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Houston Chronicle: Shell busy with fleet updates

Aug. 27, 2007, 7:48PM
Moneymakers
Five questions with Bob Salmon
Shell busy with fleet updates

By BILL HENSEL JR.
Copyright 2007 Houston Chronicle

Bob Salmon moved to Houston two years ago to become general manager of shipping for Shell Trading U.S., which provides various hydrocarbon products and services, including shipping.

A native of Wales, he joined the Shell organization in 1971 as a deck cadet on the vessel Hindsia in the Far East.

His later jobs for Shell included seagoing officer on oil tankers and liquefied natural gas carriers.

He eventually reached the rank of captain.

One project he’s been involved with recently is a plan by AHL Shipping to build three shallow-draft vessels, which Shell is chartering, that will comply with a federal law known as the Jones Act, which requires all ships docking at U.S. ports be U.S.-flagged and built.

The tankers are being built under new rules, addressing structural wear and tear on vessels, adopted by the International Association of Classification Societies.

The new vessels represent Shell’s commitment to update and diversify its fleet and provide jobs for U.S. shipbuilders, said Salmon, who spoke recently with Chronicle reporter Bill Hensel Jr.

Q: What led to these new vessels being built?

A: The Oil Pollution Act of 1990 was introduced, and that meant existing single-skin vessels had to be retired against a fixed date. By 2015, all single-hull vessels have to be retired. Obviously, shipowners avoid investment unless companies like Shell commit to long-term charters, which we have done with AHL.

Q: Will the retirement of the vessels under the act have more impact down the road for Shell Trading or for the maritime industry?

A: The lack of investment in the past has meant that, now, as the retirement dates arrive, a lot of existing vessels will disappear and there will be an even tighter market of Jones Act tankers.

That is why Shell has had a program of rejuvenating its fleet. We have a mixture of over 100 ships or barges, which transport our oil both in inland waterway and also in deep water around the coast. We are progressing toward a full double-hull fleet well in advance of the legislative environment.

Q: When will Shell begin using these new tankers?

A: It will take between two to three years to actually complete the building of vessels in various yards and the Gulf of Mexico. The big difference here is we are using a new concept.

We are the charterers. AHL are the owners building them, using a concept of modular construction. They are constructing sections of the ships in different locations. We, Shell, must charter the vessels rather than own the vessels because we are not fully a U.S. entity. A Jones Act vessel means it was built in the U.S. by a U.S. entity.

Q: Is there anything else special about these vessels other than being double-hull?

A: AHL has designed these vessels very much with our trading patterns in mind. Many U.S. ports struggle with water depth, so they are designed as shallow-draft vessels. That has twofold aspects: They carry more oil on each voyage, but it also reduces the number of calls by maximizing the quantity on each voyage.

Basically, they are wider and longer than normal vessels.

Q: How big is Shell U.S. Trading?

A: We are probably the biggest charterer of vessels in the U.S. We average around 4,000 trips a year, which is 10 trips a day, all in the U.S. It spans the West Coast, the Gulf of Mexico and the East Coast.

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http://www.chron.com/disp/story.mpl/business/5087354.html

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