LNG Ready service - Intertanko Ready final.pdf · Year Type of vessel Owner Class ... Assessment of safety level of LNG fuel system ... Basis for acceptance by administration Decision

DNV GL © 2013 SAFER, SMARTER, GREENER DNV GL © 2013

Fuel Strategy Regulatory Compliance and minimize the fuel cost

1

DNV GL © 2013

The drivers for alternative fuels in shipping are interlinked

2

DRIVERS FOR ALTERNATIVE FUELS

Increased fuel prices HFO and MDO

More stringent environmental regulations

Sox & Nox

Availability of new energy sources &

technologies

Stakeholder pressure to reduce

environmental impact from shipping

DNV GL © 2013

A number of environmental regulations are on the horizon

3


POSSIBLE REGULATIONS

EU CO2 MRV BC and VOC regulation

2018 2016 2015 2025 2020

ADOPTED REGULATIONS

NOx tier III for new builds

0.1% ECA sulphur limit

EEDI phase 1

EEDI phase 3 EEDI phase 2

0.5% global sulphur cap

Global CO2 MRV

0.5% global sulphur cap

DNV GL © 2013

Possible new ECA areas

4


Turkish Straits in 2017?

Hong Kong / Guangdong?

From 2020 ; 0,5 % Sox in EU waters

DNV GL © 2013

Three options for SOX removal …

LNG as fuel

5

HFO + scrubbers for exhaust gas cleaning

HFO + change over to low-sulphur fuel in ECA

1

2

3

DNV GL © 2013

… but do not forget the NOx reduction

Selective catalytic reduction, SCR

6

Exhaust gas recirculation, EGR

Various water based technologies

1

2

3

http://en.wikipedia.org/wiki/File:SCR2.GIF

DNV GL © 2013 SAFER, SMARTER, GREENER DNV GL © 2013

Choosing the best fuel technology

7

DNV GL © 2013

Key factors to consider

1. Development of price

of HFO/MDO/LNG…

2. Technology

development

3. ECA exposure

8

DNV GL © 2013

Gas prices are expected to remain competitive in the long-run

10

WHY LNG AS FUEL

Source: HFO 380 and MGO historical prices (Clarkson), natural gas historical (World Bank). Projections based on IEA World Energy Outlook 2013.

0

5

10

15

20

25

30

35

[U

SD

/M

Btu

]

Price development and projections for marine fuel and natural gas

MGO

HFO 380

NG: Japan import

NG: Europa import

NG: USA?

DNV GL © 2013

0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 20 000

L20DF

L34DF

V34DF

L50DF

V50DF

C26:33 L

B35:40 L

B35:40 V

M34DF

M46DF

L51/60 DF

V51/60 DF

L28/32DF (2014)

L23/30DF

L35/44DF (2014)

V35/44DF (2014)

GS12/16R

Power [kW]

Gas engines [range in kW]

Ro

lls

Ro

yce

MA

N D

iese

l & T

urb

oW

ärts

ilä

Mitsubishi

Cat

er-

pill

ar

Available and announced 4-stroke gas engines

12

MARKET AND TECHNOLOGY

DNV GL © 2013

0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000

RT-flex50DF

X52DF (2016)

X62DF (2015)

X72DF (2016)

X82DF (2016)

X92DF (2017)

S80 ME GI

S70 ME GI

S65 ME GI

S60 ME GI

S50 ME GI

S40 ME GI

Power [kW]

Gas engines [range in kW]

MA

N D

iese

l & T

urb

oW

ärts

iläAvailable and announced 2-stroke gas engines

13


DNV GL © 2013

48 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






2008 PSV Eidesvik Shipping DNV


2009 Car/passenger ferry Tide Sjø DNV



2009 Patrol vessel Remøy Management DNV







2010 Car/passenger ferry Fosen Namsos Sjø DNV

2011 PSV DOF DNV

2011* Chemical tanker Tarbit Shipping GL


2011 PSV Solstad Rederi DNV


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 Island Offshore DNV

2012 Car/passenger ferry Torghatten Nord DNV



2013 PSV REM DNV

2013 RoPax Viking Line LR


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 2014 RoPax Fjordline DNV

Ships in operation

* Conversion project


14

Updated 31.03.2014 Excluding LNG carriers and inland waterway vessels

DNV GL © 2013

60 confirmed LNG fuelled newbuilds


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 Tug Buksér & Berging DNV

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

2014 Tug CNOOC CCS

2015 Tug CNOOC CCS

2015 PSV Siem Offshore DNV

2015 PSV Siem Offshore DNV

2015 PSV Simon Møkster DNV




2015 Tug NYK NK

2015 LEG carrier Evergas BV



2015 Bulk ship Erik Thun LR

2015 Container Ship Brodosplit DNV GL

2015 Container Ship Brodosplit DNV GL

2015 PSV Siem Offshore DNV GL


2015 Container Ship TOTE Shipholdings ABS

2016 Container Ship TOTE Shipholdings ABS

2016 Icebreaker Finnish Transport A. LR



2016 Chemical tanker Terntank BV

2016 Chemical tanker Terntank BV

2016* Ro-Ro TOTE Shipholdings ABS

2016* Ro-Ro TOTE Shipholdings ABS

2016 Car carrier UECC LR

2016 Car carrier UECC LR

2016 Car/passenger ferry Boreal Transport DNV GL

2016 Car/passenger ferry Boreal Transport DNV GL


Confirmed orderbook


15


DNV GL © 2013

Global development- confirmed orderbook

Norway

Europe

North America

South America

Asia

60 confirmed LNG fuelled newbuilds - DNV GL also first choice for future projects (2/2)


2016 Container Ship Universal Marine DNV GL




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


Confirmed orderbook


16


DNV GL © 2013

Current development is in line with DNV GL projections

17

0

100

200

300

400

500

600

700

800

900

1000

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Nu

mb

er o

f sh

ips d

elivered

Year of delivery

Development of LNG fuelled fleet

Total confirmed projects DNV Shipping 2020

0

50

100

150

200

250

300

2012 2013 2014 2015 2016



DNV GL © 2013

A global LNG infrastructure is under development

19

Existing Planned (Feasibility study, risk study, proposed locations, pending approval)

Proposed (currently being discussed)

* See detailed map

Europe*

Busan Dubai

Singapore

Incheon

Nanjing

Wuhan

Buenos Aires

New York

Fourchon

Tadoussac

Tacoma

Duluth

Gaolan Hambantota

Turkish strait & Marmara Sea

Jacksonville Shanghai

Zhoushan

Santander

Algeciras Cartagena

Valencia Barcelona Ferrol

Seattle Vancouver

Sarnia

Mississippi river


DNV GL © 2013

There are two options for making a ship ready for LNG

20

We can help you select the best solution according to operational, environmental and financial requirements

Ship ready for operation today

Ship ready for future retrofit

LNG READY SERVICE

LNG fuelled ship LNG ready ship

DNV GL © 2013

There are four steps to become LNG ready

21

LNG READY SERVICE

2. CONCEPT REVIEW

Review of engine and tank type selection

Concept Design Review

Rules and regulations

Fit for purpose and best practice

Concept HAZID

1. FUEL DECISION SUPPORT

Operational profile

Concept design (tank size & location)

Financial assessment (CAPEX, OPEX,

pay-back time and sensitivity analysis)

Fuel availability

3. APPROVAL IN PRINCIPLE

For novel designs

For LNG Ready designs

4. RISK ASSESSMENT

Assessment of safety level of LNG fuel

system (mandatory by IMO)

Basis for investment

decision and outline

specification

Basis for

yard/designer

negotiations

Basis for contract

Basis for acceptance

by administration

Decision Points. Proceed with the LNG option or not.

CLASS APPROVAL (after vessel is ‘LNG Ready’)

DNV GL © 2013

LNG ready phase 1 Fuel decision support – case study

22

DNV GL © 2013

LNG as fuel on a new build MR tanker

Case description

Building an MR tanker with full dual fuel

capabilities

The vessel will use LNG for the whole roundtrip

All engines will run on LNG

Vessel specifics

Deadweight: 51,500 DWT

Length O.A: 183 m

Breadth MLD: 32 m

CASE DESCRIPTION

23

DNV GL © 2013

The vessel will trade cross-Atlantic

24

OPEREATIONAL PROFILE

Issues to consider

Vessels built after 1 January 2016 need to comply with NOx Tier III regulations when operating in NOx ECA. Compliance

options include LNG, SCR and EGR.

Rotterdam

Houston

New York

Operational profile

Total distance

(round-trip) 10,300 nm

Distance in ECA

(round-trip) 3,800 nm

Total sailing time 32 days

Sailing time in ECA 12 days

(38%)

Speed 13.5 knots

Complete round-trip

voyage time 49 days

Total time in ECA 30 days

(60%)

DNV GL © 2013

Issues to consider

Several engines types are available 4 stroke two stroke

high and low pressure

Ensuring Tier III compliance and engine compatibility with

other abatement technologies when running on diesel oil

(SCR, EGR etc).

Installation of dual fuel engines, two stroke Main Engine

25

Assumptions and comments

Dual fuel capabilities on all engines

Full HFO capabilities for back-up

Source: MAN

Dual fuel engines

1 x MAN 6S50ME-B9.2-GI Engine size:8,890 kW Engine speed: 99 RPM SGC: 135.8 g/kWh SPOC: 8.5 g/kWh 3 x MAN L23/30 DF Engine size: 850 kW Engine speed: 900 RPM

TECHNICAL CONSIDERATIONS

Source: MAN

DNV GL © 2013

A tank size of 1500 m3 is needed for 100% LNG operation (2 bunkering operations)

26


Dual fuel capabilities for all engines

Bunkering frequency: Twice per roundtrip

85% tank utilization

Issues to consider

Cruising range, bunker price difference, additional capex


0 200 400 600 800 1 000 1 200 1 400 1 600

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Main Engine

Auxiliary Engine 1

Auxiliary Engine 2

Total Consumption

REQUIRED TANK SIZE

LNG volume [m3]

LNG tank capacity needed for operation [m3]

DNV GL © 2013

There are several possible tank locations on deck

27 27


A LNG type C pressurized tank has been considered

Impacts on design/operation:

Rearrangement of some piping and equipment

Move cargo pumps to the side

Double gangway around the tank

Mechanical protection against hose handling crane

Issues to consider

Special attention must be paid to the interim guidelines,

class requirements and the draft IGF code for tank

location

Aim to keep tank size within standard supplier limits


Different tank locations

DNV GL © 2013

CAPEX estimate for LNG fuel alternative

28


The LNG system price includes the tank, the tank

connection spaces, the bunkering station and the

automation and interfacing system

The yard cost assumes a "normal" addition for risk and

overhead/profit from the yard

Issues to consider

Cost-benefit evaluation of DF capability on auxiliary

engines and boilers

Low pressure versus high pressure gas engines and

related supply systems

5,8

0,5

4,4

0,9

0 1 2 3 4 5 6 7

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Engines andGVUs

LNG system

Yard cost

Total cost

[MUSD]

Total additional cost of the LNG system [MUSD]

FINANCIAL ANALYSIS

DNV GL © 2013

CAPEX estimate for hybrid scrubber system

29


Hybrid scrubber for cleaning the exhaust of both the main

engine and the auxiliaries

Yard cost is a case-to-case specific parameter which

varies

Issues to consider

Choosing the correct scrubber solution among closed

loop, open loop and hybrid scrubber should be

investigated in detail.

A Technology Qualification process is also recommended

to increase the likelihood of a successful installation.

Operational costs of scrubber systems may vary

significantly and needs to be accounted for.

3,3

0,5

2,8

0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5

0% 20% 40% 60% 80% 100%

Scrubberequipment

Yard cost

Total cost

[MUSD]

Total additional cost of the hybrid scrubber system [MUSD]

FINANCIAL ANALYSIS

DNV GL © 2013

LNG is expected to be available on the trade route

30

Issues to consider

The availability of

bunkering LNG in

an area/port does

not necessary

mean that

bunkering will be

possible for a

specific ship

(pending slot

contracts and

compatibility)

Confirmed

Potential

LNG AVAILABILITY

Rotterdam

New York

New Orleans

Houston

DNV GL © 2013

-3

-2

-1

0

1

2

3

4

5

6

7

8

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

Co

st

[M

US

D]

Year

Cumulative discounted cost difference to HFO baseline [MUSD]

HFO baseline ScrubberFuel switch LNG @ 16 USD/MMBtuLNG @ 14 USD/MMBtu LNG @ 12 USD/MMBtu

HFO

Scrubber

Fuel switch

Cost analysis for LNG, Scrubber and Fuel Switch

Note; New global 0,5% Sox limit not included (2020/2025) MGO price 890 USD/tonne 22 USD/MMBtu HFO price 595 USD/tonne 15.5 USD/MMBtu

FINANCIAL ANALYSIS

31

DNV GL © 2013

Pros and Cons of different fuel options

32

OPTION PROS CONS

SCRUBBER • Use cheaper, high sulphur fuel

• Fuel available

• Takes up space

• Significant investment cost

• No significant reduction of NOx

• Requires additional energy during operation

• Discharge of water

• New technology - maintenance

LNG

• Currently cheaper fuel

• Reduces NOx and CO2 and Sox

• High system costs

• Requires larger fuel tanks

• Distribution network ?

• Methane slip

LOW SULPHUR

FUEL

• No or little modifications and investment needed.

• Well known and tested

• High fuel cost

• Fuel availability uncertain

• Increased Wear and tear on engines

• NOx treatment needed for Tier III

1

2

3

DNV GL © 2013

LNG Ready Studies

Interest has primarily been

spurred by known or likely LNG

availability in relevant ports

Most projects have proven the

potential for a good business case

for LNG and scrubbers

33

Updated 18.03.2014

0 2 4 6 8 10 12 14

Others

Gas carriers

Tankers

Containers

Bulk carriers

Different designs assessed

LNG READY SERVICE

DNV GL © 2013

LNG as fuel – business riks’s

34


DNV GL © 2013

LNG will become a major fuel – it’s only a matter of time!

35


LNG & Scrubbers are proven & available technology!

LNG & Scrubbers should be considered for all new builds !

Close cooperation with charterer and LNG bunker supplier needed in this early phase

DNV GL © 2013

SAFER, SMARTER, GREENER

www.dnvgl.com

Thank you for your attention

36

Håkon Skaret Business Director Tankers

[email protected]

+4795937377

Documents

LNG Ready service - Intertanko Ready final.pdf · Year Type of vessel Owner Class ... Assessment of safety level of LNG fuel system ... Basis for acceptance by administration Decision