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September 27, 2001

LNG Matthew banned from Boston
In consultation with federal, state and local emergency response agencies, the Coast Guard Captain of the Port for Boston has denied entry to a Liquefied Natural Gas (LNG) tanker. The tanker, the Matthew was scheduled to deliver its cargo to a facility in Everett earlier this week.

The 126, 538 cu.m Matthew was delivered by Newport News in 1979. Registered in the Bahamas it is operated by a unit of Norway's Leif Hoegh A/S on behalf of Cabot LNG. Cabot LNG is a subsidiary of Belgium's Tractebel, which, in turn, is the energy division of the French-based Suez Group. Cabot LNG is the parent company of Distrigas of Massachusetts , which owns and operates the Everett LNG terminal and resells LNG to serve gas utilities, independent power producers, gas marketing companies, and other industrial customers in the U.S. Northeast.  Cabot LNG is currently the only active importer of LNG on the U.S. East Coast. 

Explaining the decision to ban the LNG ship, the First Coast Guard District notes that since the terrorist attack of September 11 the Coast Guard has increased its seaport security and force protection operations in ports and waterways across the country, thus promoting a safe and efficient Marine Transportation System. To do this, the Secretary of Transportation, Norman Mineta, has directed the Coast Guard to take all necessary actions to control the movement of any vessel in the navigable waterways of the United States.

"My job as Captain of the Port of Boston is to take actions to prevent injury or damage to waterway users, vessels, waterfront facilities and ports in my area of responsibility. One of my functions is to provide for safe and secure transportation of maritime traffic in Boston Harbor," said Capt. Brian Salerno, Captain of the Port and Commanding Officer of Marine Safety Office Boston. "Since Sept 11, the dynamics of that role have changed."

To attain this level of safety and security, the Coast Guard has increased its security patrols in ports and on waterways nationally, including in and around Boston; the Coast Guard has also been directing commercial vessel traffic moving through U.S. ports. In support of this enhanced safety mission locally, the Coast Guard has established a unified command at its base in Boston. The unified command consists of Coast Guard personnel from various commands and representatives from other federal, state and local agencies, as well as representatives from Distrigas, the operators of the LNG facility in Everett.

"The primary focus of this unified command is maintaining and providing a safe and secure port in Boston," said Salerno.

The unified command, in close consultation with area emergency response agencies, has identified safety concerns in connection with the new threat of terrorism that are not adequately addressed in local response planning. The denial of entry is intended to allow sufficient time for these new concerns to be addressed.

"After consulting with members of the unified command and with other local and state agencies and officials, I made this decision because we need to be sure we've done everything we can to provide a safe environment for this vessel's transit through the port and during its product transfer operation at the dock," said Salerno.

Although there have been no specific threats to LNG shipments, the Captain of the Port decided it best to deny delivery until the ship has provided an approved safety and security plan and all response agencies are confident that appropriate safety and security measures are in place. The decision applies only to this vessel. The Coast Guard and the unified command will continue to work with their partners in industry and the government to review this process for each ensuing delivery.

"I hope this decision will stimulate debate among all parties involved on alternatives and improvements for our port safety and security concerns," said Salerno. "After thoroughly considering all facts available to me and listening to the opinions of members of the unified command, I made this decision solely based on the safety and security of the port of Boston."

HK shipowners want monopoly probe of underwriters
The South China Morning Post reports that the Hong Kong Ship Owners Association (HKSOA) has suggested underwriters be investigated by monopoly (antitrust) authorities for unilaterally setting a deadline to cancel the war-risk insurance for global fleets.

Eight days ago, in a bid to increase premiums following the September 11 outrage, the International Underwriting Association of London and Lloyd's Underwriters Association tendered a seven-day notice of cancellation of all war-risk insurance.

The South China Morning Post says industry executives have been angered by underwriter expectations of close to 0.05 per cent of the insured value of their vessels - or a tenfold increase in annual premiums.

"The way in which this was done suggests a high degree of collusion, which should probably be investigated by the relevant [monopoly] authorities," HKSOA executive director Arthur Bowring said.

During the 1991 Gulf War, notes the Morning Post, there was no increase in the basic rate. Underwriters instead increased what is now known as the exclusion zone rates, premiums levied for transiting high-risk areas such as the Suez Canal.

Bowring said no one he had spoken to could remember the seven-day cancellation clause being used to boost the basic rate before. "We feel that it is an abuse of a dominant position in a bid to prop up insurers who are not in a particularly viable position, whether or not it has anything to do with a risk-management position," he said.

New appointment at Davie
Davie Industries Inc., Levis, Quebec, has appointed Jack Berglund as VP of marketing and sales.

Berglund is a graduate of Maine Maritime Academy. Previous appointments include VP of sales and marketing at Atlantic Marine, Inc. and president of Offshore Inland Marine & Oilfield Services Inc.

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