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Tug Technology & Business

Tug Technology & Business

ATBs scrapped as ballast water treatment rules kick in

Tue 05 Feb 2019 by Martyn Wingrove

ATBs scrapped as ballast water treatment rules kick in
Kirby is the largest operator of coastal ATBs in North America

North American tugboat owners are retiring ageing articulated tank barges (ATB) instead of installing ballast water treatment systems to national and international rules.

One of the leaders in North American inland and coastal towage, Kirby Corp, says that it will take its units out of service instead of paying for treatment systems.

“Investing to meet this requirement in these ageing barges would be financially unattractive,” Kirby president and chief executive David Grzebinski says.

He explains that these need to be removed from the fleet in the next four years. “We expect we will early retire these ATBs at their next shipyard dates which range between 2020 and 2023,” he explains.

Kirby plans to spend around US$25M this year on installing ballast water treatment systems on its younger coastal towage ATBs.

Kirby has already been impacted by these IMO regulations as it had impairment costs for five ATBs in Q4 2018. “We impaired four older articulated tank barge units and one leased barge that require mandatory ballast water treatment systems under new regulations,” says Mr Grzebinski.

During Q4 2018, Kirby’s financial results were also negatively impacted by planned major shipyard maintenance on several large capacity vessels.

During 2019, Kirby expects barge utilisation to improve to around 85% as more ageing ATBs are removed by owners due to ballast water treatment regulations. 

Kirby will invest around US$45M in its marine segment in 2019 including purchasing three new coastal tugboats and 15 inland towboats. It plans to spend up to US$165M on upgrades and improvements to existing inland and coastal marine equipment, including US$25M on ballast water treatment systems on coastal ATBs.

In other news, Kirby has signed a definitive agreement to acquire the marine transportation fleet of Cenac Marine Services for around US$244M in cash. This purchase agreement comes as the inland transportation sector is encountering rising demand and barge utilisation levels and when Kirby is retiring older units.

Cenac’s fleet includes 34 inland towboats, two offshore tugboats plus 63 inland tank barges, each with capacity of around 30,000 barrels. In total, this fleet can transport approximately 1.9M barrels of oil on the lower Mississippi River, its tributaries, and Gulf Intracoastal Waterway.

Kirby announced revenues of US$722M in Q4 2018, compared with US$708M in the same period in 2017. Its reported revenues for the whole of 2018 were US$2.97Bn compared with US$2.21Bn in 2017 due to more favourable inland transportation and coastal trade.

In December 2018, Kirby took delivery of an articulated tug barge unit from Fincantieri Bay Shipbuilding – tug Ronnie Murph and 158-m long barge, Kirby 155-03.

Kirby is already one of the largest domestic tank barge operators transporting bulk liquid products throughout the Mississippi River System, on the Gulf Intracoastal Waterway, coastwise along all three US coasts, and in Alaska and Hawaii.  Kirby transports petrochemicals, black oil, refined petroleum products and agricultural chemicals by tank barge.

For more information on ballast water treatment systems please refer to our sister brand: Ballast Water Treatment Technology.

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