Ports for Kuwait’s futureMay 9, 2018
Himmat Ahlawat, general manager in Kuwait for Wilhelmsen Ships Service (WSS), talks to TOGY about how Kuwait’s maritime infrastructure needs to evolve, the company’s current operations and new opportunities in the oil and gas industry. WSS offers marine services and products to international markets, including equipment, chemicals, logistics, safety services and shipping agency.
• On the Mubarak Al Kabeer port: “That is a very ambitious project and requires a vision of 30 years. They want to develop it into a deep-sea mega-port with all the Post-Panamax cranes that are capable of going across 50 metres. They are looking at handling ships of up to 15,000-20,000 teu here, which is not required at this moment at all. In 30 years, however, that could work.”
• On port issues: “There are a lot of cranes in the Shuwaikh port, but at any given time there is never more than one or two operating. I do not know why this is. It leads to congestion and ships having to wait outside, which accrues higher costs. Since there is a lot of construction on these flyovers and bridges, it is causing a bit of a delay as well. Trucks can only operate in certain hours of the day, which further causes jams and delays in the ports. All of these things have a cascading effect.”
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What are the main challenges facing operations at Kuwaiti ports?
The marine infrastructure here is still quite primitive in comparison with that of other GCC countries. The highest standard to follow is that of Jebel Ali or other UAE ports. They are very well managed, and they have great equipment and good processes in place. Oman and Qatar are similarly advanced.
There are a lot of cranes in the Shuwaikh port, but at any given time there is never more than one or two operating. I do not know why this is. It leads to congestion and ships having to wait outside, which accrues higher costs. Since there is a lot of construction on these flyovers and bridges, it is causing a bit of a delay as well. Trucks can only operate in certain hours of the day, which further causes jams and delays in the ports. All of these things have a cascading effect.
The other port is Shuaiba, a dry port. That is somewhat better in terms of operations, but it is also not quite up to regional standards.
How much potential does the Mubarak Al Kabeer port on Boubyan Island have to alleviate these challenges?
That is a very ambitious project and requires a vision of 30 years. They want to develop it into a deep-sea mega-port with all the Post-Panamax cranes that are capable of going across 50 metres. They are looking at handling ships of up to 15,000-20,000 teu here, which is not required at this moment at all. In 30 years, however, that could work.
The development shows us that they are not only focused on Kuwait. The country does not need a mega-port; they could simply improve the ones they already have here. They are looking at the bigger picture, at becoming a regional hub. They could be targeting the hinterlands, such as Iraq and Syria. Big ships would come here and most of the cargo would go into Iraq. It is a very smart idea, but it is a long-term one. It will take five or 10 years for it to establish itself after the port is built.
What helps is that this whole region is going through turmoil and will need reconstruction. We had a conference here on the rebuilding of Iraq, where tens of billions of dollars [of investment was pledged]. The same will happen with Syria since most of the cities are now rubble. That will require huge amounts of material to come in, and it will generate activity.
Kuwait is in a good position because they have cash to spend and they are considered one of the most stable places diplomatically. People do not have a problem with Kuwait being involved, and that makes a huge difference. Boubyan Island is therefore a very good long-term idea.
So far, they have built the jetty. The problem now is that there is a lot of low-lying area. In high water, most of the island gets flooded. They need to construct elevated roads, which they are working on. Their timeline of finishing construction of the project by 2024 should work if they continue as they are now. The port needs to be operated by professionally run international terminal operators such as DP World, PSA Singapore or maybe Hutchison Ports Group. They need to be operated at that level. I am sure they have these things on their mind.
Will the WSS drone delivery system in use in Singapore be brought to Kuwait?
Drone delivery for spares is in collaboration with Airbus. The government of Singapore is also fully behind this idea and is helping both in terms of regulations and finances.
The drone can go up to 30 kilometres out to sea and deliver packages onboard a vessel. We are only using a prototype now, but our aim is to develop a drone that can deliver packages of up to 800 kilograms to a ship that is 30 kilometres away. That is an important figure because one of the common problems that ships have at sea is that cylinder heads or liners crack or piston rings need to be replaced. These are all 800 kilograms and below. The drone could deliver those things without the vessel having to enter harbour.
The pilot project is in Singapore because of the tech environment. It is much easier in Singapore to try these things because the government supports us and the talent is there to do this. Once it is tested successfully there, I see no reason why it could not be used in places such as Kuwait.
There is a need for it here because of new offshore developments. Although the traffic is too small now to justify introducing the service, over time it could well be a place where we will see these drones. Everyone will start using them. We are the first to do it, and no one can take that away from us.
What are your key activities in the country’s oil and gas sector?
Wilhelmsen Ships Service primarily provides maritime services to various shipping companies. Another business segment of Wilhelmsen is maritime products. We are the world leaders in that segment. This includes gases, chemicals and consumables used onboard ships. Oxygen and acetylene are used for welding. Then, there are all the other spares used that are not consumable. We manufacture those, as well as hawsers – ropes for ships – and many other things.
As of now, we are working with KOC and KPC quite closely. We are one of the preferred marine agents worldwide for KPC. This is underlined by the fact that KOTC [Kuwait Oil Tanker Company] is a big customer of ours; we provide agency services worldwide for its ships. KOTC ships use our maritime products almost exclusively. We have an extensive relationship with them, especially in main operations and technical services.
We do not provide agency services for KOTC in Kuwait as that is handled by a state agency called Mina Tank. Their mandate is to provide all marine agency services for all tankers coming into Kuwait, which puts us out of that business here. However, ours is an international company. We can help KPC and KOTC with their requirements all over the world. Their ships are going to Asia, Europe and the US, and they primarily use us because of our long-standing relationship and the level of service that we provide.
With KOTC, it is not really a contract as such, but a nomination. We knock on their door and we do so visibly. They nominate us for most of their ship calls – to Singapore, Japan or the Philippines, wherever they are exporting crude oil – for agency services, delivery of spares and crew changes.
We deal very extensively with KOC when it comes to the newly built sulphur terminal in Mina Al Ahmadi. They constructed a new jetty for the export of sulphur. It is a very high-tech facility, with very long bridges of several kilometres. It has a loading capacity of 1,500 tonnes of sulphur per hour. In that terminal, we are one of a handful of companies that are allowed to represent ships.
We are also the exclusive agents for Equate. We provide work clearance and any other vessel requirements, ensuring that they are following regulations and that they are up to speed with operations. These are highly secure facilities, so very few people are actually allowed there. Because of our past record, our company’s history and our performance, we are one of the few allowed to perform this service. There is a certain comfort level that KPC, KOC and KOTC have with us as compared to other operators.
Additionally, one of our big businesses here is the line agency. We represent a container shipping line called TEHAMA Shipping. They do two calls a week: one in Shuwaikh port and one in Shuaiba port. We handle approximately 1,000 containers per week for them.
Apart from that, we have a freight forwarding business, although this is not our main business. That segment gives us substantial revenue. It includes sea freight, air freight and specialised cargo. We assist our partners, Alghanim Industries.
What kind of opportunities do you see in Kuwait’s hydrocarbons and construction industries?
Many. On the oil and gas side, Kuwait has mainly been onshore. However, they are now considering going offshore. WSS owns a Norwegian company called NorSea Group that is involved in offshore logistics, specifically specialising in offshore platform logistics. Although they are not operating here at the moment, we are looking at ways to get them involved in Kuwait’s offshore development.
In Mina Al Ahmadi, STFA [Investment Holding] is building the small boat harbour project. We are their agents and the project is almost complete. They brought more than 1 million tonnes of aggregate into the country to build those jetties. This was all brought on barges and we were the agents that handled the discharge here.
We are also heavily involved in the New Refinery Project [Al Zour refinery], not directly but with the main contracts. We represent Boskalis and Van Oord, and are involved in the whole cycle of logistics.
Although some are delayed, there are big projects such as Al Mutla City. We are working very closely with the main contractors for that. This is a new project and is huge in terms of construction. Additionally, there is the Sheikh Jaber Al Ahmad causeway bridge project that is being constructed by Hyundai. We are working closely with them as well as other companies, serving as their representatives in bringing in equipment from Korea.
The biggest boom will probably be in offshore oil and gas facilities. There will also be growth in other infrastructure development projects. However, I do not see demand increasing for containers coming in.
How does WSS maintain a competitive advantage?
I believe there are two key differentiators. One of them is that we have the largest spread of products on offer, from products to ships to services. The second, which is more important than the first, is our governance. It is something we are proud of and insistent upon. We follow the highest standards in terms of safety, ethical conduct and compliance.
Everyone has a large safety manual and must follow checklists, even for simple things. We are TRACE compliant. No one in our office can offer or accept a bribe. Every company will say that, but we can say with certainty that we do not practice this. It took a lot of time, but now, by and large, people understand it.
We were in Iraq for many years and had a profitable business there. The office was three times the size of the Kuwait office. We pulled out of Iraq because of the corruption that ran counter to our governance. We will pull out of an environment even if it is highly lucrative if we cannot meet our governance standards.
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