Authorities have launched an investigation after a tanker carrying around 18,000 tons of jet fuel for the US military was struck by a container ship transporting sodium cyanide in the North Sea, triggering explosions and a massive fire. Both crews abandoned their vessels with one person reported to be missing from the cargo ship,
Insurance experts believe the collision could result in a $43m loss for the marine hull and protection and indemnity (P&I) markets.
It is reported that the collision occurred when the Stena Immaculate, an anchored tanker, was hit by the container ship Solong. The impact ruptured one of the Stena Immaculate’s cargo tanks, releasing Jet A-1 fuel into the sea and igniting large fires on both vessels.
Lloyd’s List Intelligence reported the Solong cargo vessel was carrying 15 containers of sodium cyanide, a toxic chemical used mainly in gold mining, and an unknown quantity of alcohol. Skuld of Norway has confirmed that the Solong was covered by it for protection & indemnity (P&I) which provides coverage for environmental damage, as well as crew injuries or fatalities.
The Stena Immaculate, operated by U.S. logistics group Crowley, is owned by Stena Bulk Marine Services, based in Gothenburg, Sweden, while the Solong is owned by German shipping company Ernst Russ. “Both vessels have sustained significant damage in the impact of the collision and the subsequent fire,” Ernst Russ said in a statement.
The global fund that pays compensation for oil spills is not available for the Stena Immaculate collision because of the nature of the cargo, officials have confirmed.
The International Oil Pollution Compensation Funds (IOPC Funds) pays out if costs breach the shipowners’ limitation of liability – but only if the cargo is “persistent” oil, which does not apply for jet fuel.
Data from Kpler, an analytics firm, shows the Stena Immaculate left Corinth in Greece carrying 128,476 barrels of jet fuel, which it was due to deliver to a refinery in the Humber Estuary.
The Stena Immaculate was on short-term charter to the US Navy’s Military Sealift Command, transporting fuel on behalf of the Defense Logistics Agency (DLA) Energy. Since May 2023, it has been part of the US strategic tanker program, a fleet of ten US-flagged and US-crewed vessels kept ready for military fuel transportation.
The environmental impact of the fuel spill is being assessed and the UK Department for Transport stated that it is working closely with the coastguard and emergency services to mitigate the situation.
The Yorkshire Wildlife Trust has warned of the potential environmental impact of the spill. The charity said there were ‘significant’ colonies of seabirds on the coast, including puffins, razorbills, gannets and kittiwakes. There are also concerns for seal populations in the affected area.
W Denis arrange specialist (re)insurances for organisations involving in the marine and other offshore industries including energy, shipping, cargo and transportation operations and environmental liability insurance solutions. To discuss this further with a broker at W Denis, please make arrangements with Daniel Moss at [email protected] or on 0044 (0)113 2439812.
