Towards energy transition

The month of December is traditionally a time for reviewing the past year and 2021 is no exception to the rule, with the significant impact on our industry of 3 major factors: firstly, the Covid crisis that is affecting us all and challenging our processes and the safety of operations, but also the energy transition that is guiding the evolution of our market today, and lastly the economic recovery that, albeit slow, is nonetheless real.

At the end of this year, I would like to focus on on what must be a common and shared key success factor: safety.

Let me reaffirm yet one more time my commitment and that of BOURBON's employees to delivering operational excellence for our clients, suppliers, shareholders, the countries where we operate. And for oursleves.

This excellence entails zero incidents, even during this Covid period. Our 2021 safety results have been mixed. We are reaching the recordable incidents target we set ourselves (less than 0.75) but several accidents that have occurred in recent months have proved to us that nothing can ever be taken for granted. That is why we will never cease to hammer home to our employees, clients and suppliers that safety is more than a simple priority for BOURBON, it is the base that underlies the essential part of what we stand for. Through transparency, rigor and the sharing of best practices, we must do everything to reach our targets. Even if we were to record just one incident, it would still be one too many.

Transparency? It consists in trusting each other, identifying and reporting malfunctions, all malfunctions, to better understand them and correct them.

Rigor? This means applying our OSM (Operational Safety Management) standards or stopping operations if they are not implemented, and respecting our SMS (Safety Management System) procedures. But it also means implementing corrective action plans when an incident arises and measuring the results.

Sharing best practices? This consists in showing solidarity by exerting all our efforts to communicate and transmit our standards, to ensure that the slightest incident is known about by everyone, even if it has only occured once, to ensure that it never happens again and to guarantee that our employees and clients can operate in total safety.

Yes, safety is undeniably our absolute priority, beyond any other consideration. It is our responsability to put these principles into practice on a daily basis.

The year 2022 promises us great opportunities. I would like to send my best wishes to all our teams, partners, clients and suppliers. It will be a year, I hope, that will enable us to move forward together on the path of success, innovation and energy transition! And in the context of the pandemic that has been with us for the last past years, I obviously wish you the best of health.

B Safe

Gaël Bodénès, CEO of BOURBON. 

As one of the world’s leading shipbrokers, Barry Rogliano Salles (BRS) closely monitors the shipbuilding market. This year, construction figures have risen sharply. François Cadiou, Chairman of BRS, kindly agreed to share his expert insights on the state of the world shipbuilding market with PartnerSHIP.

PartnerSHIP: World ship construction has experienced a big rise in demand in 2021. How would you compare the current market to pre-pandemic days?

François Cadiou: Let me take you back to just before the pandemic hit us. Global ship construction capacity was between 1,000 and 1,200 ships contracted annually – around 90 million DWT. In 2019, the big debate had been whether or not to install air scrubbers. The oil majors were reluctant to invest in producing a low-sulfur heavy fuel oil (HFO), so ship-owners had to consider the expensive process of installing air scrubbers to reduce the sulfur content of HFO. In early 2020, the focus changed from pollution control to the climate emergency, and from reducing SOx and NOx to cutting CO2 and other greenhouse gas emissions. But then the public health crisis came. Covid-19 brought a great deal of uncertainty, and ship production plummeted. The issues that had so concerned the industry for the previous two years were no longer as important. The world was changing, shipyards were closing, ship owners couldn’t commit themselves, and annual ship production in 2020 fell to about 75 million DWT, the lowest in three years. The situation since the start of 2021 is quite different, though. There’s been a big change in the market. With prices of raw materials rising, particularly steel, it has shifted from a buyer’s market to a seller’s market. At the end of October, 120 million DWT of ships had been ordered, and we expect the year-end figure to be around 135 to 140 million DWT, which is a level that hasn’t been seen since 2014.
 

Do you consider that we are seeing the result of a supercycle?

F.C.: We are approaching a period that is twenty years after a boom in ship construction. An enormous number of ships were delivered – around 1,450 in 2005 and about 2,500 in 2010. The problem is that today there are far fewer shipyards around the world to construct ships to replace them. There were approximately 700 in 2007-2008, but we estimate there are only 300 today. Replacing these ships is going to be urgent, because all vessels built prior to the eco-revolution have very high fuel consumption. By 2023, we will be subject to new regulations and standards, notably the EEXI (Energy Efficiency Existing Ships Register) and CII (Carbon Intensity Indicator). These rules will effectively push the vessels with the worst fuel consumption out of the market. Looked at in this light, you could say we are entering into a supercycle. But it should also be said that increase in ships contracted reflects the severe disruptions to the supply chain that have been occurring since the start of the pandemic. Many ports around the world, particularly in China, have a zero-tolerance policy towards admitting the Covid-19 virus, and vessels are blocked in harbors, for instance. It’s as a direct result of this that demand for container-carriers has exploded – the category stood at 7.7 million DWT in 2020 and it has already reached 50 million DWT, a seven-fold rise for the year. All the global supply chain problems during the Covid-19 crisis pointed to weaknesses as far as domestic production of pharmaceuticals, textiles, microchips, etc. are concerned. One post-pandemic trend may well be to develop domestic production and place less reliance on maritime transport, which will also be a benefit when it come to carbon footprints. Bearing in mind that fossil fuel cargoes currently account for about 40% of shipping, there will inevitably be less and less transportation of fossil fuels – oil, gas and particularly coal. Factors like these may well check the acceleration in ship construction. But basically the shipyards are now in the driving seat, and deliveries on new orders are now being pushed back as far as 2025.
 

Will new engine technologies help ship owners achieve the new environmental performance that is required?

F.C.: I strongly believe in science. Science doesn’t have any limits, so I’m very confident that the genius of men and women will find suitable solutions. Scrubbers were the holy grail in 2019, as I said earlier, and in early 2020 dual fuel engines were in demand. But today, there are no certainties – the World Bank, the International Energy Agency and the IPCC have all come out against the use of fossil fuels including methane, for instance. We still have the same slow-speed engines as 10 or 20 years ago, and frankly improvements in fuel consumption have been marginal. There was a quantum leap in the reduction of the consumption going from turbines to diesel engines but we have not seen any comparable single improvement since. I strongly believe in reducing speed to save fuel: a 10% reduction in speed is equivalent to 30% less power. That means roughly 30% less CO2 in the air. We have to try everything we can.

We have to try dual fuel LPG, dual fuel methanol, and tomorrow dual fuel ammonia, which will mean no CO2, as long as the ammonia used is green. Batteries will also have their part to play. I think we will be looking at a mix of fuel solutions. Improvements will also come from better naval architecture solutions. For instance, we went through an eco-revolution in the early 2010. Design of hulls was greatly improved. Before, ship designers used to insist on certain rules of thumb such as for instance the distance between the tip of the propeller blade and the hull being not less than 30% of the propeller diameter, compliance with which limited the dimensions of the propeller and reduced the overall propulsion efficiency. But by increasing the dimension of the propellers there could be fewer rotations, and then you have a virtuous circle where everything is contributing to greater efficiency. At the time, this made it possible to achieve something like 20 to 25% less fuel consumption.

The leader in the installation of floating wind turbines, BOURBON is committed to this environmentally-friendly energy but has gone beyond the demands of its clients by measuring the carbon emissions generated by its operations for nearly 5 years. The explanations of Olivier Vinoche, QHSE Manager of Bourbon Subsea Services.

PartnerSHIP: Why and how did you begin carbon emission measurements for your operations in 2017?

Olivier Vinoche: BOURBON is committed to the energy transition of its clients, which is why we are involved in floating wind turbines, a promising technology that is in full development. Thanks to our commitment, we very quickly asked ourselves about the emissions produced by our operations and, from 2017, we began measuring these emissions for two projects, one linked to the oil and gas sector - the installation of a water injection line - and the second concerning a wind turbine installation. For the first, we launched at the client's request an Environmental Management Plan for the entire project, including for the waste generated. For the floating wind turbine project, we took the initiative to establish an environmental assessment of all the solid and liquid waste resulting from the installation of anchor lines and the consumption of the 5 vessels involved.
 

PS: What was the exact scope of these environmental measures?

O. V.: We were essentially within scope 1, i.e. the direct emissions of the units involved in the project. The vessels, to be more specific. Since this date, the carbon balance of our operations has also been performed for scope 2, therefore on indirect emissions, which represent less than 1% of overall emissions but which we nevertheless take into account. Scope 3 is more complex to assess. It concerns staff movement, the airplanes used (which are included in the global assessment), the emissions related to the supply chain, etc.
 

PS: So, this practice has been generalized?

O. V.: Absolutely, each of our floating wind turbine installation operations is subject to an environmental assessment, but we have extended this practice to all Bourbon Subsea Services integrated projects, for which we have control over the entire value chain.

PS: What is the scope of your measurements?

O. V.: Today, we are able to quite reliably count the consumption of our vessels and the emissions related to staff transport. I believe we cover around 95% of the emissions of an installation project, but we are still refining all these data.

PS: What is at stake with respect to these environmental assessments?

O. V.: The current challenge, and we are in contact with WindEurope regarding this subject, is to estimate the environmental impact in terms of the carbon emissions of floating wind turbines compared with fixed foundation turbines. Floating wind turbines are booming because they have a number of advantages: they can be installed further offshore and benefit from more regular wind conditions and can be positioned at greater depths and on more varied seabeds. They can also be moved. During our installation operations, we bring in quite powerful vessels that consume fuel, and we asked ourselves whether this was a challenge to the environmental viability of the wind turbine concept. Few of the players at the time were asking this question, but it was primordial for us. The data we now have tells us that the additional environmental cost of a floating wind turbine is very low. Emissions for a floating wind turbine are very close to those of a fixed foundation wind turbine. So, yes, there is an impact, we have measured it, but we are very confident of our capacity to reduce this impact as we continue our installations in order to make it, if not negligible, at least completely acceptable.

PS: What exactly were the figures you obtained?

O. V.: For a fixed foundation wind turbine field, we have an emission of 14 g of CO2 per kWH produced¹ . This is for a field of nearly 80 wind turbines. For floating wind turbines with optimized means, we could without problem reach 16-18 g per kWh, or even better with larger wind turbines. For the record, a coal power plant emits 1000 g per kWh produced! The European average is 306 g per kWh produced1. The estimated carbon emissions for floating wind turbines is therefore very encouraging for a technology that has not been totally field proven, because many prototypes have appeared in recent years. Emissions will be greatly reduced when they are installed in series. So, even if the figures must still be refined and made more reliable, we have realized that the environmental impact does not at all bring the floating wind turbine model into question. In a fixed foundation field, it takes around 5 to 8 years to offset the environmental impact. No doubt it will take a little more for floating wind turbines, but it remains a highly interesting technology in terms of emissions.

PS: What is the next step in your approach?

O. V: First, we are going to share our data with our partners, confront and compare them with those gathered, for example, during cable laying operations, which is the other major aspect of wind turbine installation. All this is under construction, even if the first conclusions are very positive. We still lack data on floating wind turbines because it is a technology that is being deployed, there are no very large-scale fields today. The next step will be to approach entities like WindEurope and several players on the market to clarify the method and formalize CO2 emission reporting. There is no real standard for the wind turbine industry on an international scale. We have been proactive and are ready to be the motors of this approach.

¹ ADEME ( French Agency for Ecological Transition) data

Asgaard Bourbon, a newly created joint venture in Brazil, has just signed two major contracts with Petrobras. By placing the emphasis on quality and operational excellence, the new entity is confident of continuing to satisfy the state-owned company and being able to attract new customers.

A new player is now operating in offshore marine services in Brazil. Although not ranking among the sector’s biggest hitters, the newly formed entity is well regarded by Petrobras, the country’s state-owned oil major. BOURBON’s Brazilian affiliate will merge its operations with Asgaard, a small local player with the distinction of being ranked the strongest performer in Petrobras’ annual quality audit in four successive years, creating a 50/50 joint venture, Asgaard Bourbon Navegação.

Originally present in the country since 2004 through a 50% stake in a local company that later became a 100% shareholding, BOURBON began a reorganization of its activities in Brazil in 2018, selling some of its vessels and replacing expatriate staff with local nationals. After its fleet reduced to three anchor-handlers, it was struggling to survive. The creation of a joint venture with a competitor, Asgaard, enabled the Group to strengthen its presence in this area and to win two new contracts.

The choice of Asgaard as a partner has largely influenced the entity’s strategy, based on quality. “Petrobras, which recognizes Asgaard as one of the very top-performing suppliers in terms of quality, is extremely demanding when it comes to enforcing the terms of the contract,” says Eduard Claassen, Managing Director. “We are confident that our new teams will be able to meet all the requirements of the contract and deliver the required operational excellence."

Two major three-year contracts

Asgaard Bourbon is starting out with two major three-year contracts to its credit. One of these, which began in the first week of December, involves crewing and operating a Halliburton-owned vessel, the Stim Star Arabian Gulf (SSAG), for well stimulation operations, consisting in the injection of chemical products into the pipes to raise the pressure, increase the flow and keep the well productive.

Extremely accurate dynamic positioning (DP) is crucial in this operation, that will require a DPO permanently onboard, and an additional DP expert specially hired to work onshore. “Before the SSAG sailed in from the United States, there were only three well stimulation vessels in Brazil, all operated by the same company. We have been able to break this monopoly, and it’s more than likely that other oil companies will require this service for this kind of operation.”

The second Petrobras contract, which is also scheduled to run for three years, will get underway in April 2022. This entails running a support vessel for remotely operated underwater vehicles (ROVs) that will service Petrobras FPSOs, carrying out inspections and minor maintenance operations and generally checking that the platform’s systems are working. The ROVs will be provided and operated by a local company, Oceanica. The vessel selected for this operation is the Bourbon Evolution 808, which will be dead-towed to Brazil, where it will be reactivated in dry dock.

Objective: best maritime company in Brazil

“The Brazilian offshore market consists of around 392 vessels in all. Even with the SSAG and the Bourbon Evolution 808, we will only be operating six vessels, so our market share will be relatively small,” remarks Eduard Claassen. “However, we have a clear ambition to be the best shipping company in Brazil. Our differentiation will focus on the quality of our service and of our team. As Managing Director, one of my missions is to diversify our client portfolio, because at present we are working 100% for Petrobras. We have already created a very good impression with Halliburton in the well stimulation operation, and so we are very confident for the future.”

The two first crewboats of the new BOURBON Surfer-200X series operate along the Gabonese coast for TotalEnergies. After 2 years of design, engineering and construction, the offshore market is now able to experience the comfort and technical capabilities of this 19-meter, 30-knot as cruising speed, 30-passenger, new crew boat. With these new vessels, Bourbon Mobility will accelerate its fleet transformation within the next 3 years and plans to build 40 new units in total.

Three additional Surfer-200x units are already under construction at Efinor-Allais French Shipyard in Cherbourg. The thirty-five remaining vessels should be built within the next 3 years. The new fleet will be made of both 19-meter Interfields vessels and 26 & 38-meter Crewliners, which will be equipped with new-generation engines and cabins with an innovative design, while capitalising on series construction for better reliability. This is part of BOURBON's commitment to maintain its operating standards by ensuring the average age of its fleet at 8 years. The R&D teams are also integrating the CO2 reduction dimension into their analysis, being aware that this is becoming an increasingly important element for our clients.

We now propose you to discover these new Surfers in video…

Read here the article dedicated to the S200X Surfer published in the PartnerSHip #12 

As maritime industry players accelerate their commitment to the energy transition, numerous initiatives are emerging around the world. Coalitions are being organized, new technologies are being tested on a large scale... Will these efforts be enough to reach the zero emission objective in 2050? We asked Erwan Jacquin, expert consultant in maritime energy transition and contributor to French Maritime Cluster and I-T2EM (Institute for the Eco-Energy Transition of the Maritime sector), and Cyrille Le Bris, Chief Disruption Officer at Bourbon Marine & Logistics, to discuss this question.

PS: Most of the oil majors and energy industrialists are aligned over a zero-emission objective by 2050. What do you think of the actions that have been implemented and what are the major trends that have appeared?

E. J.: In my opinion, we are at the beginning of this transition. We have been through a phase of denial, which can be explained by the complexity of the subject and its comprehension. It took several years to understand the extent of climate change, its links to maritime transport, that there was no quick and obvious solution, that those including a renewal of the fleet entailed an inertia of 25 years, if not more. And even today, nobody really has a perfect vision of what tomorrow will bring. Shipowners, for example, are waiting for solutions that are still under study. In this search for solutions, the most advanced shipyards are European – or even French – which have made enormous progress toward the management of energy on board or on the overall energy performance of vessels. There is a very high level of technological expertise in Europe. The ingredients are there but the recipe isn't ready yet because the additional costs generated by "net zero" solutions are sometimes colossal and there is no guarantee of ROI. The maritime sector will not achieve its energy transition alone. It must benefit from progress of others transport sectors, in the road and air, with adaptations and marinization. But it also has its own specificities, requiring specific investments and developments, such as wind power propulsion, hydrodynamics, storage, high power, etc.

PS: For you, is it premature to speak about transition?

E. J.: We are very much in a demonstration phase, we are performing tests on a very small scale and the risk is to believe that we have done the hardest. It is going to be much more difficult than that even if the drops of water end up making rivers. The first prerequisite is to have a scientific approach that really enables us to face the problems, to evaluate the benefits of the solutions, and test their scalability on a fleet scale, and make sure that the implementation times are correct. A second fundamental element is the need to have feedback from experience at sea, by quickly getting technologies from laboratories, startups and industrial R&D departments.  Finally, the economic vision will be fundamental because the market will direct the choices towards this or that solution. Thus, we are only at the beginning of the transition, but the dynamic is now launched. 

PS: A concrete example?

E. J.: Hydrogen propulsion for vessels is one of the solutions that should be developed for small to medium power vessels. Demonstrators of a few hundred kW exist, but the challenge is to go to several MW and tens of MW. To get there, a lot of work lies ahead of us, and we should not imagine that this can be done immediately. Setting up and making reliable the technologies, producing the molecule in quantity and at a reasonable cost and setting up the distribution network will take at least 10 years if not more. 

Cyrille Le Bris: I share Erwan's point of view. To return to the question of 2050, let's not forget that 2050 is tomorrow! We have to go fast. But to draw an analogy with motion physics, it is not the speed that counts, nor the arrival, it's the acceleration. And we have to admit that for energy transition, the acceleration is enormous! This is encouraging. But I would add that while it is important to talk about tomorrow, we must also look at what is happening today. Improving the use of our vessels that are currently operating, for example, is an effective way to move towards the energy transition.

PS: How is BOURBON improving the way it operates with the 2050 target in mind?

C. L.B.: We initiated a project called “Cassiopée, for a smart and green vessel”. The idea is to capitalize on the data available onboard vessels. If we recuperate this data to analyze it ashore, it will enable us to imagine virtuous modes of operation for the consumption of energy. The solutions we are thinking about today must benefit our clients and our dialogue with them over this subject is essential. Some of these solutions can only be developed with their agreement. For example, we have also recently worked on the hybridization of vessels with batteries or with an LNG package. These are possibilities that we are already offering to our clients.
 

PS: You mentioned the need for a huge acceleration to reach Zero emissions in 2050... Huge acceleration.... but enough?

C. L.B.: If we look at the last three years, awareness of the subject has grown considerably. Many businesses are striving to define their plan of action. But the real question is: what are the right answers, especially in terms of the propulsion of tomorrow's vessels? Several technologies are more or less ready, but there will not be a single and unique solution. The solution will not be the same depending on the type of maritime activity. It is not sure that the same choices will be made for container ships and offshore service vessels. There will be questions of sizing (weight, volume) and other crucial questions about the logistics and storage of the new fuels. Researchers are studying these questions, and this is why the I-T2EM is a very positive initiative to federate the many French resources and create a leverage effect through better cooperation.
 

PS: Let's talk about the I-T2EM! The "Institute for the Eco-Energy Transition of the Maritime Sector" has the objective of "zero emission ships and ports". Why such a program?

Erwan Jacquin: This program is the gathering of all the actors of the energy transition at the national level, who want to act together and concretely on this subject. With the growing awareness of these actors, coalitions or think tanks have been set up and have allowed to identify the areas of work or projects. It is now necessary to put in place the human, technical and financial resources and to deliver the projects! To do this, the partners believe that the best way to obtain results is to co-invest with others and with the support of the government on coordinated projects. The I-T2EM must enable to move from reflection to action and to obtain results.

PS: Its objective in one sentence?

E. J.: Act for the energy and environmental transition of the maritime sector. For me, the keyword is "act".
 

PS: Cyrille Le Bris, BOURBON is one of the signatories of the letter of engagement for the creation of the I-T2EM. What are the group's expectations with respect to this type of institute?

C. L. B.: We are in a dynamic of proposing innovative solutions to our clients and to rely on technology, particularly digital technology, to improve the safety of operations and enable the energy transition. These three subjects demand good knowledge of the state of the art. Cooperation with other players in the maritime industry can help. This is why we find the I-T2EM initiative interesting.
 

PS: A last and somewhat provocative question. Does the zero emission objective for 2050 seem achievable to you?

E. J.: It seems extremely complicated to me, but I am an eternal optimist so I believe that we must fight to succeed. However, the challenge is colossal. A change of energy that will require synthetic fuel produced by renewable electricity, solar panels or wind turbines seems to be the main energy source of tomorrow. One of the basic problems remains that the energy efficiency of the production chain up to the consumption of e-fuel will be much lower than the current efficiency of the diesel chain, close to 50%. The paradox is that to decarbonize maritime transport, we will have to consume more energy tomorrow, and the energy needs of the maritime industry are enormous. The largest vessels on the market have 50 to 60 MW engines that operate continuously throughout the year. Their consumption is huge compared with the production capacity for green energy today. Real work on fuel sobriety must be carried out. We have classified our work along three lines: a first related to energy change, which means new fuels and the capacity to capture and store CO2 on board the vessels, which is a big challenge. A second line concerns energy efficiency and operational efficacy, and finally a third line based on sobriety.

C. L.B.: I believe that mankind is never more resourceful than when it has its back to the wall. The example of the Covid vaccine is a wonderful illustration. Before the pandemic, nobody believed that we could create a vaccine in less than one year, and yet we did it. The challenge for 2050 is huge but will we have the choice of not reaching these objectives? We have to follow the acceleration that is already in progress and go even further to reach these objectives.

¹ Created in 2006, the Cluster Maritime Français (CMF) brings together all the players of the maritime ecosystem, from industry to maritime services and activities of all types. Today, it consists of over 430 entities: businesses of all sizes, competitiveness centers, federations and associations, laboratories and research centers, schools and training organizations, communities and local economic players, as well as the French Navy.

An emblematic part of the Smart shipping program, the "Vessel Operational Model" project has made it possible to reduce the workload on board by digitizing reporting and implementing a new maintenance organization, for a reallocation of the crew's tasks on key issues such as safety.

Now deployed on around sixty vessels in the BOURBON fleet, this video offers you an immersion in the daily life of our operational teams, both on board and on land, who are now benefiting from this new work organization.