Dry Bulk Terminals vs. Offshore Transshipment

Dry Bulk Terminalsvs.

Offshore Transshipment

ICHCA International Conference “Changes to Trade & Shipping in the 21st Century”

Busan, S. Korea

May 2008Seabulk Systems Inc. 1

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The Fundamental Concept of The Fundamental Concept of ““TransshipmentTransshipment””

Transshipment requires

the ‘port’ to move to the ship, instead

of the ship moving to

the port.

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Shipping in the 21Shipping in the 21stst Century Century An increasingly interdependent and highly

interconnected world of trade in bothgoods and services Seaborne cargo volume exceeds all other

modes of transport combined Port congestion always leads to serious

bottlenecks, creating scarcity and severe wastage of resources Efficient movement of bulk materials will

dictate the fortunes of food and energy sectors in the very near future

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Shipping in the 21Shipping in the 21stst Century Century Port infrastructure and real estate will be

proven to be an increasingly major costfactor in all parts of the world.

Reliable transshipment solutions for both imports and exports will be sought at all high-volume ports.

Self-unloading bulk carriers equipped with continuous unloaders will be employed more commonly. Efficiency in land movement of cargo will

demand equivalent efficiency from themarine sector also.

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Shipping in the 21Shipping in the 21stst Century Century Annual world seaborne trade of coal is in excess of 900 million tonnes (out of a

total estimated production of five billion tonnes).

Annual world seaborne trade of iron ore is expected to be well in excess of 600 million tonnes (out of a total estimated requirement of 1.5 billion tonnes, not

including the 0.5 billion tonnes in scrap metal consumed worldwide) At present, the world does not have the

port capacity to meet future volumes.

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Shipping in the 21Shipping in the 21stst Century Century

Therefore…,

We will have to boost the current capacity to load bulk cargo into export vessels through innovative ideas like offshore transshipment and / or transportation in unconventional and alternate forms, such as coal slurry or iron ore slurry carried in specially constructed vessels.

PORT PORT DEVELOPMENTDEVELOPMENT

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Typical Port Development Typical Port Development SequenceSequence

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Typical Port Development Typical Port Development SequenceSequence

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Typical Port Development Typical Port Development SequenceSequence

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Marginal Wharf Marginal Wharf Bridgetown, BarbadosBridgetown, Barbados

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Port of QuebecPort of QuebecQuebec City, CanadaQuebec City, Canada

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Typical Port Development Typical Port Development SequenceSequence

A Powerful SolutionA Powerful Solutionfor thefor the

New Era of Marine TransportNew Era of Marine Transport

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B

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When to Transship …..When to Transship …..

B

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Typical Assumptions …..Typical Assumptions …..

24 Months = $4.08 / t

18 Months = $3.24 / t

6 Months = $1.22 / t

12 Months = $2.30 / t

Operating Cost Available to Accelerate First Delivery Without Eroding NPV of Project EBITDA

B

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Replaces Capex with Opex …..Replaces Capex with Opex …..

At 30% OCC, each $10,000,000 CAPEX equals $0.38/ t OPEX

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The Math …..The Math …..

NPV @ 30%Construction Operation

1 2 3 4 1 2 3 4 5 6 7 8 9 10

$95.8 M 8 Mt per year for 10 years @ $10.00

NPV @ 30%Const'n Operation

1 2 3 1 2 3 4 5 6 7 8 9 10

$95.9 M 8 Mt per year for 10 years @ $7.70

NPV @ 30%Const'n Operation

1 2 1 2 3 4 5 6 7 8 9 10

$95.9 M 8 Mt per year for 10 years @ $5.92

NPV @ 30%Construction Operation

1 2 3 4 1 2 3 4 5 6 7 8 9 10

$3.9 M $10 M                    

$3.9 M 8 Mt per year for 10 years @ $0.38

B

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Sub-Total …..Sub-Total …..

WITH ZERO NET IMPACT ON PROJECT FEASIBILITYB

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Eliminates Demurrage Risk …..Eliminates Demurrage Risk …..

B

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Why it Works …..?Why it Works …..?

B

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The Seabulk Solution …..The Seabulk Solution …..

The Seabulk Solution re-writes the basic risk-sharing equationB

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Transshipment - Evolution

B

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Summary…

Transshipment Offers a Viable

Alternative to the Port.

B

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