Billiton and Teekay link up in freight cost-saving merger

Fleet will call at Richards Bay, writes Alan Peat A MAJOR freight cost saving has motivated a joint-venture between the London-listed BHP-Billiton group (a merger of SA and Australian mining houses) and the Bahamas-based Teekay Shipping - claimed to own the world's largest fleet of medium-sized oil tankers. This will "improve operating costs through economies of scale and on-going surety over service quality and risk", said Billiton's president of transport and logistics, Bruce McGowan. With 30% of its income derived from crude oil and gas business, Billiton will contract the services of Teekay's modern fleet of 95 vessels. At the same time it is folding its own shipping assets into the Teekay fleet, Michael Campbell, Billiton's Johannesburg-based vice-president for investor and media relations, told FTW. This will add six wholly-owned bulkers, four in joint ventures, and seven which Billiton manages for the owners - along with four liquid gas carriers and eight tugs. "Basically," he said, "we are outsourcing our assets to Teekay which will take these over and run all our shipping logistics." The joint venture is expected to create a world- class shipping management business, caring for the sea transport of Billiton's major interests in oil and gas, iron ore, aluminium and coal. The joint fleet will also serve other independent customers, Campbell told FTW. And it will become visible in SA, when bulkers in the fleet start to call at the deep-water harbour of Richards Bay for coal export cargoes from the Billiton and other mines in Mpumalanga and Gauteng.