Britannia P&I is facing the prospect of a claim that is larger than initially expected after last week’s collision between a Norwegian frigate and a Tsakos Energy Navigation tanker, which is under its protection and indemnity cover.
The warship KNM Helge Ingstad, which had been participating in a Nato exercise, had taken on water and was in danger of sinking. No-one was injured in the accident, which occured near the Sture oil terminal at Hjeltefjorden, while the 113,000-dwt aframax Sola TS (built 2017) suffered little damage.
Although the frigate was earlier described as in stable condition it has now sunk and now likely to be declared a constructive total loss.
The KNM Helge Ingstad is reputed to be one of the most advanced frigates in the Norwegian fleet and fitted with state-of-the-art equipment. The cost of its loss will be a hefty one, speculated to be in the region of $500m. P&I insurers are generally liable for around one quarter of the financial cost of a loss in the case of a collision with hull insurers picking up the rest of the bill.
While it looks like the claim will fall well short of that figure, it is still likely to become a pool claim under the International Group of Protection & Indemnity Clubs, which kicks in after the first $10m.
The ultimate claim would also likely be increased by the temporary closures of the Sture oil terminal and the Kollsnes gas processing plant.
The frigate is likely to have been self-insured by the Norwegian government.
Local press reports also suggest the frigate may have been at fault, which would also work in the favour of Britannia P&I, although it is too early to say who is to blame for the collision.
The frigate, as is common with navy vessels, had turned off its AIS, making a timeline and tracking of the accident difficult to determine.
Two previous collisions between naval vessels and merchant ships have led to International Group pool claims. In June 2017, the 2,858-teu ACX Crystal (built 2008) hit the USS Fitzgerald off the coast of Japan, while the 50,760-dwt product tanker Alnic MC (built 2008) collided with the USS John S McCain off Singapore in August of the same year. The two accidents cost the lives of 17 US Navy sailors.
However, sources familiar with the claims process in these two cases have said the US Navy’s reluctance to pass on information on the voyages for security reasons helped keep a lid on the final amount. One particular piece of undisclosed information was the type of sophisticated equipment onboard the vessels, and some believe this might also apply to the KNM Helge Ingstad claim.
This article has been updated since first publication to reflect the sinking of the Norwegian warship.
