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Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013
LNG-fuelled Deep Sea Shipping The outlook for LNG bunker and LNG-fuelled
newbuild demand up to 2025
Jesper Aagesen Senior Surveyor
Ship Design Specialist
25 February 2013
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 2
My Background and Experience
1997 Technical University of Denmark
Naval Architect, M.Sc.
1997 Carl Bro Marine
Project Manager
2005 A.P. Moller – Maersk, Newbuilding Dept.
General Manager
2010 Lloyd’s Register, Nordic Marine Business
Senior Surveyor, Ship Design Specialist
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 3
Overview of the Programme
• Setting the Scene
• Options for Compliance
• Lloyd’s Register LNG as Fuel Leading Projects
• LNG Bunkering Infrastructure Study
• Conclusions
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 4
Setting the Scene
• 96 weeks to go until 1 Jan. 2015
• Main compliance options:
• Low sulphur fuel oils
• HFO w/ scrubber
• Alternative fuel, e.g. LNG, methanol, DME
• We don’t believe in “one fuel fits all”
• LNG is a solution not the only solution!
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 5
Lloyd’s Register LNG as Fuel Leading Projects
• Viking Line Cruise Ferry
• Inland waterways vessels in The Netherlands
• Other projects & JIPs with leading stakeholders
• Huge LNG-carrier experience
• Risk assessments
• LNG Bunkering Infrastructure Study
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 6
Why Doing the LNG Bunkering Infrastructure Study?
Short-sea &
Smaller ships
Deep-sea &
Large ships
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 7
Bunkering Study – How We Did
1
Infrastructure
Existing oil-based & LNG
bunkering facilities
2
Supply LNG
Terminals imports & exports
4
High volume of
trade routes per
ship types/size
5
Trade routes
in/out ECA zones per
ship types/sizes
6
Shipowner's Survey
‘Beyond Compliance’
‘Early adopters’
3
Identify
Bunker ports with close proximity
to ECA Zones
7
Port Survey
Validate 10 top ‘most
likely ‘locations
2nd Stage Reality-based
approach Validation of findings by
stakeholders
1st Stage Process
2nd Stage Process
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 8
Limitations of the Study
• Not a technical study
• Not short-sea focussed
• Not trying to develop a new fuel price forecast
model
• Energy density/tank volumes not considered
• It has a global approach
• Considering deep-sea ships only
• The estimated number of LNG-fuelled ships are for
newbuildings only
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 9
Step 1 Top Bunkering Ports
Top 10 oil
bunkering
ports 2010
Through
put
(000’s t)
Market
share of
Top 10
Singapore 34,000 38 %
Rotterdam 13,000 15 %
Fujairah 9,500 11 %
Antwerp 6,108 7 %
Hong Kong 5,429 6 %
Gibraltar 5,047 6 %
Korea
(Busan) 4,559 5 %
West Africa 4,100 5 %
Tokyo Bay 3,494 4 %
Iran 3,135 3 %
• Top 10 ports > 35% of global volume
• NW-Europe, Singapore and Persian
Gulf account for abt. half of the
global volume
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 10
LNG Import Bunkering Hubs LNG Export
Steps 1-3 Oil Bunkering & LNG Supply Locations – N America
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 11
LNG Import
Bunkering Hubs
LNG Export
Steps 1-3 Oil Bunkering & LNG Supply Locations – Europe
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LNG Import
Bunkering Hubs
LNG Export
Steps 1-3 Oil Bunkering & LNG Supply Locations – M East
-
10
20
30
40
50
60
Qatar Oman Yemen UAE Kuwait
mil
lio
n to
nn
es
LNG Import & Export Locations Middle East 2010, by Shipments
Exports
Imports
0
2
4
6
8
10
Fujairah Iran Ras Tanura Suez Canal
milli
on
to
nn
es
Middle East Oil Fuel Bunker Throughput - 2009
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 13
Steps 1-3 Oil Bunkering & LNG Supply Locations – Far East
LNG Import
Bunkering Hubs
LNG Export
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Step 4 Identification of Major Deep-Sea Trade Routes
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Step 4 Trade Routes & Consumption – Containerships
Figures are based on a round trip average FOC of a Panamax
abt. 127 t/day and a Post-Panamax abt. 190 t/day excl. port time.
Cont.ship Routes Dist.
(nm)
Transit
Days
Est. HFO
(t)
LNG
Eq. (t)
Asia -N Europe 8,257 21 2,667 2,134
Asia – USWC 5,695 22 2,794 2,235
Europe - USEC 3,302 10 1,270 1,016
S Africa – Europe 6,139 16 2,032 1,626
Asia – S Africa 7,569 15 1,905 1,524 Europe –
USEC
Europe – S
Africa
Asia – S
Africa
Asia –
USWC
Asia – Mid East
Asia – Ind Sub Med – ECSA
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 16
Persian Gulf to:
China, S Korea, Japan,
Taiwan, S Asia
W Africa – Asia
W Africa – USEC Persian Gulf –
USWC
Persian Gulf – USEC
Persian Gulf – Asia
VLCC Routes Dist.
(nm)
Transit
Days
Est. HFO
(t)
LNG
Eq. (t)
Persian Gulf -
USWC 12,045 39 3,775 3,020
W Africa - Asia 10,000 34 3,291 2,633
Persian Gulf - USEC 9,142 22 2,130 1,704
Persian Gulf - Asia 6,000 17 1,646 1,316
W Africa - USEC 9,142 10 968 774
Step 4 Trade Routes & Consumption – VLCCs
Figures are based on a single laden voyage with average
FOC of a VLCC abt. 97 t/day excl. port time.
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 17
Step 4 Trade Routes & Consumption – Capesize Bulkers
Brazil – China/Asia
S Africa – China/Asia
Aus – China
Aus – Japan
Colombia – Europe
Canada – Europe
Aus – Europe Figures are based on a single laden voyage with average
FOC of a Capesize bulker abt. 60 t/day excl. port time.
Capesize Routes Dist.
(nm)
Transit
Days
Est. HFO
(t)
LNG
Eq. (t)
Australia - Europe 11,630 38 2,280 1,824
Brazil - China/Asia 10,897 36 2,160 1,728
S Africa -
China/Asia 6,830 20 1,200 960
Colombia - Europe 4,974 14 840 672
Australia – Asia 3,730 11 660 528
Canada – Europe 2,767 10 600 480
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 18
Step 6 Shipowner Survey Results – All Ship Types
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 19
Step 7 Port Survey
• 25 ports approached globally
• 13 replies received
• Assessing the awareness of ports of LNG as a viable fuel
option for deep-sea shipping and what plans they may have
to provide LNG bunkering in the future
• Ideally this will identify the future global locations of LNG
bunkering and the conditions that need to be met in order for
LNG bunkering to take place
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 20
Step 7 Ports Selected & Basis of Selection
1. Singapore *
2. Rotterdam *
3. Fujairah *
4. Hong Kong
5. Algeciras *
6. Busan
7. San Francisco
8. Los Angeles
9. New York *
10. Panama Canal – Cristobal
11. Panama Canal – Balboa
12. Houston *
13. Gothenburg *
14. Piraeus *
15. Suez Canal – Port Said
16. Shanghai *
17. Zeebrugge *
18. Tokyo Bay - Yokohama
19. Southampton *
20. Vancouver *
21. Las Palmas
22. Nynäshamn *
23. Kochi (Cochin)
24. Gladstone
25. Sydney
Tier 1
Ports
Tier 2
Ports
Tier 1 Ports: 1. Known bunkering ports.
2. Known to be looking at their
potential to be an LNG bunkering
site.
3. The supply of LNG is close to the
port (within a 50 mile radius).
4. The port is located along a main
deep-sea trade route with high trade
volume. Tier 2 Ports: 1. Ports considered as early adopters.
2. Bunkering ports that ships may be
able to deviate to before entering an
ECA.
3. Trade volume specific to particular
ship type; bulk carriers transit
Sydney & Gladstone.
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 21
Ports that see themselves as drivers
of change to LNG as fuel
Yes
62%
No
38%
Step 7 Port Survey Results
Ports that have carried out
research into LNG bunkering
Yes
54%
No
46%
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Step 7 Port Survey Results
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 23
Step 7 Port Survey Results
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 24
2nd Stage LNG Bunkering Demand Model
• Containerships, tanker, bulkers and cruise ships
• Factors considered per shiptype:
• All findings and strands from the steps 1-7
• Representative deep-sea trade routes per shiptype
• Confirmed ECAs and Global sulphur limits
• LNG compared to HFO (w/ scrubber) and MGO options and installation costs of alternative technologies
• Propensities to bunker LNG as fuel depending on time in ECAs and savings potential compared to MGO and scrubber
• HFO and MGO bunker price developments relative to LNG bunker prices regionally for 2012-25
• Dynamic and interactive model with “fluid” assumptions
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 25
LNG Bunkering Demand Model – Driving Factors & Scenarios
Factors Assumption
s Base Case High Case -25 %
Low Case +25
%
Regulatory
complianc
e
ECAs Confirmed ECAs only Confirmed ECAs
and Japan,
Singapore and
Panama by 2018
Confirmed ECAs
only
Global sulphur
cap
From 2020 From 2020 From 2023
Future
newbuildin
g demand
Newbuilding %
propensities to
select LNG as
fuel
Increase 2020+
propensities by 50 %
Increase 2020+
propensities by
further 25 %
Decrease 2020+
propensities by 25
%
Commercia
l savings
HFO/MGO price
forecasts
Driven by y-o-y crude
oil price changes
As base case As base case
LNG bunker
price forecasts
Driven by y-o-y price
changes of HFO (75
%) & Henry Hub (25 %)
Base case price -25
%
Base case price
+25%
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 26
LNG Bunkering Demand Model – Propensities
ECA-% Propensity of newbuildings to
adopt LNG as fuel
Scenarios 2012-19 2020+
Base
2020+
High
2020+
Low
Global
cap
2020
Global
cap
2020
Global
cap
2023
< 5 % 0 % 0 % 0 % 0 %
5 – 25 % 10 % 15 % 19 % 11 %
25 – 55 % 20 % 30 % 38 % 23 %
55 – 75 % 25 % 38 % 47 % 28 %
75 – 100 % 30 % 45 % 56 % 34 %
OPEX
Savings
by LNG
vs.
HFO/MG
O
Propensity
for newb.
to adopt
LNG as
fuel
< -10 % 0 %
-10 – 0 % 20 %
0 – 10 % 40 %
10 – 20 % 60 %
20 – 30 % 80 %
> 30 % 100 %
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 27
LNG Bunkering Demand Model – Fuel Price Assumptions
Fuel Price 2012
(USD/MMBtu)
Price 2012
(USD/t)
Price 2012
(USD/t oil eq.)
HFO ~700 ~700
MGO (&
MDO) ~1000 ~1000
LNG Europe 14 664 531
LNG America 10 474 379
LNG Asia 20 948 758
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 28
The Demand Model – Ship Demand Forecast 2012-25
Ship type Newb.
(cum.)
LNG-
fuelled
newb.
(cum.)
LNG-
fuelled
newb. per
ship type
Share of
LNG-
fuelled
newb.
Container 1,898 110 6 % 17 %
Bulk 7,305 275 4 % 42 %
Oil tankers 1,977 146 7 % 22 %
Cruise 230 25 11 % 4 %
Chem. tankers 1,614 14 1 % 2 %
LPG tankers 522 4 1 % 1 %
General cargo 1,313 49 4 % 8 %
Car carriers 711 30 4 % 5 %
Total 15,570 653 4 % 100%
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 29
LNG Bunkering Demand Model – Overall Ship Demand
29
Scenario Base case High case Low case
Total newb. 653 1,963 13
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 30
Next Steps…
• Continual (yearly) updates of the model and press releases of findings
• Continual validation of the model and investigate appetite for JIPs with:
• Gas supplier
• Engine maker
• Shipyard
• Shipowner
• Port terminal operator
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 31
Conclusions
• 1 Jan. 2015 is getting closer: From today 96 weeks to go!
• Existing bunkering hubs are well positioned to supply LNG for ships
• LNG bunker infrastructure is a major challenge
• Short-term: MGO is seen as a solution
• Long-term: LNG for deep-sea ships for container and cruise ships Still some doubt among tanker owners
• Solutions will be ship type and trade route specific
• The driving factors are supply, price, ECA-% and global cap date
• We estimate abt. 650 LNG-fuelled newbuildings up to 2025
• LNG is a solution not the only solution!
• Report for download: www.lr.org/bunkering
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013 32
For more information please contact:
Jesper Aagesen
Senior Surveyor
Ship Design Specialist
Lloyd’s Register EMEA
Strandvejen 104A, 2.
DK-2900 Hellerup
Denmark
T +45 3948 4261
E jesper.aagesen@lr.org
W lr.org/marine
Lloyd’s Register Marine – Air Emissions from Shipping – Copenhagen, 25 Feb 2013
Thank you for your attention!