The Monitor: Canada's register to add two crude tankers

MV Palva in Montreal, now owned by Transport Maritime St Laurent

I’m back in Quebec, passing through Quebec City, on our way to Oswego, with a load of Aluminum ingots from the smelter in Sept Iles, bound for Mitsubishi. As we pass my “old stomping grounds” in Quebec City I see no signs of Valero’s “new” Panamax tankers. Apparently the whole deal and its details are quite hush, hush, but they are around, I am told.

Valero, the US based oil company that operates Ultramar’s Jean Gaugin Refinery, in Levi, across the river from Quebec City, has purchased two Panamax tankers for an undisclosed sum. The tankers Stena Poseideon and the Palva, where jointly owned by UK based Concordia Maritime, and Finnish oil company, Neste Oil; the deal closed in April 2014. The new owners are Transport Maritime St Laurent Ltd., a new shipping entity in Canada, with Desgagnes being tapped as ship managers.

MV Palva in Montreal

The two ships have a length of 228 m, a beam 32 m, and a draft of 12.2 m, with deadweight of 74,000 tons. They are powered by a MAN-B&W 6S60 MCC main engine, delivering 13,560 kW to a controllable pitch propeller (CPP), to give them a 16 knot service speed. The ice classed ships were built in 2007 and 2006 at the Brodosplit Shipyard, in Split, Croatia, and are classed by DNV. The two ships are bound to be some of, if not, the largest ships on the Canadian ship registry.

The Stena Poseidon has been renamed the Espada Desgagnes, and the Palva, has been renamed the Laurentia Desgagnes. Until Desgagnes takes full management control, Concordia Maritime remains the ship managers. The ships are currently trading internationally in the North Atlantic area, and still fly the Barbados flag, with a non-Canadian crew aboard. In the fall of 2014, they are expected to start regular service between Montreal and Levi, carrying 350,000 barrels of Alberta crude, with 100 trips a year planned.

Picture by FleetMon

The “new” ships are expected to carry crude from Montreal, to Levi, utilizing Berth 86; the smaller, but recently dredged “inside” berth. The bigger outside berth will remain for crude imports from overseas. The plan is based on Valero wanting to take advantage of the cheaper Alberta oil sands crude, coming to Montreal, by Enbridge’s pipeline “9B”, from Sarnia and points west. But until the East West Pipeline Reversal proposition is “rammed through”, errrr, I mean approved, they are faced with a transportation issue between Montreal and Levi.

Media reports state that Valero is spending CDN$180M. on upgrades to their facilities, in Montreal and Levi, to accommodate the two ships. Desgagnes’ Jean Marie Beaulieu is quoted as saying 100 jobs will be created with this new venture.

Berth 86 at Valero's St Romuald Marine
Terminal near Quebec City

A couple of years ago, Valero completed a clean product pipeline from Levi to Montreal, which alleviated some pressure on the local tanker market. Currently, Quebec City based Desgagnes’ Petronav division handles most of the product moved out of the refinery, utilizing Desgagnes own ageing tankers, and those from the (ex)Rigel fleet of four vessels.

Crude oil for the refinery has been coming in from places like Northern Africa on foreign flagged tankers. The addition of two large ships in the St Lawrence River, moving crude, is a net increase of ship borne traffic in Canada, and is sure to stretch the resources available.

One of the problems with the plan, apparently, is a lack of seafarers able to handle this surge in work. Desgagnes is renowned for their low wages, especially for Marine Engineers, so this crewing problem is probably not going to get any better fast. Regardless, it will undoubtedly put some additional pressures on an already tight labour market.

With the federal government’s unwavering support for the Alberta crowd, I wonder where they are going to magically make Engineering and Deck officers appear from. I estimate you would need 20 or so engineering officer alone.

Sister ship Stena Perros

Perhaps we are going to see the “highly successful” Temporary Foreign Worker program come into play, but I would assume this would be too cumbersome for the companies involved, especially with cumbersome and archaic Transport Canada personnel certification regulations.

Alternatively, I would suspect some kind of foreign crewing arrangement, as they don’t have too many options to choose from. At the very least I would expect a strong demand for Certificate of Equivalency.

Given Valero’s past experiences with Canadian cabotage, I would suspect the latter will be deemed necessary, and eagerly facilitated by the Harper Government ™. Of course, we tax paying professional Canadian seafarers we’ll keep getting the “high standards” from Transport Canada, and be left onshore.

Ok, maybe I am too depressing in my views, but no matter what, this is a major development in Canada. There are very few - five other - Canadian crewed, managed, crude oil tankers operating in Canada, so there is a shortage of experience in this market, I would propose. This is a very ambitious plan by Valero, and it is bound to be a major shift / blow / impact on the current Canadian seafarer / shipping scene.

Stena Perros and Vega Desgagnes on Montreal 2008