Rescue boats resume search for missing Sanchi sailors

Rescue boats recommenced their search on Thursday January 11th for any survivors from stricken Iranian oil tanker Sanchi, which collided last Saturday with bulk carrier CF Crystal (since towed to port) in the East China Sea, 160 nm off Shanghai.

The ship remains at risk of exploding and sinking due to spilled oil, the Chinese Ministry of Transportation (MOT) said in a statement yesterday.

On Wednesday rescue crews had been forced to retreat after a blast on the tanker, Reuters reports.

“Spilled oil covering the ship body and its surrounding water is still burning, which leaves Sanchi at risk of exploding and sinking,” the MOT said. The ministry has sent 12 rescue ships to search for the 31 remaining tanker crew members and to extinguish the fire. One body suspected to be from the tanker crew was retrieved from the water this week.

“Contaminated air from fire and bad weather have increased difficulties of rescue work,” the MOT said.

By 17:00 local time on Thursday, the tanker was still on fire and the search area had expanded to more than 1,000 square miles. The cause of the collision was not clear. CF Crystal arrived at Zhoushan port on Wednesday and is under investigation. Sailors from CF Crystal were rescued by a passing Chinese fishing boat.

Korean insurer Hanwa and China’s PICC have been named by Insurance Insider as lead insurers for various parts of the insurance associated with the accident. Skuld has confirmed its position as lead hull insurer for Sanchi and P&I Club insurer for CF Crystal. Steamship Mutual is the P&I insurer for Sanchi.

The cargo value of Sanchi was put at about $60m, and it is now thought that the event could impact the lower end of the International Group’s pool reinsurance, which attaches from $10m to $45m. The upper pool layer runs from $45m to $80m (with an individual club retention of 7.5%), and a layer from $80m to $100m is currently reinsured by group captive Hydra.

Once above $100m (to $600m) the situation becomes more complex, with GXL reinsurance making up 55%, Hydra co-insuring for 30%, and three private placements taking 5% each. However, the indications appear to be (notwithstanding the uncertainties surrounding condensate) that, even if the $100m limit is breached, it will not be by much. These levels apply to both P&I and to oil pollution. In each case there is a single per-vessel retention.

Sanchi is entered with Steamship Underwriting (Smuab), Eastern Syndicate, on behalf of Bright Shipping Ltd.

CF Crystal, owned by Changong Group HK Ltd care of manager Shanghai CP International Ship Management of Shanghai, China, is entered with Skuld on behalf of Changfeng Shipping Holdings Lim.

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