The case for LNGA successfull story in Norway

• Hans Kristian Haram• December 2010

LNG Success Story• LNG knowledge cluster• Safe and economic technology• 20 ships in operation• 10 more on order• LNG distribution infrastructure

• Saving the environment!

Presentation• LNG is the solution for ECA• Norwegian LNG policy• LNG fuelled fleet• LNG technology• LNG infrastructure• LNG price development• Golden opportunity

Meeting ECA* requirements• SOx < 0.1% in 2015• Expected NOx reduction• Expected increased CO2 fees

* Emission Control AreaThe solution is LNG

LNG is most economic

Typical shortsea vessel of 2700 grt, engine of 3300 kW, 5250 sailing hours/yr – Source DnV

5 year pay-back time for LNG

compared to alternatives

No SOx

Emission for typical Baltic Sea cargo vessel - Source DnV

Limited NOx

Emission for typical Baltic Sea cargo vessel - Source DnV

20% reduction in CO2

Emission for typical Baltic Sea cargo vessel - Source DnV

No Particles

Emission for typical Baltic Sea cargo vessel - Source DnV

Norwegian Policies - Vision• Leading maritime nation supplying

the most innovative and environment-friendly solutions

LNG Challenges• Availability• Price• Capex• Loss of cargo space• Safety

Active LNG Policies in Norway1. Research and development funding2. LNG required in government tenders3. NOx fund for LNG investments

Norwegian Policy - LNG• Meeting ECA requirements

with LNG• Develop LNG company cluster• International cooperation• Chairman Council of Baltic Sea• Major conference on use of

LNG in Baltic next year

20 vessels in operation + 10 in order

Car/passenger ferries

Offshore Vessels

Coast Guard

RoRo

Bulk Carrier

Conversion of Tanker

Mature Technology• Lean burning mono

...or dual fuel

...(or fuel cells)

• Methane slip is being solved

• Multiple suppliers:Wärtisilä, Rolls-Royce, MAN Diesel, Mitsubishi

LNG is SAFE!• Used in LNG Carriers

(now 350) for 40 years• As fuel in Norway

in 20 ships since 2001• DnV Rules

• Low pressure in tanks• Lower flammability• Lower flame velocity• Light weight

Minimal loss of cargo space

• Development of a new LNG storage system (IMO A tank)

State of the Art• New hull design• LNG powered• Increased dwt

• 50% lower CO2 per tonne• No SOx, limited NOx• No particles

75% lower CO2 emission compared to truck

LNG distribution

• Shortsea LNG Carriers

• Distristribution depots

• LNG Bunker Vessels

Distribution• Shortsea LNG ships• LNG Depots

Deep sea LNG

Kystgass

Coastal LNG ship

Coastal LNG ship

Local LNG skip

Local depot

Regional LNG depot

Snøhvit - base load LNG plant

Ferry LNG supplies• Bunkering station • Bunkering

Nordic LNG distribution

6 multi gas (LNG, Ethylene, LPG) carriers of 10 000 cbm and 2 of 12 000 cbm

Tjelbergodden

Kolsnes

KarmsundRisavika

Teeside

Nynäshamn

Klaipedia

Primorsk

Swinoujscie 2014

Emshafen 2014Rotterdam

Zeebrugge

WilhemshavenRostock

Dunkerk 2014

Isle of Grain

Canvey 2014Milford Haven

Shannon

Port Meridan

Anglesey

Le Havre 2014

Mentoir

Le Verdon 2013

BilbaoGijon

El Ferrol

LNG in Atlantic, North Sea, Baltic Sea

New LNG facilities are coming on-stream

LNG price projection• Natural gas will

cost less than 50% of crude oil per mmBtu

• Price of natural gas is more stable

• Oil price will grow faster

Price and Correlation• Gas price has

dropped relative to oil recently

• Assumed future LNG price: USD 570/tonne = USD 12 mmBtu

Golden Opportunity

• Ship upgrading relatedEuropean ECA 2015-16

Regulative measures • Demand LNG on

government ships• Provide investment

incentives• Build efficient LNG

infrastructure• International cooperation

Governments must lead!

Thank you for your attention!!• Hans Kristian Haram

SOx=0NOx<2g/kWh

PM=0CO2 -20%