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DNV eyes 5% growth in 2011

A ship transits the Suez Canal en route from the Mediterranean Sea to the Gulf of Suez at the city of Suez, Egypt, on Wednesday (AP)

By Sam Smith

DNV, a leading classification society, is expecting a 5 per cent increase in revenue this year, compared to about 4 per cent drop last year, its top official said.

“The orders have also dropped last year,” Henrik O. Madsen, CEO of DNV, said during his visit to Dubai. “Maritime dropped by 7 per cent but we grew in the energy business by 5 per cent so overall, revenues dropped by 4 per cent last year. But in the Middle East, the numbers are stable.”

Up until 2009 the company has been registering growth – 11 per cent in 2007 and 18 per cent in 2008 and 8 per cent in 2009, although that year saw severe setback, with the number of new-builds falling by 90 per cent.

It was only last year that the company experienced contraction.

 “This year, we are expecting 5 per cent growth and this will come mainly from our energy business, which we expect to grow by 12 per cent,” Madsen said.

He was speaking on the sidelines of DNV’s launch of Triality concept in Dubai. The concept aims to introduce a new crude oil tanker that is fuelled by liquefied natural gas, has a hull shape that removes the need for ballast water and will almost eliminate local air pollution.

Both the Triality concept VLCC and a conventional VLCC have the same operational range and can operate in the ordinary spot market. However, compared to the traditional VLCC, the Triality VLCC is designed to emit 34 per cent less CO2, eliminate entirely the need for ballast water and eliminate entirely the venting of cargo vapours (VOCs).

NOx emissions will also be reduced by more than 80 per cent while emissions of SOx and particulate matter will fall by as much as 95 per cent.

A traditional tanker in unloaded transit needs ballast water to obtain full propeller immersion and sufficient forward draft to avoid bottom slamming. The new V-shaped hull form and cargo tank arrangements completely eliminate the need for ballast water in the VLCC version.

There will also be much less need for ballast water on other kinds of crude oil tankers, such as Suezmax, Aframax and smaller ships. The new hull shape results in a reduced wetted surface on a round trip and has a lower block coefficient and thus a more energy efficient hull.

“We are now talking with more progressive yards, some in Korea, some in Japan. We are also talking with Dubai Drydocks here,” Madsen said. “We will see this concept very soon, maybe not all the ideas but some of the ideas will be seen in the next couple of months. We expect to see the full concept by 2014.”

DNV estimates an additional capital expenditure of 10-15 per cent for a Triality VLCC newbuilding compared to a traditional VLCC.

But even with this extra cost included, Madsen said shipowners can expect a reduced life cycle cost equal to 25 per cent of the newbuilding cost for a traditional VLCC.

“It is possible to develop an environmentally superior ship and be profitable at the same time,” he said.
Despite the recovering economy, the shipping and maritime sector is expected to remain weak, Madsen said.
“Maritime is still distressed,” he said. “2011 will be bad but we hope 2012 will be better. We have to wait till 2013-2014 for things to normalise. I’m not very optimistic for 2011 in the maritime sector.”

To offset the slowdown in the maritime sector, DNV expects to see a boost from its energy business, which include traditional and renewable energy.

“World wide we’re very strong in the offshore wind farm,” Madsen said. “Carbon capture storage is still more in the research side. In this region, we are dealing with Masdar in a number of certification projects.”