Methanol –An Ultra Clean Marine Fuel Solution for North America

Methanol Policy Forum| June 13, 2017Washington, D.C.

Jason Chesko, Sr. Manager, Global Market DevelopmentMethanex Corporation

The world’s largest producer and supplier of methanol to major international marketsMethanex

Production SitesGlobal Office LocationsDistribution Terminals and Storage FacilitiesShipping Lanes

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PresenterPresentation Notes��

28 vessels, including 7 methanol dual-fuel vessels Waterfront Shipping

Cabo Negro II Caribbean Spirit Global Spirit Magellan Endeavour Patagonian Mystic Falkanger Finnanger

Fjellanger Sabrewing Scarlet Ibis Tamiat Navigator World Navigator Taranger

Lindanger Taranaki Sun Mari Jone Leikanger Mari Boyle

Medium Range Fleet 45,000 - 50,000 DWT

Class

Medium Range Fleet 50,000 DWT

Methanol Dual Fuel Engine Class

Handy Size Fleet20,000 to 30,000

DWT Class

Coastal Fleet1,000 to 10,000

DWT Class

Mariline Marinex Medalta Adventurer Sakhara Lotus Marit

Yelena Argo Chemist3

Manchac Sun Cajun Sun

SCT Matterhorn

IMO Regulations Leading to Adoption of Cleaner-Burning Marine Fuels in North America

- Rationale- Emissions reduction: SOx,

NOx, Particulate Matters

- U.S. EPA – Significant air quality & resulting health benefits/cost savings

- Methanol offers significant emissions reductions compared to main compliance option MGO (0.1% diesel)…Methanol

Emissions Reductions1

1 Source: Stena 4

Methanol is an economically viable alternative marine fuel over the cycle

…and Methanol is Cost Competitive versus Diesel (MGO)

Chart source: Platts and IHS Chemical• MGO NA GC Average of Houston and New Orleans; MGO NA EC average of New York, Philadelphia, Norfolk, Montreal and Charleston; NA WC average of

LA, San Francisco, Portland, Seattle and Vancouver.• Methanol: USGC spot price; adjusted to energy equivalent of MGO (2.16 factor)

$200$300$400$500$600$700$800$900

$1,000$1,100$1,200

Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16

$ / t

onne

North America (Gulf Coast) MGO North America (East Coast) MGONorth America (West Coast) MGO Methanol (Energy Equivalent)

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U.S. Production has grown including Methanex relocation of two plants from southern Chile to LouisianaU.S. Domestic Methanol Production Growth

Geismar, Louisiana

• Domestic Resource Use

• Job Creation• Energy Security• Environmental

& Health Cost Benefits

Methanol infrastructure already in place to reliably supply the North American marine industryMethanol is Widely Available

Source: Methanex

Red flags/circles represent existing methanol supply locations; lines represent rail networks7

Methanol is a clear, colourless liquid that quickly and naturally biodegradesMethanol - Environment, Health and Safety

• More environmentally benign than conventional marine fuels (i.e. HFO and MGO)

• Long history of methanol safe handling

• Industry standards established for the safe handling of methanol and other low flashpoint fuels

Methanol

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Source: Stena Line

Methanol has minor modification requirements and modest incremental costInnovative Clean Technology

New high pressure common rail system

High pressure double walled pipe High pressure

pump

Methanol tank in double bottom

Inert gas system (nitrogen)

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The world’s first methanol-fuelled tankersMethanol in Use as a Marine Fuel Today: Waterfront Shipping

Lindanger

Taranaki SunMari Jone

Leikanger Mari Boyle

Medium Range Fleet 50,000 DWT Methanol Duel Fuel Engine Class

Manchac Sun

Cajun Sun

• Commercial-ready technology

• In 2016, Waterfront Shipping launched seven vessels with methanol dual-fuel MAN ME-LGI 2-stroke engines

• Vessels have been operating safely and reliably across the globe

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http://www.wlco.no/Default.aspxhttp://www.mol.co.jp/en/index.html

Several other initiatives are underway to support further commercializationMethanol Research & Development Projects

Large Engine Market (i.e. cruise ships and ferries)

• Funded by German government to support further commercialization work for new methanol cruise ships and ro-pax ferries

Small Engine Market (i.e. tug and barge)

• LeanShips: Sponsored by the EU to support commercialization of the smaller engine market

• GreenPilot: Co-funded by Swedish Maritime & Transport Administrations & Methanol Institute to support commercialization of the smaller engine market

China Market• China Classification Society (CCS) methanol for marine fuel guidelines under development• Ministry of Agriculture methanol marine fuel pilot project

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Thank you!

www.methanex.com

linkedin.com/company/methanex-corporation

@Methanex

Methanol – �An Ultra Clean Marine Fuel Solution for North America��MethanexWaterfront ShippingIMO Regulations Leading to Adoption of Cleaner-Burning Marine Fuels in North America…and Methanol is Cost Competitive versus Diesel (MGO) U.S. Domestic Methanol Production GrowthMethanol is Widely Available Methanol - Environment, Health and SafetyInnovative Clean TechnologyMethanol in Use as a Marine Fuel Today: Waterfront ShippingMethanol Research & Development Projects Thank you!