Ted Wang, the former head of OOCL’s China and European operations, and who now runs Friendship Transport Inc – an nvocc and used container trader – believes ‘Project Hope’ can address some of the difficulties the container industry faces.
Although modest in scale, the backers of a project that aims to convert containerships into semi-submersible and heavy lift/project cargo vessels hope that it will help address some of the overcapacity in the industry.
‘There is still a huge surplus with more box ships to come. In contrast, the semi-submersible and heavy lift sector is undersupplied (by at least 15%) and is getting old. The barriers to entry are also very high,’ said Wang. ‘With the oil price at USD80/barrel and likely to rise to USD100/barrel by the end of 2010, the need to move rigs, drilling equipment, workboats, etc, picks up.
There is also increasing demand from decommissioning work in South East Asia, the North Sea and the Gulf of Mexico.’
The executive stressed that a lot of research had been carried out, while discussions had taken place with several Classification Societies who said the project was feasible.
Wang has targeted 2,500/3,000TEU-size containerships of between 10 and 15 years of age and with the superstructure located aft.
‘Ships of this design can be purchased for USD7 million and with conversion costs of about USD18 million a semi-submersible unit can be brought into service in about a year for USD25 million,’ he said, ‘a new ships costs in the region of USD60-USD80 million, depending on whether it is of an open deck or open stern design.’
He explained that Friendship and his other partners in the US, Europe and China – the so-called G3 – had identified eight ships for initial conversion. Four of the vessels have already been purchased, with Wang hoping that all of them would enter service as open-deck semi-submersible units by the end of 2010/early 2011.’
He a also said that 16 new semi-submersible ships would be built under the auspices of the China Ship Fund set up towards the end of December. These will comprise 10 x 50,000dwt open deck units and 4 x 50,000dwt and 2 x 70,000dwt of open stern design. ‘Two are already under construction at the Jinling yard in Nanjing and once all of them are delivered, we will move to Project Prosperity, declared an enthusiastic Wang.