The BW Group is not an average shipping company – it strives for excellence in its operations, fleet, personnel, environment and impact. Its commitment to shipping and the environment is communicated clearly and there is nothing average about its operational style.
It is one of the world’s leading maritime groups in the tanker, gas and offshore segments, operating a fleet of more than 150 owned, part-owned or controlled vessels. We discussed shipping with Andreas Sohmen-Pao, CEO of BW Shipping, part of the BW Group.
The oil market
“We are in shipping with a long-term perspective, which is important in a cyclical industry. For instance, the charter rates for oil tankers have fluctuated by as much as USD 20,000 to 200,000 within a week. So we try not to be overly optimistic when rates are high or overly pessimistic when they are low: one has to live by the law of averages in this business. With the turmoil in the financial markets, we see that banks have become more cautious and there have been some order cancellations at yards, although no one has a crystal ball on what will happen,” says Sohmen-Pao. “The oil price has been volatile and will remain so for quite a while.” BW Shipping, operated out of Singapore, controls a fleet of 34 tankers including newbuildings, with a total of almost 7 million dwt.
The gas market
BW Gas has a fleet of 91 gas carriers, including newbuildings, with a total cargo capacity of around 6.7 million cbm. The fleet is managed and operated from Oslo.
“Our vessels operate globally, reflecting the international nature of our business. The gas market is interesting as gas is a cleaner fuel. There has been a slowdown in this market and there will be many new carriers coming onto the market. Again, we take the long-term view: underlying demand for gas is strong,” says Sohmen-Pao.
Geopolitics and the global oil and gas trade
“The geopolitics of oil and gas are increasingly important to the shipping markets. Transportation distances are generally getting longer because energy security is rising up the agenda. For instance, China is buying oil from West Africa rather than just sourcing from countries closer by; Europe is importing LNG as a back-up to piped gas from Russia; Venezuela is shipping some of its oil half way around the world rather than to its neighbour,” says Sohmen-Pao.
When we start discussing the environment and shipping with Sohmen-Pao, his personal engagement is clear. This is a topic on which Sohmen-Pao has stated his views many times and in many different forums. He is pictured at the business magazine Forbes’ global CEO conference participating in a panel discussion on the environment where he stressed the two most viable avenues for achieving environmental gains: legislation and self-initiated innovation for profit.
“I share the general concerns about the environment and the changes we have seen accelerating over the past few years. My belief is that to reduce the environmental impact of our activities we need to link this with every individual’s self interest. People will not stop driving, flying and so on: most of us will want to maintain our standard of living. How do we make it worthwhile for countries and individuals to achieve results? I think we need to start with projects where the cost-benefit makes sense. For instance, simple projects that increase energy efficiency and save costs, while at the same time looking for longer-term solutions. There is no silver bullet to solve all environmental issues at once,” he says.
These are some of the actions the BW Group has implemented:
Non-bio-degradable waste, such as plastic, has been reduced. The actions here include elimination of mineral water packaged in plastic bottles by the introduction of water dispensers and reusable drinking bottles on board vessels.
Engine room waste and bilge handling resulting in major upgrading projects on existing systems on board older vessels to make them comply with the highest industry standards. Waste and bilge management systems on newer vessels have been improved by installing additional hardware to exceed industry requirements and, finally, introducing an innovative process for extracting bunker fuel by treating engine room waste oil.
The release of refrigerant gases from shipboard air conditioning and refrigeration plants has been reduced. Older vessels built before 2000 have plants using chlorofluorocarbon (CFC) gases. Existing gas recovery systems on board can collect and reuse gas after any overhauls or repairs, but not during accidental leakages. Solutions include installing improved gas detection systems with a number of fixed sensors continuously sampling the atmosphere.
Effective waste management. Due to limited storage capacity on board ships, large numbers of empty aluminium cans are normally disposed of and compactors available in the market are large and expensive. The solution is to place suitable compactors on board so that the volume can be reduced to facilitate storage during voyages and waste can be landed ashore for recycling. In-house design and manufacture of suitable compactors.
Energy conservation will include the introduction of energy saving light bulbs to save an estimated 33 megawatts per year per ship.
Natural resources have been conserved by reducing paper usage. E-filing, electronic Total Quality management systems, etc, have been implemented.
DNV and the environment
“You have a unique insight into where the problem areas exist. DNV has considerable muscle to do R&D and the topical focus areas are well known: ship recycling, ballast water issues and emissions. An organisation like DNV could play a role in tackling these, getting the right people together and working to achieve effective solutions. This is a real challenge, as shipping companies are not normally geared up for R&D – we are service providers. Ship owners generally do not build ships and have no factories, no laboratories. We take the ships and we provide a service – pretty much like a hotel or an airline. Class and yards are in a stronger position to make an impact,” says Sohmen-Pao. “With the role we play we can, however, influence class, yards and equipment suppliers to confront these challenges when we are contracting new tonnage.
“As an industry we have to move, but not so hastily that we bring about unintended consequences. The urgency is there, but hasty solutions by legislators may not benefit the global environment or the shipping industry. There is a risk that legislators and organisations will grab at solutions without properly considering the consequences. A good example is a suggestion that the entire shipping industry abandons residual fuel and runs exclusively on distillates with a sulphur content of less than 0.1 per cent. One estimate suggests that this would cost an additional USD 130 billion, and would result in the creation of an extra 120 million tonnes of CO2 due to reprocessing the fuel oil. We find it important to look at emissions as a whole and not just at the individual components,” underlines Sohmen-Pao.
The BW Group brand
“The purpose of re-branding was to unite the people behind our brand and our values.
“Then there is the external side of this: create a clear image of who we are by conveying unity and scale. Having too many brand names creates confusion externally. The brand is much more than just a logo – it has to be supported by a real service. The brand values we have included are that we are always trying to do better for our customers, while focusing on the long term. We act in a socially responsible manner and we want to be a good partner for those we work with. We try to retain our sense of heritage and core values while staying agile as we go about our business,” concludes Sohmen-Pao.
Date: 2008-03-14