BC Ferries awards $165M deal to Polish shipyard for LNG-powered vessels

VICTORIA—BC Ferries has awarded a $165-million deal to a Polish shipyard for a trio of bi-fuel ferries capable of running on liquefied natural gas (LNG).

The ferry operator said it awarded the contract to Remontowa Shipbuilding S.A. for three intermediate class ferries that can run on either diesel fuel or LNG, the first such vessels in BC Ferries’ fleet.

“This is an exciting initiative for BC Ferries that can reduce upward pressure on fares due to lower fuel costs for LNG, and reduce the environmental emissions substantially since LNG is a cleaner and greener fuel compared to current alternatives,” BC Ferries vice-president of engineering Mark Wilson said in a statement.

The first two 105-metre vessels are scheduled to arrive in British Columbia in August and October 2016, respectively, while the third and final ferry is set to be delivered in February 2017.

BC Ferries said one of the new ships will replace the 49-year-old Queen of Burnaby, which sails between Comox, B.C., on Vancouver Island, and Powell River, B.C., north of Vancouver.

Another of the new vessels will run BC Ferries’ Tsawwassen,B.C., on the mainland, and the Southern Gulf Islands, replacing the 50-year-old Queen of Nanaimo.

The third vessel will be used to augment service during peak season and provide refit relief across the fleet.

All three vessels can carry 145 vehicles and 600 passengers, according to BC Ferries.

“As we begin the next phase of our new build program, a key objective is to achieve capital and operating cost savings and efficiencies through an overall class and standardization strategy,” Wilson said.

“Standardization offers greater interoperability and lower crew training and maintenance costs, and also enhances safety. This is a significant step forward in taking BC Ferries from 17 classes of ships to five classes.”

The contract with Remontowa contains “substantial guarantees” surrounding delivery dates, cost certainty, build quality and performance criteria, Wilson continued, including penalties of about $20,000 per day to a maximum of $6 million for late delivery.

BC Ferries can rescind the deal after 180 days.

The ferry operator can also hit Remontowa with penalties for below-specification speed, excessive noise or vibrations, and poor fuel consumption, weight and freight capacity, acceleration time and rate of turn.

The deal also includes an extended builder’s warranty of 24 months from delivery—12 months longer than the standard terms of a typical shipbuilding contract.

While the three vessels carry a price tag of $165 million, the total project budget approved by BC Ferries’ board of directors is $252 million, which includes financing and project management costs, as well as $51 million for taxes and import fees.

The contract also includes the title to the vessels’ design, plans and drawings at no additional cost to BC Ferries.

This, according to the company, is important for future fleet renewal projects as BC Ferries implements its overall class strategy.

According to BC Ferries, Seaspan Marine Corp., which has a shipyard in Vancouver, was the only Canadian firm shortlisted to be a finalist in the bidding process, but had to withdraw its bid due to capacity commitments under a contract with the federal government’s National Shipbuilding Procurement Strategy (NSPS) and BC Ferries’ new cable ferry.