Tanker Trade - History

1. Tanker Trade - History • Crude-produced commercially in USA in 1859 • 1861 Elisabeth Watts carried 900 wooden barrels to London • 1866 German vsl. Glukauf – 8 tanks, steam engine • 1913 first middle east refinery at Abadan started • Tankers were owned by Oil cos like Shell,trading trading betweenLondon Europe, USA &Russia • 1920-1940 tankers of 10000 – 12000 tons size were built.

2. Tanker Trade – History • 1940 large oil finds in Saudi Arabia. • 1950 tkr size increased to 40000 tons. • 1960 – VLCC over 2 lac DWT mostly ordered by Shell. • 1979 largest tkr. / ship – 564843 tons ULCC mt Seawise Giant (currently trading as mt Jehre Viking) was built. • ULCCs are committed to major producers/refiners

3. Tanker Trade – History • Demand for tankers is measured in ton/mile. • Political/economical factor like closure of suez, source etc. influences no. /size of tankers required. • 1939 to 1969 six fold increase in oil demand – 10 to 64 million Bbls/day. • Tanker trade got serious setback in 1973 due OPEC price increase • Four fold increase From $ 2.75 to $10.84/bbls in Jan 1974. • 1982 increased to $ 34 which dropped below $10 in July 86 - due Iraq/Kuwait war?

4. Tanker Trade - History • What is the Current price of crude per Bbls? Indian/ HPCL basket? Where to look up for daily update ? • 1974-84depression in tkr mkt due OPEC price increase lead to vsl proceeding to lay up from new building yard - increased scrapping. • Oil & Tanker market operates within a framework formed by the crude oil reserves (Producing countries) vis-a-vis major consumers like USA, Europe, Japan, China, Korea & India.

5. Tanker Information • Tankers – Measurements. • LOA - Extreme length of vsl. • LBP – length between forward & after perpendiculars measured along summer loadline. • Breadth Moulded – inside shell plating. • Beam – Extreme width of vsl. • Draft – depth of lowest point of vsl below waterline.

6. Tanker Information • Depth – Distance from upper deck to lowest point of keel. • Capacity – Bbls / cbm - cargo carrying volume. 98% of total volume – temp exp. • BCM - Bow to Centre of Manifold – to assess position of loading arm/shore pipelines. • Air draft – Distance from waterline to uppermost mast • KTM – Keel to uppermost mast.

7. Tankers-Cargoes & Equipment Tonnage : • Lightweight-Lightship weight, light displacement tonnage-steel, engine, lubricants, water for boiler-cooling- Used while neg. sale for scrapping • Deadweight (DWT) diff between light weight & loaded displacement i.e. weight of cargo, fuel, stores, bunkers, FW, passenger, crew, ballast- carrying capacity varies with draft – SDWT. • Displacement – total weight of water displaced by ship – light ship + DWT • Deadweight Cargo Capacity (DWCC)DWT-bunker water & constants

8. Tankers-Cargoes & Equipment • Crude Oil – Produced along with dissolved gas LPG (Butane/propane) For safer transportation gas is separated/flared off. Not economical. Gas is used as fuel for heating or generating electricity etc. • Crude Oil Tankers –one or two grades-deep sea-50000 to 5 lac DWT. below 150000tons heating facility. comply with MARPOL, COW, IGS, SBT etc • COW –Clingage- sand/waxy residue at the bottom-appx 10% cargo is circulated thru rotating guns – reduce loss. Crude is volatile & gaseous-to avoid disastrous explosions-IGS-oxygen below 5% to 8% in tanks • IGS – Fuel + ignition + oxygen = Fire. tanks under pressure with inert gas of exhaust of engine/auxiliaries to prevent air entering in tanks. Scrubbed/cooled. IMO reg. 8% max.

9. Tankers-Cargoes & Equipment • Pumps & Pipelines Systems: Pumps are normally at the bottom of ship-forward of engine or aft of cargo tanks. Required for disch cargo & loading/disch ballast. Centrifugal – large tkrs - driven by steam, diesel, ele. power -high rate but not efficient for highly viscous liquids. Requires stripping pumps drains last metre of cargo.. Reciprocating pumps are not powerful-multiple grades-low rate-small vsls. steam driven can be fitted anywhere in the ship- vacuum strip pumps • Eductor: Economicalpumps for drainingaftertank cleaning –low pressure area/cargo after main pumps losses suction. • Screw Pump: Wide range –chemicals/Veg. low capacity • Deep Well :modern product chemical tkrs-bottom of tanks-Pump room not required. High value products/ positive seg.

10. Tankers-Cargoes & Equipment • Pipelines: depends on type/grades of cargo.viscosity, dia of P/L, bends, heights /distance of shore tanks. Back pressure, costly steel (corrosion due air & salt content in ballast. requires regular turning) • Main considerations: • 1)Protection from contamination-other cargo/sea water/ballast. Ok for crude but not for chemicals-lead to unsafe/un usable cargo-needs more complicated/sophisticated pipelines. Concurrent ldg cargo discharge ballast-port safety. • 2)Speed of discharge: within 24 hrs. • Contamination occurs mainly due ballast P/L passing thru a cargo tank becomes corroded & oil passes thru holes in the P.L into tanks. latest Glass reinforced plastic pipes (GRP)

11. Types of Pipeline Systems Pipelines are combination of one or more of the following types: • Ring Main: Runs round the bottom of ships like a ladder.2/4 lines running full length of ships. flexibility for ldg / disch. Expensive/flexible. • Block System: One P/L full length other only for fore & aft. less flexible but simple / popular. • Free Flow: No P/L. free flow control with big valve in bulkhead. one grade combined with other P/l system • Stripping Lines: connected to stripping pumps for draining low level cargo. Smaller dia /slower rates

12. Types of Pipeline Systems • Ballast Line – (SBT) connected to dedicated ballast pumps. clean ballast seg. No pollution / contamination. Separate stripping lines for ballast tanks. • Deck lines- running across the deck to connect to manifold. Requires set of reducers for connecting diff. shore lines. • Direct Loading Lines- Lead directly to tanks/pipelines bypassing pumps. Segregation. • Stern Discharge Line- P/l connected only at rear. Slow ldg / disch. Not popular.

13. Types of Pipeline Systems Tanker trade - History • Pump Room Lines- Complicated crossover section.In the bottom or top to permit total flexibility to connect any main line with any pump or sea suction for isolation/contingency. • Gas Lines- allow escaping air & gas while loading/sea passage. evaporation. pressure build up dangerous. Fracture /explosion? venting out on the top of mast. CLS- Close ldg system to avoid gas release? Segregation of gas lines are done to avoid product contaminations. • Pressure Vacuum Valves- while at sea valves are used to allow pressure diff between tanks and out side air to be relieved. while ldg / disch these valves are bypassed

14. Valves: Gate valvescontrols flow of oil thru P/L-Manual, remote hydraulic operated from control room. • Types of valves: Tank , gate , master, crossover, bulkhead & sea valves. Sea valves are fitted in pairs as they are used for ballasting / de ballasting to prevent possibilities of pollution while ldg and discharging. Act as evidence in case of oil pollution case. • Combination carriers :hybrid ships • O/O – Ore/oil carrier • OBO – Oil, Bulk,Ore carrier • Probo’s – Modern product OBOs • 25% to 30% expensive than single hull ship-extra steel, complicated design- employ as per market trend (wet or dry) or oil with dry.

15. Combination Carriers Product Carriers- Clean and dirty. Clean product vsls. tanks are frequently coated with special paints to reduce corrosion. Dirty are fitted with heating coils to pump high viscosity products. Clean tkr up to 70000dwt to 115000 & Dirty upto 150000dwt. ME refiners are trying for 200000dwt VLPC. Clean vsl are normally 4 grade seg .with SBT. Chemical carriers- bulk liquid trade – range of chemicals, incl. extremely hazardous & edible/vegetable oil trade. Chemical tkr needs to be equipped with very high std. of fire, toxicity, corrosion & explosive proof machinery/design etc. very expensive as compared to their size .perfect clean & nothing like allowable contamination.

16. Chemical Carriers Chemical Carriers (Parcel Tankers) Sophisticated ships, deep well pumps. Tanks are coated/stainless steel, zinc, silicate epoxy resin and polyurethane to prevent chem. cargoes from reacting with the ships structure & damaging ship/cargo. High quality of coating makes it possible to carry veg oil & chem together with utmost purity. Last three cargo? After leaded MS ldg / disch even with cleaning of tanks ATF or Veg oil ldg is not possible – lead contamination.

17. LNG / LPG carriers Gas Carriers : Highly Specialised ships. most expensive-require experience manpower to build, run & operate both ashore & afloat. LNG – Liquified natural gas carrier. Methane –available in dedicated gas fields & carried in insulated tanks at minus 162 deg C at atmo. pressure to keep it liquid. Started in 1964 in UK.Then Brunei, Japan, Malaysia, Indonesia, MEG, Caribbeans &WAF. Built for certain projects & not seen in chartering mkt. Dedicated Supplier, receiver & fast transport-no delay. LPG – Liquid petroleum gas carrier. Propane & Butane. by product of oil producing process .either kept under high pressure 10-12 BAR or it is cooled to minus 50 deg C to keep it liquid. can be used for carriage of chem gas & Amonia etc LPG is directly linked with oil production.