THE I.M. SKAUGEN COMPANY

A Brief History

isak_martinius_skaugen

Isak Martinius Skaugen

1875 – 1962
The founder of the company
Master Mariner 1900
Part Owner 1912
Sole Owner 1916

morits_skaugen_snr

Morits Skaugen sr.

1920 – 2005
Joined the company in 1947 and made a partner together with his two brothers in 1952. As a ship owner he held many positions of trust in national and international shipping organizations.

morits_skaugen_jnr

Morits Skaugen

1955 –
Joined the board in late 1990 and became CEO in 1992. Since then he has been in charge of refocusing the activities of the Group, concentrating on customer service, quality control and reduction of costs, applying a global approach and innovative processes.

The four masted barque, 'ALCIDES'
The four masted barque, ‘ALCIDES’

Steady as she goes

Steady as she goes, through 100 years and more- with the steady hands of each generation at the helm. Along the way weathering the elements, the highs and the lows, the destruction of two World Wars and the deep troughs of global economic depression. All the while aspiring to doing things better, to innovate and embrace new technology, to encourage and educate in the search for that betterment. To maintain those high moral standards, in all our dealings, that each generation has faithfully upheld.

Although the I.M.Skaugen company of today has its foundation in the D/S A/S “Eikland”, the company that Captain Isak Martinius Skaugen established in Norway in 1916, there is little doubt that the historic origin dates back to 1912, when he was Master of the four masted barque “Alcides”. From that point on he became the Disponent Owner, while continuing to command the vessel. In 1916 the Captain, now the Sole Owner,was convinced that the days of sail were over and that steam vessels were the way forward. The elegant “Alcides” which is still our symbol of pride was sold and in its place the new S/S “Eikland” was put into service. The Captain had decided that the new company and its first steamship would take the name of the first shareholder to provide economic support for his new venture, Mr.Olaf Eikland.

Since then the company has travelled far and explored many different ventures within the field of maritime transportation. Ever since the days of sail the company has based its operations on a multinational, multicultural manning, just as it does today.

The details of this century of exploration follow, along with the thought that our focus can be expressed in the words of the poet,

“Made weak by time and fate
But strong in will
To strive, to seek, to find and not to yield.”

The company's first steam vessel - the 'D/S EIKLAND'
The company’s first steam vessel – the ‘D/S EIKLAND’

1916 – 1928: From Sail to Steam

Master of his own sailing ships since 1900, Captain Skaugen could see that the future belonged to steam-driven vessels and so the ‘Alcides’ was sold and replaced with a steam vessel of 2,040 DWT, christened the ‘Eikland’. The money for this purchase was raised on the Christiania Stock Exchange and the first shareholder to invest in the company was Mr Olaf Eikland. To show his appreciation, Captain Skaugen named the company and its first vessel after him. The ‘Eikland’ was later joined by two more steam vessels and together they were employed in the North European tramp trade.

‘M/T PERICLES’
‘M/T PERICLES’

1929 – 1938: Diesel Power and the Tanker Trade

Looking to develop the company further, Captain Skaugen decided to venture into the transportation of oil and in 1929 signed a contract for the building of his first tanker, choosing the new diesel engine for power and propulsion. In the following years two more diesel-powered tankers were delivered. Thus steam in its turn gave way to a future based on diesel, and consequently Skaugen’s steam vessels were sold.

‘M/T ALCIDES’ Torpedoed and sunk Indian Ocean June 1943
‘M/T ALCIDES’
Torpedoed and sunk
Indian Ocean June 1943

1939 – 1945: World War II

At the outbreak of the hostilities in 1939, Captain Skaugen had a newly delivered cargo liner on charter to the British Government, in addition to his three oil tankers. In April 1940, when the Germans occupied Norway, the Skaugen fleet was placed under the control of the exiled Norwegian Government in the UK and became a valuable asset in the Allied war effort. Captain Skaugen lost all contact with his ships from this time until Norway was again a free country in 1945. Only two of the Skaugen vessels survived the war, the rest were torpedoed and sunk with great loss of life. The tanker, ‘M/T Alcides’, was one of these and its fate is testimony to the brutality of war. Of its crew of 52 men, all but three perished, gunned down in their lifeboats in the Indian Ocean escaping the torpedoed ship. However the Captain and two officers were taken prisoner by the submarine that had sunk the ship and survived the horrors of the concentration camps to tell the tale of the ‘Alcides’ and her men.

‘M/S SKAUVANN’ Survived World War II
‘M/S SKAUVANN’
Survived World War II

1946 – 1949: Rebuilding – Challenges and Opportunities

Immediately after the war, the first order of business was replacing the lost tonnage and establishing new trade routes. Together with Sven Salen, the largest Swedish ship owner of the day, the Salen-Skaugen Line was established. This line offered regular services between the US West Coast and ports in the Far East, combining general cargo and passengers. The tonnage that survived the war was augmented by newly acquired ships bought in the USA. Another addition to this Trans Pacific line was the unfinished new building, ‘Ostmark’. Discovered in Kiel in 1947 and subsequently purchased through the British Ministry of Transport, she was completed and renamed ‘Skaugum’. However, after Mao Zedong led the communists to power in China in 1949, the ports so essential for the success of this venture were closed and the partnership decided to withdraw and develop opportunities elsewhere.

‘M/S SKAUGUM’ - the first refugee carrier and the precursor to Skaugen's venture into modern cruise business
‘M/S SKAUGUM’ – the first refugee carrier and the precursor to Skaugen’s venture into modern cruise business
'M/S SKAUBRYN'
‘M/S SKAUBRYN’

1950 – 1959: Refugees, Troops, Pilgrims and Passengers

World War II left in its wake hundreds of thousands of refugees. Designated ‘displaced persons’ and collected in camps all over Europe, the relocation of these unfortunate individuals needed to be accomplished speedily. The ‘International Refugee Organisation’ was given the mandate to relocate them and the USA, Australia and Canada were all willing to receive them. Appropriate vessels were therefore required for this mass transportation project and the ‘Skaugum’ proved to be a particularly well-suited candidate.

Converted in Kiel in 1949, she was fitted out for 1,800 refugees and 200 crew. With a maximum speed of 22 knots, ‘Skaugum’ was an obvious choice for the long voyages to Australia. Joined in 1950 by the new ‘Skaubryn’, a total of 170,000 refugees were carried to Australia by I.M. Skaugen over some five years. Subsequently, both these people carriers were involved in transporting troops to Korea, repatriating Dutch citizens in the wake of Indonesian independence and carrying troops from France and North Africa to Vietnam. ‘Skaugum’ ended her career carrying pilgrims to Mecca for the Haj. ‘Skaubryn’ was upgraded to first-class passenger standard for the launch of Skaugen Line’s Australian route.

‘M/S SKAUFAST’ Loading iron ore in Labrador
‘M/S SKAUFAST’
Loading iron ore in Labrador

1960 -1970: New Cargoes, New Routes, New Specialisations

In the early 1960s, the company commissioned a fleet of four new bulk carriers to serve large freight contracts to shallow water ports in Argentina. Consequently, ship-to-ship transfer was required and Skaugen made its first foray into large scale transfers at sea. Skaugen also pioneered the bulk shipment of cement, developing the self-unloading equipment required. Skaugen was one of the founders of the Norwegian Bulk Carrier pool – NBC, and the vessel size grew from 14,000 to 100,000 DWT over a period of eight years. In addition, a specialised lumber carrier and five new product tankers were added to the fleet.

Royal Caribbean Cruise Line's - 'M/S SONG OF AMERICA and M/S SUN VIKING' In Miami 1982
Royal Caribbean Cruise Line’s –
‘M/S SONG OF AMERICA
and M/S SUN VIKING’
In Miami 1982

1968 – 1988: Cruising – A Brand New Concept

Building on its experience and expertise in operating passenger ships, Skaugen now saw new opportunities in a specialised cruise concept. Shipboard vacations in hotels with propellers: custom-built ships, scheduled ports, clockwork regularity, maximum efficiency and economy of scale. Thus, together with two other Norwegian owners, Gotaas-Larsen and Anders Wilhelmsen, Royal Caribbean Cruise Line was founded. Later, in the 1980s, in co-operation with J. Lauritzen of Denmark, Pearl Cruises was formed to meet the growing demand for more adventurous cruising to the newly re-opened China.

‘M/S SKAUGRAN’ - the first of three specially commissioned ro-ro vessels
‘M/S SKAUGRAN’ – the first of three specially commissioned ro-ro vessels

1971 – 1980: Offshore Oil, Ro-Ro, and Car Carriers

With the increase of off-shore oil and gas activity in the 1970s, Skaugen Offshore and Skaugen Drilling were established. A drilling rig and four state-of-the-art supply vessels to serve it were ordered. Exploration in the Canadian oil fields off the coast of Labrador and later the Sakhalin fields of the Soviet Far East were the main areas of operations. During the same period, long-term contracts with Ford were signed and thus car decks were built into a number of the bulk carriers. Viking Car Carriers was formed – a collaboration between Skaugen, C.T. Gogstad – another Norwegian owner, and Dominion Steamship Company of New York. In 1974 the owned tonnage was released for other trades and replaced by chartered vessels. Viking Car Carriers operated successfully well into the next decade. New vessel designs for ‘roll on roll off’ cargoes were emerging and in close association with the Seaboard Company of Canada, who employed Skaugen’s former lumber carrier, three new ro-ro vessels were ordered. Fitted for both packaged lumber and cars, they were the biggest of their kind ever built.

'Nosac Skaukar' - The Pure Car Carrier
‘Nosac Skaukar’
– The Pure Car Carrier

1981 – 1988: Liquid Petroleum Gas and Other Activities

Norwegian Gas Carriers – NGC (now Norgas) – was established in 1982 as the chartering and marketing entity for a co-operative pool of 20 LPG carriers, belonging to five separate owners. I.M. Skaugen gradually became the largest shareholder and after merging with two of the most influential of these five, became an owner and operator of liquid petroleum gas carriers. Together with Norwegian ship owner, Anders Jahre, Jahre Skaugen Carriers was established to provide bulk carrier tonnage to service the long-term shipment of iron ore from Brazil to Japan contracted by the Norwegian bulk carrier pool – NBC. In addition, in 1986, Ford Motors expressed interest once again in doing business with Skaugen and a new design concept of vessel was built, the ‘Pure Car Carrier’.

1988 – 1991: Acquisitions and Mergers

Skaugen sold its interest in the Royal Carribean Cruise Line in 1988 and acquired the conglomerate, Kosmos. The main shipping activities of this famous old whaling company were retained and its numerous other businesses sold off. A new I.M.Skaugen (IMS) was registered on the Oslo Stock Exchange in 1990 after a merger of the privately-owned Skaugen family business, the publicly-held Laboremus, founded in 1910 and Kosmos Shipping, founded in 1912. At the same time, the Kosmos shuttle tanker operation based in Texas was spun-off, made public and registered as Skaugen PetroTrans (SPT). The composition of the IMS fleet was four VLCCs, 23 LPG carriers, 10 product tankers and 20 bulk carriers, half of which were owned, and half chartered. The SPT fleet comprised 11 shuttle tankers, six workboats and two chemical tankers.

SPT shuttle tanker lifting cargo from a VLCC in the Gulf of Mexico
SPT shuttle tanker lifting cargo from a VLCC in the Gulf of Mexico

1991 – 1995: The Turnaround Process

Due to substantial weaknesses in the merged companies, evident in high operational costs and high acquisition costs of the assets, I.M. Skaugen shifted its focus from being a diversified investment company to becoming a true marine service transportation company.

Under the brand names SPT (Skaugen PetroTrans) and NGC (now NORGAS) the core activities became the ship to ship transfer of oil cargoes and the transportation of gas cargoes.

Two of Skaugen's five LPG barges, transporting cargoes along the Yangtse river
Two of Skaugen’s five LPG barges, transporting cargoes along the Yangtse river
Norgas Ethylene Carriers built at Hudong shipyard, Shanghai
Norgas Ethylene Carriers built at Hudong shipyard, Shanghai

1996 – 2000: New Horizons

In 1996, IMS entered into the first Sino-foreign joint shipping venture in China with the Hubei Tianfa Group to transport liquid petroleum gas on the Yangtze River. To secure a stable supply of competent manpower, IMS established its own training and recruiting centres as joint ventures with maritime universities in Wuhan, China, and St.Petersburg, Russia.

SPT sold its owned shuttle tanker fleet in 1996, preferring to operate the ship-to-ship transfer business with chartered tonnage. In its first 20 years of operation SPT transferred over four billion barrels of crude oil and received a number of prestigious awards for its safety and environmental record.

In 1999 IMS joined forces with GATX Capital of San Francisco to commission six new ethylene carriers from the Hudong-Zhonghua Shipyard in Shanghai. Other plans for expansion were on the drawing board, in the expectation of growth in the years ahead.

‘M/T NORGAS ORINDA’
‘M/T NORGAS ORINDA’
‘M/T SPT CHALLENGER’ - One of the 6 purpose built shuttle tankers
‘M/T SPT CHALLENGER’ – One of the 6 purpose built shuttle tankers

2001 – 2003: Alliances and Fleet Expansion

After a sound start to the decade, a continued tight focus on costs and sound management helped to propel Norgas to a particularly strong performance during this period. SPT performed well in the opening years of the new millennium and as the largest trans-shipper of US crude oil imports the company lightered on average over 1.1 million barrels per day or about 14 per cent of the US seaborne crude oil imports.

Norgas took delivery of six new 8000 m3 & 10000 m3 ethylene carriers. By the end of 2003, the Norgas fleet consisted of 19 gas carriers and the average age had been reduced to 16 years. I.M. Skaugen formed a revenue sharing gas carrier pool with A.P. Møller-Mærsk, under the name MNGC. (Mæersk Norgas Carriers).This pool was later transformed into ENGC when the Camilla Eitzen Group took the place of Mærsk.

In 2003 I.M. Skaugen joined forces with Teekay Shipping Corporation to jointly operate and expand its lightering business, allowing Teekay to take a 50 per cent stake in SPT.

These two alliances enabled I.M. Skaugen to enhance each of its business units and strengthen its marketing leadership in the world.
At year end 6 new purpose built 106 000 dwt. lightering tankers were commissioned for SPT on long term bareboat charters commencing in 2007 & 2008.

2004 – 2006: Partnerships and fleet renewals continue

The company initiated a comprehensive programme to build up to 16 gas carriers to augment the Norgas fleet. The first of these was to be delivered in 2007. These specially designed vessels will when delivered give the company a solid foundation for future growth in the energy and petrochemical sectors.

The 6 Super Coolers sat a new standard – not only able to
maintain the temperature as the traditional vessels, but also cool down the cargo 2.5C per day. More R&D resulted into new liquefaction
technologies enabling an increase in performance by another 10%. Over the years we have improved the cooling capacity on our newbuildings – from Super Coolers, to Wintergas and Multigas. Better cooling capacity resulting in improved performance without any increase in power consumption.

Taizhou Skaugen Wuzhou Shipbuilding
Taizhou Skaugen Wuzhou Shipbuilding

2006 Further Joint Venture Initiatives in China

I.M. Skaugen created a new division in 2006, Skaugen Marine Construction (SMC). Through SMC the company streamlined its marine construction activity in China. SMC took primary responsibility for the new build activities by acting as project leader, supported by the company’s two Chinese joint venture (JV) partners.

The first of these JVs was with Taizhou Wuzhou Shipbuilding Co Ltd. The second JV was with Shenghui Gas & Chemical Systems, which specializes in structural cryogenic tanks used in the marine and petrochemical industry.

In 2006, SPT purchased a UK-based lightering company and expanded into the European, Russian and West African markets. This same year SPT performed the world’s first four commercial lightering operations of LNG.

SHIP TO SHIP transfer of LNG at Scapa Flow
SHIP TO SHIP transfer of LNG
at Scapa Flow

2007 – 2008 Innovative Maritime Solutions

Carbon capture and storage (CCS) promises to assist in reducing global CO2 emissions by up to 30 percent.Large scale shipping offered a flexible and fast solution to complement the conventional pipeline approach.IM Skaugen is the only shipping company operating vessels designed for transporting up to 10 000 m3’s of liquid carbon dioxide . Since 2006 we have taken a proactive role in its project and technology development. During this period Norgas was able to position itself as the low costtransporter of petrochemical gases from the Middle East to Asia. The company’s ship to ship transfer division partnered with Teekay to expand its service capacity, from its presence in the US Gulf into global markets, with a new focus on LNG.The company’s activities in China – including ship construction expanded rapidly and provided the basis for long term development. The company recognized the growing need for environmental solutions to the world’s energy problems, and for this reason developed its own small-scale LNG concept.

2008 -2016 A period of a Great Global Financial crisis and years of Transformation

When the “great financial crisis of 2008″ hit the world, the Company was in the middle of a fleet renewal and expansion, building of a series new ships in China. These ships were delayed as a result of the crisis and also delivery became more complicated than anticipated. Financing became more complicate and much more expensive. The EU/US sanctions placed on Iran increased the challenges and with it a decline in the cargo volumes from the Middle East/Gulf region was yet another factor. Trade from the region was reduced to less than half of what it had been and much of our strategy was focused on a growing export from this region. The Company was also challenged as LNG was not available in the quantities expected due to very high prices from a shortage of supply. US crude oil imports were redcued and took away the potential for our US based lightering business. Having completed the fleet renewal program with the delivery of the Multi Gas LNG ships in 2010/11 the Company then divested itself of all their ship building related activities in China. The same applied to all other non-core business activities in China.

However, new opportunities existed due to the positive effects of the shale oil-and gas boom in the US, increasing both export and import of most liquefied gases. Our expectation was that LNG production and exports would expand in the years ahead and that prices would become more competitive.

The Company transformed the existing global ambition of three different business segments to that of one core segment which focused on the markets engaged in handling regional transportation of liquefied gases, and with a focus on LNG. During the start-up period of the LNG the Company made substantial investments to develop our small scale LNG concept. The cargo and reliquefaction systems we developed for the new Multigas vessels were unique and contained many novel technologies. The company also invested abt USD 15 mil in R&D, and the development of equipment and system for the ship to ship transfer of cargo, as well as the storing and re-gassing of LNG. The enhanced flexibility and superior capabilities of the new ships became an effective tool in capturing new business opportunities.

“Norgas Innovation” – The latest of the multigas class vessels

the journey continues…