Bulking up business
Stena Bulk is a market-leading tanker shipping company providing maritime logistical services for oil and product cargo across the world. It is part of the wider Stena family – or Stena Sphere – and thus offers the same reliable, high quality and innovative service ethic that defines other Stena companies. It has been involved with this market since its foundation in 1982 but over the last 30 years has widened its remit to encompass other business units as well: in the mid-1990s a joint venture with Texaco (now Chevron) saw it begin to adopt mid-range (MR) vessels, whilst a decision to expand into LNG carriers was made at the beginning of 2011.
Stena Bulk was last featured in Shipping & Marine in spring last year, at which point the company had just announced a programme of acquisition for seven newbuild suezmax tankers. Today, two of those seven have now been delivered – Stena Superior and Stena Suede – and as executive vice president Erik Hanell illustrates, they have proved to be a great investment: “They are being built by Samsung Heavy Industries, one of the best shipyards in the world, so the project has gone very smoothly. Delivery has been on time each time and the tankers were exactly what we expected.
“When we ordered the ships we invested an extra five million dollars in additional fuel saving and environmentally friendly equipment and, once they arrived, we saw very quickly the positive impact of the extra money. Primarily there is a major reduction in fuel consumption when compared with other vessels of a similar age of about 15 per cent. The ships are also fitted with a volatile organic compound (VOC) reduction system that lowers VOC emissions during loading, unloading and transportation of cargo.”
Following the successful delivery of the first two vessels, the next five are expected over the next few years. “They are all on schedule,” Eriks adds, “and we will be receiving another three vessels this year. The remaining two will arrive in 2013. Once again we are dealing with Samsung Heavy Industries and other professional yards for this so we foresee no problems. The question is more what time of day they will be delivered rather than what day.”
As well as being part of Stena Bulk’s independent operations, the seven suezmaxes – alongside a number of other medium sized vessels in its fleet – are part of the Stena-Sonangol Pool, which makes available 23 suezmax tankers for spot charters across the world. Stena Bulk operates the pool from its offices in Houston, Gothenburg and Singapore with staff from the state-owned Angolan oil company Sonangol helping run commercial operations. Two other partners are involved as well: Principal Martime and d’Amico.
When creating the pool in 2005, Stena Bulk and Sonangol aimed to maximise the profits from the available ships by facilitating high quality spot trading using vessels with an average age of 3.5 years across the fleet. Its success has been great, with the Stena-Sonangol Pool consistently beating competitors as well as sector benchmarks since day one. Over the next year, the pool is expected to expand even further to a total of 30 vessels.
Stena Bulk has expanded in other areas of its business as well. At the start of last year and after observing the market for some time, the company decided that a move into the LNG sector would maintain its relevance in the maritime market well into the future. “When we had the opportunity to purchase three LNG tankers in May, we were fast in making that acquisition,” says Erik. “From enquiry to delivery the whole thing took only two weeks, and since then it has been another huge success. The market was strong when we entered it but today it is even stronger; the ships have been chartered out on profitable rates consistently. We are now finalising longer term charter contracts with key players in the market.”
The company has also increased its MR portfolio through the incorporation of Weco, now called Stena Weco, in January 2011. Weco is a specialist in transportation of edible oils, palm oils and easy chemicals and until its acquisition this was an area Stena Bulk had previously had little experience in. Along with experience, 15 MR vessels were added to Stena Bulk’s repertoire whilst Weco gained from the financial strength and market-wide expertise that the Stena Sphere offers. Stena Weco’s good performance proved encouraging and the company is expected to expand its fleet roster up to 50 ships by 2014.
Stena Weco in particular has been a positive influence on Stena Bulk’s trading through 2011. “Most people in tankers have had quite a few tough years and so have we, but in terms of activity 2011 was a great year,” explains Erik. “Stena Weco was one big step on the MR side and with LNG having had a relatively positive year, our LNG ships were very popular and generated a lot of revenue. With this and the ongoing delivery of suezmaxes, though, we are looking forward to the next couple of years.”
LNG will form an increasingly important part of Stena Bulk’s future operations in what has been called its ‘LNG offensive’. The $700 million three-ship acquisition is just the beginning of what Stena Bulk hopes will become a core part of its service with the market expected to grow eight per cent per year for at least the next decade. Despite this, learning from mistakes made by the industry in recent history, Stena Bulk is unlikely to procure vessels on speculation and instead will secure contracts before purchasing new or second hand vessels. “Next year and 2013 will be exciting years,” Erik concludes. “We can leave 2011 behind us, appreciating it not for its numbers but as a good time of investments made for the future. Expect to see a lot of interesting things coming from Stena Bulk over the next years to come.”
Successful new suezmaxes
Expanding into LNG
Plenty of future prospects