These days it can generally be agreed that the bulk carrier market is rather hot and that the tanker market is a bit slower. Reflecting the market trend, many owners have consequently decided that being able to offer tonnage for transporting such things as iron ore to, for example, China is a good and secure trade for the years to come, and are converting their VLCCs into VLOCs.

At the COSCO Shipyard Group commercial headquarters Li Rong, Executive Director (not present when the picture was taken), Michael Zhou, Deputy General Manager (right) and Yan Chongyu, Deputy Manager of COSCO’s commercial offices in Shanghai (left) proved an excellent overview of the COSCO conversions activities as well as good presentations on how you actually do this for single to double hull, tankers to heavy lift vessels and VLCC to VLOC.

When looking at these heavy lift vessels it is hard to believe that they used to be single hull tankers for oil. When converting the yard keeps the bow and the stern including engine room and makes a brand new midsection.

Other owners find that their single hull tankers will not be able to trade beyond 2010 and convert them into double hull tankers to comply with the IMO rules.

The benefits to the ship owner’s bottom line are many – the most obvious being the possibility of taking a VLCC out of trade for half a year and get a VLOC ready to trade after an investment of some USD 26–28 million. That is rather inexpensive and fast compared to ordering a new VLOC for delivery in maybe 2011 at a cost of USD 130 million.

In addition, with newbuilding yard capacity worldwide under strain, ordering new double hull tankers will usually be for delivery after 2010. And if you have no use for the tanker, an FPSO, Heavy Lift Ship or drillship for the offshore industry may be a better bet for a conversion project. For instance, a Suezmax tanker is currently being converted into a heavy lift ship at a cost of some USD 40 million.

You can ask Michael Zhou, Deputy General Manager, or Li Rong, Executive Director, at the COSCO Shipyard Group’s Department of Shiprepair and Conversions, and Yan Chongyu, Deputy Manager of COSCO’s commercial offices in Shanghai, about any of these conversion projects. COSCO’s reference list is already long and made up of many of the world’s leading shipowners.

“We have some 82 tankers in our order book right now for conversion from single to double hull at a typical cost of some USD 26–28 million per VLCC vessel. Most of the work is carried out at our COSCO Nantiong, Dalian and Guangzhou Shipyard,” says Zhou. “We have some 600 technical employees in our technical design departments, and we carry out many of the conversion projects in cooperation with DNV. The technical and design calculations needed to ensure that the work is done correctly are very important – regardless of whether the conversion is from single to double hull or tanker to bulk carrier. The design work usually takes two to three months, and we can also start pre-cutting the steel in order to reduce yard time. The whole sequence of work is based on careful calculations of the hull strength.”

Resource-wise, not many can match the COSCO group, which has some 6,000 permanent employees and around 40,000 subcontractors. COSCO also builds new vessels in COSCO Zhoushan, Dalian and Guangzhou Shipyard. It has 120 vessels in its order book.

Single to double hull
“At the tanker end of the market, we do many single to double hull conversions, including chemical and product tankers – quite a complicated job as all the piping must be removed and taken on shore for storage – up to ten kilometres for any given vessel of this kind. We do many Panmax, Aframax, Suezmax and VLCC conversions to double hulls.”

Rong demonstrates how this is actually done by giving us a short presentation. Step one is the technical process, in which the concept and design are prepared in close cooperation with DNV for approval of the design drawings. The owner and class must approve the drawings before the shipyard can start with block prefabrication. The yard typically needs some three months for this process.

“When the vessel arrives at the yard, we start by cutting a two by six metre hole in the tank top deck for access. Then, after much staging, we start with the centre oil tanks, then the side tanks – and here we always start at the bottom of the tank. Then we do the sides. So we build a new inner bottom, then the new inner sides. Normally the process takes some 110 days at the yard and up to 180 days for a VLCC – we have the experience now,” adds Rong. “A converted tanker will typically have a reduced cargo capacity of five per cent and there will be some 8,500 tonnes of additional steel. On the other hand – the ship’s life will increase by some 20 years.”

VLCC to VLOC
“The process here is very similar to the process described above, but when we do this at the yard the story is very different. The new cargo carrying tanks for a converted vessel will be the centre tanks, whereas the wing tanks will become ballast tanks. The integrity of the ship hull is essential when we start working, so our first step when the vessel arrives at the yard is to construct the double bottom in a very carefully calculated sequence. Having completed the inner bottom, we convert the wing tanks, add the correct stiffeners, brackets and so on to ensure that the ‘new’ VLOC will be fit for purpose before we add hatch covers, hydraulics and the remaining systems, which may be cargo gear, conveyors, etc.

“The cooperation with DNV when doing conversions is important to us,” concludes Rong.
“The trend these days is towards an increasing demand for conversions from tanker to bulk carrier, tanker to heavy lift vessel and tanker to FSO/FPSO,” says Zhou. “But we should not forget the single to double hull market either, where a total of 82 vessels have been or are currently under conversion (30) just in the three-year period from 2005 to the end of 2007.”