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ARDMORE SHIPPING CORPORATION
Stifel Nicolaus Investor Presentation
February, 2016
This presentation contains certain statements that are deemed to be “forward-looking statements” within the meaning of applicable U.S. federal
securities laws. All statements, other than statements of historical facts, that address activities, events or developments that Ardmore Shipping
Corporation (“Ardmore” or the “Company”) expects, projects, believes or anticipates will or may occur in the future are forward looking
statements, including, without limitation, statements about future operating or financial results; global and regional economic conditions and
trends; pending vessel acquisitions or possible upgrades to vessels; the Company’s business strategy and expected capital spending or
operating expenses; fuel efficiency savings and the potential impact of the company’s cost structure on the share price; competition in the tanker
industry; shipping market trends; the Company’s financial condition and liquidity, including ability to obtain financing in the future to fund capital
expenditures, acquisitions and other general corporate activities, the amount of future cash flows and earnings of the Company; dividend
amounts actually declared by the Company’s board of directors; the amount of cash reserves established by the Company’s board of directors;
limitations on dividends contained in the Company’s credit facilities or under Marshall Islands law; additional issuances of the Company’s
shares of common stock, the Company’s ability to enter into fixed-rate charters after the current charters expire and the Company’s ability to
earn income in the spot market, and expectations of the availability of vessels to purchase, the time it may take to construct new vessels; vessel
delivery dates and vessels’ useful lives, are forward-looking statements. Although the Company believes that its expectations stated in this
presentation are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements.
Factors that might cause or contribute to such a discrepancy include, but are not limited to, the risk factors described in the Company's filings
with the Securities and Exchange Commission (the "SEC"). This presentation is for information purposes only and does not constitute an offer to
buy or sell securities of the Company. For more complete information about the Company, the information in this presentation should be read
together with the Company 's filings with the SEC which may be accessed on the SEC website at www.sec.gov.
Factors that might cause or contribute to such a discrepancy include, but are not limited to, the risk factors described in the Company's filings
with the Securities and Exchange Commission (the "SEC"). This presentation is for information purposes only and does not constitute an offer to
buy or sell securities of the Company.
Stifel Nicolaus had no involvement in the preparation of this presentation and, accordingly, makes no representation or warranty as to the
accuracy or completeness of any of the information or data included therein and expressly disclaims any and all liability relating to or resulting
from use of this presentation.
2
Disclaimer
.
3
Overview of Ardmore Shipping
4
Leading public product tanker focused on most attractive sector over the
long-term, strategy based on service excellence and operating efficiency
Owns and operates a fleet of 24 “Eco” medium size (“MR”) product and
chemical tankers. MR’s are the workhorses of the product tanker fleet
Internal management company and no transactions with affiliates
MR product tanker rates increased 56% YoY(1) in 2015, yet remain ~50%
below 10-year peak rates
Generated record earnings of $1.23 per share for the 12 months ended
Dec 31, 2015 with an average of 20 vessels in operation
World class operations driving significant earnings upside:
o Every $1,000 increase in charter rates adds 34 cents to EPS & Cashflow
and increases the dividend by $0.20 / share(2)
Attractive new dividend policy:
o Dividend policy to pay out 60% of net income quarterly
Completed a refinancing of substantially all of our outstanding debt,
reducing our interest expense by ~$2 mln and improving surplus cashflow
by ~$6 mln in 2016
1. Source: HRP, increase based on comparison of average triangulation rates January 2nd to December 31st 2015 to the same period in 20142. Realized across a full fleet of 24 ships. Calculation based on: ($1,000 day x 363 revenue days x 24 ships) / 26.1mln shares = $0.34 per share. $0.34 x 60% = Dividend of $0.20 per share
Ardmore Shipping Corporation
5
High Quality Fleet
Modern “Eco” Fleet
Average age of ~4.6 yrs
Upgraded for enhanced
commercial capability
Built at high-quality yards in
Korea and Japan
Quality fleet = lower
operating cost, higher
utilization and maximum
value appreciation
Complementary fleet
High Quality Vessels Fleet List
Vessel Name Type Dwt Built Country Specification Employment
Ardmore Seavaliant IMO 2/3 49,998 Feb-13 Korea Eco-design Spot
Ardmore Seaventure IMO 2/3 49,998 Jun-13 Korea Eco-design Spot
Ardmore Seavantage IMO 2/3 49,997 Jan-14 Korea Eco-design Time Charter
Ardmore Seavanguard IMO 2/3 49,998 Feb-14 Korea Eco-design Time Charter
Ardmore Sealion IMO 2/3 49,999 May-15 Korea Eco-design Pool
Ardmore Seafox IMO 2/3 49,999 Jun-15 Korea Eco-design Pool
Ardmore Seawolf IMO 2/3 49,999 Aug-15 Korea Eco-design Pool
Ardmore Seahawk IMO 2/3 49,999 Nov-15 Korea Eco-design Pool
Ardmore Endeavour IMO 2/3 49,997 Jul-13 Korea Eco-design Spot
Ardmore Seafarer IMO 3 45,744 Aug-04 Japan Eco-mod Time Charter
Ardmore Seatrader Product 47,141 Dec-02 Japan Eco-mod Spot
Ardmore Seamaster IMO 3 45,840 Sep-04 Japan Eco-mod Spot
Ardmore Seamariner Product 45,726 Oct-06 Japan Eco-mod Spot
Ardmore Sealeader Product 47,463 Aug-08 Japan Eco-mod Spot
Ardmore Sealifter Product 47,472 Jul-08 Japan Eco-mod Spot
Ardmore Dauntless IMO 2 37,764 Feb-15 Korea Eco-design Pool
Ardmore Defender IMO 2 37,791 Feb-15 Korea Eco-design Pool
Ardmore Centurion IMO 2 29,006 Nov-05 Korea Eco-mod Spot
Ardmore Cherokee IMO 2 25,215 Jan-15 Japan Eco-design Pool
Ardmore Cheyenne IMO 2 25,217 Mar-15 Japan Eco-design Time Charter
Ardmore Chinook IMO 2 25,217 Jul-15 Japan Eco-design Time Charter
Ardmore Chippewa IMO 2 25,217 Nov-15 Japan Eco-design Time Charter
Ardmore Calypso(1) IMO 2 17,589 Jan-10 Korea Eco-mod Time Charter
Ardmore Capella(1) IMO 2 17,567 Jan-10 Korea Eco-mod Time Charter
Total 24 969,953 4.6 (2)
1. Agreed sale of the Ardmore Calypso and Ardmore Capella, expected to deliver to buyer in 2Q162. Average age of fleet as at Jan 27th, 2016
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Mill
ion
To
nn
es
Crude Seaborne Trade Product Seaborne Trade
6
MRs in Perspective
Crude Tankers
(Uncoated)
Product / Chemical Tankers
(Coated: 25,000 Dwt to 120,000 Dwt )Short Range / Stainless / Specialized
World Tanker Fleet(1)
5,907 Vessels
UL / VLCC SUEZ AFRA PAN LR2 LR1 MR SR Stainless Spec
635 494 629 84 262 329 1,892 896 577 109
Growing Share of World Tanker FleetProducts Share of Oil Seaborne Trade Increasing(2)
75%
25%
64%
36%
MR tankers comprise ~32% of the world tanker
fleet by number of ships(1)
Seaborne oil transport is gradually shifting away
from crude and toward refined products
This is the main growth driver for MRs
1. Drewry as at Feb 2015 2. Source: Clarksons Shipping Intelligence Network Time series
7
MRs the “Yellow Cabs” of the World Tanker Fleet
MRs Trade Everywhere And Are The Ship Of Choice For Oil Traders Due To Their Versatility
MR VLCC
LR1 LR2
8
Consistent and Focused Strategy
Acquire vessels at cyclical lows: low cash
breakeven and maximum ship value
appreciation
Operate and maintain vessels efficiently
Low overhead at approx. $1,200 per ship /
day (1)
Cost Efficiency
Time charter and spot employment - mix
adjusted to maximize TCE
1Q16: Spot 71% v Time Charter 29%
Maintain close dialogue with charterers at
all times for time-charter opportunities
Maintain a high-quality, fuel efficient fleet
Exploit the product and chemical overlap
Close operational collaboration with
charterers: service excellence
Optimise voyage performance: maximise
TCE
Highly Effective Chartering Strategy2
Superior Operational And Financial Performance
3
Consistent Focus on MR Product and Chemical Tankers1
Value Added Service = Max Earnings4
1. Based on full fleet of 24 ships
9
Strong Management Team with Proven Track Record
NameExperience
(Years)Past Positions
Tony Gurnee 33
CEO
Mark Cameron 30
COO
Paul Tivnan 14
CFO
Gernot Ruppelt14
Director of Chartering
and Business Development
Greg Chad38
Director of Human
Resources
CEO of Industrial Shipping Enterprises, COO of MTM Group and CFO of Teekay Shipping
Corporation
Shipping financier with Citicorp and U.S. Naval Officer
MBA, CFA, Fellow of the Institute of Chartered Shipbrokers
VP of Strategy and Planning at Teekay Marine Services
Fleet Manager at AP Møller-Maersk
Chief Engineer at Safmarine
Formerly at Ernst & Young, Financial Services Advisory
Associate of the Institute of Chartered Accountants of Ireland and the Irish Taxation Institute
Member of the Institute of Chartered Shipbrokers
Tanker Broker at Poten & Partners
Chartering Manager Maersk Broker / AP Møller-Maersk (Copenhagen, Singapore, Germany)
Graduate of Hamburg Shipping School and Member of the Institute of Chartered Shipbrokers
VP Corporate Services at Teekay Shipping Corporation
Held human resource management positions at BC Telephone and Canadian Airlines
Graduate of the University of British Columbia and holds MBA in Human Resource Management
from Seattle City University
Decades Of Experience With Industry Leading Companies
10
Product Tanker Market
Average MR Triangulation Rates(1)
Product Tanker Orderbook and Fleet Development(4)
Strong Spot & Pool TCE rates in 2015 averaging $21,548 for the full
year:
o Very strong rates in 2Q15 and 3Q15 but eased in 4Q15 due to
seasonality and refinery turnarounds
o 1Q16 starting strong but refinery maintenance in the USG and a fire
at Exxon’s Beaumont refinery reducing cargo volumes
• Seaborne product trade increased by 1.3 million bpd to 22 million bpd
in 2015 (~6% YoY increase), while tonne mile demand grew by ~7%
YoY(4)
EIA data shows US Gulf Coast (PADD 3) exports of finished
petroleum products averaged ~2.3 million bpd from Jan to Nov 2015,
a 7% increase YoY(3)
US Gulf refineries currently operating at 83.1% utilization(2) due to:
o Scheduled maintenance (turnarounds)
o Power outage at Exxon's 344kbd Beaumont refinery on Jan 21st
Orderbook at ~9.5% of the fleet which is the lowest level since 2001:
o 146 MR’s delivered and 20 MR’s scrapped in 2015
o Est. 99 MR deliveries and net fleet growth of ~4% in 2016(5)
o Orderbook may be <5% of the fleet by year end 2016(6)
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
$22,000
$24,000
$26,000 Trailing 12 Mth. Average Rates
1. Source: HRP - Trailing 12 month average of TC11/TC4 and TC2/TC14 triangulation rates as at December 31st, 20152. Source: EIA Weekly Inputs & Utilization report for the week ending January 29th, 20163. Source: EIA Finished Petroleum Product Export Data4. Source: Clarksons Shipping Intelligence Network 5. Based on management estimates6. Assumes no new orders placed in 2016
0%
10%
20%
30%
40%
50%
60%
0
10
20
30
40
50
60
70
80
90
100
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
OB
as
% F
leet
Mill
ion
DW
T
11
Product Tanker Demand Outlook
Seaborne Volume of Oil Products Traded(2)Estimate of 2016 Seaborne Imports / Exports(1)
1. Source: Clarkson's Shipping Intelligence Network, forecast for 2016 according to Clarkson’s SIN data2. Source: Seaborne volume of Oil Products sourced from Clarkson's Shipping Intelligence Network, forecast for 2016 according to Clarkson’s SIN data3. Source: IEA Medium Term Market Report 2015 and management estimates
Global Refinery Capacity Growth(3)
94.0
95.0
96.0
97.0
98.0
99.0
100.0
101.0
102.0
2015 2016e 2017e 2018e
mb
/d
+1.6mbd
+1.2mbd
+1.5mbd
12.2
22.8
0.0
5.0
10.0
15.0
20.0
25.0
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
e
MM
bp
d
Import Export NetImports as % Total Trade
Exports as % Total Trade
Middle East 1.2 2.7 1.5 5.3% 11.8%
North America 1.8 3.3 1.5 7.9% 14.5%
China 0.5 0.6 0.1 2.2% 2.6%
Asia (ex China) 8.1 5.7 -2.4 35.5% 25.0%
Europe 7.1 5.7 -1.4 31.1% 25.0%
Latin America 1.9 0.6 -1.3 8.3% 2.6%
Africa 1.3 0.4 -0.9 5.7% 1.8%
FSU n/a 3.1 n/a n/a 13.6%
Other 0.9 0.7 -0.2 3.9% 3.1%
Total Trade MMbpd 22.8 22.8 100% 100%
CAGR +4%
~1.6 million bpd of new refining capacity expected to come on
stream in 2016(3):
o United States +300kbd (primarily PADD3)
o China +490kbd / Other Asia +330kbd / Middle East +296kbd
Increasing diesel exports from China driving trade
Refinery margins remain strong, particularly for gasoline,
resulting in higher outputs worldwide
Comments
12
Chemical Tanker Market
25k Dwt / 37k Dwt Chemical Tanker TCE $/day(1)
Chemical Tanker Orderbook and Fleet Development (2)
1. TCE $/day based on internal chemical tanker voyage data2. Orderbook for coated IMO2 with average tank size <3000m3 and stainless steel ships above 10,000 Dwt3. Based on comparison of Chemical Tanker “Eco-Mod” rates FY2015 vs FY20144. Based on management estimates5. Based on management estimates and assumes no new orders placed in 20166. Source: Richardson Lawrie Associates, Chemical Carrier World No. 40. Calculation based on the growth in the combined exports of the US and Middle East from 2014 to 2015
Chemical tanker charter rates were strong in 2015, evidenced by
ASC rate performance up 18% year-on-year(3)
The chemical tanker market continues to improve:
o Continued expansion of petrochemical plants in US and Middle
East leading to increased exports of commodity chemicals (+6%
YoY)(6)
o Imports of chemicals into China remain strong despite slowdown in
GDP growth, in particular those used in light industrial / textile
manufacturing
o Strong start to 2016 with Veg Oil / Biodiesel volumes at historical
highs
Simpler, coated chemical tankers such as those in ASC fleet are
benefiting from strong product tanker market:
o Continuing to engage in regional CPP trade to a greater degree
o ASC chemical fleet spending 50% of time in CPP trade, 25% in veg
oils and 25% in commodity chemicals
o As chemical market strengthens further, these ships can swing
back into more chemical business
Fleet growth expected to be relatively moderate with:
o Orderbook at ~11% of the fleet
o Est. 80 deliveries (~2 mln Dwt), resulting in net fleet growth of ~5%
in 2016(4)
o Orderbook expected to be <5% of the fleet by year end 2016(5),
assuming no new orders placed
0
5,000
10,000
15,000
20,000
25,000
TCE
$/d
ay
CHEM-25s CHEM-37s
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
5
10
15
20
25
30
35
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
OB
as
% F
leet
Mill
ion
DW
T
MR Shipyards and Product Tanker Demand & Supply
MR Product Tankers
Fleet: 1,984 ships
Demand growth: 114 ships / year ++
Expected deliveries(1): 99 ships / year
Expected scrapping(2): 20 ships / year
Net fleet growth: 79 ships / year
Demand And Supply Lead To Positive Outlook
Source: Drewry, Internal data, publicly disclosed market information.1. Management estimates based on analysis of MR Product orderbook, vessel deliveries and yard capacity2. Internal Estimate based on average dwt of ships scrapped over the last three years adjusted for average vessel size in total fleet. 39 ships scrapped in 2013 ,30 ships in 2014 and 20 ships in 20153. Source: Clarkson's Shipping Intelligence Network, forecast based on management estimates. 2015 estimate assumes Sungdong SB Korea is closed
Demand Growth 5%+ vs.
Supply Growth ~4%
13
Shipyard Capacity(3)
4 4
23
67
54
4 2
2
4 6
2
2
0
2
4
6
8
10
12
14
16
18
20
2007 2008 2014 2015e
Nu
mb
er o
f Ya
rds
Number of Yards to Deliver at Least One MR Tanker
China Korea Japan Other
-42%
15
20
25
30
35
40
45
50
55
60
Jan
-02
Jul-
02
Jan
-03
Jul-
03
Jan
-04
Jul-
04
Jan
-05
Jul-
05
Jan
-06
Jul-
06
Jan
-07
Jul-
07
Jan
-08
Jul-
08
Jan
-09
Jul-
09
Jan
-10
Jul-
10
Jan
-11
Jul-
11
Jan
-12
Jul-
12
Jan
-13
Jul-
13
Jan
-14
Jul-
14
Jan
-15
Jul-
15
Jan
-16
Ves
sel P
rice
($
mln
)
Newbuild (47 - 51K Dwt) Secondhand (5yr Old 47k Dwt)
10,000
15,000
20,000
25,000
30,000
35,000
Jan
-02
Jul-
02
Jan
-03
Jul-
03
Jan
-04
Jul-
04
Jan
-05
Jul-
05
Jan
-06
Jul-
06
Jan
-07
Jul-
07
Jan
-08
Jul-
08
Jan
-09
Jul-
09
Jan
-10
Jul-
10
Jan
-11
Jul-
11
Jan
-12
Jul-
12
Jan
-13
Jul-
13
Jan
-14
Jul-
14
Jan
-15
Jul-
15
Jan
-16
US$
per
Day
14
Rates and Asset Values Still at Low Levels
Historical 1YR MR Charter Rates Historical MR Asset Values
Charter Rates And Asset Values Remain Well Below Historical Averages And Ardmore’s Fleet Has Been Assembled At An Attractive Point In The Cycle
Source: Clarkson’s Shipping Intelligence Network, Internal data, publicly disclosed market information.
Rates remain more than ~40% below the last cycle peak
Ardmore’s Investment
Period
$6
$8
$10
$12
$14
$16
$18
$20
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Nov-15 Dec-15 Jan-16 Feb-16
Shar
e P
rice
Ave
rage
Sp
ot
MR
Tan
ker
Rat
es
Average Spot MR Tanker Rates vs ASC Share Price Performance (1)
Average MR Spot Rates Share Price
15
Attractive Share Price – Disconnected from Ship Rates
1. Source: Bloomberg, HRP. Period November 02, 2015 to February 04, 20162. Source: Bloomberg. Period November 02, 2015 to February 04, 20163. Source: HRP – Comparison of the average of the combined TC11 / TC 4 and TC 2/ TC 14 triangulation rates as at November 02, 2015 to the same rate as at February 04, 2016
Volatility in the stock market has created a disconnect between share price and business prospects
ASC share price now trading at a considerable discount to the inherent value of the company. ASC price down
~42% since November 2015(2), while average MR spot rates have are flat over the same period(3)
Disconnect Between Share Price and Rates
ASC Share Price -42% Vs MR Spot Rates
Nov - Feb
4,280
7,071
8,221
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
FY14 1Q15 2Q15 3Q15 4Q15 FY15 FY16 EST
Rev
enu
e D
ays
16
Executing On Rapid And Profitable Growth Through Fleet Expansion Program
Strong Financial Performance and Significant Growth
EBITDA Growth ($Mln)(2)
Revenue Growth ($Mln)
1. Revenue Days based on managements estimates. FY16 estimates include the impact of the sale of the Ardmore Calypso and Ardmore Capella2. EBITDA is a non-GAAP measure that is defined as earnings before interest, taxes, depreciation and amortization. Management uses this measure in evaluating Ardmore’s operating performance.
Revenue Days Growth From New Deliveries(1)
+65% (Y-o-Y)
+16% (Y-o-Y)
$25.2$35.9
$67.3
$157.9
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
FY 2012 FY 2013 FY 2014 FY 2015
$5.1$9.5
$22.7
$70.6
$0
$10
$20
$30
$40
$50
$60
$70
$80
FY 2012 FY 2013 FY 2014 FY 2015
$423.6
$699.4 $1.3 $9.4 $9.4 $9.4
Vessel Assets @ 4Q15 Gross Debt @ 4Q15 (1) 1Q 2016 2Q 2016 3Q 2016 4Q 2016
Debt Repayments
17
Conservative Capital Structure
Book value of vessel assets ~$700 mln and gross debt of ~$424 mln as at Dec 31, 2015(1)
Low corporate leverage: ~55% as at Dec 31, 2015, with significant balance sheet cash
Completed a refinancing of $344 mln of debt in January 2016, reducing our interest expense by ~$2 mln and improving surplus
cashflow by ~$6 mln in 2016
o Additional incremental commitment of ~$20 mln provided by ABN AMRO and DVB Bank to fund future acquisitions
All debt is amortizing at ~$38 mln per year
Debt Profile(2)
1. Gross Debt excludes impact of netting of deferred finance fees as required under US GAAP ($423.6 mln - $8.6 mln = $415 mln)2. Proforma debt repayment profile based on 1Q16 debt refinancing
$0.72$1.14
$1.50
Base Rates Rates FY2015 Upside Rates - 3Q15
$1.20
$1.89
$2.50
Vessel Type TCE per day TCE per day TCE per day
MR Product (50k) $18,500 $21,500 $24,250
MR Chem (25-37k) $16,500 $17,500 $18,000
18
Every $1,000 / day
increase in rates equals
34 cents per share in
EPS and Cashflow &
dividend increase of
$0.20 / share(2)
Earnings Per Share(1)
1. Management estimates based on a full fleet of 24 vessels operating in the spot market for 363 revenue days / ship2. Realized across a full fleet of 24 ships. Calculation based on: ($1,000 day x 363 revenue days x 24 ships) / 26.1mln shares = $0.34 per share. $0.34 x 60% = Dividend of $0.20 per share
Efficient Operation Resulting in Significant Earnings Power
Dividend Per Share(1)
Earnings Power
19
Why Invest In Ardmore?
Generated record earnings of $1.23 per share for the 12 months ended Dec
31, 2015
Near-term outlook remains positive, anticipating a solid charter market in
2016 driven by refinery expansion and increased output, underpinned by
continuation of oil market dynamics (volatility and congestion)
Strong secular demand growth continues as worldwide refinery expansions
and complexity of trading activity drives tonne mile demand, almost
independent of underlying oil consumption growth (6% vs 1.4% over the last
seven years)
MR orderbook now at lowest point in 15 years and set to decline by year-
end to around 5% without additional ordering
Ardmore is well positioned to take advantage of continued strong rates -
every $1,000 increase in charter rates across the delivered fleet equates to
$0.34 in EPS and $0.20 in dividend(1)
Attractive dividend yield driven by world class operations:
o Dividend policy to pay out to pay out 60% of net income quarterly
Completed a refinancing of substantially all of our outstanding debt,
reducing our interest expense by ~$2 mln and improving surplus cashflow
by ~$6 mln in 2016
1. Calculations based on a full year at our existing cost structure and assumes (a) fleet of 24 vessels, (b) utilization of 99.45% and (c) 26.1 mln shares. Assumes no change in tax rate, cost of debt or share count
.
20
Thank You
21
Cru
de
Oil
NGL Plant
Appendix: Origin of Product and Chemical CargosG
as
Refinery
Ethylene
Cracker
Naphtha
Cracker
Reformate
EthanePropaneButaneNaphtha
Pygas
Ethylene
Propylene
Butylene
Ethylene Dichloride Ethylene Glycol Linear Alcohols Vinyl Acetate Styrene Misc chemicals
Manufacturing• Polystyrene• Fibres• Resin • Latex• Polyester• Nylon• Adhesives • Solvents• Detergent• Anti-Freeze• Flooring• Textiles
Fuel Blending• Oxygenates• Anti-knock agents
Agri-Business• Fertilizers
Commercial UseM/A
Production
Plant
Methanol MTBE UAN
Liquid Cargos
• Benzene• Toulene• Xylenes• Styrene• Cyclohexane• Misc chemicals
Methane
• Gasoline• Jet Fuel and Diesel• Fuel Oil Ardmore’s Fleet Capability
Ethylene
Natgas, NGL’s and Naphtha are the key feedstocks for chemicals shipped by sea
22
Appendix: Product and Chemical Overlap
GasolineDieselKerosene Jet Fuel Naphtha
Clean Petroleum Products (CPP) Chemicals*
* Certain chemicals such as Caustic Soda can be carried on IMO3 ships. However the vast majority of inorganic chemicals must be carried on IMO2 ships and acid based cargos are only suitable for stainless steel ships.
IMO 3 Tankers
• Cargo
• Tank Coating:
• Tank Size:
• Inerting:
• Crewing:
IMO 2 Tankers
• Cargo:
• Tank Coating:
• Tank Size:
• Inerting:
• Crewing:
IMO 2 (Coated)
IMO 3
CPP + Vegoils
Epoxy
>3,000 m3
Required (standard IGS not suitable for chemicals)
Standard tanker competency
CPP + Vegoils + Biofuels + Chemicals
Phenolic Epoxy / Stainless Steel / Marine Line
<3,000 m3
Not required for chemicals but growing preference for Nitrogen
Chemical tanker competency
Organic Inorganic
Vegoils Biofuels EthanolOther Cargos
Coated IMO2 Ships Are Essentially More Sophisticated Product Tankers
23
Appendix: Product Tanker – Long Term Secular Drivers
Underlying / ongoing demand coming from:
Increased demand for oil products driven by
low oil price
New export refineries in Middle East(1)
US Gulf increasing exports of refined products
Sulphur and other regulations increasing
voyage duration and demand for ship days
Product tanker tonne mile demand grew by ~5%
CAGR between 2005 and 2015(3)
MR vessel supply estimated to be ~4% in 2016
Combination of constrained supply growth and
fundamental secular demand drivers should result
in further tightening, leading to continued
improvements in charter rates
Secular Trends + Positive Supply–Demand Outlook Is Supporting Rate Increase
Note: Ongoing trend of refineries expanding closer to the oil well as refineries in areas of consumption close down.1. Seaborne trade of refined products is ~22 million barrels / day. New / expanded refineries in Yanbu (Saudi Arabia) and Ruwais (UAE) for export market is equal to ~820,000 barrels / day commenced in 1Q15. Significant additional refinery expansion in 2015 -2018 2. Source: IEA Medium Term Market Report 2015, World Refinery Capacity Additions 2015 -2020 (thousand barrels per day) 3. Source Drewry as at January 2016
Global Refinery Developments (2015-2020) (2)Drivers in Product Tanker Market