An aerial shot of Seaspan's Vancouver Shipyards. Photo: Seaspan Shipyards

Canada’s Seaspan Marine Corporation says it has entered into a technology support agreement with STX Offshore and Shipbuilding that will help its Vancouver Shipyard optimize planned facilities upgrades for the Federal Government’s recently awarded $8 billion Non-Combat National Shipbuilding Procurement Strategy (NSPS) program.

Under the deal, STX will dispatch a technical staff to Vancouver Shipyards to review facility upgrades and provide recommendations for optimizing shipbuilding efficiency.  STX is one of the leading shipbuilders in the world and currently produces approximately 60 vessels per year with annual steel throughput over 700,000 tonnes.

“This partnership marks a key milestone in the plan to upgrade our facilities and is the beginning of what we believe will be a long and successful relationship with STX,” said Brian Carter, Seaspan Shipyard’s President. “We are extremely happy STX has signed on with us and look forward to evolving our facility into a world-class shipyard.”

“We are also extremely delighted to build long-term partnerships with Seaspan Shipyards and anticipate this technology support will lead to the enhancement of competitiveness of Seaspan Shipyards and ultimately contribute to the Canadian Shipbuilding industry,” said Sungsoo Shin, Deputy President of STX offshore and Shipbuilding.

The technology support provided by STX will initially focus on optimizing shop layouts, material flow, and production methods and processes.

“The efficiency improvements STX finds will be reflected in final facility designs providing significant long-term benefits to both the Government of Canada and future commercial customers. The improvements will also make Vancouver Shipyards more efficient and better able to compete internationally retaining shipbuilding jobs in BC,” said Carter.

An aerial shot of Seaspan's Vancouver Shipyards. Photo: Seaspan Shipyards

North Vancouver-based Seaspan Shipyards says the Canadian Coast Guard has decided to spend an additional $5.2 billion on the construction of even more ships under Canada’s historic military shipbuilding program, the National Shipbuilding Procurement Strategy (NSPS) program.

Under the program, Seaspan’s Vancouver Shipyards was selected as the prime contractor in the construction of seven new Non-Combat vessels for the Royal Canadian Navy and Canadian Coast Guard worth an estimated $8 billion.  Originally, the program called for the construction of two Joint Support Ships, a Polar Icebreaker, three Offshore Fisheries Science vessels and one Offshore Oceanagraphic Science Vessel.  Now the number of ships to be constructed will grow even more.

“The award of additional Coast Guard vessels not only shows the Government of Canada’s unwavering commitment to the Canadian shipbuilding industry, but also their commitment to Vancouver Shipyards as the winner of the NSPS Non- Combat package,” said Seaspan’s Jonathan Whitworth, CEO. “We are also pleased that the additional Coast Guard vessels create and sustain a significant number of additional jobs and careers in Vancouver and Victoria. Thanks also in part to the NSPS requirement for Seaspan to invest in new technology, industrial and human resource development in the West Coast shipbuilding and ship repair industry, Seaspan’s investment commitment will now grow to over $50M.”

According to Seaspan Shipyards, the first vessel to be built under the program will be the Offshore Fisheries Science Vessel and the timing and sequence of the recently announced vessels is yet to be determined.

“Planning, hiring and the modernization of our shipyards has already commenced,” said Jonathan. “We look forward to beginning construction on the first vessel under the Federal Non-Combat program in 2013.”

In total, Seaspan Shipyards is spending up to $200 million in facilities upgrades at its Vancouver and Victoria shipyards in order to fulfill the government contracts.

Ocean Ranger Semi-Submersible Drlling Rig

30 years ago today the Ocean Ranger, a semisubmersible drilling rig, sank during a vicious winter storm while drilling an exploration well off the coast of Newfoundland, killing all 84 crew members onboard.

Considered the world’s largest and most advanced oil rig of her time, the Ocean Ranger disaster left the industry puzzled and prompted hard look into how a disaster of this proportion could happen.  The investigations that followed revealed a load of problems from mechanical and design problems to poor training and inadequate lifesaving equipment.

Here is part 1 of a 6 part series that looks into the anatomy of the disaster that changed Canada’s offshore oil and gas industry forever.  Watch Part II.

Click here to view the embedded video.

Canada's Irving Shipyard

In a continued effort to bolster economic growth and create jobs, the Canadian Government has announced a plan aimed to help maximze the benefit of countries aggressive federal shipbuilding plan announced late last year.

As part of their National Shipbuilding Procurement Strategy (NSPS), the Canadian government in October awarded US$32.3 billion worth of shipbuilding contracts, the largest-ever in the country’s history.

The contracts were awarded to Nova Scotia’s Irving Shipbuilding and British Columbia-based Seaspan Marine Corp., for the construction Canada’s next generation of naval and coast guard vessels.  The work, which will span the next 20-30 years, is estimated to create 15,000 jobs annually.

Now, the Canadian Government is moving forward with two initiatives designed to maximize the Government’s investment in the domestic shipbuilding industry.

The Atlantic Shipbuilding Action Plan, focusing on the contract awarded to Irving Shipbuilding, will provide small and medium-sized companies in Eastern Canada with the information and knowledge needed to seize opportunities related to these major procurements.  Topics include:

Specifically, the Atlantic Shipbuilding Action Plan will ensure awareness of the process and the requirements to access supply chain opportunities; provide enterprises access to Atlantic Canada Opportunities Agency programs to proactively support their development so that they can capitalize on these opportunities in areas such as marketing, acquisition of certification, process improvements, training, and technology acquisition; engage with community colleges and the provincial governments on skills and labour force research and planning; and hold supplier development sessions in each Atlantic province as well as an Atlantic Marine Industry Forum.

“Work undertaken at Irving Shipbuilding’s Halifax shipyard will be sustained for decades and carries the real potential to radically transform the entire Atlantic economy. The shipbuilders of Atlantic Canada will create jobs, drive innovation and help build a world class industry,” explained Minister MacKay. “Through the Atlantic Shipbuilding Action Plan, our Government is helping Atlantic businesses understand and be part of the process and address such areas as innovation capacity, certification and workforce skills so they can compete as suppliers and sub-contractors.”

Meanwhile, Western Canada’s Shipbuilding Action Plan provides an investment of more than $1 million to help British Columbia’s Resource Training Organization construct a new marine training center that will ensure the sustainability of British Columbia’s shipbuilding and repair industry by training workers.

“Our Government’s Shipbuilding Action Plan is an exciting initiative that is creating jobs and growth throughout British Columbia,” added the Honourable James Moore, Minister of Canadian Heritage and Official Languages, Senior Minister for British Columbia. “We are committed to equipping our region with the tools needed to take full advantage of the many opportunities to come.”

“The support of the federal government is instrumental in moving this project forward. The Centre is envisioned as a scalable, industry- managed organization exclusively dedicated to developing and maintaining the skills, knowledge and capacity of the shipbuilding and repair workforce,” added Doug MacLaren, CEO of the Resource Training Organization.

CCGS Louis S. St-Laurent

STX Canada Marine announced that they have been awarded a contract to design the future flagship polar icebreaker of the Canadian Coast Guard. The $9.5 million contract was awarded by the Department of Fisheries and Oceans as part Canada’s the National Shipbuilding Procurement Strategy to create and strengthen Canada’s shipbuilding industry.

The polar icebreaker, to be named CCGS John G. Diefenbaker after the former Prime Minister, will be able to operate autonomously for 270 days in the Arctic, over a larger area, and in more difficult conditions than any of Canada’s current icebreakers.

The new Icebreaker will be delivered to coincide with the decommissioning of the CCGS Louis S. St-Laurent in 2017 and will replace the vessel as the CCG Flagship.

STX Canada Marine has previously worked with the Department of National Defense on the design of an Arctic Offshore Patrol Vessel (AOPS) and the Canadian Coast Guard on the design of a Offshore Oceanographic Science Vessel (OOSV).

The polar icebreaker is one of the vessels included in the National Shipbuilding Procurement Strategy (NSPS) Non-Combat contract awarded to Seaspan Vancouver Shipyards Ltd in October and will be designed and built in Vancouver.  The work will be carried out at STX Canada Marine’s Vancouver office and be completed by the end of 2013.

Supporting the project will be a team of experts from Aker Arctic Technology (AARC), SNC-Lavalin, INDAL Technologies and Noise Control Engineering.

An artist's rendition of the new Equinox Class vessels. Photo: Algoma Central Corp.

Algoma Central Corp., the largest Canadian shipowner and operator of Canadian-flagged Great Lakes vessels, has announced plans to install fresh water exhaust gas scrubbers on six new vessels that the company says will remove 97% of sulphur oxides emissions generated by vessel engines.

The St. Catharines, Ontario-based company has signed a contract with Wärtsilä Ship Power for the supply of the systems for its Equinox Class vessels, which are currently being built by Chinese shipbuilder Nantong Mingde Heavy Industry Co. Ltd, for a total supply and installation cost of the six scrubber systems is US$12 million.

The two gearless bulk carriers and four self-unloading bulk carriers are designed specifically for Great Lakes service with high efficiency hulls that will require less horsepower to achieve higher speeds than any previous Great Lakes design and thus achieve the lowest fuel consumption and emissions per tonne/kilometre of cargo carried.  The first Equinox Class vessel will arrive in Canada in the first half of 2013.

The Algoma order is the first for Wärtsilä’s new, integrated, fresh water, exhaust gas scrubber design. The scrubbers are designed to clean the exhaust gases of the vessels’ main and auxiliary engines as well as the oil-fired boiler and will meet more stringent environmental regulations taking effect over the next three years.

These scrubber systems will allow shipowners to use lower cost, heavy fuel oils while, at the same time, meet the new Emission Control Area sulphur limits established by the International Maritime Organization (IMO) and adopted by Canada and the United States for the Great Lakes and coastal waters.  Without scrubber technology, shipowners will be forced to convert vessels to burn more expensive low sulfur diesel.

The Wärtsilä scrubber concept works with fresh water recirculating in a closed-loop system. Sulphur oxides that are washed out of the exhaust are neutralized with caustic soda. A small amount of scrubbing water is continuously extracted and an on board water treatment unit removes other captured contaminants such as particulate matter.

A major advantage of fresh water scrubbers is the possibility to operate in a zero discharge mode which means that there is no effluent (waste product) from the scrubber discharged into the lake water. The treated, clean effluents would be held in a holding tank for discharge at an appropriate location while solid contaminants are disposed of at reception facilities in port.

“These are truly important vessels as they will set new standards for environmentally sustainable shipping on the Great Lakes and for cargo vessels in general. The Wärtsilä integrated scrubber solution removes more than 97 percent of sulphur oxides emissions,” says Juhani Hupli, Vice President, Ship Power Technology at Wärtsilä Ship Power.

“In addition to the environmental initiatives another key focus for Algoma’s fleet renewal process has been to reduce maintenance costs. Wärtsilä’s capability in providing both an integrated marine solution and global service support was a major reason Wärtsilä was selected to provide this comprehensive equipment package.” says Al Vanagas, Senior Vice President Technical, Algoma Central Corporation.

This process meets all the quality and monitoring requirements stipulated by the IMO. Wärtsilä is the first manufacturer to have been awarded a marine scrubber certificate by the classification societies Det Norske Veritas, Germanischer Lloyd, and Bureau Veritas.

More about Wärtsilä’s Fresh Water Scrubbers

Click here to view the embedded video.

Views of the U.S.-Canada fourth joint mission to map the continental shelf in the Arctic Ocean in August and September 2011. The 2011 joint mission employed the flagship icebreaker from each country, the U.S. Coast Guard Cutter Healy and the Canadian Coast Guard Ship Louis S. St-Laurent (LSSL), with each ship performing different functions and one ship breaking ice for the other.[State Department photo/ Public Domain

By Brian Van Pay and Barbara Moore, US Department of State

In the enduring spirit of friendship and cooperation, the United States and Canada conducted their fourth joint mission to map the continental shelf in the Arctic Ocean this past summer. The 2011 Arctic mission traversed more than 5,600 total miles and reached more than 1,230 miles north of the Alaskan coast. It marks the completion of a successful five-year collaboration between the United States and Canada to collect the scientific data necessary to determine the extent of the continental shelf beyond 200 nautical miles (referred to as the extended continental shelf) in the Arctic. Determining the extent of the continental shelf is important because a country has rights to manage and protect the resources of its continental shelf.

Collecting these data was not a trivial endeavor, especially in the Arctic’s ice-covered waters. The 2011 joint mission spanned nearly six weeks in August and September and employed the flagship icebreaker from each country, the U.S. Coast Guard Cutter Healy and the Canadian Coast Guard Ship Louis S. St-Laurent (LSSL), with each ship performing different functions and one ship breaking ice for the other. The partnership is an important example of the use of science as an effective tool of international diplomacy and both countries obtained more data and saved money by working together.

Each ship is equipped with different tools to accomplish its mission. The Healy is one of the few icebreakers in the world with a sophisticated mapping system called a multibeam echo-sounder that can generate beautiful three-dimensional images of the seafloor. The LSSL collected seismic data that provide a cross-section view of what is beneath the surface of the ocean floor, giving scientists insight into the thickness, geometry, and other characteristics of the geologic layers that make up the floor of the ocean.

Since the start of U.S. ECS work in the Arctic in 2003, the Healy has mapped more than 123,000 square miles of the Arctic seafloor, an area equivalent to the size of Arizona. Since 2006, the LSSL has collected 9,320 miles of seismic data, enough to cross the United States almost three times. As in previous Arctic missions, the scientists and crew were not entirely sure the ice would allow the ships to proceed, especially in the eastern portions where some of the thickest Arctic ice is found. The 2011 mission exceeded expectations.

The continental shelf is an important maritime zone, one that holds many resources and vital habitats for marine life. Each nation has sovereign rights to exploit and manage the resources of its continental shelf. From oil to tin, diamonds to gravel, metals to mussels, the resources of the seabed are enormous. Knowing how far the ECS extends, and what resources it contains, is necessary for national security and effective management of those resources.

The U.S. Extended Continental Shelf Task Force, chaired by the Department of State, will analyze the data collected on this and other cruises to determine the full extent of the U.S. continental shelf. Preliminary studies have indicated that the U.S. ECS likely totals at least one million square kilometers — an area about twice the size of California or nearly half the Louisiana Purchase — and a significant portion of that is in the Arctic.

Barbara Moore, a NOAA detailee to the Department of State, was a key participant in this summer’s final joint cruise. To view some of Barbara’s amazing photos taken during the 2011 Arctic expedition, visit the Facebook page of the Bureau of Oceans, International Environmental and Scientific Affairs or the Department of State’s Flickr page.

The U.S. ECS work is not limited to the Arctic and also includes areas in the Pacific Ocean, Bering Sea, Gulf of Mexico, Gulf of Alaska, and Atlantic Ocean. To learn more about mapping the U.S. continental shelf, please visit the webpage of the U.S Extended Continental Shelf Task Force: www.continentalshelf.gov.

Brian Van Pay serves as a Maritime Geographer in the Bureau of Oceans and International Environmental and Scientific Affairs, and Barbara Moore is serving on detail to the Bureau of Oceans and International Environmental and Scientific Affairs from the National Oceanic and Atmospheric Administration (NOAA).

Royal Dutch Shell has won a $970 million bid (NS 11-1) for exploration rights offshore Nova Scota, says the Canada – Nova Scotia Offshore Petroleum Board (CNSOPB).

This 9-year license covers rights to explore 4 offshore fields located approximately 250 kilometers south of Halifax, Nova Scotia.  Speaking with Tanya White, Manager, Public Relations & Administration for the CNSOPD, seismic surveys will begin, followed by exploratory drilling during the latter part of their license.  These parcels are all located in waters between 1400 and 3750 meters deep, which is the top-end range of any new ultra deepwater drilling rig currently available on the market today.

As winner of this bid, Shell is required to post a deposit of $242,500,000, or 25 percent of the amount of the bid, to demonstrate their commitment to conduct the intended work.

In order to even qualify to bid for this work package, bidders must have experience in the drilling of exploration wells in water depths greater than 800 metres in the past ten years.

Shell demonstrated that it has extensive worldwide experience in deepwater drilling including involvement in three previous deepwater exploratory wells drilled offshore Nova Scotia and Newfoundland.

“These Work Expenditure Bids are the highest received to date for parcels offshore of Canada’s east coast,” says Stuart Pinks, CNSOPB Chief Executive.

“These lands are located offshore Southwest Nova Scotia where recent studies have identified oil potential.  It is also important for our community to know that we have a regulatory regime in place which serves to ensure that petroleum activities are only conducted by competent parties in a manner which holds the health and safety of offshore workers and the protection of the offshore environment paramount.”

The next Call for Bids will be issued in May 2012 with nominations now being accepted until March 16, 2012.

Irving, which owns the Halifax Shipyard, secured the lion’s share–a C$25 billion deal to build combat ships–while Seaspan was awarded a smaller C$8 billion contract for non-combat ships. A third contender, Quebec’s Davie Shipyard, was shut out.

The economy is the big winner from the contracts, according to the Canadian Manufacturers & Exporters. “Beyond the benefits for the winning companies and their workers, the shipbuilding contracts will have profound benefits for the entire economy, coast-to-coast,” CME President Jayson Myers said in a statement. He described it as a “great day” for Canada’s manufacturing industry, saying that hundreds of suppliers from across the country will have a chance to bid for various sub-contracts.

There will be another C$2 billion contract to build smaller ships which will be open to Davie Shipyard and other bidders, but not to Irving and Seaspan, government officials said.

The major contracts are a politically sensitive matter as they determine which regions stand to benefit. A controversial decision in 1986 by then-Prime Minister Brian Mulroney’s Progressive Conservative government to award a fighter-plane maintenance contract to Montreal’s Bombardier Inc. (BBD.B.T) over a more competitive bid from a western Canadian company helped spark the creation of the right-wing, western-based Reform Party–which later morphed into the present-day Conservative Party that’s now in power.

The government of Prime Minister Stephen Harper structured the decision-making for the shipbuilding contracts in such a way as to make it an arm’s-length process. The way the announcement was made further underscores the political sensitivities. Major announcements are typically made by cabinet ministers, but this one was unveiled by a senior bureaucrat from the Public Works department.

Public Works Minister Rona Ambrose said later Wednesday that the government is delivering on its promise to create good jobs across Canada and provide much-needed ships for the Royal Canadian Navy and the Canadian Coastguard, “all through a transparent and arm’s length process.” She said the contracts will create 15,000 thousand jobs annually over the next 30 years. She did not take questions from reporters.

The fact that the Quebec company didn’t get the main contracts can be expected to draw criticism from the opposition parties. The main opposition New Democratic Party holds 59 of the 75 federal seats in the French-speaking province, while the Conservatives have just five.

-Nirmala Menon, Dow Jones Newswires

The exercise, called Operation Nanook, involves more than 1,000 Canadian troops. Military aircraft and navy vessels, and–for the first time–pilotless drones are taking part. Mr. Harper is also expected to unveil several economic initiatives aimed at developing the increasingly accessible Canadian Arctic.

Melting ice–blamed by many scientists and governments on global warming–promises to open new shipping routes and make oil and mineral deposits there more accessible. The U.S. Geological Survey estimates that already-discovered onshore Arctic fields contain about 10% of the world’s known, conventional petroleum reserves. The agency thinks there could be another 90 billion barrels of oil–just a little less than the reserves of a super producer like Kuwait–still undiscovered, especially in the largely unexplored offshore.

That has set off a scramble by rival Arctic powers to position themselves to take advantage. Last month, Canada announced details of its military exercise just days after Russia said it would deploy two army brigades to the north to defend its own interests.

At the same time, government and international bodies are scrambling to come up with rules and emergency response protocols as economic activity increases. Michael Byers, an international law scholar and Arctic authority at the University of British Columbia, says the chances of armed conflict over the region are small. But Ottawa and other governments are waking up to serious threats that melting polar ice might pose, including criminal activity, from smuggling and illegal immigration to terrorism.

“The challenge is, as the amount of activity, shipping in particular, increases almost exponentially, can the Canadian government ramp up to deal with that,” Mr. Byers says.

At a summit in May, Arctic powers, including heavyweights Russia, Canada, the U.S., Denmark and Norway, divided up search-and-rescue responsibilities for the region and pledged to create rules for preventing and cleaning up oil spills. Washington sent Secretary of State Hillary Clinton, the highest-ranking U.S. official to attend such a meeting. International maritime officials are drafting new safety guidelines for polar voyages, anticipating increased shipping.

Meanwhile, lofty metals and petroleum prices–even after steep declines amid recent market turbulence–have emboldened companies to swallow the higher costs of exploring and developing hard-to-reach Arctic or near-Arctic reserves. Earlier this month, Royal Dutch Shell PLC (RDSA, RDSB) cleared another regulatory hurdle to drill in Arctic waters offshore Alaska. Steel giant ArcelorMittal SA (MT, MT.AE) plans to develop a vast iron-ore mine in Canada’s Arctic.

Russian and Nordic shippers have recently invested in Arctic-capable cargo ships, ice breakers and escort tugs to ply the icy waters.

The stakes this year are especially high for Canada. This summer, research teams are wrapping up field work to support claims by Ottawa of additional economic privileges in the Arctic Ocean. Those claims are due at the United Nations next year.

Mr. Harper has long made the Arctic a centerpiece of his right-of-center platform. Ottawa has pledged to deploy a fleet of new, ice-breaking naval patrol craft, build an Arctic deepwater naval port and bolster Arctic warfare training.

By Chip Cummins, Dow Jones & Co