LNG Ready Capabilities

Patrick Janssens Vice President, Global Gas Solutions Antwerp 12 February 2015

INTERTANKO/ISTEC meeting

ABS Milestone LNG fuelled Projects Harvey Gulf OSVs

First US LNG fuelled ships Wrtsil medium speed DF First delivery Q1 2015

Tote Container Ships First MAN ME-GI order (MAN 8L70ME-C8.2GI) US built, US Flagged, Keel laid Feb 2014

Q-Max Conversion (Rasheeda) Will be first ME-GI engine in operation Planned operation early 2015

Nordic Hamburg Container Feeder vessels Among first Wrtsil Slow Speed DF engines Planned operation early 2016 Navigator Gas Ethane/Ethylene carriers

Jiangnan Shipyard, Planned operation 2016

LNG Carrier Fleet Also LNG Fuelled!

3

47

28

18

ABS Fleet

Steam Turbine

Dual Fuel DE

Diesel w Reliquefaction

2 2

31

4 4 4

ABS Orderbook

Reheat System

STaGE

Dual Fuel DE

Slow Speed w Reliq

Slow Speed DF

To be confirmed

As of February 2015

Methane Princess - 1964

4

Ships Fuel in Transition?

l Reminiscent of coal to oil . could it be oil to LNG next?

l Conventional wisdom: n status quo (i.e. LSFO in ECA

only) until IMO decides when (2020 or 2025) worldwide 0.5% LSFO will be implemented

l Turning point: IMO 2018 study on LSFO availability

l LNG-ready ? n yes, for dual-fuel engines

n iffy for ship arrangements IGF code still evolving

n not really, for bunkering facilities

Evidence so far Adoption of LNG: Short sea, dedicated routes only Uncertainties in:

- Bunkering infrastructure - Regulatory regime - LNG price vs. fuel oil price

Adoption of Scrubber Mainly ECA operators, such as

cruise ships, ferries Uncertainties in scrubber

technology and CAPEX Increasing amount of

installations

5

Uncertainties for Immediate Application of LNG

l Sulphur Regulation is a Certainty However n Will there be Future ECAs? n When will Global Sulphur Limits Happen?

l Uncertainty of Fuel Costs n LNG as Bunker

n MGO and other Low Sulphur Fuels

l Uncertainty of Availability

Too many uncertainties to justify a very high investment for an LNG Fuelled vessel? LNG Ready is a Precautionary Application

6

Why to be LNG Ready?

l Preparing for the Future n Uncertainties will Resolve n LNG Fuel may prove the most

attractive option

l Designing for Future Conversion

n Ensuring Feasibility of Concept

n Considering the Effort

n Minimizing Difficulties

7

How Ready is Ready?

l Define Operational requirements n Operating range n Bunkering options n Trading Pattern n Port requirements

l Evaluate economic viability n LNG vs MGO and other Low Sulphur Fuels n LNG vs Scrubbers

l Ensuring Feasibility of the Concept n Compliance with Rules & Regulations n Technical feasibility n Risk assessment

l Many levels of readiness Execution n Space reservation only n Partial Preparation (design, on board) n Equipment/systems installed on Board

8

Cost Benefit Analysis

Understanding monetary concerns for implementation l Fleet profile

n Operational profiles, time spent in an ECA, speed, draught etc. l CAPEX for LNG adoption l OPEX for LNG price sensitivity vs

HFO MDO option l LNG availability

n Source, liquefaction, distribution n Infrastructure export facility,

bunkering vessels, tank trucks, etc. l Price spread of LNG and other

alternative fuels l LNG fuel system maintenance costs

10

ABS Guide for LNG Fuel Ready Vessels

l Growing Interest in Published Guidance n Provide Independent Recognition of

features n Assist in Shipyard Specification n Confirm Compliance with Class

Requirements

l ABS Guide for LNG Fuel Ready Vessels published in November 2014 n Formalizes the LNG Ready Process n References the requirements of the ABS

Guide for Propulsion and Auxiliary Systems for Gas Fueled Ships

11

LNG Fuel Ready Vessels

l Class criteria for preparing vessels to use LNG as marine fuel

l The ABS Guide for LNG Ready Vessels provides guidance to shipowners and shipbuilders preparing a ship design to be ready for using LNG as a fuel

l The ABS Guide defines 3 LNG Fuel Ready Levels: n Level 1 Concept Design Review n Level 2 General Design Review n Level 3 Detail Design Approval and Installation

12

LNG Fuel Ready Level 1: Approval In Principle l High level evaluation of the geometry and structural

arrangements of the vessel

l General scope of review: n Safety concept n General arrangement n LNG fuel containment type, location and supporting structure n BOG management n Fuel gas supply system and

piping arrangements n Engine selection n Hazardous area plan n Vent mast and venting systems n Bunkering arrangements n Electrical load analysis

Source: OMT

13

Risk Assessment

l IGF Code requires a risk assessment to be undertaken for each design

l Disagreement at IMO

l Expect papers to MSC 95

15

LNG Tank Considerations

l Consider complete fuel containment, supply and consumption systems

l Tank type and location l Vessel range/tank volume l Structure reinforcement l Sloshing effects l Filling limits and BOG management l Cofferdam and insulation arrangements l Hold space l Hazardous area l Vessel impact

n DWT, stability

16

Prime Mover Choice

l Diesel or Otto cycle

l Low pressure Otto cycle slow speed engine now offered

l Bigger engine? More cylinders?

Diesel Cycle

Same power density Same transient

response No knocking No methane slip

High pressure gas Requires EGR or

SCR for Tier III NOx compliance

Otto Cycle

Reduced power and/or change bore size

Transient load ramps Compressed gas and

air mixture Gas quality (MN) Methane slip

Low pressure gas Tier III NOx

compliant

Scavenging Compression/ gas admission Ignition expansion

17

Fuel Gas Supply System

l BOG compressors/cryogenic FGSS/heaters

l Gas Valve Unit (room/enclosure)

l LNG and gas piping

l Bunkering arrangements

l Vent, purging, nitrogen supply

l Electrical loads Source: MAN B&W/DSME

Master gas valve

Gas fuel from FGS

system Block and

bleed valve

To gas consumer

Vent

N2 Machinery space N2

Vent GVU room

18

LNG Fuel Ready Level 2: General Design Review l Additional to Level 1 and categorized in separate groups

l Design details general except gas consumers

l The subgroups of Level 2 are:

n Hull structural reinforcement for LNG storage tank

n LNG fuel storage tank arrangements

n Fuel gas bunkering system and arrangement

n Fuel gas supply system

n Gas vapor handling system

n Gas consumers

19

LNG Fuel Ready Level 3: Detail Design Approval & Installation l Incorporates both the Class Approval of the detailed drawings and

the installation of specified equipment on board the ship

l Drawings to be in compliance with the relevant sections of the ABS Gas Fueled Ships Guide

l To be performed in combination with Level 2 or straight after Level 1

l Categorized in separate groups similar to Level 2 and more

l Upon completion of the installation to the surveyors satisfaction, the vessel will be eligible for the class notation LNG Ready and statement description: S, TS, TA, BK & GS

20

LNG Fuel Ready Vessels

l Upon satisfactory completion of each review level, ABS will provide: n Level 1 An Approval In Principle (AIP) for the concept design

and a statement in the ABS Record n Level 2 A suitably worded Statement of Compliance and a

statement in the ABS Record n Level 3 A Class Notation LNG Ready with a description note

21

LNG Ready Obstacles

l Regulatory Changes n IGF Code not Complete (but maturing) n Applicable Regulation at time of Conversion

unclear

l Bunkering Requirements Uncertain n Permissibility in Ports n Simultaneous Operations

l Rule Changes ABS LNG Ready Guide does not lock in Requirements

22

Are You LNG Ready? We Are!

Photo Source: HHP Insight ABS-classed Harvey Energy

www.eagle.org