Crew/supply boatsOct 31, 2017 01:24 PM
As vessels stack up along Gulf, shipyards seek any port in oil storm
Despite the downturn in offshore oil and gas production, some new hulls are still hitting the water in the Gulf of Mexico. Eastern Shipbuilding Group delivered Harvey Sub-Sea, at left above, a 340-foot multipurpose support vessel, to Harvey Gulf International in May. Sister boat Harvey Blue-Sea, right, is the finishing stages for delivery. Vard Marine designed both vessels.
Port Fourchon, La., is a lonely place to moor a boat this year. Normally one of the most prominent oil ports in the Western Hemisphere, now there is only a handful of oil field support vessels trickling in and out.
Even though there is currently a slight increase in deepwater activity in the Gulf of Mexico, the aggressive building of the past decade has swamped the region with a glut of offshore supply vessels (OSVs). Industry estimates are that half of the Gulf’s support vessels are stacked. Many of them are new boats, some never having displayed an oil rig on their radar screens. Overcapacity looms large.
The good news is that many of the newbuilds are high-specification platforms designed to meet deepwater demand for vessels equipped with cranes, remotely operated vehicles (ROVs) and expanded accommodations for oil field personnel. Another encouraging sign is that Tidewater Marine recently emerged from Chapter 11 bankruptcy, having completed a reorganization plan that cleared $1.6 billion of debt from its books. Tidewater, Hornbeck Offshore Services, Harvey Gulf International, SEACOR Marine and other U.S. operators with young high-spec fleets are poised to compete with the sophisticated foreign-flagged vessels that have crept into the Gulf and filled that void over the years.
All of which brings us to the Gulf Coast shipyard industry, the hub of oil support vessel construction in the nation. The more diversified yards — short on OSV and fast supply vessel (FSV) contracts — are building tugboats, ferries, fishing vessels and other boats. The Pacific Coast and Great Lakes yards not tethered to the oil industry seem to be doing fine, too. Shipbuilders that are focused on the oil industry, primarily working in aluminum, are suffering.
Diversification at Gulf Craft, long known for its crew boats, includes a catamaran ferry being built for SeaStreak of Atlantic Highlands, N.J. “We’re looking for all other types of aluminum work,” says Scotty Tibbs, vice president and CFO at the shipyard in Franklin, La. “The uncertainty that we have is frustrating and tiring, but we want to keep the skilled work force that we have.”
There are bright spots. Gulf Island Shipyards (GIS), formed in 2016 when Gulf Island Fabricators acquired Leevac Shipyards’ three facilities in Louisiana, is still building multipurpose support vessels (MPSVs). It delivered two 300-footers to Tidewater earlier this year and has two 365-foot behemoths under construction for Hornbeck. In a nod to diversification, GIS also is building a research vessel for Oregon State University and has begun an order for eight Z-Tech tugs designed by Robert Allan Ltd. for Galveston-based G&H Towing.
“We’ve got work for the next two and a half years,” said Mike Jannise, director of sales and marketing at GIS.
But life is grim at the aluminum boatyards hugging the banks of Bayou Teche between New Iberia and Morgan City, La. The parking lots at Breaux’s Bay Craft, in business since 1925, and Breaux Brothers Enterprises, founded in 1983, are nearly empty. The parking lots at Neuville Boat Works and Geo Shipyard are empty. The sad undercurrent is that these are smaller family-run operations with loyal, local, skilled work forces.
“We’re all in the same boat,” said Errol Neuville, vice president at Neuville Boat Works in New Iberia. Having just laid off his last seven employees, Neuville was not in an optimistic frame of mind last spring. But he said that he and his brother Kerry were trying to scare up work from anywhere to get their skilled people back on the job.
At Gulf Craft in Franklin, La., the outlook is brighter. The 194-foot Liam J. McCall, the first boat in a four-FSV contract, was delivered to SEACOR Marine earlier this year. Ava J. McCall, the second in the Incat Crowther-designed Express Plus-Plus class, is scheduled for delivery in November, and Libby L. McCall is taking shape in the shed.
Thoma-Sea Marine Constructors is building a pair of 290-foot OSVs for an undisclosed client. The yard in Lockport, La., has been expanding its repair portfolio as demand weakens for newbuilds to support oil and gas customers in the Gulf.
Gulf Craft also has a 150-foot, 600-passenger catamaran — also designed by Incat Crowther — under construction for SeaStreak, a private ferry company operating in New York, New Jersey and New England. In addition, the yard has a contract for two 95-by-28-foot catamarans for Ocean Properties in Bar Harbor, Maine.
“It’s really hard and the margins are really small,” said Scotty Tibbs, vice president and chief financial officer at Gulf Craft. “We’re looking for all other types of aluminum work. The uncertainty that we have is frustrating and tiring, but we want to keep the skilled work force that we have. The big scare now is Tier 4. Who wants a boat that costs 25 percent more, runs slower (and has) less capacity?”
Grant Pecoraro, managing director at Incat Crowther’s office in Lafayette, La., explained that with the Environmental Protection Agency’s Tier 4 emissions rules, “one size does not fit all. We are looking at Tier 4 in select FSV designs. Needless to say, it is a challenge, especially given that each engine manufacturer has its own aftertreatment solution.”
Over in Lockport, La., Thoma-Sea Marine Constructors has a 290-foot OSV floating in Bayou La Fourche and another taking shape on the bank. As is the trend, the client has a nondisclosure contract with the builder, so there are no details.
Walter Thomassie, the yard’s managing director, said he was doing the same as everybody else in the oil and gas world: competing for the small amount of work that is out there.
Gulf Island Shipyards has two 365-foot MPSVs under construction for Hornbeck Offshore Services.
“Margins? What margins?” he said. “There are no margins in some of the stuff I’m bidding on. … We’ve had three small oil and gas jobs this year. Our oil and gas work has gone from 85 percent of the business to somewhere around 5 percent.”
Thoma-Sea’s bright spot is the repair division, which has been handling tugs, barges and government work. “It has been doing very well and we’re expanding our customer base,” Thomassie said. “But it has taken years to diversify that department. It takes a long time.”
Pointing out that the downturn is global, not just in the Gulf, Thomassie predicted no improvement in the oil and gas industry for the foreseeable future.
“A lot of boats will go for scrap,” he said. “It will be a decade or more before new boats will be needed. There are so many vessels out there. It will be interesting to see how young some of the boats being scrapped will be. It may not be just 40-year-old boats being scrapped. There may be some that are 20 years old.”
Bill Hidalgo, engineering manager at Halimar Shipyard, summarized the state of the OSV fleet in two words: “Tied up.” In the meantime, the Morgan City shipyard is staying afloat on a raft named diversity. “We’re stretching it out with different things,” he said. “We just finished a cutter-head suction barge for Manson. That was a real nice project. And we’ve got a push boat, a spud barge and a dry dock going.”
A Gulf Island Shipyards welder works on one of the Hornbeck MPSVs at the yard in Jennings, La.
In part, the “master” in Master Boat Builders is the company’s ability to survive in a down market. In the past, the shipyard has built fishing boats to see it through voids in the OSV market. But Bayou La Batre, Ala., once the fish-boat building hub of the Gulf Coast with a global market, has experienced a marked decline in demand for new vessels in a diminishing commercial fishing industry.
“In the early ’80s, we moved to fish boats to get through,” Andre Dubroc, the yard’s general manager, said last year as oil prices kept dropping. “Now it looks like we’ll look at tugs. It’s going to get dirty before it gets better.”
Master Boat Builders has delivered two Rotortugs — Trident and Triton, the first of their kind in the U.S. — to Seabulk Towing in Port Fort Lauderdale, Fla., and it is working on the last two vessels of the four-boat order. Scattered around the remaining two tug hulls at the yard are the modules for the remainder of a series of 221-foot OSVs for SEACOR. At Master Boat Builders, life goes on, albeit a bit slower.
In May, Gulf Coast Shipyard Group of Gulfport, Miss., delivered the 310-foot Harvey Freedom, the fourth dual-fuel OSV for Harvey Gulf International. Harvey America, the fifth boat in the six-vessel contract, is in the water with its superstructure in place, and delivery of the final vessel is scheduled for 2018.
The newbuilds are the first OSVs in the U.S. capable of burning either liquefied natural gas (LNG) or diesel. Propulsion is provided by twin Wartsila dual-fuel main engines producing 7,241 hp, and two Wartsila bow thrusters generating another 1,992 hp. Three Wartsila generators provide electrical power. The vessels’ maximum speed is 14 knots and the cruising speed is 12 knots.
The order book has thinned at Master Boat Builders in Bayou La Batre, Ala., but the yard is spreading a wider net to stay afloat. The builder continues to work on a series of 221-foot OSVs, left, for SEACOR Marine, as well as two more Rotortugs for the operator.
The OSVs can carry 253,000 gallons of fuel oil and 78,000 gallons of LNG, as well as 18,000 barrels of liquid mud and 10,250 cubic feet of dry cement. They have nearly 10,500 square feet of deck space. ABS has rated the vessels ENVIRO+ and Green Passport.
Harvey Freedom will work from Port Fourchon under charter to an unnamed energy major. The other three dual-fuel OSVs in the Harvey Gulf fleet, Harvey Liberty, Harvey Energy and Harvey Power, work in the Gulf of Mexico supporting Shell’s deepwater operations.
Although not on the Gulf Coast, it is noteworthy that Moose Boats of Vallejo, Calif., has begun construction of a 75-foot aluminum catamaran crew boat for Westar Marine Services of San Francisco, the first of a multi-boat contract.
The vessels will be powered by twin Volvo D13 turbo diesel engines with Volvo IPS drives. The expected service speed is 25 knots. The boats are expected to have exceptional close-quarters maneuverability, with bow and stern operations from both the raised pilothouse and the upper-level aft steering station.
The catamarans will be capable of carrying 28 passengers and 20,000 pounds of cargo to and from anchorages and piers within San Francisco Bay, San Pablo Bay and the Sacramento River Delta, as well as offshore.
Five HamiltonJet waterjets translate power to speed for Libby J. McCall, the third 194-foot fast supply vessel from Gulf Craft for SEACOR Marine.
Moose Boats designed the cabin superstructure and provided the general arrangement with collaborative input from Westar. Incat Crowther in Lafayette, La., is providing naval architecture services for the final design and U.S. Coast Guard Subchapter T compliance.
Perhaps the model on the Gulf Coast for diversity is Eastern Shipbuilding Group, with yards in Panama City and Allanton, Fla. “Being a diverse shipyard here at Eastern, we learned our lesson back in ’86 and have since diversified,” said Steve Berthold, Eastern’s vice president of marketing and sales.
Earlier this year, Eastern delivered Harvey Sub-Sea, a 340-foot MPSV, to Harvey Gulf International. On deck and nearing completion is the identical Harvey Blue-Sea. Even though it is the last oil field vessel on its books, Eastern has a fairly full plate, the result of diversification.
At the top of the list is the contract to design and build the Coast Guard’s new offshore patrol cutter (OPC). A nine-boat contract initially, ultimately the count is expected to extend to 25 vessels and be worth up to $10 billion.
Other Eastern projects include a 320-foot Staten Island Ollis-class ferry; the remainder of four triple-screw retractable towboats for IWL River Inc.; a 356-foot trailing suction hopper dredge for Weeks Marine; an articulated tug-barge for Great Lakes Dredge & Dock Co.; and the 65th pushboat the company has built for Florida Marine Transporters. Eastern also is building another catcher-processor larger than the 194-foot Araho, delivered earlier this year to the O’Hara Corp., for an undisclosed client. And then there is the company’s pet project: the second 141-foot replica of the schooner Columbia.
Ava J. McCall is the second boat in the Gulf Craft series for SEACOR. The Express Plus-Plus class is designed by Incat Crowther.
The two Harvey boats are the last OSVs that Eastern expects to build for a while, but they are likely to be the type of high-end vessels that will be built when the oil and gas industry recovers.
“Unless they’re specialized vessels, it’s going to be a tough business. It’s very, very competitive,” Berthold said.
However crowded the Gulf fleet may be with new OSVs, there are other classes of support vessels required in the oil patch. Two of note delivered this year are 217, a 185-foot dive support vessel (DSV) for C-Dive, and J.L. O’Brien, Clean Gulf Associates’ new 95-foot oil spill response vessel.
C-Dive broke with tradition with 217, a purpose-built vessel from A&B Industries of Amelia, La. Historically, DSVs in the Gulf of Mexico have been converted from older OSVs. According to Robert Champagne III, C-Dive’s owner and founder, 217 is the first purpose-built, four-point anchoring SAT (saturation diving) DSV in the Gulf. The vessel has an expanded beam of 44 feet to add stability during operations, and a clear deck space of 65 by 44 feet.
Built-in dive equipment includes a dive control system, decompression chambers and a 12-foot moon pool. The vessel also is equipped with a six-man, 1,000-foot saturation diving system, hyperbaric rescue chamber and an EBI API-2C 30-ton crane.
History, being the repetitive creature it is, suggests that diversity is still the best way to endure the inevitable bust following a boom in the oil industry. What will happen when the oil market recovers is one question. Another is where have all the mariners gone, long time passing? There will be fewer, more sophisticated boats employed in the future, but will there be crews to man them?
The oil doldrums that have descended on the Gulf have laid up charters and delayed newbuilds. Big P, built by Breaux’s Bay Craft in 2016 for Crewboats Inc., was still moored at the Bayou Teche yard last spring awaiting delivery.