FPSO Floating Production, Storage and Offtake vessels GFC Global Financial Crisis GT&Cs General and Conditions - part of petroleum sale and purchase contract H&M Hull & Machinery - refers to particular insurance covering physical hull and machinery on board ILO International Labour Organisation IMO International Maritime Organisation Incoterms Incoterms or international commercial terms are predefined terms published by the International Chamber of Commerce. IOC International Oil Company – used to refer to the large, global, publicly listed oil companies (includes BP, Chevron, ConocoPhillips, ENI, ExxonMobil, Shell, Total among others) ISGOTT The International Safety Guide for Oil Tankers and Terminals ISM code International Safety Management Code ISPS code The International Ship and Port Facility Security Code LPG Liquefied petroleum gas LR Long Range tanker – larger categories of product tankers (although sometimes also used to refer to crude – LR1 is similar to Aframax size, LR2 to Suezmax) MARPOL The International Convention for the Prevention of Pollution from Ships MR Medium Range tanker – most common tanker used for transporting petroleum products Oil Companies International Marine Forum Panamax Crude oil tanker category of a size that can fit through the Panama Canal (50-80,000 DWT) P&I Professional & Indemnity club – the means by which ship owners get pollution insurance SAFE -T Shell proprietary tanker vetting system SIRE OCIMF tanker vetting database SOLAS Safety of Life at Sea – an IMO convention STCW convention International Convention on Standards of Training, Certification and Watchkeeping for Seafarers – an IMO convention Suezmax Crude oil tanker of a size that can fit through the Suez Canal DWT) 200,000
Voyage Charter Company contracts with ship to undertake voyage from load port to discharge port. Specific cargo terms including voyage charter party. Cost determined on lumpsum or benchmark (see discussion on Worldscale) - includes all ship costs including port costs (both ends). Owner responsible for providing vessel and operation. Spot or term purchase of petroleum or petroleum products. Generally used when sourcing and products from supplying locations where good vessel liquidity available for ongoing requirements. Contract of (COA) Company contracts with ship to undertake series of voyages from the load port to the discharge port. Ship owner provides suitable vessel on required timing for each voyager with agreed notice. Specific cargo terms including voyage charter party. Cost determined on lump sum (per voyage) or benchmark (see discussion on Worldscale in 6.1) - includes all ship costs including port costs both ends. Owner responsible for vessel operation. Term purchase of petroleum of petroleum or petroleum products. Reduced or poor vessel liquidity for ongoing cargo requirements. Time Charter Company contracts with ship owner to provide specific vessel for specified period. Company directs where the vessel is to go. Company pays time charter fee ($ 000s per day) covering cost of vessel and crew. Company responsible for ship fuel and port costs. Owner responsible for vessel operation, insurances and certification. Limited or no liquidity of vessels required to perform task. Company has specific operational needs requiring it to control deployment. Common in coastal operation where domestic refining used to supply seaboard markets. Demise or bareboat charter Ship owner provides specific vessel for (typically) long period. Company acquires full control but is responsible for all operation (including surveys for maintenance of class) and insurances. Company responsible for crewing. Limited or no liquidity of vessels required to perform task. Company has specific operational requiring it to control deployment. Common in coastal operation where domestic refining used to supply seaboard markets. Documentation
Security perspective: The number of product tankers servicing Australia will increase, despite both the ships increasing in size and the capability of the converted refineries to receive much larger product tankers. This will more than offset the loss of some coastal tankers and provides an increase in the flexibility to respond to domestic supply disruption provided exemptions are provided. Comparison of the Australian maritime supply chain to other locations There is nothing that markedly differentiates the maritime market which services Australia from that servicing other markets. Shipping for the Australian market is drawn from the same pool of tankers that service the maritime market globally. The ships are engaged in the same generic activity where the participants are global in reach, voyages extend to areas outside Asia Pacific as a normal part of trade and the operational and security imperatives remain common. Australia is characterised as being distant from main supply routes. Table 19 examines a range of differences and discusses how these might impact on security. Table 19: Difference with Other Markets Item How manifest in shipping market? Impact on security Availability – Australia would become one of the larger importers of finished petroleum product Availability is not anticipated to be an issue but more term chartering may be an outcome to underwrite perceived availability risk Possibly higher costs where Owners can exert some market power Geography of demand chain relatively long compare to Asian countries where main supply routes are close to refining centres (Japan, Korea, Taiwan, Singapore, India, Middle East) It takes longer to supply for domestic disruption May require short notice voyage changes to manage disruptions Owners will be asked for options as part of standard contracting As covered in section 8.8 the isolated market does result in higher cost Higher stock levels required to manage the longer supply chain Investment in required to provide greater ship flexibility (larger drops) Australian geography – lack of internal transport options Compared to many other countries shipping is a more vital disruption response mechanism due to lack of inland transport options The ability to use import shipping in disruption is a key requirement Domestic shipping regime This is relatively unusual within Unknown