Forum No_3_2008

no 03 2008DNV Forum

Also inside:> A new energy era with LNG > Food safety under scrutiny > Managing biorisk

Nobuo Tanaka, executive director of the International Energy Agency:

SAVING ENERGY

128 42

01 Editorial: No simple solution

02 News

08 Nobuo Tanaka: Re-energizing energy

12 LNG14 FLNG: Small is beautiful16 HHI: LNG carriers start new energy era19 Lloyds TSB: Due diligence offers banks peace of mind

22 Food safety24 Katokichi: Bringing trust back to frozen food26 Rieber & Søn: Local taste champion

30 Vietnam on the move

36 MAN for the future

38 Beyond compliance with Ericsson

42 StatoilHydro: Taming wind and waves

46 Managing biorisk

50 Polarcus: Moving into position

52 Last word: Let’s dance the carbon waltz

contents

46

1

The Earth is getting warmer. We’re all aware of it, andwe’re also aware that there is no simple solution to befound. The solution is a range of measures; an energytechnology revolution. DNV is engaged in most partsof this revolution.

First of all, we have to use energy more efficiently. TheInternational Energy Agency suggests that end-userefficiency could potentially account for 40% of CO2

reductions. DNV is involved in energy efficiencythroughout its service range. For instance we’re work-ing to make shipping more energy efficient, coveringaspects ranging from low-resistance coating researchto total energy management. Through our environ-mental management system certification services, weassist industry worldwide, across all sectors, in usingenergy more efficiently.

However, energy efficiency alone is not enough. Wealso need extensive research and development ofrenewable energy. All renewable energy sources willplay an important part in the final solution. In DNV,we have defined a few areas on which to focus ourefforts. Wind technology is evolving and investors areopen to the idea of being wind farmers. We are help-ing the wind industry to manage risk throughout thelifecycle of their projects. More than 15 years’ experi-ence of wind turbine certification makes DNV one of

the wind industry’s pioneers. More and more windfarms are now situated offshore, giving DNV theopportunity to combine its technical skills to provideunique services. This also goes for the many conceptsthat are proposed for utilising wave and tidal energy. But even with full-speed ahead in both the efficiencyand renewable directions, this will still not be enough.For this reason, huge investments are being made todevelop technology for the capture and long-term safestorage of CO2. Upcoming carbon capture and storageprojects will need a range of established DNV services,and we’re already in full swing preparing for thisopportunity.

In addition to all these efforts, green developmentmechanisms, including quota trading, have beendefined under the EU Emissions trading scheme,Kyoto Protocol and in voluntary schemes to ensure the quality and speed of implementation worldwide.DNV has been involved in this field since 1997, and is today a world leading climate project verifier.

The final carbon solution is made up of an array ofsolutions, and a lot of small steps have to be taken to achieve the ambition. DNV is involved in many ofthese steps, striking a balance between business andsociety. We’re proud to play our part in the solution.

No simple solution

HENRIK O. MADSENPresident and Chief Executive Officer

2 DNV Forum no 03 2008

DNV acquires Jardine TechnologyDNV has acquired Jardine Technology Limited adding this company’s market-leading performance forecasting andoptimisation products to the upstream oil and gas industry, TARO for the downstream refining, petrochemical andchemicals industries and TRAIL for the rail industry.

These new products complement DNV’s existing market leading Safeti software for quantitative risk assessment, consequence modelling and management systems assessment.

“This software, along with DNV’s global base of highly qualified engineers, now gives DNV a uniquecapacity to provide tailored solutions for improved financial performance combined with enhanced risk management to its customers, says Elling Rishoff, managing director for DNV Software.

Joining forces for a cleaner environmentDNV has acquired Global Energy Concepts and aims to be the dominant playerin the international wind energy market.

By joining forces, DNV and GEC will provide expanded service offerings, capabilities and international reach by bringing together European and NorthAmerican expertise in wind energy. The market will be offered an unparalleledarray of wind energy services for a wind project’s entire life-cycle, includingboth onshore and offshore technology applications.

DNV Energy’s COO, Remi Eriksen, explains: “DNV’s 20 wind experts are nowjoining forces with GEC and its close to 100 employees. This is a big stepforward, as we aim to rapidly build a powerful and dynamic professionalservices environment. With GEC on board, DNV will thus be the windworld’s leading service provider.”

”The result of integrated operations is a potential for considerable value creation and the opportunity to enter new, prospective areas,” says DNV’s project manager Heidi Brovold.

DNV leads Integrated Operations developmentIntegrated operations are a key element in the future of the oil and gas industry. New technology and new work

processes will lead to safer, faster and better decisions.

To be able to operate safely and sustainably in remote and hazardous areas, major Norwegian stakeholders are nowjoining forces to develop a digital platform which manages the risks and optimisation of next generation integrated

operations. The project is a unique collaboration between the IT, defence, oil and gas industries.

Based on this reality, a new joint industry project, ‘IO in the High North’ with DNV as project manager, aims tofacilitate the implementation of next generation integrated operations, by developing a common digital platform.

news>>

DNV Forum no 03 2008

Accredited for Chain of Custody by theMarine Stewardship Council

DNV has been accredited for Chain of Custody certification of sustainable fish-eries using the Marine Stewardship Councils (MSC) schemes.

The Marine Stewardship Council Chain of Custody standard for seafood traceability ensures that the MSC label is only displayed on seafood from a

MSC certified sustainable fishery. Once a fishery has been certified, before itsseafood can carry the MSC ecolabel, all companies in the supply chain must

have MSC Chain of Custody certification.

To achieve the certification a product traceability system is required soproducts can be traced from their suppliers and tracked to their buyers.

EADS selects DNV Defence and aerospace group EADS calls on DNV to improve processes for globaldevelopment of safety-critical software and systems.

EADS, a global leader in aerospace, defence and related services, has selected IToperational risk management specialist DNV IT Global Services for a three yearproject to enhance expertise for effective software development and systems engineering processes across the EADS group.

EADS businesses plan is to achieve targeted improvements using the CMMI(Capability Maturity Model Integration) – a widely used capability managementframework. By managing system and software improvements, EADS will deliverIT-dependent projects that are faster, more efficient and more cost-effective withbetter quality.

EADS will enhance its ability to use complex IT in product innovations.

Ford-Group acquire Safety Expertise fromDNV To improve functional safety and robustness of Ford’s components and plat-forms, they hired a team of three safety experts from DNV IT Global Servicesin Germany to set up a functional safety concept.

Ford’s research and advanced engineering department is in charge of activesystems research and engineering for the Ford car division. DNV’s specialistssupport the development project portfolio on an operational level and willcarry out hazard analysis. DNV is also coaching Ford in a second phase onhow to establish a sustainable safety concept in their research department.

Safety experts from DNV are helping Ford to set up a functional safetyconcept.

> >

3


Providing Corporate Responsibility training to UN-backed initiativeDNV has provided tailor-made training based on Corporate Responsibility Assessment to members of theEmirates Environmental Group, an UN-backed non-governmental organisation.

Topics for the training include: Corporate responsibility, sustainability reporting, ethical supply chain and fraud andcorruption resistance. The Emirates Environmental Group has been a DNV customer since 2001 when it becamethe first environmental non-government organisation in the world to receive the ISO 14001 environmentalmanagement system certification.

“We're delighted that the Emirates Environmental Group asked DNV to deliver the training,” saysbusiness development manager for the Middle East in DNV, Khurram Zia.

news>>

The contract was signed by RSHI Chairman and President Chen Qiang (front left) and VALE Logistics Executive Director EduardoBartolomeo (front row, second from the left), and witnessed by DNV Maritime COO Tor E. Svensen (back row, 4th from the left) and DNV Vice President Bjørn K. Haugland (back row, 5th from the left).

The world’s largest shipbuilding order to DNV classChina’s third largest shipbuilder, Jiangsu Rongsheng Heavy Industries and the world’s biggest iron ore supplier, Brazilian company Companhia Valedo Rio Doce (VALE) have concluded an order for building 12 very large ore carriers, making it the world’s largest shipbuilder order ever contracted.DNV is awarded to class all the 12 vessels.

The ore carriers, which will be 360 meters long, 65 meters wide and 30.4 meters high, with the loading capacity to 400,000 deadweight tonneseach are the world’s largest ore carrier ever contracted, and with the total deadweight tonnes of all vessels, this is the largest shipbuilding order evercontracted in the world to date. The first vessel is scheduled to be delivered in 2011. All vessels will be operated on fixed route transporting iron orebetween Brazil and China.

5DNV Forum no 03 2008

What does an Arctic 2018 winter Olympic cost?DNV has led a quality assurance project on the budget estimate and of the concept for arranging OlympicWinter Games in the Arctic Norwegian city Tromsø. The report showed the Olympics would be twice as expensive as estimated by the tentative bidder Tromsø 2018. Also weaknesses in the concept were analysedand discussed.

Controversy, enthusiasm and emotion always surround bids for hosting Olympic Games. Big projects like thesetend to have expansive budgets and frequent overruns on costs, which is why the government was keen toget independent quality assurance from trusted parties. The sports associations decided not to support thearrangement based on the new cost estimates, and therefore Norway will not promote Tromsø's candidacyfor the Olympic Winter Games in 2018 for the International Olympic Committee (IOC).

“The report demonstrated the value of independent quality assurance of big investment projectsand established a new baseline for cost discussions and decision-making,” says DNV’s projectresponsible Aage Enghaug.

> >

DNV retains ’Best in Class’ crownDNV has retained its crown as the ’The Best Classification Society in the Middle East and Indian Subcontinent’.

At the Seatrade Awards in October, DNV was crowned ’The Best Classification Society’,fending off competition from Lloyd’s Register and the Indian Register of Shipping. Theevent took place in Dubai and DNV’s victory is the third time they have won it over thepast four years. DNV also picked up the prestigious award in 2005 and 2007.

Today DNV is the largest classification society in the Middle East and India in terms ofgross tonnage operated by owners in the region and more than 8 mill dwt on order bylocal owners to DNV class.

DNV’s Eivind Grøstad (middle) accepts the award from Ramesh Ramakrishnan (left) chairman of the Transworld Group andChristopher Hayman, chairman of Seatrade Communications.

DNV approved by U.S. HealthAuthorities to accredit hospitalsDNV’s innovative NIAHO accreditation programme has passed the rigorousevaluation process, and the US Centers for Medicare & MedicaidServices has approved DNV Healthcare Inc. to become a new hospitalaccreditation organisation. This is the first new hospital accreditationorganisation in more than 40 years.

DNV’s hospital accreditation programme has met all Medicare &Medicaid Services requirements to deem hospitals in compliance withthe Medicare Conditions of Participation. The programme is calledNIAHOSM (National Integrated Accreditation for HealthcareOrganisations) and has been successfully implemented in multiple hospitals across the US demonstrating its effectiveness as well as DNV’s readiness to deliver it on a broad scale.

The new hospital accreditation programme encourages innovation within individual hospitals while helping themtake advantage of system-wide best practices.


DNV’s Environmental Performance System goes around the globeDNV Software’s custom-built Environmental Performance System programme is being applied to all elements of this year’s VolvoOcean Race, including the event organisation, the sponsors, the teams and their boats.

The programme measures a user’s environmental performance with a web-based reporting tool, supporting the Global Reporting Initiative, the world’smost widely used sustainability reporting framework, as well as ISO 14001 environmental management system certification. It is a web-based environ-mental software that calculates emissions from all areas of the race including fossil fuel usage for chase boats, air transport, container transport andthe small amount used to power the electrical and electronic equipment onboard each race boat.

“I am in no doubt that we need to grow and develop the Volvo Ocean Race in a sustainable way, and take our corporate socialresponsibility as well as our environmental management seriously,” Knut Frostad, CEO of the Volvo Ocean Race, said.

DNV introduces roadmap for reduced CO2 emissions“A shift from traditional fuels to natural gas is necessary if the shipping industry is to meet expectations of substantial reductions in CO2 emissions,” said COO of DNV Maritime Tor Svensen as he presented elements of a road map for how the shipping industry can reduce its CO2 emissions.

“Only a common effort of the industry can keep regulators from imposing damaging new requirements on shipping to achieve environmental improvements,” he said.

The shipping industry needs to establish ambitious targets for its CO2 emissions. Shipping will face toughexpectations of emission reductions, in line with all other industries. Tor E. Svensen believes that CO2 emissionscan be reduced by as much as 30–50% by actions taken on existing vessels and for newbuildings prior to 2030.

“The main elements of CO2 reductions would be operational improvements, including weatherrouting, the optimisation of energy consumption and close cooperation between charterers andowners,” said COO of DNV Maritime Tor E. Svensen.

news>>

© Volvo Ocean race


Planning a greener cruise industryHigh speed ships and floating islands will ensure a more environmentally friendly cruiseindustry, said fourteen Master’s students spending their summer holidays with DNV.

Their task during a six-week cross-disciplinary internship programme, “The year 2030green cruise experience”, has been to design an environmentally friendly cruise conceptwhere everything from leisure activities to the vessel itself is green and healthy.

The students came from China, France, Mexico, Norway and Sweden. They had differenteducational backgrounds from Scandinavian universities. Drawing inspiration from busi-ness areas within and outside the DNV organisation, the team suggested integration ofcutting-edge technologies to reduce the cruise sector’s impact on our vulnerable planet.

With the objective of reducing the environmental footprints to a minimum, theteam designed a competitive concept based on several bold designs. Their con-cept provided a convenient, flexible and green cruise experience as an alterna-tive to aviation and to eliminate the moving stress and annoying scheduling.

> >DNV to set the standard for damagetolerant bladesDNV is leading the way in helping the wind power industry to improve the quality and damage tolerance of wind turbineblades. A new Recommended Practice is under development.

When producing increasingly larger fibre composite turbine bladesthe wind power industry is facing major challenges of consistentquality and sufficient robustness.

A major concern in the wind power industry is the long time ittakes to establish internationally recognised standards. DNV hastherefore launched a Joint Industry Project (JIP) to develop aRecommended Practice for defects and damage in compositestructures and components.

The Recommended Practice will contain a catalogue ofproduction defect types and observed in-service damage.

DNV classed ships breaking records in IndiaFor the first time ever recorded in India, a shipyard has launched five vessels at the same time.

Cochin Shipyard Ltd launched the Platform Support vessels from their building dock, with all five ships classed to DNV standards. The shippingindustry in India is on the rise and DNV is playing a big part. The Cochin Shipyard alone has 18 vessels on order for delivery by 2011 and themajority of those will be classed by DNV.


The energy industry has met with two fun-damental problems in the past 18 months:Climate change has brought with it theominous cloud of more severe carbon poli-cies that threaten to rain down on produc-ers of CO2. And the sharp rise in oil pricesbrought on largely by China and India’sgrowing energy demands has raised fearsabout the security of oil supplies.

Oil accounts for 35% of global energyconsumption, and coal produces 40% ofthe world’s electricity supply. These figuresare unlikely to change significantly for atleast two more decades, providing an evengreater need for innovative technologicalsolutions to ensure a cleaner and sustain-able future.

The Paris-based International EnergyAgency (IEA) was set up in 1974 inresponse to the oil embargo, to provide

security management and energy policycooperation among member states. TheIEA has changed with the times and nowincorporates the “Three E’s” of balancedenergy policy making: energy security, eco-nomic development and environmentalprotection.

In the 2008 edition of its biennial EnergyTechnology Perspectives, the IEA foreseesa 70% increase in oil demand by 2050 anda 130% rise in CO2 emissions under a base -line or ‘business as usual scenario’.According to the UN’s IntergovernmentalPanel on Climate Change (IPCC), a rise inCO2 emissions of such magnitude couldraise global average temperatures by 6°C,perhaps more. The consequences would be a significant change in all aspects of lifeand irreversible change in the natural envi-ronment.

For IEA Executive Director Nobuo Tanaka,the twin challenges of CO2 reduction andincreased energy demand representopportunities rather than crises: “Ouranalysis suggests that total additionalinvestment of $45 trillion between nowand 2050 would be needed in order to cutglobal CO2 emissions by 50% by that time.This amounts to roughly 1.1% of averageannual global GDP over the period. But atthe same time there would be significantnew business opportunities,” he says.

At this year’s G8 finance ministers meet-ing in Japan, an Action Plan for ClimateChange to Enhance the Engagement ofPrivate and Public Financial Institutionswas agreed upon. Subsequently, Japan, the United States and Britain have alllaunched Climate Investment Funds cur-rently worth $12 billion. The funds have

Re-energizing energyNobuo Tanaka, executive director of the International Energy Agency, sees boundlessbusiness opportunities for companies involved in cutting CO2 emissions, and those developing technology for improved energy efficiency. TEXT: ROSIE COLLYER PHOTO: TOM HAGA


been set up to assist developing countriesin curbing greenhouse gas emissions.

“The IEA series Energy TechnologyPerspectives is one of our responses to theG8 call on the IEA to provide guidance onhow to bridge the gap between what ishappening and what needs to be done interms of energy-related CO2 emissionsand how we can respond with new tech-nologies,” Mr. Tanaka explains. “We pro-posed 25 concrete recommendations forenergy efficiency measures. The mostimportant step now is implementation. We know what to do, but the will of governments to implement is the key.Additionally, we need to invest in newtechnologies, renewables, Carbon Captureand Storage (CCS), nuclear in those coun-tries where it is acceptable, and in thetransportation sector. With these invest-ments, we can respond to the twin chal-

lenges of climate change as well as energysecurity.”

The IEA’s main message is that there isan urgent need for energy efficiency. End-user efficiency could potentially accountfor 40% of CO2 reduction. Decarbonisingthe power generation sector, throughincreased use of renewable energy, nuclearenergy and CCS, are also identified asimportant steps towards reducing CO2

emissions. “But to achieve a 50% cut in CO2 emis-

sions by 2050, we need a real energy tech-nology revolution. We would need a virtualde-carbonisation of the power and trans-portation sectors, either by using secondgeneration biofuels or by wide-scale use of electric or fuel cell hydrogen vehicles.Hydrogen can be produced without car-bon by using electric power, but this canbe really costly. De-carbonising the trans-

portation sector is estimated to cost $200per ton of CO2. So this is why a staggering$45 trillion investment is needed to makethis energy revolution happen,” Mr Tanakapoints out.

While governmental implementation isan important part of the solutionsrequired to reduce CO2 emissions, so toois the role of business: “Of the $45 trillion,most of it should come from the privatesector and ultimately from consumers, but the business community needs good,stable and transparent policy frameworkswhich governments need to develop,” saysMr Tanaka.

Given that fossil fuels are such a signifi-cant part of the energy mix, the IEA viewsthe development of Carbon Capture andStorage (CCS) as imperative: “Countriessuch as China and India are growing rapid-ly. If they want to expand their use of coal-

“WITHOUT CARBON CAPTURE AND STORAGE, WE CANNOT ACHIEVE 50% REDUCTION IN CO2 EMISSIONS.”


fired power plants and reduce emissionswe need the CCS technology to becomesuccessful. Without CCS, we can notachieve 50% reduction in CO2 emissionsby 2050. In the G8 summit meeting, I saidvery clearly that we can reduce our CO2

emissions to the required level, but weneed a clear focus point, and that is tomake CCS possible in China. The develop-ment of CCS is a litmus test of seriousnessfor the negotiators in this climate changeissue,” Mr. Tanaka warns.

Mr Tanaka, who is familiar with the CCS test plant in Mongstad, Norway, is also aware that it has been described as the ‘moon-landing’, by leading Norwegianindustry figures and politicians due to thetechnological complexity of the project.“We have to test this technology as soon as possible in a full-scale demonstrationplant. In our Energy Technology

Perspectives 2008, we concluded that – to achieve a decarbonisation of the powersector – we would need, among otherthings, to fit on average per year 35 coaland 20 gas-fired power plants with CCStechnology between 2010 and 2050 at acost of USD 1.5 billion each. Costs, regula-tory frameworks, liability issues, all theseelements must be clarified, otherwise largescale investment will not happen.”

Reaching the target of 50% reductionin CO2 emissions is possible, in the eyes ofMr Tanaka it’s: “a huge effort – we needimmediate policy action and technologicaltransition on an unprecedented scale, withsignificant investment in the energy infra-structure, much more research and devel-opment and considerable efforts in energyefficiency. Otherwise this 50% reduction inCO2 emissions will become science fiction.”

“End-user efficiency could potentially account for 40% of CO2 reductions.”

© Nina Eirin Rangøy

There are currently no standards and

recommendations on how to manage

large scale CO2 capture, transport and

storage.

DNV is developing guidelines and

procedures for critical parts of the CCS

value chain:

� Technical uncertainties

� Economical feasibility

� Legislation

� Environmental impact

� Safety.

! DNV’s CCS expertise

12

Small is beautiful and is certainly an option. With the world now looking for supplies of natural gas, attention has to be focused on the small and medium-sized gas fields.

TEXT: PER WIGGO RICHARDSEN PHOTO: NINA EIRIN RANGØY AND FLEX LNG

Small isbeautiful


Floating units that freeze natural gas so asto form liquefied natural gas (LNG) off-shore and then prepare it for offloadingand further transportation on keel to themarket will generate these new options –options that have not previously existed.

Some 2,500 offshore gas fields containnatural gas that can be converted into 5million tonnes or more of LNG. Less than100 of these are big enough to be devel-oped using conventional LNG onshoreplants. More than 95% of the gas fields are waiting for new solutions.

Some of these solutions will soon beavailable. FLEX LNG, a two-year-old compa-ny whose objective is to commercialise theworld’s first floating natural gas liquefactionunits, and one of the world’s major ship-builders, Korea’s Samsung Heavy Industries,are just three years away from delivery ofthe very first FLNG vessel. Contracts weresigned long ago and the first steel will becut in September next year.

“FLNG vessels are going to change the whole LNG industry,” predicts TrymTveitnes, co-founder and Chief TechnicalOfficer of FLEX LNG. His company isinvesting a lot of money and he knows thatno one else has walked this line before.

SHORTAGE OF GAS

FLEX LNG has ordered not only one butfour new vessels. It also has options toorder additional vessels from SamsungHeavy Industries.

All these vessels will produce, liquefy,store and offload gas. They will be 336metres long and able to store 170,000 m3

LNG – similar to today’s large LNG carriers,and in addition, they have 50,000 m3 con-densate tanks. Their lifetime is expected to be 40 years.

Mr Tveitnes reels off the arguments forthe company’s fresh initiative: “Many haveforeseen a shortage in LNG supply in theyears to come. Many have seen the increas-ing costs for land-based liquefaction plants.Many are aware of the long lead times forland-based plants. Many are aware of thehuge potential of smaller gas fields andassociated gas offshore. And of coursemany have thought about FLNG as a solu-tion.”

But not too many have thought that an offshore medium-scale liquefactionsolution could be cost competitive andthus commercially attractive. Only a fewhave therefore started to develop FLNGconcepts. And indeed only FLEX LNG has so far placed orders for vessels.

The new concept has been developedthrough a close collaboration between the owner and yard, assisted by class.

Samsung’s vice president C. Y. Kim, who is in charge of these new vessels beingbuilt at Samsung Heavy Industries, is notimpressed by the LNG industry’s ability to be frontrunners: “The LNG industry ingeneral has for years been conservative,”he says.

But he is impressed by this leap into a new era and continues; “The newcomer,FLEX LNG, has brought new ideas andthen helped to create new solutions forthis industry. That is very positive. I have a strong feeling that this new concept withan optimised design to comply with variousfield requirements will have its rightfulplace in the market soon after delivery.”

OPPORTUNITIES IN THE FUTURE

Samsung has for years been one of theleading yards for LNG vessels. The yardhas today some 30 LNG carriers underconstruction. Its market share is about35%. Although the yard is among theKorean top three and a major yard global-ly, C. Y. Kim emphasises:

“We are not competing in the mass production market. High value ships areour main focus area.”

Based on this and the fact that Samsunghas a 70% market share when it comes todrill ships and has built ships for produc-ing, storing and offloading oil for morethan 15 years, FLEX LNG is expecting wellsuited vessels to be delivered into a marketthat is already waiting for this solution.

One vessel is dedicated for ProgressLNG, a project offshore Nigeria. A wideapproach to the overall risks of relevantprojects will be taken, and FLEX LNG willalso be looking for opportunities connectedto the actual locations or partners devel-oping the field.

As the demand for gas is expected toincrease, new areas will be explored anddeveloped. The FLNG vessels will be tailor-made to move into these remote areas.

“The new FLNG vessels will allow stranded gas fields to be developed and supply moreLNG to customers,” says C. Y. Kim, vice president (front) of Samsung Heavy Industriesand his senior managers Hae-Ki Jang (middle) and Dong-Il Yeo.

“FLNG VESSELS ARE GOING TOCHANGE THE WHOLE LNG INDUSTRY,” predicts Trym Tveitnes, Chief Technical Officer of FLEX LNG.

15

With new and larger LNG carriers, more gas from the Middle East will be availableto consumers in Asia, Europe and North America. TEXT: PER WIGGO RICHARDSEN PHOTO: OVERSEAS LNG

LNG carriers start new energy era


All in all, some 50 LNG carriers – biggerthan ever before – will transportLiquefied Natural Gas (LNG) from theenormous gas resources offshore Qatar.The very first one, the Al Gattara classedby DNV, was built by Hyundai HeavyIndustries (HHI) in South Korea anddelivered late last autumn. The gas it has

transported has already been used forcooking in Singapore and Japan.

Since the very first LNG carrier with acargo volume of more than 100,000 m3 wascompleted in the early 1970s, these vessels’size and storage capacity have increasedslowly but surely. It took almost 25 years to pass the next milestone of 150,000 m3.

Now, at one stroke, the global LNG carrierfleet has been given a new dimension. Thelargest of the new ships tailor-made for theliquefaction plants at Ras Laffan IndustrialCity in Qatar are some 50% bigger thanany previous LNG carrier.

The Al Gattara is 315 metres long andhas a loading capacity of 216,000 m3. It is

The Al Gattara was the first ship to exemplify the new LNG carrier dimensions. When delivered latelast autumn, it was 40% bigger than any similar ships previously delivered. It was built by KoreanHyundai Heavy Industries for Overseas LNG to DNV class.


the biggest LNG carrier currently sailing.The first of a chain of even bigger vessels is to be delivered later this year. A 345-metre-long ship with a loading capacity of 265,000 m3 will then be the biggest.

EVOLUTION – NOT REVOLUTION

All the new LNG carriers are to be built at the three major South Korean yards –Hyundai Heavy Industries (HHI), SamsungHeavy Industries and Daewoo Shipbuilding& Marine Engineering. This major leapahead is impressive but is not described asrevolutionary – it is more of an evolutionwhen it comes to the containment andpropulsion technology involved.

As a representative of HHI, vice presi-dent Jae-Keun Ha does not see any majornew steps being taken within the foresee-able future: “We have to keep in mind thatthese leaps have been taken due to thehuge gas resources to be exported fromQatar and the new and increasing num-bers of LNG processing trains and receiv-ing terminals being built for this purpose.”

Qatar is already the world’s largestexporter of LNG. Its production capacitywill be some four times greater once allQatargas’ ongoing expansions have beencompleted in two years’ time. Qatar’sexport volume will then be three to fourtimes that of the second-largest exporter.

A whole industry has been involved inmoving LNG transportation to these newheights, but it is still fair to say that theyards in South Korea have played an essen-tial role. So Mr Ha is perhaps in a betterposition than most to predict future devel-opments:

“It’s always difficult to look into thecrystal bowl,” he says, “but the terminalsare the major limitation. We believe that in addition to the Qatar projects, other big projects, such as new ones in Russiaand Iran, will decide their ship capacity in accordance with the project’s total eco-nomics. However, the capacity of theseships is not expected to exceed those ofthe Qatar projects. Terminals will still bethe limitation. Without new investments in existing terminals worldwide, the maxi-mum is 155,000 m3 for worldwide tradeand 170,000 m3 for the Atlantic Oceantrade.”

OPTIMISTIC ABOUT THE FUTURE

There are several reasons for being opti-mistic when you are managing the world’sbiggest shipyard’s LNG unit. The wholeworld needs more energy and availableenergy is the key element for growth anddevelopment. The demand is expected toincrease to new heights and LNG’s advan-tages, such as reduced emissions, cleaner

energy, available resources and promisingprospects, make the yard optimistic aboutthe future.

“Due to some delays when developingthe LNG processing trains in Qatar andthe fact that major new projects have notbeen initiated in other parts of the globe,there is a lack of orders for new LNG carri-ers at the moment. However, we are surethis is temporary. HHI believes the numberof vessels will be doubled by 2015,” says Mr Ha.

He uses other examples to justify thisoptimistic view: “LNG is an important partof the solution when developing one ofthe world's largest offshore gas fields,Stockman. It has not been developed asfast as expected, but it will be developed.At the other end of the scale, new produc-tion floating terminals or vessels to developgas fields of restricted size will also be built.In between, there will be a wide range ofother gas resources to develop.”

The common element is that most ofthe gas resources are located far away fromthe consumers. Liquefying the natural gasand then transporting it by ship is the solu-tion – even more so in the future thantoday.

“The terminals are the major limitation. Webelieve that in addition to the Qatar projects,other big projects will decide their ship capacityin accordance with the project's total economics.However, the capacity of these ships is notexpected to exceed those of the Qatar projects,”says Jae-Keun Ha, Vice President of Hyundai Heavy Industries.

Due diligence offersbanks peace of mind

>Bard Veldhuizen, head of the Ship Financedepartment at Lloyds TSB.

The easiest way for a bank to ensure that a companyinvesting in an LNG project is able to repay credit,

is to perform a due diligence investigation into thefeasibility of a company’s role in the project.

TEXT: ROSIE COLLYER PHOTO: NINA E. RANGØY


In the early 1960s when the trade in LNGbecame significant, plants were located instranded areas and were not served by pipe -lines, which made the cost of treating andtransporting LNG enormous. Constructinga receiving terminal also cost billions ofdollars, meaning that only the biggest oiland gas majors could afford to take part.But at the turn of this century an influx ofsmaller companies began to pop up, manyof whom had profited from the develop-ment of new technologies that simultane-ously helped to reduce the costs involvedin LNG production and transportation.

So gone are the days when the LNGbusiness was regarded as a game for play-

ers with financial clout equal to that ofdeveloping nations. But the more playersthe industry attracts coupled with increasedtechnical innovation, the greater the riskfor a financial institution offering the creditto finance a project.

The easiest way for a bank to ensurethat a company investing in an LNG proj-ect is able to repay credit, is to perform adue diligence investigation into the feasi-bility of a company’s role in the project.Such an exercise should, in addition totechnical issues, cover a thorough reviewof elements such as project management,execution strategy, yard, suppliers and sub-contractors.

“When it comes to straightforward ships,such as tankers, financial due diligence isthe most important element for us, thereisn’t necessarily such a strong emphasis ontechnical information regarding the ves-sel,” explains Bard Veldhuizen, head of theShip Finance department at Lloyds TSB inEngland.

“LNG vessels are a different story how-ever, as the ships vary so widely in terms ofdesign, with varying propulsion systems forexample, or a ship may be fit for one kindof terminal, but not another. So, due dili-gence for LNG tends to be a lot more tech-nical. And then on the floating terminalside of the LNG business, the technology

As technological solutions become ever more complex in the field of offshore LNG, project financiers requirethird party providers of due diligence services to possess both in depth financial and technical know-how.


has to be fully understood during the proj-ect finance assessment.

“What we do here at Lloyds TSB isfinance a whole range of shipping assets,but one of the biggest mistakes a shippingbank can make is to pretend that they area connoisseur of all the technologicalassets, because ultimately we are financialexperts. We do have a dedicatedEquipment Management Team, but eventhey would admit that they don’t have thetechnical background to assess all of thetransactions and projects. So this is why we rely on companies such as DNV to assistus in executing due diligence for LNG-related projects.”

CALCULATING RISK

As cutting edge technology penetrates theLNG value chain, then banks are required

to be even more aware of project-relatedrisks:

“Technical due diligence also enables us to calculate the risks relating to a vesselthat has been re-delivered from its con-tract. We need to know, what’s the rede-ployment capability of such a specialisedvessel? Is it such a bespoke vessel that itcan only be used for this particular proj-ect? If this is the case then from a financialpoint of view it is necessary to structurefinance accordingly, which also applies ifthe vessel actually has a good redeploymentcapability,” according to Mr Veldhuizen.

He continues: “From a due diligenceperspective, many of the transportationsolutions within LNG are quite flexible. So if the re-gasification is planned onboard that means that you actually havevery quick access to the market, and thushigh returns in the short term. But most of these projects tend to be temporarysolutions, as the more sustainable projectslook to build a permanent onshore termi-nal. So we’d very much look at the re-deployment of these assets in the case of a re-gasification vessel.”

GREEN ELEMENTS

LNG is widely perceived as a greenersource of energy, due to its limited CO2

emissions when burned in a gas-firedpower station, which is also a driver for it becoming a more important element of the energy mix for a growing number of nations.

“From our perspective the green ele-ment associated with LNG is a driver. Mypredecessor, for example, just went on tobecome the head of sustainable energywithin the bank, which just goes to showthat within shipping LNG is high on theagenda.

“From a market driver perspective, thefact that LNG is more environmentallyfriendly is an important factor. Also, thehigh price of oil has caused a growingnumber of countries to rethink their ener-gy strategies, to avoid dependence on oil.So there are a lot more import terminalsbeing built,” says Mr Veldhuizen.

GLOBAL SLOWDOWN

The financial turmoil that has hit marketsaround the world has raised uncertainty in the majority of sectors that make up theglobal economy. On a positive note, theEU leaders came to the conclusion thatthey will continue to pursue their climatechange goals despite the economic down-turn. So the LNG market looks set to growin the long term, although in the shortterm it may suffer, as Mr Veldhuizenexplains:

“The global economic turndown willslow down some of the projects simplybecause there is not enough moneyaround. I think that has to be sorted outover the coming months, perhaps even the next year.

“There will definitely be more rulesimposed upon the export credit banks as a result of the injection of capital thatmany of us have received from our respec-tive governments. So it’s the export creditbanks that will take on the huge majorityof the financing of upcoming projects,especially within the onshore business,” he says, and continues:

“It will be interesting to see how manyLNG ships we will need in the comingyears, as coincidently a lot of the LNGimport terminals have been quite delayed.So a lot of the ships that have been specifi-cally built for that trade have been deliv-ered. So the ships are there, the LNG pro-duction facilities are there, and these shipsare being used to basically service the spotmarket right now. And once these importterminals are up and running, then theseships will be used for what they are builtfor. But right now I can’t see anyone goingout ordering new LNG ships on spec,” MrVeldhuizen warns.

But there is still plenty of hope on thehorizon for LNG: “Although the oil pricehas been going down I can’t see it goingdown forever, it is very much tied to thedollar. So as the dollar weakens, the priceof oil goes up, it’s one of the balancingacts you always see. And, if that happens,it will make stranded gas a promisingoption,” concludes Mr Veldhuizen.

Food safety un

nder scrutiny


At the beginning of this year, frozendumplings made in China and importedto Japan were discovered to be tainted withpesticide, causing those affected to experi-ence a temporary illness. The dumplingswere produced by a supplier of JT Foods,the food division of Japan Tobacco, whichalso owns Katokichi. Food scandals such as this one have had severe effects on thewhole frozen food market in Japan.

“The misconduct that caused this andother scandals has made the customerfocus more severe on the whole industry.Customer trust fell dramatically, and salesfell by 40% for the entire frozen food sector in Japan following the scandal. For Katokichi, the reaction caused a salesdecrease of about 85% for a time,” saysKazuo Kobayashi, Executive Vice Presidentfor Katokichi Co. Ltd.

BALANCING COSTS AND QUALITY

Handling the risks of food production,especially after such scandals, is a challenge.Katokichi’s response is to strengthen theirfocus on quality in every link of the supplychain to reduce risk.

“Risk is a broad word. For us the sub-ject is the balance between quality andthe cost of the raw material. That is themain challenge. And, while we won’t com-promise on quality, the cost of food hasgone up, so this has become more diffi-cult. In addition, the competition istough, so we cannot increase our prices,”says Mr Kobayashi.

FOOD SAFETY MANAGEMENT

What Katokichi, now merged with JT Foods,has done is to contract DNV to assess andcertify their production plants accordingto the Food Safety Management Systemstandard ISO 22000.

“The certification is an improvementfor Katokichi. However, we feel this is notenough, and have added further safetymeasures. We have hired additional peopleto control and improve the quality. Wehave invested in equipment to check thefood materials for contaminates, which isvery expensive, and also we have decidedto use a third party which can go deeperinto the quality situation,” says MrKobayashi.

DNV was also chosen to perform severalsecond party food safety audits. About 50audits of manufacturing factories and sup-pliers in Asia and Europe are underway,based on Katokichi’s own quality manage-ment plan and protocol. Also, DNV will cer-tify 20 of Katokichi own plants in Japan tothe ISO 22000 standard by the end of 2009.

Bringing trust backto frozen foodLeading Japanese frozen food producer Katokichi has responded with force to thenationwide food scandals that has troubled Japan recently. The company is leaving nostone unturned to find solutions to improve their food safety management and rebuildcustomer trust. TEXT: ANDERS ØVREBERG PHOTO: DNV

Mr Kazuo Kobayashi, Executive VicePresident for Katokichi Co. Ltd., isfocusing on food quality and safetyby implementing a number of activi-ties throughout the global Katokichiorganisation.

KAZUOKOBAYASHI


CAUSE FOR SCANDAL UNKNOWN

The cause for the dumpling scandal hasnot yet been discovered.

“It’s still unclear to us what happened.At the time, there were many problems inChina, especially with how to control foodproduction. JT Foods informed us through -out, as Katokichi handled some food fromthe same factory in China. Immediately,we stopped selling all foods from that fac-tory, and issued a nationwide food recallof the affected products. We also issued a press release, stating what our countermeasures were. The openness in this eventwas dictated by our number one concern,which is the health risk to customers,” saysMr Kobayashi.

Still customers in Japan are doubtful of imported food, and the recent babymilk formula scandal in China will do littleto build trust. However, Katokichi’s actionshave been met with positive reactions bothin the industry and among the public.

FOOD INDUSTRY TRENDS

According to Mr Kobayashi, the food producers in Japan are now looking forsafer foods in order to survive in the market. Smaller companies may nothave the resources to follow this trend.

“The investments we have made in thequality assurance of every aspect of foodproduction are expensive. Small compa-nies cannot invest in these measures,which means that in this severe marketthey cannot survive,” says Mr Kobayashi.

Of course, as Katokichi and JT Foodsare merged under the ownership of JapanTobacco, the new company is larger andstronger than ever. Mr Kobayashi pointsout that one of their main strengths now is purchasing.

“We can purchase food materials andmake many different types of products,and we have a strong sales presence in themarket for our products. JT Foods is alsostrong within the development of new food

products, and as JT Foods and Katokichihave merged under the Katokichi brandname we find that our two product lineshave good synergy; there are no conflictsbetween the two product selections. Withthese synergies, we believe that we will bethe number 1 company in Japan withinfrozen food,” says Mr Kobayashi.

EXPANSION

While the main market certainly is Japan,Katokichi now eyes expansion possibilities.“We want to expand to oversees markets,but are still not sure which area is mostprofitable; Europe, USA or Asia,” says MrKobayashi.

So you can expect Katokichi products to hit the frozen food section of your localsupermarkets quite soon, and behindthose products there is an unflinchingcommitment to quality.

Facts about KatokichiCO. Ltd.: � 50 years ago, the company started

with frozen food. (Frozen rice) � Bought by Japan Tobacco (JT)

December 2007. � JT has also a food division, JT

Foods, and now the two companiesare merged under the name of Katokichi.

� The new food group has a total of 5500 employees.

� About 60% of turnover is frozen food.

� The group has 16 factories in Japan. Overseas Katokichi has six factories, mainly in China.


The Toro facility has been expanded ninetimes since 1967 and now has a floor spaceof 43,000 square metres. The company hasinvested almost MNOK 500 in automationduring just the past decade. Nonetheless,the 370 employees still have enough to doand enough to taste. Flavourists – tastejudges – are on the payroll. Toro’s work isall about what the products taste like, andthe human element cannot be avoided.

TASTE AS A TOOL

“Taste is one of our tools. Toro is a pio-neering company here, and unique in thisindustry,” says Magne Sjøbakk, QualitySystem Manager in Rieber & Søn. Heemphasises that Toro’s taste departmentand laboratory are essential to the company.A separate process department’s goal is to

be the best at ‘Norwegian taste’ and, on aworldwide basis, Rieber’s goal is to be the‘local taste champion’.

“This is where we boil the meat, fishand other ingredients that form part ofour recipes,” explains Factory ManagerJan Arne Vevatne. “We develop the basictastes for our own products here and wesell these tastes as ingredients to otherindustries. We export a lot of tastes andfinished products such as soups andsauces in paste form to major consumers,such as hotels and restaurants. We pro-duce more than 100 tonnes of these prod-ucts to the French market,” says MrVevatne, who underlines that a product isnot released onto the market unless it isbetter than those of Toro’s competitors.

“Our flavourists play key roles in bothdeveloping new products and maintainingold ones. We also test all our raw materialsagainst a benchmark sample. And in thesame way as for machines that have to becalibrated, we also calibrate our flavouristsevery year.”

TRACEABILITY AND FOOD SAFETY

The Toro products are made according to750 recipes and contain 450 different rawmaterials bought from all over the world. Itis obvious that there may be many threats tofood safety. 60 major raw materials accountfor 80% of the ingredients used. Therefore,samples are taken of all the raw materialsand checked in the laboratories.

“It must be possible to trace all the rawmaterials back to their place of origin and

Local taste

championRieber’s Toro factory outside Bergen in Norway manufactures 700,000 packets of soup,sauce and other quality food a day. Robotised, automated, efficient and – not least –huge investments – are key words for this well established company, which puts quality,food safety and local taste at the top of its agenda. TEXT: HARALD BRÅTHEN PHOTO: NINA E. RANGØY


growth,” says Mr Sjøbakk. “For example,when we use chicken meat, we know wherethe chickens came from, what kind of feedthey have been given – and if relevantwhat kind of medicines they may havebeen given.”

X-ray detectors check the products thatare being sent out and immediately removestones, hard plastic and glass. A small stalkcould get through, but everything possibleis done to deliver completely clean prod-ucts. Toro has a revolving 12-month produc-tion schedule and promises a 98% ability todeliver to its four main Norwegian cus-tomers.

BENCHMARK AND SUPPORTER

Rieber was one of the first food compa-nies in Norway to introduce certificationwhen the Toro factory was certified inaccordance with a Danish standard asearly as in 1994. The factories in theCzech Republic and Poland are certifiedby DNV. Now all the other factories willgradually be certified by DNV.

“We want to try to get more out of the cer-tification by sticking to one certificationbody,” says Mr Sjøbakk. “When we’re surethat the measurement systems are the samewe can benchmark our various factoriesagainst each other. We also see that thecertification body can be a useful help and support, suggesting areas for improve-ments to our systems. Annual top-levelmeetings will provide the quality assurancework with the necessary authority and giveus a better overall picture of the ‘threats’that we as a company are facing.”

ISO 22000 GAINING GROUND

Consistency and effectiveness are impor-tant, and Rieber was interested in DNV’sRisk Based CertificationTM approach.

“The ability to listen and to adapt thecertification to what is important and toour needs, is crucial for success,” says MrSjøbakk. He states that, to Rieber, speakingthe local language and having local audi-tors were important criteria when DNV waschosen. On the whole, Rieber has used theQuality Management System standard ISO

9001 and the Environmental ManagementSystem standard ISO 14001, but businesssector standards such as the British RetailConsortium Standard (BRC), the DutchCertification Scheme for HACCP basedFood Safety Systems Hazard AnalysisCritical Control Points (HACCP) standardand Germany’s International FoodStandard (IFS) have also been used.

“We now see that the whole industryis maturing and approaching a commonstandard. The ISO 22000, which is a stan-dard for food safety management systems,will probably form the core of all our certi-fication in the future, although still withlinks to the BRC and other existing stan-dards,” according to Mr Sjøbakk.

A research collaboration is establishedbetween Rieber and DNV Research andInnovation concerning new inspectionmethods. A company that wants to ensuregood taste – in the future too – has a lot to look out for.

“THE ISO 22000, WHICH IS A STANDARDFOR FOOD SAFETY MANAGEMENT

SYSTEMS, WILL PROBABLY FORM THECORE OF ALL OUR CERTIFICATION

IN THE FUTURE.”


� Rieber & Søn is one of Norway’s leading

food conglomerates.

� Its main markets are Western Europe and

Central and Eastern Europe, where the

Group has considerable market shares in the

retail grocery sector.

� Aims to be the Local Taste Champion in its

main markets. Attractive and sought-after

food products based on consumer require-

ments are developed through their knowl-

edge of established eating habits.

� The Group has a workforce of 4,000

(of whom 1,050 are in Norway),

production plants in seven countries

and sales and marketing offices in a

further six countries.

! Facts about Rieber & Søn: An international food group

While Toro products are dehydrated and do not contain preservatives. Rieber in Norway recently entered the fresh food industry with dinner dishes under the trade name “Velbekomme” (Enjoy your meal). This is an area where food safety is extremelyimportant.

“When dealing with, and distributing a fresh product we are very vulnerable. Food safety is vital,” says Magne Sjøbakk,Quality System Manager in Rieber & Søn. “Velbekomme” is a complete dinner that is intended to provide just as much energyand enjoyment as a normal dinner. Up to now, this has been a huge success which has achieved new sales records month aftermonth.

Fresh goods

“WHEN DEALING WITH, AND DISTRIBUTING A FRESH PRODUCT WE ARE VERY VULNERABLE. FOOD SAFETY IS VITAL.”

Magne Sjøbakk, Quality System Manager in Rieber & Søn.

Vietnam on the moveVIETNAM IS ENDEAVOURING TO REACH ITS GOAL OF BECOMING ONE OF THE WORLD’S LEADING SHIPBUILDING NATIONS.

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Striving to move higher upthe shipbuilding league tableVietnam is endeavouring to reach its goal of becoming one of the world’s leading ship-building nations. There has already been substantial investment in modern shipbuildingequipment and practices, and orders worth USD billions have been secured. Now thefocus is on training and education to enhance the development of the country’s compe-tency and capacity. TEXT: STUART BREWER

The growth of Vietnam’s shipbuildingindustry over the past few years has beendescribed by market observers as ‘remark-able’ and, in spite of its record-high infla-tion, the Vietnam Shipbuilding IndustryCorporation (Vinashin) remains confidentthat it will become a major force in ship-building.

“As reported in the media, Vietnam, like other Asian countries, is sufferingfrom high inflationary pressures and thishas resulted in some credit challenges forus. However, we have the backing of theVietnamese government and will continuemoving towards our goal of becoming theworld’s fourth largest shipbuilder by 2015,”states Mr Nguyen Quoc Anh, CBO ofVinashin.

EXPLOSIVE GROWTH

Indicating the explosive growth ofVietnamese shipbuilding, Vinashin, which

controls the majority of the country’s shipyards, has registered annual growth in excess of 30% over the past ten years.Starting with landmark orders placed byGraig for handymax bulkers, the state-runshipbuilder has bagged orders worth USDbillions from other owners such as MPCMarine, Clipper and Ray Car Carriers.

The growth of Vinashin as an interna-tional shipbuilder has, however, requiredlarge investment – and the shipbuilder’sdebts have mounted, with Vinashin invest-ing not only in shipbuilding but also in awide variety of other ventures to build upmarine machinaries as supporting industry.As a result of credit difficulties combinedwith high steel prices, Vinashin has beenforced to cut back on non-core projectsand to concentrate, instead, on its ship-building projects.

“We have the support of the governmentand investment banks so it’s business as

usual for Vinashin’s shipbuilding inter-ests,” emphasises Mr Anh. “Our shipownercustomers can rest assured that we will notonly build their ships to a good qualitystandard but will also grow and makeVietnam a substantial shipbuilding nation.”

With new shipbuilding facilities comingon-stream, it is anticipated that Vinashin’snetwork will include 33 shipyards by 2010.At the same time, Vinashin is investingheavily in extensive shipyard modernisationat many of its existing yards.

BRIDGING THE GAP

“The shipbuilding industry in Vietnam isstill lagging behind that of other countries,particularly the major nations Korea,Japan and China,” says Mr Anh, addingthat “To bridge the gap, Vinashin hasinvested millions of dollars to improve itsshipyards through modernisation andincreased efficiency and rationalisation.”

33

Vinashin has ambitions to become the world’s fourthlargest shipbuilder over the next decade, compared to itscurrent sixth position. In the space of just a few years, theindustry has made the transition from a builder of smallvessels for local use to a competitive player in the interna-tional market for an increasingly diverse range of ships upto the 100 000dwt category and beyond.


He adds, “We will continue to invest inthe hardware but we also need to invest inpeople and enhance our competency andcapacity.”

Vinashin has hired DNV as a strategicpartner to develop a three-year trainingprogramme for the state shipbuilder’smanagement and staff. It is supported bythe Norwegian Agency for DevelopmentCooperation, and more than 1,200 peoplewill be trained each year.

”The utilisation of advanced technology isimportant but is not enough. Only throughcollaboration with well-reputed internation-al companies like DNV and its Academy canthe shipbuilding industry in Vietnam seefurther development,“ says Mr Anh.

COLLABORATION PROJECT

In a separate initiative, this June saw thelaunch of what is dubbed the ‘TwinningProgramme’ between Vietnam MaritimeUniversity (Vimaru), Vinashin, Marintek inNorway and DNV. The objective is to enableVimaru to meet the technical needs of thecountry’s shipbuilding industry in areassuch as naval architecture education andresearch and development.

“One of the main aims of the collabora-tion is to hire teaching staff and experts

from Norway,” says Dr. Dang Van Uy, thePresident of Vimaru. “Indeed, internation-al projects such as this one are extremelyuseful as they significantly contribute toimproving the quality of our education,training and scientific research activities,”he points out.

Established in 1956, Vimaru has playedan important role in the provision of man-power to the shipping and shipbuildingindustry. It currently runs about 30 highereducation degree programmes and enrolsabout 2,300 students each year to meet thegrowing industry needs.

“Recently, Vimaru has been activelyengaged in the exchange of researchersand conducting joint research with foreignuniversities in the fields of maritime scienceand technology, shipbuilding and seaport & ship operations,” says Mr Truong, addingthat “This work is helping to support theindustry, but we need more assistance fromour international business relations if weare to further develop our education andtraining to meet future industry needs.“

POTENTIAL GROWTH AREA

Some time ago, DNV identified Vietnam asa potential growth area for shipbuilding tofollow on from China. “DNV has the tech-

nical know-how and managerial capabilityto help yards improve their shipbuildingcapabilities,” says Dr George McHenry, theHead of the DNV Academy in Vietnam.“We find there is a willingness to learn andinvest in new technology. However, there isa gap between academia and the needs ofthe industry, mainly due to the capabilitiesand lack of capacity within the academicsector.”

DNV is probably the most importantclassification society for Vietnam’s fastexpanding shipbuilding industry, account-ing for approximately 80% of the country’stotal order book. “Our order book has sur-passed 2 million grt and by the end of thisyear we expect the number of orders toDNV class to reach 80 vessels,” says DrMcHenry.

Commenting on DNV’s role in Vietnam,Mr Anh says “DNV is an important partnerfor us, not only supplying traditional classi-fication services but also helping us withour expansion, not least on the trainingside,” he says and concludes, “Indeed, weremain bullish on our prospects for thefuture. With the help of international part-ners like DNV, we are confident that wewill be able to move higher up the ship-building league table.”

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Vietnam Maritime University (VIMARU)and the Vietnam Shipbuilding IndustryGroup (VINASHIN), and Norway’sMarintek and DNV have agreed to collabo-rate in a cooperative project to enhancecapacity development in Vietnam.

“The success of this project, dubbed theTwinning Programme, will create a plat-form to enhance competency and capacitywithin the maritime and offshore sector inVietnam by adopting the latest know-howand state-of-the-art technology in education,training and R&D collaboration,” saysGeorge McHenry, Head of DNV Academyin Vietnam.

The parties recently signed aMemorandum of Understanding (MOU)in Oslo. The objective is to strengthen thecapability and capacity at VIMARU to meetdemands and requirements at an interna-tional level and from industry in Vietnam,as represented in particular by VINASHIN.

Mr McHenry emphasised that Vietnamis a fast developing country where the ship-building sector is one of few prioritised bythe government to lead the socio econom-ic development of the country.

“Because of the strong growth in themaritime and shipbuilding sector, Vietnamstudents have a unique opportunity to getfirst hand experience to be engaged inlarge scale production of commercial tonnage, which is not the case in muchof Europe, but knowledge and skills devel-opment is strongly required for this to takeplace,” he said.

STRATEGIC PARTNER

One of the main aims of the cooperationaccording to Mr McHenry is to engageteaching staff and experts from Norway in order to develop curriculum activitiesand R&D activities between the parties,and at the same time ‘engage VINASHINas strategic partner’ to meet local require-ments to secure a sustainable future forthe Vietnamese shipping, offshore andshipbuilding sectors. Through this initia-tive DNV also makes a corporate responsi-bility impact on the education of navalarchitects in Vietnam.

DNV has also committed to assist in thedevelopment of Vietnam’s shipbuildingindustry through a 3-year training pro-gramme for VINASHIN shipyard manage-

ment and staff. “DNV is committed to fur-ther developing Vietnam’s shipbuildingindustry to ensure its products satisfy inter-national rules and standards. To this end,we have jointly developed a 3-year trainingprogramme for all VINASHIN shipyardstaff. Supported by NORAD (theNorwegian Agency for DevelopmentCooperation) more than 1,200 peopleeach year will be trained in differentaspects of shipbuilding,” said Mr McHenry.

“DNV is an important partner to us, not only supplying traditional classificationservices, but helping us with our expansion,not least on the training side,” said PhanThanh Binh, Chief Executive Officer ofVINASHIN at the signing ceremony.

Collaboration with VIMARU andVINASHINCollaboration between Vietnamese and Norwegian interests aims to enhance competency and capacitywithin Vietnam’s maritime, offshore and shipbuilding sectors. TEXT: STUART BREWER PHOTO: ANDERS ØVREBERG

George McHenry, Head of DNV Academy in Vietnam.


“Here in Augsburg, Germany alone, we areplanning to triple production between 2006and 2015,” says Dr. Ing. Gottfried Braun,the senior vice president responsible for

quality assurance and the entire classifica-tion process related to ship engines.

“We manufactured 120 engines a yearin 2006. This will increase to 180 in 2008,230 in 2010 and 350 in 2015. While weused to take four weeks to build anengine, we now need to make it in onlyten days. To achieve this growth, we mustchange our production process complete-ly, improve at every stage and make majormodifications to the factories here atAugsburg. We are investing Euro 100 mil-lion here alone in complete rebuildingwhich includes a new production assem-bly facility, painting work, testbed and alogistics centre.”

Dr Braun has 110 employees in his unit,which is responsible for Group quality. His

staff are located in Germany, Denmark,France, the UK, India, Korea and China,where MAN Diesel manufactures its ownengines either at own production facilitiesor at licensees. MAN can look back on sev-eral long-term collaborations with licensees,such as those with Japan’s Kawasaki since1911 and Mitsui since 1926.

“We are also preparing for the fact thatChina will almost certainly become theworld leader in shipbuilding in 2010, aftermany booming years,” says Dr Braun.

CO2 AND ENERGY CONSUMPTION

CO2, NOx and reduced energy consump-tion are hot topics for MAN. MAN Dieselis relaunching its portfolio, making all itsengines compatible with the limits estab-

Dr. Ing. and senior vice president forMAN.

GOTTFRIEDBRAUN

Despite the global financial turbulence, the order books have never been fuller. 250-year-old MAN Diesel expects to grow until 2015 and then to level off at a high level. TEXT: HARALD BRÅTHEN PHOTO: MAN

MAN for the future


lished by the International MaritimeOrganisation (IMO) in its Tier II regula-tions. The relaunch is seen as an historicmilestone for the company, and one whichpreempts the January 2011 implementa-tion of the new IMO NOx emission limitsby some time.

“What we have done is a complete opti-misation of the engine-installation, whetherelectronically or mechanically controlled,”says Dr Braun. “The main focus, of course,is on environmental challenges such as cut-ting emissions and the use of bio-fuels. “Itis a milestone, we have been working forthis for many years,” he says.

In addition to these optimisationsMAN Diesel has launched a new large-bore Dual-Fuel engine, the 51/60 DF. “We are proud to have the type approvalof all major classes for this important newmarine engine. The approval comprisesthe engine and a very comprehensivesafety concept for the engine room,” heexplains.

Having addressed Tier II, MAN Diesel willnext start to focus on the Tier III regula-tions, the successor to Tier II, which aredue to come into force in a decade.

FULL FLEXIBILITY EXTREMELY IMPORTANT

MAN Diesel works with all the major classi-fication societies. Dr. Braun describes DNVas one of the most progressive of them andsays: “DNV offers a very good businessmodel for the self responsible class accept-ance – the Manufacturing SurveyArrangement (MSA). It is extremely impor-tant for us to have the full flexibility in ourproduction. DNV has very experienced andgood surveyors, and state-of-the-art rules.We have great expectations for the futureincluding electronic certificates to be issuedat site directly after the survey. DNV shouldalso inform the engine makers continuouslyabout the design of new rules, so the rulescould be in-situ optimized in cooperationwith the engine builders. DNV should alsoput pressure on the International

Association of Classification Societies(IACS) to create state-of-the-art IACS rules.”

POWERING THE WORLD

‘Powering the world’ is MAN’s slogan, andwith its 250-year history MAN is clearly acompany for the future too. And althoughthe future is bright, it does contain chal-lenges. With worldwide production andlarge and small subcontractors, a lot has to go right.

“We must make sure we have a goodstaff and trained personnel. We must alsoalways make sure we have enough parts,”says Dr Braun. “For example, it’s difficultto obtain enough crankshafts, and this is a key to success. Ensuring we have enoughcomponents at the right time, at the rightplace, in good condition and with theright quality is a major strain. But we’vemanaged to do this for 250 years, and we’llno doubt also manage it in the future.”

Rudolf Diesel was born 150 years ago and startet his first diesel engine in Augsburg when he was 35. ‘Powering the world’ is MAN’sslogan today, and the company is now investing Euro 100 million in complete rebuilding which includes a new production assemblyfacility, painting work, testbed and a logistics centre.


“ You should be a little bit proud.” is thefirst thing Harald Stubert says to DNVForum as he provides a warm welcome at Ericsson’s global headquarters inStockholm, Sweden. “No other certificationcompanies are allowed here.” Qualifyinghis statement he adds that while Price -waterhouseCoopers is the financial auditor,on the operational side DNV is alone atEricsson.

Mr Stubert then launches into anenthusiastic description of the Ericsson

Global Management System (EGMS) – asystem used in all countries where Ericssondoes business and certified by DNV globally.The EGMS is applied in all Ericsson unitsfor the purposes of describing and manag-ing their way of working. It is a templatefor a ‘one company’ view, and it is consis-tently applied in every Ericsson operation,providing the framework for achievingoperational excellence.

DELIVERING TO THE CUSTOMER

“Most companies go local and get localcertification,” he explains, “but that’s notmeaningful to us. That would be very scat-tered. We want to follow the processesfrom the top to the customer. In a companyyou have a lot of processes, but there isonly one process that is generating money.That is to deliver to the customer.”

Many of Ericsson’s customers are alsoglobal in scope, for example Vodafone andDeutsche Telekom. That means that theyare Ericsson customers in many differentcountries, and they want the same deliveryeverywhere.

“Our way of ensuring this is by having a global management system – and bygetting global assessment and certificationby DNV,” says Mr Stubert.

Few competitors can compete in as manycountries as Ericsson can. For GSM – todaythe most common mobile system – Ericssonhas approx 40% of the global market. Thereare 20 new mobile subscribers in the worldper second. Says Mr Stubert, “40% ofthose will call on an Ericsson system.”

UNUSUAL BACKGROUND

Mr Stubert does not have the technicalbackground like most of those working forEricsson. He comes from a career in con-sulting. He has degrees in psychology andteaching, which have been very useful headmits: “Information is very much adminis-tration. That is something that you have inthe back of your mind. Ericsson is a verytechnical company. We have lots of peoplewho know everything about technology,but when you come to implement e.gInformation Security or CorporateResponsibility, you find very few people who

Beyond compliancewith EricssonGlobal companies are heading toward a paradigm shift beyond pure compliance, believesHarald Stubert, head of operational assessment and certification at Ericsson.

TEXT AND PHOTO: KAIA MEANS PHOTO: ERICSSON

Head of operational assessment andcertification at Ericsson.

HARALDSTUBERT

39


understand how to do it. You find manywho think that these subjects are very inter-esting and very important, but you have tohave the tools to do it.”

This is where Mr Stubert and DNVcome into the picture. He works closelywith DNV’s London-based Jack Atamianwho is the Key Customer Manager forEricsson. He manages a team of some 25people belonging to the global assessmentresource pool for the Ericsson account.

Traditionally certification has beenabout to-the-letter compliance according

to a standard. Ericsson, however, uses therelevant management system standards asa reference framework for good practice,and addresses their intentions within thecontext of the Ericsson business and cul-ture to support the ‘way of working’.Where certification is demanded by thecustomers and considered appropriate,Ericsson demonstrates compliance withinits global management system (EGMS).Currently, Ericsson holds global group certificates to ISO 9001 (quality) and ISO14001 (environment), as well as OHSAS

18001 (occupational health and safety)and ISO 27001 (information security) inspecific areas. The EGMS is therefore usedas the vehicle for addressing many require-ments in the business, and using ISO 9001as the basic framework, other relevantperspectives are managed within the samesystem. Effectiveness and compliance aresystematically verified through assessmentsinternally as well as by DNV.

The global management system is alsouseful when Ericsson acquires new compa-nies, such as Marconi in 2005 and

Few competitors can compete in as many countries as Ericsson can. For GSM – today the most common mobile system – Ericsson has approximately 40% of the global market. There are 20 new mobile subscribers in the world per second. Here is CEO and President of Ericsson, Carl-Henric Svanberg.


Tandberg Television in 2007. “Even if webuy relatively big companies, the totalforms a minor part of global Ericsson. Mostcompanies already have some sort of ISOcertification. We immediately take this toDNV and include them in our setup. Thismeans we have a much more dynamic sys-tem,” says Mr Stubert.

THE FULL CONTEXT

“Take for example Tandberg, which wasalready certified by another certificationbody prior to becoming part of Ericsson. If we had let them keep their existingarrangement, that would have meant thatanother certification body would examinejust Tandberg in isolation of the widerview. Perhaps they would come up with a non-conformity based on lack of under-standing of the full context. Then thatwould have created big problems. For us,it’s important that they are integrated inan effective way in Ericsson. We can askDNV about that. They can see the wholepattern,” he says, continuing:

One example of the usefulness of theEGMS is the way it deals with the AmericanSarbanes-Oxley Act (SOX) of 2002, a federal US law created in response to themany accounting scandals. Businessesquoted on US stock markets must complywith SOX. Instead of creating a separateSOX system Ericsson has included therequirements in the EGMS and applied it globally, in preparation for similar lawswhich are predicted to come in Europeand other countries.

Another example of the value of the system has been seen in relation to selec-tion of suppliers. Earlier this year mediauncovered unsatisfactory working condi-tions at suppliers to Telenor and Ericssonin Bangladesh. Ericsson has a systematicapproach to supplier evaluation and selec-tion within the EGMS. Therefore, suppliersin China, India and Brazil are focussed forgreatest effort. It is interesting to note thatan assessment of operations in Bangladeshhad been planned some six months aheadin the annual global assessments of the

EGMS, and scheduled for June with specif-ic focus on the supplier interface issues.

PARADIGM SHIFT

Mr Stubert says that other global compa-nies that have been doing things in the‘old’ way are now seeing the value ofEricsson’s setup. “I know that other com-panies want it because they call me,” hesays. “I’ve talked to several companies. Ithas to be described as a paradigm shift.”

WORTH IT

Ericsson pays for the total DNV effort ofservice delivery and the global manage-ment of it, with Jack Atamian doing a lotof work that other companies are doinginternally. “We’re very satisfied with thisarrangement. Is it worth it to invest in this?And it’s our conclusion that it is,” says MrStubert.

� Ericsson is a world-leading provider of tele-

communications equipment and related

services to mobile and fixed network

operators globally.

� Over 1000 networks in 140 countries utilise

their network equipment and 40% of all

mobile calls are made through Ericsson

systems.

� Origins date back to 1876. Headquarters

are located in Stockholm.

� Global workforce of approximately 74,000

of which about 20,000 are in Sweden.

� R&D activities in 17 countries. Has the

industry’s most comprehensive intellectual

property portfolio containing over 22,000

patents.

� 24 market units covering 169 countries.

! Facts on Ericsson

42

43

Taming windand waves

“We’re a new entrant in offshore wind, and it’s fun to be shakingthings up a little bit.” says Anne Strømmen Lycke, StatoilHydro

vice president, wind power. “We’re bringing in new ideas andusing all our experience from offshore oil and gas.”

TEXT: KAIA MEANS PHOTO: STATOILHYDRO


Since so much resistance to wind powerhas centred on concerns about aesthetics,the need for space and potential environ-mental concerns, much hope rests on theHywind project, in which many of theseissues are mitigated. There are a decliningnumber of onshore and shallow-water sitesavailable. In addition, there are some areasthat have very limited or no shallowshelves to use, such as California, Japanand Norway. The questions remaining are,‘Can it be done?’ and more specifically, ‘At what cost?’

That remains to be found out, as thewind turbine is scheduled to run for atwo-year trial period.

WORLDWIDE INTEREST

Ms Lycke believes that floating wind tur-bines can one day be an important sourceof cost-efficient renewable energy – withparks full of 100 meter tall turbines inoceans across the globe.

“We’ve had a lot of people calling usabout the possibility of future offshorewind turbine parks in their countries,” says Ms Lycke.

A delegation from StatoilHydro recentlyaccompanied the king of Norway on anofficial visit to Portugal, and learned aboutthe innovative Portuguese programmes tosupport offshore wind development.

“We think this will be a new icon, sym-bolising our company’s technology, innova-

tion and ability to look in new directions.It is opening up a whole new business areain the world,” she says of the NOK 400 mil-lion project. ”It’s easy for us to find part-ners – and that’s always a good sign”.

The power platform uses a floatingstructure known from the oil and gasindustry, a technology that StatoilHydrohas years of experience with secured withthree anchors in waters from 100 to 700meters deep. The sites available for off-shore wind parks are thereby multiplied.Although the platform is full size, engi-neers have settled for a relatively small,conventional turbine.

“We want to test the concept, so we’reusing a 2.3 MW Siemens turbine. It’s one of the world’s most tested turbines, so we’resure it will work properly,” says Ms Lycke.

A smaller scale model has been testedin a water tank at Marintek in Trondheim.Technip will deliver the sub surface float-ing element, and Nexans will lay the sub-sea cable to land. Engineers will be able tocontrol the turbine remotely, adjusting theangle of the rotors in relation to wind andwaves. All of the data will be recorded andused in the two-year research project. Theelectricity generated will be delivered toHaugaland Kraft.

“The interaction between the wind and waves will be exciting to see,” says Ms Lycke. “If it is as successful as we think it will be, there will be no reason why weshouldn’t decide to let it continue to pro-duce electricity after two years have passed.”

The turbine is designed to have a lifes-pan of 25 years, but already StatoilHydro is working with partners – among others,

Hywind Pilot specifications

� Turbine capacity: 2,3 MW� Weight of turbine: 138 tonnes� Turbine height: 65 m� Rotor diameter: 82.4 m� Floatation element draught below sea

surface: 100 m� Total weight: 5300 tonnes� Diameter at sea surface: 6 m� Diameter of floatation element: 8.3 m� Sea depth range: 120 – 700 metres� No. of anchor moorings: 3

Impressive towersTowering 65 meters above water with a rotor diameter of 80meters, StatoilHydro’s planned Hywind offshore floating wind turbine – the first ever of its kind – will be impressive in size. But few people will ever get the chance to admire it in its working life, as it will be towed to a location in the North Sea, 10 km fromKarmøy. That is the whole point.


DNV – to see how the original design lifecan be extended.

StatoilHydro already operates an Arcticland-based wind turbine park at Havøy -gavlen in Finnmark, northern Norway, the world’s northernmost wind turbinepark. The experience of operating the parkfor the past six years in harsh weather con-ditions, including extreme temperatures,has been invaluable. Havøygavlen is jointlyowned with the Dutch company Nuon.

The European Union has stated that20% of its energy should come fromrenewable sources by 2020. Ms Lyckethinks this will be a challenge. But someEuropean countries, such as the UK, areinvesting large resources into making thishappen. The UK is about to go ahead witha third licensing round for offshore fixedwind turbines, and StatoilHydro is intend-ing to make a bid.

POLITICAL GOODWILL

Before offshore wind energy can really getgoing, politicians have to make some keydecisions.

“There’s a lot of political goodwill inNorway for wind energy, and that’s impor-tant. The previous petroleum and energyminister did a good job of promotingNorway, and focusing on the possibilitiesfor becoming a big exporter of renewableenergy. But to develop offshore wind youneed laws and regulations for it that wedon’t have now. We have also asked for a licensing system similar to that used forthe oil and gas industry, which would solvesome of the usage conflicts,” she says.

The power generated from offshorewind turbines will be more expensive toproduce than the current market price. Ms Lycke expects that state subsidies willbe needed to support the greener energy,but how much remains to be seen.

If wind parks are built in four NorthSea blocks, she says, the energy generatedwill equal the production from the OrmenLange field, which produces 22 BCM. Thatis equal to 20% of the UK’s natural gasconsumption.

Hydro had 10 years of experience withwind energy before the merger with Statoil.

“Wind energy has really been supported inthe new company,” says Ms Lycke. “There’sa real focus on technology and innovationhere, and this fits in very well. The combi-nation of Statoil and Hydro has made usstronger in renewable energy. We have abroader portfolio and a more pronouncedfocus on technology. Our main focus areasare CO2 management, renewable powerproduction and sustainable biofuel.”

StatoilHydro takes part in a wave energyproject where three floating test devicesoff the coast of Portugal use pressure fromwave movements to generate electricity.Also, an underwater turbine that harveststidal energy has been running in Finnmark,north of Norway for five years with goodresults – owned by Hammerfest Strøm ASwhere StatoilHydro is main shareholder.

“Commercially, that’s very interesting,since the tide is moving all the time. It’s a lot easier to sell into the electricity grid,when it’s a stable production,” says MsLycke.

Hywind is a new concept for producing wind

power offshore in deep waters. Hydro’s Dag

Christensen got the idea when observing a

buoy during a sailing regatta in 2001. “If we

make that 100 meters tall instead of four, then

we could have a windmill tower,” he thought

to himself. He discussed the idea with his col-

league Knut Solberg, and they drew a sketch on

a serviette. He realised that Norway could be a

major producer of wind power after calculating

that one windmill per km2 in an area of the

North Sea of 70 km by 70 km would double the

nation’s electricity production. Since 2001 the

project has been through various research phas-

es. StatoilHydro announced earlier this year that

it will build the world’s first full-scale floating

windmill, to be installed in the North Sea out-

side of Karmøy in the autumn of 2009.

! How Hywind began

The European Union has stated that 20% of its energy should come from renewablesources by 2020. Ms Anne Strømmen Lycke thinks this will be a challenge.

A restricted area around the dam in Kelbra, Germany, was set up after bird flu was discovered in dead wild birds July 2007.

ManagingbioriskBiorisk is a hot topic due to the threats from bioterrorism and natural outbreaks of diseases such as bird flu and SARS. In an effort to address this vital issue, DNV is helpingfacilities and organisations better understand and manage biorisk. TEXT: STUART BREWER PHOTO: JENS-ULRICH KOCH/AFP/GETTY IMAGES

47


Over the past six years, DNV has workedwith a number of internationally recognizedinstitutes and companies in conductingaudits and risk assessments of their biocon-tainment facilities. This work has coveredlaboratories from biosafety level 2 to 4,and have included, The Swedish NationalInstitute for Infectious Disease, The WorldHealth Organisation, The EuropeanCommission and Eijkman Institute, theleading national laboratory in Indonesia.

NOT WITHOUT RISK

According to Dr Stephen McAdam, BioriskProgramme Director in DNV Research andInnovation many facilities conduct research,diagnostic and production activities onmany organisms of serious potential threatto humans and animals, and are designed

to ensure that the risk of worker exposureand release of materials to the communityor environment is minimized. However, thework of such facilities is not without risk andthere have been several cases of laboratoryacquired infections in recent years.

“A feature of these cases is that oftenthere is a failure of the safety managementsystem, as opposed to deficiencies in thefacility and equipment employed,” DrMcAdam points out and adds, ‘It is alsoour experience that in this field a greatdeal of emphasis is placed on the designand construction of the facility itself, butrather less attention can sometimes bepaid to how the facility will be run and thestaff deemed competent with regard tobiosafety and biosecurity.

“This can be partly due to the difficulty

in finding experienced personnel availablein this field, but also a lack of the necessarystructures and frameworks around whichfacilities can build adequate biorisk man-agement systems. Such problems exist inEurope and North America, but can beparticularly severe in developing coun-tries,” he adds.

INTERNATIONAL PROJECT

DNV recently managed an internationalproject to develop the Laboratory BioriskManagement Standard, (CWA 15793:2008)which has a scope to set requirements nec-essary to control risks associated with thehandling or storage and disposal of biolog-ical agents and toxins in laboratories andfacilities. The standard is performance-based and sets out requirements for and

Biorisk – a global issue

© G

etty

Imag

es

The management of biosafety and biosecurity (collectively know as biorisk) have become a vital globalissue, especially in light of the laboratory-acquired cases of SARS in Singapore, Taiwan and China in2004. This is particularly true for operators of biological containment laboratories handling dangerousbacteria and viruses, such as anthrax, ebola and avain flu.


places responsibility on organizations todemonstrate that appropriate and validat-ed risk reduction procedures have beenestablished and implemented. The stan-dard is based on a traditional managementsystems approach. The organization’s abili-ty to deal with the hazards associated withbiological agents and toxins is henceimproved through the identification,understanding and managing a system of interrelated and relevant processes.

Efforts to address this global issue gath-ered momentum in June this year when a regional seminar for South East Asia onPromoting and Implementing Biosafetyand Biosecurity Management was held in Jakarta. The seminar was co-hosted byIndonesia, Norway and the BiologicalWeapons Convention ImplementationSupport Unit, with DNV and EijkmanInstitute as technical organisers. Morethan 70 representatives from 17 countriestook part in the seminar, which also bene-fited from substantive contributions by theWorld Health Organisation, the Asia PacificBiosafety Association, and academia.

NEED TO ENHANCE CAPABILITIES

The seminar did not negotiate any outcomedocuments, but the conveners of the eventmade several observations, including theclear need among countries in the regionto further enhance their capabilities inaddressing these challenges.

Increased co-operation between coun-tries in the region was encouraged.

“Adequate systems to address biosafety andbiosecurity are critical,” said AmbassadorKnut Langeland, of the Norwegian Ministryof Foreign Affairs.

“A number of actors have importantroles in promoting biological safety andsecurity: Governments, professional organ-isations, research institutions, internationalorganisations, and international networkssuch as regional biological safety associa-tions. We encourage partnerships.”

It was also noted that recent initiatives,and in particular the development of theLaboratory Biorisk Management Standard(CWA 15793) provide an opportunity toaddress many areas of concern regardingthe proliferation of biological weaponsand intentional misuse.

Richard Lennane, head of the BiologicalWeapons Convention (BWC) Implemen -tation Support Unit, pointed out that the“spectrum of biological risk runs from nat-urally occurring diseases at the one end,through unintended consequences, acci-dents, lack of awareness and negligence, todeliberate misuse at the other. By lookingat the spectrum it is evident that it is futileto attempt to tackle these risks individually,as isolated threats.”

COLLECTIVE APPROACH

He added, “It is imperative that we meetthis challenge collectively. We need tocoordinate and harmonize our efforts.With this in mind, this seminar is animportant step.”

More recently, the UN held a meetingunder the Biological Weapons Conventionin Geneva to discuss measures to improvebiosafety and biosecurity. The DNV-workperformed in Indonesia, as well as theexperiences and results from the JakartaSeminar was presented. RepresentingNorway, Dr. Paul Huntly, also introduceda well-received position paper on the men-tioned CWA Biorisk Laboratory Standard.

Meeting the requirements of theLaboratory Biorisk Management Standardis likely to further biosafety and biosecurityat laboratories containing harmfulpathogens and toxins according to DrMcAdam. ‘As such, the Standard shouldserve well as a platform for awareness-raising, confidence building, as well astechnical cooperation under the BWC.International standards can also play a rolein the development of national regulations,guidelines and requirements,’ he says.

‘The massive progress made in biotech-nology and moves by organisations to relo-cate their research, development and pro-duction programmes to the emergingworld, also adds to the complexity andpotential for untoward events in Asia andelsewhere,’ warns Dr Huntly and con-cludes, ‘We need to address the issue collectively because there is a large andgrowing need for support in the regionswho are struggling to manage real issues of potential global impact, and such needsare likely to grow in the future.’

Efforts to address this global issue gathered momentum in June this year when a regional seminar for South East Asia on Promotingand Implementing Biosafety and Biosecurity Management was held in Jakarta. The seminar was co-hosted by Indonesia, Norway andthe Biological Weapons Convention Implementation Support Unit, with DNV and Eijkman Institute as technical organisers.

From left, DNV’s Stephen McAdam,Ambassador Knut Langeland, of the

Norwegian Ministry of Foreign Affairs, UN representative Georgi Avramchev,

and DNV's Paul Huntly.


Seismic vessel operations are in demand asoil companies step up their search for oiland gas reserves. Faced with stiff marketcompetition, Polarcus is in the process ofbuilding a young and efficient fleet, which

will access wider geographical markets dueto the vessels environmental advantages.

“We have developed an advanced 12streamer 3D seismic vessel based on aninnovative ship design,” says PeterZickerman, executive vice president ofPolarcus.” All six such vessels will be built atDrydocks World-Dubai and classed by DNV.”

SPECIAL FEATURES

Established in May this year, Polarcus is a pure play marine geophysical companywith a pioneering environmental agenda,specialising in high-end towed streamerdata acquisition from pole to pole. Thecompany is currently building six advancedseismic vessels. Four of these will be capableof towing up to 12 streamers, and two will

be positioned initially as multipurposevessels for 2D/source operations but arecapable of towing up to six streamersaccording to market demand. All six vesselswill feature the ULSTEIN X-BOW® design,along with other important features such as the additional SF class notation for con-trolled stability and floatability, diesel electric propulsion, dynamic positioningand both Comfort and Clean class nota-tions by DNV.

“Taken together, this will provide for asafer, quieter and more professional workenvironment onboard, with the lowestenvironmental footprint of any seismiccompany operating today,” says MrZickerman and adds, “Our vision is to be apioneer in an industry where the frontiers

Moving intRight technology, right competence, and right timing are just some of the key elementsinitiating a series of seismic vessel orders for Dubai-based owner Polarcus. The newlyformed company has developed an advanced seismic vessel based on a novel ship design to be classed by DNV. TEXT: STUART BREWER PHOTO: POLARCUS

Executive vice president of Polarcus.

PETERZICKERMAN

Polarcus is launching six innovative vessels, the first of which will begin operations in Q3 2009. All the vessels will be equipped withhigh-end systems and technology for advanced 3D operations in regions ranging from environmentally sensitive frontier zones to established production fields.


of seismic exploration are responsiblyexpanded without harm to our world andthrough this become the client’s preferredsupplier of choice.”

The new Polarcus vessels have beendesigned for the most challenging offshoreprojects and operating conditions, withclose attention paid to system redundancyand clean air emissions to enable Polarcusto operate safely and efficiently in regions ranging from environmentally sensitivefrontier zones to established productionfields.

IMPROVED EFFICIENCY

The novel design offers several advantagesover conventional designs that will makeoperations more efficient. These includehigher transit speed in head seas, givingreduced power consumption or greaterfuel efficiency. Reduced noise and vibra-tion levels is another advantage, as is nobow flare, eliminating bow impact andslamming.

All the vessels will be equipped with the

latest seismic technology and the latestnavigation and positioning systems.

“The vessels are very high-tech, but atthe heart of any operation are people andthis is equally so of Polarcus,” emphasisesMr Zickerman. “Unlike most other geo-physical companies, we are directly employ-ing both seismic and maritime personnel,thereby ensuring one EHS&Q(Environment, Health, Safety and Quality)management system onboard and eliminat-ing many of the inefficiencies inherent intwo operations.”

He continues, “We are also recruitingsome of the most experienced names inthe business, and we believe we will contin-ue to attract the highest talent into ouryoung company.”

INDUSTRY LESSONS

Mr Zickerman points out that Polarcus iscommitted to implementing from start-up many of the latest industry lessons learnedaround crew welfare, health, and generalwell-being. “Our core values of innovation,

performance, excellence, and respect arealready well established in our companyethos and will enable us to deliver to ourcustomers and shareholders superiorresults and performance that would beexpected of a responsibly and professionallymanaged company.”

Polarcus’s first vessel will be operationalon Q3 2009, with all six fully operationalwithin 2010. Mr Zickerman is confidentthat the company has the know-how andtechnical capability to be a long-term playerin this segment.

“It’s no secret that a number of opera-tors are positioning themselves to enterthis segment with potentially high returns.But this is no business for beginners. Wehave experienced management here atPolarcus, all with excellent track recordsfrom the high-end seismic market,” saysMr Zickerman and adds, “We also have avery high-tech ship, superseding all oftoday’s standards. With our planned earlydeliveries in a booming market, we feelconfident that the timing is right.”

to position


last word!

Unfortunately, large-scale carbon captureand storage (CCS) is still at an immaturestage for both coal and gas. However, thetechnology has the potential to be one ofthe most significant contributors to solvingthe future’s global climate challenges. Andthere is no doubt any longer, the climatewill change.

There is no quick fix, though – mainly dueto a number of risks and dilemmas relatedto CCS, especially the vast number of stake-holders which may have conflicting goals.

Every country faces political risks when itcomes to deciding ways of reducing emis-sions and spending money. Linked to thisare the risks to society of leakage duringtransportation or storage. Also, it has to be decided where infrastructure should bebuilt in order to minimise the risks posedto humans and nature.

Technologically, there are several logisticsrisks, ranging from capture and transporta-tion to storage. The commercial risk relatesto the challenge of building a completenew value chain, in which several stake-holders need to have a balance betweentheir risks and rewards. The power andindustrial plants, transportation infrastruc-ture, and operators of reservoirs and wellswill be driven by totally different players.

A whole new marketplace needs to be cre-ated, with long-term predictable conditions

for everyone, including a transparent deci-sion basis and interfaces that need to bedefined. Otherwise, it will be like dancingto music with an ever-changing rhythm andwith dance partners who don’t always movein the same direction.

However, I am glad to see that the partyhas started. Many companies and somecountries are developing both technologyand policies for CCS. Norway plans tobuild its first full-scale plant already in2012. In Europe, demo projects will bedeveloped in 2015 and full-scale plants in2020. North America and Australia are tak-ing active roles and the world is discussinghow to incorporate CCS in quota tradingschemes to ensure that the price of CO2

will be a driving force. DNV is also facilitat-ing, on behalf of the different industriesand authorities, the development of stan-dards for capturing, transporting and stor-ing CO2. This work will be finalised in2010.

Today we know the risks of not acting. Forthis reason, the players must learn to dancethe carbon waltz together.

ELISABETH TØRSTADDirector of operationsDNV Cleaner energy and utilities

Let’s dance the carbon waltzThere is no point of return. First we must capture it before it rushes off into the atmosphere, then moveit to a suitable location before storing it for hundreds of years. I am, of course, speaking about CO2, thebiggest environmental challenge ever.

TODAY WE KNOW THE RISKS OF NOT ACTING. FORTHIS REASON, THE PLAYERS MUST LEARN TO DANCETHE CARBON WALTZ TOGETHER.

DNV worldwide

www.dnv.com

Regional officeHead office

DNV IS A GLOBAL PROVIDER OF SERVICES FOR MANAGING RISK. ESTABLISHED IN 1864, DNV IS AN INDEPENDENT FOUNDATION WITH THE OBJECTIVE OF SAFEGUARDING LIFE, PROPERTY ANDTHE ENVIRONMENT. DNV COMPRISES 300 OFFICES IN 100 COUNTRIES, WITH 8,000 EMPLOYEES.

PUBLISHED BYDNV Corporate CommunicationsNO-1322 Høvik, NorwayTel: +47 67 57 99 00Fax: +47 67 57 91 60

EDITOREva HalvorsenTel: +47 67 57 97 [email protected]

DESIGNCoor Graphic [email protected]

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COVER PHOTO© Tom Haga

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