The $3.6 billion Floating Production Storage and Offloading vessel (FPSO) for Egina deep offshore oil project yesterday began its journey from Geoje in South Korea to Nigeria.
The Guardian gathered that the much-expected facility, which is going to be the largest of its type in Nigeria, would sail for 90 days from South Korea to Lagos, Nigeria, where it will undergo further integration of critical components.
Built by Samsung Heavy Industries (SHI) of Korea, the 2.3 million barrels of oil capacity vessel will also be the first FPSO to be fabricated and integrated locally in Nigeria, and indeed, Africa.
The vessel will measure approximately 330 meters in length, 61 meters in width and 33.5 meters in depth. It has a topside module with a gross dry weight 34,000 tonnes. It will berth in Apapa, Lagos, where the six modules fabricated in-country will be integrated, with 21400 pre-commissioning tasks expected to be performed. After integration, the FPSO will be towed to the Egina field, about 200 kilometers south of Port Harcourt, Rivers State and hooked-up for operation.
Chief Operating Officer, Samsung Heavy Industries Nigeria Limited, Frank Ejizu, in an interview with The Guardian had earlier said all is set to receive the FPSO in Nigeria.
He said: “We ready to receive the FPSO. Our readiness is demonstrated in the state- of -the- art integration and fabrication facility we have completed at our SHI-MCI FZE yard. To enable the mooring, integration and assembly of the hull and topside modules of the FSPO upon its arrival in country.
“We have also completed a 502m long quay wall at our SHI-MCI-FZE Yard and obtain all statutory approvals and permits for its operation. We have further dredged the quayside to a water depth of 11.5m to berth the FSPO and concluded arrangement for all related towage activities including simulation test for Lagos Channel passage.
“Above all, we have a formidable team of well-trained and motivated personnel ready to commence the integration works,” he said.
Ejisu added that the Egina FPSO is highly specialized and the NOGICD Act prescribe that a minimum of 80 per cent of the man hours to be expended on detailed engineering in deep offshore facilities- Hull and Topside were to be expended in-country.
“It was extremely challenging to get Nigerian engineers with requisite experience and expertise to undertake this segment of the work. We however appreciate the effort put in by the consortium of the Nigeria engineering firms contracted to execute these works and the innovative ways they employed to achieve completion,”
The Executive Secretary, NCDMB, Engr. Simbi Wabote said: “We are happy with the progress of the project and its contribution to Local Content and the national economy. FPSOs have been built abroad in the past and moved straight to site. This is the first time that many Nigerians will see what it looks like.”
Global seaborne trade volume to hit 10.6b tonnes in 2017
A number of ports development projects across Africa may be pointing to a positive outlook for capacity expansion in the region, but the myriads of uncertainties in economic growth have emerged a limiting factor.
The United Nations in its new report tagged: “Review of Maritime Transport 2017” is optimistic that the projects, when realised, would aid trade facilitation in the region.
However, projects such as the $1.5 billion Lekki Deep Seaport in Nigeria, and the proposed $2.5 billion Badagry Deep Seaport are currently facing challenges ranging from economic considerations to inconsistency in policies.
The report noted that container port volume in Africa dropped by 1.2 per cent in 2016, but growing by 1.1 per cent in 2017.
The United Nations Conference on Trade and Development (UNCTAD) projected that it would grow by 2.5 per cent by 2018.
It however, forecast that world seaborne trade to increase by 2.8 per cent in 2017, with total volumes reaching 10.6 billion tonnes.
Projections for the medium term also point to continued expansion, with volumes growing at an estimated compound yearly growth rate of 3.2 per cent between 2017 and 2022.
UNCTAD noted that against the situation in some regions, the projected demand is expected to surpass planned capacity growth (East Coast of North America, China and Oceania).
“Capacity expansion is expected to outweigh demand growth in Northern and Western Africa, Southern Asia and the Gulf Coast of North America, sighting Drewry Maritime statistics.
“Assuming all planned projects are implemented, it is likely that capacity growth in Africa and Southern Asia will be significant. In Western Africa, for example, a sharp increase in port development projects is being observed, fuelled mostly by Chinese investment in African infrastructure projects.
“Several projects are under way, and others are in the pipeline. Dredging works are in progress at ports such as Abidjan, while ground and soil improvements are being carried out in Lomé. In some cases, new greenfield sites have been selected to boost capacity, as illustrated by the $1.5 billion project in the Port of Lekki, Nigeria.
“The expansion project of Tema Port, estimated at $1.5 billion, is expected to reach completion by the end of 2019, while the Takoradi Port expansion project of $197 million is well under way.
“Similarly, the Ghana liquefied natural gas import terminal project ($500 million) and the Atuabo Freeport project ($700 million) are in the final stages of construction. A $690 million expansion project is being implemented in Dar-es Salaam Port (Port Development West Africa, 2017).
“Other important developments include the Mombasa–Nairobi Standard Gauge Railway, which opened in May 2017, and the Lamu Port–South Sudan–Ethiopia Transport Corridor project.
“However, many projects are uncertain, given the overall economic situation and obstacles to container trade growth. While some projects are likely to go through, others may require further backing, especially from carriers,” the report said.
It noted that cargo dwell time in sub-Saharan Africa are unusually long, compared with performances in other regions such as Asia and Europe, where cargo dwell times in large ports are usually under one week.
The average cargo dwell time in most ports in sub-Saharan Africa is estimated at 20 days.
Cargo flows are set to expand across all segments, with containerized and major dry bulk commodities trades recording the fastest growth. Uncertainty and various positive and negative risk factors are shaping the world economic and merchandise trade outlook.
Vessel operating costs on upward swing
Vessel operating costs are expected to increase in 2017 and 2018, according to the latest survey by international account and shipping consultant Moore Stephens.
Repairs & maintenance and spares are the cost categories which are likely to increase most significantly in each of the two years.
The survey, based on responses from key players in the international shipping industry, predominantly shipowners and managers in Europe and Asia, revealed that vessel operating costs are likely to rise by 2.1 per cent in 2017 and by 2.4 per cent in 2018.
The cost of repairs & maintenance is expected to increase by 2.0 per cent during the period, while expenditure on spares is predicted to rise by 2.0 per cent in 2017 and by 1.9 per cent in 2018. Drydocking expenditure, meanwhile, is expected to increase by 1.7 per cent and 1.8 per cent in 2017 and 2018 respectively.
The survey revealed that the outlay on crew wages is expected to increase by 1.7 per cent in each of the years under review, with other crew costs thought likely to go up by 1.6 per cent in 2017 and 1.5 per cent in 2018.
The increase in expenditure for lubricants is expected to be 1.6 per cent during the period. Meanwhile, projected increases in stores are 1.5 per cent and 1.7 per cent in the two years under review, while management fees are expected to rise by 0.7 per cent and 1.0 per cent in 2017 and 2018 respectively.
The cost of hull and machinery insurance is predicted to rise by 0.5 per cent and 1.0 per cent, while for P&I insurance the projected increases are 0.7 per cent and 1.1 per cent respectively.
The predicted overall cost increases were highest in the offshore sector, where they averaged 4.8 per cent and 3.8 per cent respectively for 2017 and 2018. By way of contrast, predicted cost increases in the container ship sector were just 1.1 per cent and 0.8 per cent for the corresponding years.
Operating costs for bulk carriers, meanwhile, are expected to rise by 1.9 per cent in 2017, and by 2.4 per cent the following year, while the corresponding figures for tankers are 2.1 per cent and 2.7 per cent.
Moore Stephens Partner, Shipping & Transport, Richard Greiner, said: “Predicted increases in operating expenditure are a matter of concern for any industry, and particularly one such as shipping in which a range of factors have conjoined in recent years to inhibit (and, in some cases, eradicate) profit margins. But shipping has seen a lot worse. If it does transpire that operating costs rise by 2.4 per cent in 2018, for example, that will still be less than one-sixth of the actual operating cost increases absorbed by the industry ten years previously,”
“It is significant that, for the first time, new regulations were included in the list of factors which respondents could cite as most likely to influence the level of operating costs over the next 12 months. It was even more significant, perhaps, that 15% of respondents did indeed identify the cost of regulatory compliance as a major consideration when weighing future operating cost increases. The Ballast Water Management convention, now with an extended implementation window, is still potentially the most expensive item on the menu, but by no means the only one. Tellingly, one respondent referred to new regulations which ‘most of the time are unclear and indefinite.’
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