Heavy hearts after the boom

A maxim for the heavy lift shipping sector in 2016 could be ‘nice work if you can get it’. Low oil prices, slow global growth, falling revenues and reduced investment have made it tough going for heavy lift specialists.
 
Competition has intensified over the last 18 months. Too many heavy lift and project cargo vessels have packed the market. New deliveries have added to the crush. Low rates for (and oversupply in) other sectors have even resulted in large bulkers and container ships muscling in on already cramped conditions for project cargo.
The big hit for the heavy lift sector since oil prices plummeted from the summer 2014 peak has been the cancellation and deferment of global energy projects, and the dearth of new opportunities. 
Wood Mackenzie, the UK energy consultancy, estimated at the start of the year that around US$400B of spending on new oil and gas projects had been shelved since the collapse of crude oil prices. Some 68 major energy investmentprojects, or 27B barrels of oil equivalent in reserves, have been put back, as companies slash costs. Although prices have begun to rally from around a US$30 a barrel low, the response has been ruthless. 
 
Wood Mackenzie views the outlook as “bleak” as a handful of oil and gas projects get the go-ahead this year and billions of dollars of spending is postponed. With average breakeven prices for projects around US$62 a barrel, a rally to US$50 a barrel mark remains shy of this tipping point. Oil income often underpins other infrastructure projects too – such as ports or power plants – and there is less demand from these for heavy lift vessels.
 
The response of the heavy lift market is to graft for alternatives, such as offshore wind, and ongoing work in the Middle East or coming out of Asia. But, with economic growth restrained, whether in China, the emerging markets or the West, heavy lift shipping has its work cut out. 
 
Busted flush
Alongside the collapse in oil prices and energy projects, the heavy lift sector has had to contend with falling iron ore and coal prices, and the impact this has also had on mining infrastructure investment.
The global mining sector’s expansion to cater for China’s need for raw materials over the last decade has required heavy investment in the expansion of production capacity, bulk handling equipment and port terminal capacity.
Iron ore producers, with their reliance on seaborne exports, have invested in export facilities and materials handling equipment, often in remote places, providing a good source of business for heavy lift shipping.
Western Australia has been one of the boom areas for the iron ore sector, with major projects such as Rio Tinto’s Cape Lambert port expansion, and the Jimblebar mine project and current Roy Hill mining development that areserved by the Port of Hedland.
 
These developments in the iron ore-rich region of Pilbara have generated extensive project work for the heavy lift sector this decade. In 2015, ALE, the global heavy transport group, coordinated landside delivery by truck andtrailer of bulk handling and mining equipment from Port of Hedland to Jimblebar and Roy Hill, as well as to the Nammuldi iron ore mine expansion in 2014.
But the winds of change in the iron ore industry have hit new projects, with prices down some 80% between 2011 and the end of 2015. SAL Heavy Lift, the Hamburg-based shipping specialist, earlier this decade won work on the export facility for the US$3B Karara iron ore project in Western Australia. SAL’s heavy lift vessel SVENJA transported five wharf modules weighing up to 700t each from Sattahip, Thailand, to the under-construction berth at the port ofGeraldton. By 2016, Gindalbie Metals had indicated that it could close the mine due to low iron ore prices. (However, in May, Karara won a tax concession from Western Australia, which also waived a levy on the use of Geraldtonport). 
Asian power
Yet Asia remains a steady source of heavy lift projects. For example, Dutch group BigLift this year secured work delivering large shiploaders and unloaders around the China Seas. BigLift’s 1984-built HAPPY BUCCANEER, the oldestmember of its 15-strong fleet, transported three shipunloaders (for two separate projects) from Taiwan and China to Japan and the Philippines. Arne Hubregtse, MD of BigLift, commented: “Heavy weather, inventive cargo operations and sheer reliable heavy lifting power all worked to add two more satisfactory projects to the long CV of HAPPY BUCCANEER.”
BigLift had been hired to assist in the reconstruction of a 2 GW coal-fired power station in Fukushima, Japan that was severely damaged in the tsunami five years ago. In January, HAPPY BUCCANEER carried and installed a 1,200t continuous ship-unloader (CSU) from the Kaohsiung fabrication yard in Taiwan, to Haramachi thermal electric power station. The vessel installed the 45m high CSU on rails at the shoreside power plant, replacing a previous unit damaged in devastation of March 2011.
 
The Dutch group worked closely with engineers from Japan’s IHI Transport Machinery Co. The CSU was loaded and discharged by two 700t heavy lift mast cranes, which employed a pair of 24m beams. Hubregtse says the project’s particular challenges were the high deckloads, the lifting height and the crane outreach needed for installation. “Very large forces were expected on the supports of the bucket wheel boom and the ballast arm,” he explains. A detailed load-spreading plan was needed for the placing of the unit onto the vessel’s highstrength upper deck. 
 
Super-tramp diary 
The HAPPY BUCCANEER set out in mid-January across the East China Sea, only to arrive off Haramachi with the port closed due to bad weather.
“The ship and CSU had to ride out the storm at sea,” says Hubregtse. After the vessel was able to berth, the CSU was installed two days later. Installation at the power station required the CSU to be lifted at a height of 40m above the wharf and over the conveyor belt system on the berth, requiring a crane outreach of 14m from the ship.
Following the delivery to Haramachi, HAPPY BUCCANEER repositioned to Zhangjiagang in China to load two coal ship-unloaders for a new power plant in Northern Mindanao, Philippines. BigLift’s 24m lifting beams were used with a connection frame to raise the 650t unloaders, unconventionally with their boom forward and aft, rather than sideways. “This meant that part of the sea fastening could be completed prior to lifting, instead of having to do all this workafter loading,” explains Hubregtse. The ship cranes’ wide reach allowed the machines to be lifted directly to their stowage position.
The challenges were to continue for the HAPPY BUCCANEER and its Philippinesbound cargo. As it left the port of Zhangjiagang, it had to pass under the Sutong Bridge that spans the Yangtze River. The cranes were stowed on the ship’s tween deck, to reduce height, with the upper deck hatches not shut, and left in open sailing configuration. In agreement with lead charterer, Deugro Japan, HAPPY BUCCANEER ballasted down and was granted a specialpermit to navigate the bridge under escort at low tide with a small, but sufficient, clearance remaining.
Big country
Project work out of Asia can also be long-haul and worldwide. In 2015, the recently delivered ice-class heavy lift ship HAPPY STAR transported a large consignment of specialist iron ore bulk handling equipment from China to theport of Sept-Îles in Québec, Canada.
The cargo consisted of huge two 1,200t shiploaders, including elevator and tripper car, and 27 conveyor galleries that totalled more than 70 components and weighed in excess of 3,000t. BigLift and Sandvik Canada, the equipment manufacturer, had to devise an approach to fit the cargo in one voyage and unload in sequence for installation at the iron ore handling facility.
HAPPY STAR, on only its second voyage, left Longxue Island in the Nansha Port Area of Guangzhou in late December for a 43-day voyage across the Pacific Ocean, through the Panama Canal, north along the eastern seaboard and then to the multi-use port on the north shore of an icy Gulf of St Lawrence. 
 
The laden vessel met rough winds and high waves in the Atlantic, and employed her ice-breaking capacity in the last stretch of the 10,275-nautical-mile voyage. The Port of SeptÎles is North America’s leading ore port, handling 28 Mtpa, with shiploaders each capable of moving 10,000 tph of iron ore.
Built in the Huisman shipyard, Zhangzhou, HAPPY STAR has two 90t heavy lift mast cranes, 3,280 m2 of unobstructed deck space, a weather deck with pontoon hatch covers, and an adjustable-height tween deck. The vessel also has Finnish/ Swedish 1A Ice Class notation. The sheer size of the Sept-Îles materials handling consignment meant that the deck was full to capacity, with the tripper cars extending 17m beyond the wheelhouse. The cargo was unloaded in eastern Canada in temperatures below -20 degC and amid a snowstorm that reached speeds of up to 100 kph.
Southern Cross
The maiden voyage of HAPPY STAR involved a delivery to the warmer climes of the Indian Ocean carrying modules for an iron ore wharf at Port Hedland, Western Australia.
Although new large-scale bulk terminal developments have trailed off over the last year, heavy lift specialists have had a rich seam of business from the expansion of mining capacity as producers invest to retain their share of demand from China’s, albeit slowing, economy.
BigLift has also played a crucial role in Rio Tinto’s Cape Lambert port development in Western Australia, including delivery of stackers, reclaimers, shiploaders and tripper cars, as well as wharf modules to cater for large Capesize bulkers. 
 
Other recent mining projects served by the BigLift fleet include the new third berth at the BHP Billiton/Mitsubishi-owned Hay Point Coal Terminal, which lifted export capacity by 11 Mtpa to 55 Mtpa. Work started in 2010 on the CentralQueensland facility, which serves seven metallurgical coal mines in the region.
New offshore facilities include the new berth, shiploader and a 1.9 km trestle and conveyor link between the coal terminal’s three berths. The HAPPY BUCCANEER has delivered shiploaders to the Hay Point development, as well as wharf decks to the Port Hedland iron ore terminal development. 
Low commodity prices have also reined in the ‘big ticket’ mine and terminal projects in the coal sector that have provided the heavy lift sector with steady work over the last decade. The Wiggins Island Coal Export Terminal, off Queensland, Australia, opened last year, after three years’ of construction and investments totalling US$3.3B.
Owned by a consortium led by Glencore, the 27 Mtpa terminal has options to expand capacity by an extra 57 Mt. But low coal prices have already tipped two of the original consortium members, Bandanna Energy and Cockatoo Coal, into administration, leaving remaining partners with multi-million dollar costs.
Jumbo puzzle
Dutch group Jumbo Shipping played a key role in the Wiggins project, with the heavy lift specialists transporting equipment from fabrication yards across Asia to Golding Point, Queensland. Jumbo’s planning started in 2012, and the task was huge. 
 
Export terminal equipment that would be moved from yards in China and Malaysia included a 1,250t shiploader transported on the group’s heavy lift vessels FAIRPLAYER and JAVELIN. Other kit included modular wharf-decks and 500t stacker bridges, as well as gantries for a conveyor system and galleries.
Jumbo’s J-1800 class vessels, which are each fitted with two 900t capacity cranes, were able to sail the cargo in fewer shipments through the use of the special design of the vessels’ decks layout and hold. 
 
The Dutch group had gained transferable experience on Chevron’s huge Gorgon natural gas project located 130 km off the northwest coast of Western Australia. The group’s heavy lift vessel JUMBO JUBILEE transported caissons from Port Klang, Malaysia to Chevron’s gas project on Barrow Island.