu m and can load and discharge at a rate of 3,500 cu m per hour.

The conversion work will be undertaken by Gdansk-based Remontowa shipyard to enable the vessel to shuttle crude oil from the Shell Stones field, according to industry sources.

When asked if there was a contract between Shell and OSG for the use of Overseas Tampa, Shell declined to comment.

Initially, the Stones field will have two subsea production wells tied back to an FPSO and will have a daily production rate of 50,000 barrels. The Overseas Tampa is capable of taking on board six days production in 15 hours. The FPSO is located around 320 km southwest of New Orleans, which is within a day’s voyage. Phase I of the development is planned for completion in 2016 and this will be followed by a further six wells, which will be drilled at a later stage and connected to the FPSO.

OSG already has experience of transporting oil in the Gulf of Mexico. It commenced a timecharter in mid-2011 using the Overseas Cascade and Overseas Chinook shuttle tankers to lift oil from a Petrobras America operated

FPSO located at the Chinook and Cascade ultra-deepwater fields some 250 km from Louisiana’s coast.

In reaching its preliminary decision, the NVDC examined OSG’s proposal for certain work on the Overseas Tampa to be undertaken overseas, to determine if it would result in a loss of the tanker’s eligibility for a coastwise endorsement under the Jones Act.

The work proposed by OSG included:

  • Addition of a bow loading system consisting of a bow loading platform at about frames 95 to 110 with associated supporting systems and cargo pipe line.
  •  Addition of generator set for auxiliary power to bow thruster and bow loading equipment.
  • Addition of single electrically driven bow thruster with tunnel (not previously fitted) at around frames 95-105.
  • Conversion of main engine fixed pitch propulsion to controllable pitch propulsion and related upgrades; addition of main engine damper.

Other related work includes the high-tech automation of these components.

The sections of the regulatory standard, US Code Title 46 – Shipping, used to evaluate whether a coastwise vessel that is rebuilt outside the US will retain the privileges, are the ‘major component test’ (46 CFR, Section 67.177 [a)]) and the ‘considerable part test’ (Section 67.177 [b]).

Difficulties arise because there is no regulatory definition of the term ‘major component test’, however, it has been deemed to relate to changes to the hull or superstructure.

The Court (Shipbuilders Council of America v. US Coast Guard, 578 F. 3d 234 (4th Cir. 2009)), further defined this as a new, separate and completely-constructed unit, built separate from and added to the vessel, which weighs more than 1.5% of the steelweight (or discounted lightship weight) of the vessel.

The ‘considerable parts test’ as defined says ‘a vessel is not considered rebuilt when the work performed on its hull or superstructure constitutes 7.5% or less of the vessel’s steelweight prior to the work’. The NVDC letter added that any separately constructed components to the hull or superstructure, whether or not deemed ‘major’ under the ‘major component test’, would count towards this 7.5% threshold.

The examination of the proposed modifications to Overseas Tampa was referred to the US Coast Guard’s Naval Architecture Division (NAD). Its report concluded that the OSG calculations for steelweight had included several non-structural components, such as piping and certain internal bulkheads and added 168.6 tonnes of weight. NAD, focusing on the items that formed part of the structural integrity and flotation envelope, such as underdeck reinforcements and thruster tunnel extensions, found that additional steelweight amounted to only 22.9 tonnes.

Using the OSG calculations, the combined steelweight and discounted lightship weight resulted in a 2.14% weight increase. The NAD evaluation produced a lower weight increase of 0.3%. In both cases the results were well within the 7.5% threshold.

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