The Future Of Lng As Fuel, Technical And Infrastructure Aspects And Considerations

The future of LNG as fuelTechnical and infrastructure aspects and considerations

Lars SørumDirectorDNV

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CONTENTS

CURRENT BARRIERS

INNOVATIONS

BENEFITS OF LNG AS A FUEL


Areas affected by MARPOL 73/78 Annex VI


The effect of implementing Tier III requirements on NOx

Source; CNSSVolker Matthias


Environmental benefits of natural gas as a fuel


30 LNG fuelled ships in operation worldwide

Ships in operationYear Type of vessel Owner Class2000 Car/passenger ferry Fjord1 DNV2003 PSV Simon Møkster DNV2003 PSV Eidesvik DNV2006 Car/passenger ferry Fjord1 DNV2007 Car/passenger ferry Fjord1 DNV2007 Car/passenger ferry Fjord1 DNV2007 Car/passenger ferry Fjord1 DNV2007 Car/passenger ferry Fjord1 DNV2008 PSV Eidesvik Shipping DNV2009 PSV Eidesvik Shipping DNV2009 Car/passenger ferry Tide Sjø DNV2009 Car/passenger ferry Tide Sjø DNV2009 Car/passenger ferry Tide Sjø DNV2009 Patrol vessel REM DNV2009 Car/passenger ferry Fjord1 DNV2010 Patrol vessel REM DNV2010 Car/passenger ferry Fjord1 DNV2010 Patrol vessel REM DNV2010 Car/passenger ferry Fjord1 DNV2010 Car/passenger ferry Fjord1 DNV2010 Car/passenger ferry Fosen Namsos Sjø DNV2011 PSV DOF DNV2011 Chemical tanker Tarbit Shipping GL2011 Car/passenger ferry Fjord1 DNV2011 PSV Solstad Rederi DNV

Year Type of vessel Owner Class2012 Car/passenger ferry Fjord1 DNV2012 PSV Eidesvik DNV2012 PSV Olympic Shipping DNV2012 PSV Island Offshore DNV2012 General Cargo Nordnorsk Shipping DNV

Updated 06.08.2012

© Det Norske Veritas AS. All rights reserved.

32 confirmed LNG newbuilds

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Confirmed orderbookYear Type of vessel Owner Class2012 PSV Eidesvik Shipping DNV2012 Ro-Ro Sea-Cargo DNV2012 Ro-Ro Sea-Cargo DNV2012 High speed RoPax Buquebus DNV2012 PSV Island Offshore DNV2012 PSV REM DNV2012 Car/passenger ferry Torghatten Nord DNV2012 Car/passenger ferry Torghatten Nord DNV2012 Car/passenger ferry Torghatten Nord DNV2012 Car/passenger ferry Torghatten Nord DNV2012 Harbor vessel Incheon Port Authority2013 RoPax Fjordline DNV2013 RoPax Fjordline DNV2013 General Cargo Eidsvaag DNV2013 Car/passenger ferry Norled2013 Car/passenger ferry Norled2013 Ro-Ro Norlines DNV2013 Ro-Ro Norlines DNV2013 RoPax Viking Line LR2013 Tug Buksér & Berging DNV2013 PSV Harvey Gulf Int. Marine ABS2013 PSV Harvey Gulf Int. Marine ABS2013 Patrol vessel Finish Border Guard GL2013 Car/passenger ferry Society of Quebec ferries2013 Tug CNOOC2013 Tug CNOOC

Year Type of vessel Owner Class2014 Car/passenger ferry Society of Quebec ferries2014 Car/passenger ferry Society of Quebec ferries2014 Tug Buksér & Berging DNV2014 PSV Harvey Gulf Int. Marine ABS2014 PSV Harvey Gulf Int. Marine ABS2014 PSV Remøy Shipping

Updated 06.08.2012


Barrier: Lack of suitable infrastructure

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Barrier: Regulatory Frameworks

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LNG supply infrastructure LNG bunkering options LNG received as shipping fuel

OnshoreLNG tank

LNG FSU

LNGBunkerbarge

LNG

LNG Terminal

LNG truck loading station

LNGBunkerbarge

Receiving Vessel

Ship-to-ship

Jetty-to-ship

Truck-to-ship

IMO IGC CodeClass rules

Port State Legislations

Environmental permitSafety case (Seveso)Building permit

ISO Guideline (draft by end 2012)Local bunkering procedures

IMO IGFClass RulesFlag state

Receiving Vessel

Receiving Vessel

LNGBunkerbarge

ADRPort State LegislationsAccreditation

IMO IGCClass RulesFlag statePort StateAccreditation

LNG ISO container

LNG


Barrier: Development of bunkering practices

Gas fuelled ships:

DNV class rules published 2001

Norwegian Maritime Directorate has rules

Interim Guidelines for IGF (International Safety Code for Gas Fuelled Ships), 2010

Port and bunker operations:

Limited experience and documentation

Standards do not cover all bunkering

Development under way:- STS Gothenburg (Got LNG)- “Bungas” – Port of Hamburg- Rotterdam JIP- Singapore JIP- ISO project- More initiatives underway…….


Ongoing: ISO standard on LNG bunkering

DNV proposed the topic to ISO TC67/WG10 (ISO workgroup for the LNG industry)

Objective: Develop standard for LNG bunkering equipment and procedures

30+ companies and regulators are participating - 15 countries.- 8 oil, gas and energy companies- 2 regulators- 3 shipping companies- 7 equipment providers- Sigtto and 3 class societies

6 work meetings have been held

Ambition is to publish draft standard by the end of 2012

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With a predicted 1000 ships fuelled by LNG in 2020 – the global bunker demand is equivalent to 4-7Mill Tons of LNG

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South America

North America

Europe & the Baltic Sea

Middle East & India

SEA

Japan & Korea

Australia & NZ

LNG Bunkering demand 2020Equivalent to 4 -7 million tons of LNG

LNG Bunkering demand 2012

0.9 – 1.4 million

China

0.3 – 0.4 million

1.4 – 2.2 million0.3 – 0.8 million

0.3 – 0.7 million

0.4 – 0.7 million

0.1 – 0.2 million

0.3 – 0.5 million0.07 – 0.09 million


Bass Strait

Europe*

Tokyo BayBusanFujairah

Singapore

Incheon

Shaanxi

Hubei

Buenos Aires

New York

Fourchon

Tadoussac

Tacoma

Duluth

• Is bunkering facility available outside ECA zones?

• How to identify the right locations for bunkering?

LNG as

a fuel

Government

Port authority

Ship owner

Engine manufacturer

Financial institution

Terminal operator

LNG supplier

Innovation – Technical, Commercial and Operational

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Ship-to-ship LNG bunker

Truck-to-ship LNG bunker

LNG bunker station-to-ship

• Which bunkering operations fit your needs?

• What kind of small-scale LNG distribution fits your needs?

• What are the hazards during bunkering operations?

• Will demand be large enough?

• Will funding be available?

• How to solve situation of supplying LNG from large scale LNG terminals?

• How to ensure reliability of infrastructure, equipment?

Small LNG carrier at large scaled LNG terminal

• Will regulations & standards be ready in time?

• How to convince public that LNG is safe?

DNV rules & STS bunkering procedure

• Price gap between LNG & other fuel types?

• What will be the price of LNG in the future?

• What kind of incentives available for the players?

2-6 USD/mmbtu10-11 USD/mmbtu

15-17 USD/mmbtu

LNG price gap globally

• How much investment to be made to retrofit

• What are hazard & risks during ship design & development?

• What is the best strategic investment –newbuild or retrofit?

Bit Biking retrofit


LNG is the preferred solution to meet environmental requirements

The technology is proven, 30 ships in operation and 32 new ships contracted

Barriers include lack of suitable infrastructure, regulation and bunkering practices

These barriers are currently being broken

Regulations and working practices are now being developed for LNG fuelling infrastructure

To realise the potential for LNG as fuel is dependent on Innovation, not only technical or operational (procedures) but also commercial

The construction of new LNG bunkering infrastructure needs to begin now

Summary

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Safeguarding life, property and the environment

www.dnv.com

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The Future Of Lng As Fuel, Technical And Infrastructure Aspects And Considerations

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