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Woodfibre LNG Marine Shipping August 6th, 2014

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• The Project

• LNG shipping

o History

o Track record

o Regulations

o Vessel design

o Environment

o Shipping routes

o LNG facilities near urban centres

• Discussion

Agenda

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Project

1. Natural gas pre-treatment and liquefaction plant

2. Flare 3. Floating storage and offloading

(FSO) unit 4. Module load-in quay 5. Supporting infrastructure

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Small scale LNG processing & export facility • Approx. 2.1 million tonnes of LNG per year

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A brief history – LNG shipping

1959 “Methane Pioneer” Converted to LNGC

1964 “Methane Princess” & “Methane Progress”

1969 First exports of LNG from Alaska to Japan

1982 Japan imports 72% of global LNG for power generation

1991 First LNG shipments from Australia to Japan and South Korea

2009 Canaport imports Canada’s first LNG in Saint John

2013 US and Canada projects seek to export LNG

Source: Helderline.nl

Source: Helderline.nl

Source: Calum McClure

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• From 1964 - 2012, there have been more than 140,000 LNG carrier voyages

• There are more than 400 LNG carriers in the world, with an additional 100 on order

• There has never been an LNG spill as a result of a loss of LNG containment of an LNG carrier

Safety track record

Source: Royal Dutch Shell

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• International Maritime Organization (IMO) specialized agency with responsibility for:

o Safety and security of shipping: SOLAS

o Prevention of marine pollution: MARPOL

• International Gas Code (IGC) for Ships Carrying Liquefied Gases in Bulk

• Classification Society rules and requirements cover Design, Construction, and Operation against SOLAS and MARPOL

• Port State control through Transport Canada

• Training (legislative and non legislative)

International regulations for LNG carriers

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Canadian shipping regulations

• Canada Shipping Act regulates domestic and international vessels operating in Canadian waters

• Key legislative objectives of the Act are:

o Protect the health and well-being of individuals involved in the shipping industry

o Promote safety in marine transportation

o Protect the marine environment

o Establish an effective compliance promotion program

• The regulator for shipping in Canada is Transport Canada

• All vessels transiting will meet the Canada Shipping Act requirements

Source: Transport Canada

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• Society of International Gas Tanker and Terminal Operators (SIGTTO)

• Established in 1964 with membership from terminal operators and shipping companies

• The organization provides a means through which all industry participants may: • share experiences

• address common problems

• develop best practices

• define standards

• Provides a basis for recommended design requirements and operational practices for both terminals and ships

Industry bodies & best practices - SIGTTO

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• In the aftermath of 9-11, the US Government commissioned Sandia National Laboratories (2004, 2008 and 2011) to study a worst case scenario involving an LNG carrier

• The objective is to ensure that an extreme event is analyzed with a view to further improve the safety of the LNG industry

• The study simulated, in controlled conditions, a major spill caused by a terrorist attack or other event and then measured possible effects

o https://www.youtube.com/watch?v=RQ1RsirstDo&feature=youtu.be

• The results of the study are used by the industry to further improve the safety and integrity of the LNG industry

Safety is the number one priority

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Transport Canada - TERMPOL Process

Woodfibre LNG will complete a voluntary Transport Canada Technical Review Process of Marine Terminal Systems and Transshipment Sites (TERMPOL) for the project

• Program managed by Transport Canada and a committee of select government agencies and interested bodies e.g., BC Coast Pilots

• Comprehensive risk assessment process to ensure safety of vessel transits from terminal to open ocean

• Transit simulations and detailed studies

• Process takes approximately 6 – 12 months to complete

• Recommendations to improve safety and minimize risk are adopted into the project

• Detailed safety procedures and emergency response plans are developed

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Carrier design – relative sizes

Moss LNG Carrier Length: 285m Draft: 11.5m Height: 58m

Membrane LNG Carrier Length: 294m Draft: 11.5m Height: 57m

Large Container Ship (Sofie Maersk) Length: 347m Draft: 14m

Cruise Ship Length: 294m Draft: 8.2m Height: 62m

BC Ferries (Coastal Celebration) Length: 160m Draft: 5.7m

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• Double hull cargo tanks and fuel tanks

• Four or five cargo tanks at ambient pressure

• Containment systems meet IGC code design requirements

• Moss – Type B tanks

• Membrane Tanks

LNG Carrier design

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LNG carrier design – features • Capacity is about 160,000m3 for standard vessels

• LNG Vessels are highly sophisticated costing in excess of $200M USD per vessel.

• High levels of redundancy are provided:

• Propulsion

• Electrical

• Cargo handling systems

• Transfer of cargo is undertaken with highly specialized loading arms connected to

the vessel and completed in about 20 hours from connection

• Ship to shore link – three (3) independent systems to integrate safety systems

• Quick shutoff

• Quick disconnect to enable the vessel to depart the berth in an emergency

• Integrated Automation System ensures extensive alarm and monitoring systems

• Firefighting capability onboard the vessel and on the terminal

• Operating crew of about 24 people onboard

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LNG carrier operations

• Extensive regulations for operations onshore and onboard the vessel • Regulated competency requirements for crew and onshore personnel • Ships crew are regularly trained and evaluated for competence • State of the art simulators enable crew to manage navigational

situations and complete training exercises • Comprehensive training for engineers and cargo operators

Source: Teekay

Source: Maritime Executive

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Natural Gas vs Diesel • Natural gas will be the primary fuel of LNG carriers in Howe Sound • Using natural gas instead of diesel to fuel LNG carriers reduces GHG emissions

by about 25% • Estimated emissions in tonnes for Howe Sound round trip: Ballast water • Ballast water exchange must be completed at deep sea, >200 Nm offshore,

prior to vessels arrival • Future marine legislation will require ballast water to be treated

LNG carriers - environment

Note: upper limit CO2 percentage is taken from 2010 DNV The age of LNG is here, other percentages come from 2009 IMO Second IMO GHG study.

Natural Gas Low Sulphur Diesel

CO2 95 130

NOX 1.0 1.7

SOX 0 1.0

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Coastal shipping route

Tethered Tugs for loaded passage

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Howe Sound shipping route

• Vessels will be escorted in Howe Sound

• Tugs, with firefighting equipment onboard, will support the berthing operations and remain during loading

• Sophisticated assisted docking and mooring monitoring systems

• Vessel will be at manoeuvring speed about 8 – 10 knots during transit

• Insignificant wake generated by vessels < 10cm at 50m

• Noise will be negligible due to low speed and power (approx. 30% of installed power)

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Coast transit

Route In bound Outbound

Distance 172 nm 169 nm

Transit Time 14 – 15 hours 14 – 15 hours

Time in Canadian Waters Approx. 57 hours per round trip

Increase in traffic (English Bay) to Ocean

<1%

Increase in traffic (Howe Sound) Approx. 62% increase However, 10% less activity than when Woodfibre Pulp Mill was operational

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LNG facilities near urban centres

Higashi-Ohgishima LNG Terminal, Tokyo

Image Source: Obayashi.co.jp2

Higashi-Ohgishima LNG Terminal

Capacity1 15.57 mtpa

Start-up1 1984

Type Regas Terminal

Status1 Operational

Nearest City Tokyo, Japan

City Population8 35,682,460

Ship Frequency NA

Higashi – Ohgishima LNG

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LNG facilities near urban centres

Futtsu LNG Terminal, Tokyo Bay, Japan

Image Source: lngworldnews.com3

Futtsu LNG Terminal

Capacity1 20.24 mtpa

Start-up1 1985

Type Regas Terminal

Status1 Operational

Nearest City Tokyo, Japan

City Population8 35,682,460

Ship Frequency NA

Futtsu LNG

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LNG facilities near urban centres

Barcelona LNG Terminal, Spain

Image Source: shipspotting.com4

Barcelona LNG Terminal

Capacity1 13.31 mtpa

Start-up1 1969

Type Regas Terminal

Status1 Operational

Nearest City Barcelona, Spain

City Population8 4,604,000

Ship Frequency NA

Barcelona LNG

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LNG facilities near urban centres

Zeebrugge LNG Terminal, Belgium

Image Source: kingspantarec.com5

Zeebrugge LNG Terminal

Capacity1 6.62 mtpa

Start-up1 1987

Type Regas Terminal

Status1 Operational

Nearest City Bruges, Belgium

City Population8 117,170

Ship Frequency NA

Zeebrugge LNG

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LNG facilities near urban centres

Everett LNG Terminal, USA

Image Source: Reuters7

Everett LNG Terminal

Capacity1 5.44 mtpa

Start-up 1971

Type Regas Terminal

Status1 Operational, but inactive

Nearest City Boston, United States

City Population8 4,180,000

Ship Frequency 60 ships in 20096

Everett

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Summary

• LNG shipping has one of the highest safety record in the maritime industry

• Safety performance is maintained through stringent regulatory

regime, strict design requirements, robust operational practices, and training

• Vessels are regularly inspected by regulators and port state inspection authorities, i.e. Transport Canada • Marine safety and navigational risk will be comprehensively

addressed through the TERMPOL process