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LNG as fuel – recent development

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The backpicture

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Global Ship Traffic

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Shipping: 3% of global CO2 emissions

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Shipping is lagging land-based industry

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Sulphur emission requirements

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EU sulphur Directive - revision highlights

Revised Directive agreed

by EU;

– Alignment with MARPOL

Annex VI

– Agreement on 0.5% in EU

waters in 2020

– PAX vessel requirements at

1,5% in all non-ECA EU

waters until 2020 (200 NM)

– State aid for technology

investments (scrubbers,

LNG, infrastructure)

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7 © DNV GL. All rights reserved.

Shipping in a complex regulatory landscape

© Det Norske Veritas AS. All rights reserved.

LNG Fuelled Ships

LNG as fuel has impact on health and environment

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0%

20%

40%

60%

80%

100%

CO2 NOx PM SOx

CO2:

~20% reduction

NOx:

~90% reduction

Particulate matters:

>95% reduction

SOx:

>95% reduction

HFO

LNG

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Other drivers than ECA for LNG fuel market

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Existing ECAs Upcoming ECAs?

2010: Sulphur < 1.0% 2015: Sulphur < 0.1%

ECA sulphur requirements

2011: NOx Tier II, -20% 2016: NOx Tier III, -80%*

*New builds, only m ECA

NOx requirements

2020 / 2025*: Sulphur < 0.50% * Date TBD pending 2018 review – but 2020 will apply in EU waters

Global requirements

3 to 5 $/mmBTU 9 to 12 $/mmBTU

HFO approx 18 $/mmBTU

MGO approx 25 $/mmBTU

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A look into the rear mirror

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14 years LNG as ship fuel for “non gas carriers”

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First LNG fuelled ship: GLUTRA in 2000

LNG fuelled cruise liner type ferry: STAVANGERFJORD in 2013

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LNG fuelled ships – Rules and Regulation in place

2000

2013

2001 first DNV Class rules for gas fuelled ships

2004 NMD proposal to develop the IMO IGF Code

2010 IMO MSC.285(86) in force

2013 DNV Rules Part 6 Ch 13: Gas Fuelled Ship Installations (Ver. Jan 2013)

2013 IMO IGF-Code: International Code of safety for ships using Gases or other low-flashpoint Fuels (Draft Feb 2013)

2013 DNV: Crew Training SoC 3.325 The use of LNG as a fuel on board vessels (Ver. April 2013)

2013 ISO Guidelines for systems and installations for supply of LNG as fuel to ships (OGP Draft 118683) (draft published in June 2013)

DNV-RP-G106: Recommended Practice for the development and operation of LNG bunker facilities (published Nov. 2013)

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Key questions are answered/worked on

Tank locations below accommodations are possible

Low pressure prismatic tanks for large LNG volumes

will be built

Tank distance from side shell still under discussion

(discussed at IMO SDC 1, January 2014 and forward

to MSC)

Tank length also under discussion in IMO

Crew training addressed to IMO, ongoing work in

SGMF

Harbour regulations: first regulations to be

published by port of Antwerp in QA-1 2014

Bunkering with passengers on board is not creating

an unacceptable risk

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LNG Fuelled – from niche segment to

world wide shipping

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LNG fuelled ships

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LNG Fuelled Ships today

LNG Fuelled ships tomorrow

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LNG as fuel for cruise ships

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Engine arrangement M/S Stavangerfjord

Bergen marine gas motor; 4 pcs B35:40V12PG with GRU

LNG fuelling system; 2 pcs 300m3 LNG tanks with cold boxes, 2 pcs bunkering stations, associated piping

ACON LNG control and monitoring system

All existing vessels use Type C tanks. This will change for large amounts of LNG!

Source: Rolls Royce Bergen

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LNG Fuelled ships– running fleet and

orderbook

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47 LNG fuelled ships in operation worldwide

Year Type of vessel Owner Class

2000 Car/passenger ferry Fjord1 DNV

2003 PSV Simon Møkster DNV

2003 PSV Eidesvik DNV

2006 Car/passenger ferry Fjord1 DNV

2007 Car/passenger ferry Fjord1 DNV

2007 Car/passenger ferry Fjord1 DNV

2007 Car/passenger ferry Fjord1 DNV

2007 Car/passenger ferry Fjord1 DNV

2008 PSV Eidesvik Shipping DNV

2009 PSV Eidesvik Shipping DNV

2009 Car/passenger ferry Tide Sjø DNV

2009 Car/passenger ferry Tide Sjø DNV

2009 Car/passenger ferry Tide Sjø DNV

2009 Patrol vessel Remøy Management DNV

2009 Car/passenger ferry Fjord1 DNV

2010 Patrol vessel Remøy Management DNV

2010 Car/passenger ferry Fjord1 DNV

2010 Patrol vessel Remøy Management DNV

2010 Car/passenger ferry Fjord1 DNV

2010 Car/passenger ferry Fjord1 DNV

2010 Car/passenger ferry Fosen Namsos Sjø DNV

2011 PSV DOF DNV

2011* Chemical tanker Tarbit Shipping GL

2011 Car/passenger ferry Fjord1 DNV

2011 PSV Solstad Rederi DNV

Year Type of vessel Owner Class

2012* Car/passenger ferry Fjord1 DNV

2012 PSV Eidesvik DNV

2012 PSV Olympic Shipping DNV

2012 PSV Island Offshore DNV

2012 General Cargo Nordnorsk Shipping DNV

2012 PSV Eidesvik Shipping DNV

2012 PSV Island Offshore DNV

2012 Car/passenger ferry Torghatten Nord DNV

2012 Car/passenger ferry Torghatten Nord DNV

2012 Car/passenger ferry Torghatten Nord DNV

2013 PSV REM DNV

2013 RoPax Viking Line LR

2013 Car/passenger ferry Torghatten Nord DNV

2013 Harbor vessel Incheon Port Authority KR

2013 General Cargo Eidsvaag DNV

2013 RoPax Fjordline DNV

2013 High speed RoPax Buquebus DNV

2013 Tug CNOOC CCS

2013 Tug CNOOC CCS

2013 Car/passenger ferry Norled DNV 2014 Car/passenger ferry Norled DNV 2014 Tug Buksér & Berging DNV

Updated 23.01.2014 Excluding LNG carriers and inland waterway vessels

Ships in operation

* Conversion project

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48 confirmed LNG fuelled newbuildings

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Year Type of vessel Owner Class

2014 RoPax Fjordline DNV

2014 Ro-Ro Norlines DNV

2014 Ro-Ro Norlines DNV

2014 Patrol vessel Finish Border Guard GL

2014 Car/passenger ferry Society of Quebec LR

2014 Car/passenger ferry Society of Quebec LR

2014 Car/passenger ferry Society of Quebec LR

2014 Tug Buksér & Berging DNV

2014 PSV Harvey Gulf Int. ABS

2014 PSV Harvey Gulf Int. ABS

2014 PSV Harvey Gulf Int. ABS

2014 PSV Harvey Gulf Int. ABS

2014 Gas carrier SABIC BV

2014 Gas carrier SABIC BV

2014* Product tanker Bergen Tankers LR

2014 General Cargo Egil Ulvan Rederi DNV

2014 General Cargo Egil Ulvan Rederi DNV

2014 PSV Remøy Shipping DNV

2014 Car/passenger ferry AG Ems GL

2014* Car/passenger ferry AG Ems GL

2014 Car/passenger ferry Samsoe Municipality DNV

2014 Ro-Ro Sea-Cargo DNV

2014 Ro-Ro Sea-Cargo DNV

Year Type of vessel Owner Class

2015 PSV Siem Offshore DNV

2015 PSV Siem Offshore DNV

2015 PSV Simon Møkster DNV

2015 PSV Harvey Gulf Int. ABS

2015 PSV Harvey Gulf Int. ABS

2015 LEG carrier Evergas BV

2015 LEG carrier Evergas BV

2015 LEG carrier Evergas BV

2015 Container Ship Brodosplit DNV GL

2015 Container Ship Brodosplit DNV GL

2015 PSV Siem Offshore

2015 PSV Siem Offshore

2015 Container Ship TOTE Shipholdings ABS

2016 Container Ship TOTE Shipholdings ABS

2016 PSV Siem Offshore

2016 PSV Siem Offshore

2016 Chemical tanker Terntank

2016 Chemical tanker Terntank

2016 Car/passenger ferry Boreal Transport

2016 Car/passenger ferry Boreal Transport

2017 RoPax Brittany Ferries BV

2017 Container Ship Crowley Maritime DNV GL

2017 Container Ship Crowley Maritime DNV GL

2018 Container Ship Matson Navigation DNV GL

2018 Container Ship Matson Navigation DNV GL

* Conversion project Updated 23.01.2014

Excluding LNG carriers and inland waterway vessels

Confirmed orderbook

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What is the operational experience?

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Damage experience from our own class records

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Collecting operational feedback from different stakeholders

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LNG Fuel - Technical and operational experience

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LNG Bunkering

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Global LNG bunker demand by 2020

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South America

North America

Europe & the Baltic Sea

Middle East & India

SEA

Japan & Korea

Australia & NZ

LNG Bunkering demand 2020 Equivalent to 4 -7 million tons of LNG

LNG Bunkering demand 2012

0.9 – 1.4 million

China

0.3 – 0.4 million

1.4 – 2.2 million 0.3 – 0.8 million

0.3 – 0.7 million

0.4 – 0.7 million

0.1 – 0.2 million

0.3 – 0.5 million 0.07 – 0.09 million

4-7 million tons of LNG p.a is required for 1000 ships in 2020. This corresponds to 0.2-0.3% of global gas production of 2010

Source: DNV study - early 2012

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LNG Bunkering ISO and RP issues

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Availability of LNG for bunkering

42 vessels

Local traffic along the

Norwegian coast and in the

Baltic

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A snapshot from LNG Fuelled vessels February 4th 2014

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Ready for LNG or not?

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Are you ready for the future fuel?

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LNG Ready

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The stepwise approach enables clients to benefit from DNVs expertise where needed

‘LNG Ready’ – Service Overview

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The path to become ‘LNG Ready’

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1. STRATEGY – FUEL DECISION

• High level technical feasibility

• Fuel consumption estimates

• Financial feasibility

• Cost, pay-back time and sensitivity analysis

• Fuel availability

2. CONCEPT CAPTURE

• Detailed technical feasibility study

• Performance benchmarking

(Machinery and tank evaluation and

optimization)

• Concept Design Review

(Statement - class acceptance)

• HAZID

CLASS APPROVAL (after vessel is ‘LNG Ready’)

3. INITIAL DESIGN

• Approval in Principle

4. RISK ASSESSMENT

• Gas fuel safety risk assessment (mandatory

by IMO)

Decision Points. Proceed with the LNG option or not.

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LNG Ready – more than an option

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Will LNG be the future fuel?

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A look to the past may light the future

20 years after 1. vessel

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Selandia – first diesel powered ocean going vessel - 1912

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Warning: Never mistake a clear view for a short distance (Paul Saffo, Stanford)

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SAFER, SMARTER, GREENER

www.dnvgl.com

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