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LNG as Ship Fuel – Status Quo & Outlook
Nautischer Verein zu Bremerhaven
Bremerhaven – 17th of September, 2014
Introduction: Bomin Linde LNG
LNG vs. traditional marine fuels
Status quo & outlook: LNG as ship fuel
LNG-fuelled fleet
Safety & regulations
Pricing
2
Bomin Linde LNG – Nautischer Verein zu Bremerhaven
Agenda
08/10/2014 Source: Bomin Linde LNG
Comments
The Joint venture was founded in October 2012 in Hamburg and aims to become a leading supplier of LNG as a marine fuel in ECAs The Linde Group
Founded in 1879 in Munich
Leading supplier of industrial, health care and specialty gases
Leading supplier of cryogenic equipment and facilities
Marquard & Bahls
Founded in 1947 in Hamburg
Largest privately owned natural resource trader in Europe
Worldwide fuel storage and handling is done by Oiltanking
3
Bomin Linde LNG is a 50/50 JV between The Linde Group
and Marquard & Bahls to supply marine LNG
The Joint Venture
08/10/2014 Source: Bomin Linde LNG
4
Bomin Linde LNG covers the entire value chain and
develops the infrastructure for marine LNG bunkering
Comments Small-Scale LNG Supply Chain
Bomin Linde LNG is covering the
entire LNG value chain
This is enabled through unique
competences as well as financial
commitment internally as well as
from the shareholder side
“Tailor made solutions” such as
small terminals, containerized
solutions and dedicated bunker
vessels at individual bunkering
locations can be realized
depending on volume demand
“Economies of scale” is key for
intermediate storage and
transportation
LNG SOURCE
TRUCK
RAILCAR LNG
STORAGE
LOADING
ARM
FUELING
VESSEL
TRANSPORT
VESSEL
CONTAINER
CUSTOMER
VESSEL
TRUCK
08/10/2014 Source: Bomin Linde LNG
5
Bomin Linde LNG inherits the unique experience of LNG
storage and ship-to-ship bunkering in Sweden
Comments Nynäshamn terminal and ship-to-ship fueling
LNG supply: 20,000 m³
Nynäshamn terminal in
operation since 2011
World‘s first LNG fueling
vessel in operation:
“Seagas”
Bunkering of “Viking Grace”
six times per week in less
than 40 minutes
Above 350 ship-to-ship
fueling operations without a
single fault or accident
Bomin Linde LNG has full
access to both terminal and
the fueling vessel
08/10/2014 Source: AGA, Bomin Linde LNG
North
Sea Baltic
Sea
Black Sea
Mediterranean Sea
South of 62 N
East of 4 W
East of 5 W
Bomin Linde LNG Locations in Europe
1) Bomin Linde LNG has full access to both the LNG terminal as well as the SEAGAS fueling vessel
6
Europe: terminal and fueling vessel live in Sweden,
three more small-scale terminals under development
Stockholm (Owned by Linde)1
Operational
Hamburg (Bomin Linde LNG)
Live in 2015
Bremerhaven (Bomin Linde LNG)
Live in 2015
Rotterdam (Bomin Linde LNG)
Live in 2015
Key Facts Impressions
Fueling Vessel (Bomin Linde LNG)
World’s first LNG fueling vessel:
SEAGAS
Conceptual designs ready
Multiple solutions available
08/10/2014 Source: Bomin Linde LNG
Impressions: layout of a Bomin Linde LNG fueling terminal
7 08/10/2014 Source: Bomin Linde LNG
Introduction: Bomin Linde LNG
LNG vs. traditional marine fuels
Status quo & outlook: LNG as ship fuel
LNG-fuelled fleet
Safety & regulations
Pricing
8
Bomin Linde LNG – Nautischer Verein zu Bremerhaven
Agenda
08/10/2014 Source: Bomin Linde LNG
0
1
2
3
4
5
2000 2005 2010 2015 2020 2025
9
By 2015 new emission limits for sulphuroxides to be
introduced, ship owners/operators need to act
Comments
Stricter emission limits in Emission
Control Areas (ECA)
North Sea Baltic Sea English channel US and Canadian coastlines
Reduction of SOx emissions:
ECAs: by 2015 from 1% to 0.1% Global (aim): by 2020 from 3.5% to
0.5%
Reduction of NOx emissions:
American ECA: by 2016 to Tier III European ECA: timeline under
discussion
Emission Limits: SOx and NOx
Sulfur (%)
Global
SOx ECA
Year
0
3
6
9
12
15
18
0 200 400 600 1000 1200 1400 1600 1800 2000 2200
NOx Limit, G/kWh(%)
Tier I
Tier II (Global)
Tier III (NOx Emission Control Areas)
Rated Engine Speed, rpm
08/10/2014 Source: International Maritime Organization, Dieselnet.com, Bomin Linde LNG
Liquefied natural gas, cooled down
to around -160° C
Distillate fuel with reduced sulphur
content (<0.1%)
Scrubber: permanently installed
desulphurization system
The Guardian, iStockphoto (Mayumi Terao), Wärtsilä, Bomin Linde LNG
10
There are three ways to comply with the upcoming
emission limits: MGO, LNG and HFO + Scrubber
Liquid Natural Gas (LNG) Marine Gas Oil (MGO) Heavy Fuel Oil (HFO) + Scrubber
Cheaper than MGO
LNG meets all current and
planned emission limits
Full compliance with NOx
emission limits
CO2 emission reduction
MGO today already 50%
more expensive than HFO
Price increase due to rising
demand by 2015 very likely
Compliance with NOx
emission limits needs SCR
Operating challenges (e.g.
increasing fuel consumption,
handling of hazardous waste)
Sustainability questionable
Compliance with NOx
emission limits needs SCR
Alternative Fuels in Compliance with ECA Regulations
08/10/2014 Source: Bomin Linde LNG
0,4 2,0 13,0 SOx
11
LNG is a future-proof fuel enabling compliance with ever-
tighter emission limits for the next decades
LNG / HFO emission
comparison :
Close to 100% less
Sulfur and small
particles (PM)
80 – 85% less NOx
emission
20 – 25% less CO2
emissions
Reduction of noise
and vibration
Remarks Overview of Fuel Emissions Specified per Category [g/kwh]
Liquid Natural Gas
(LNG)
Gasoil
(0.1% Sulphur)
Marine Diesel Oil
(0.5% Sulphur)
Residual Oil
(3.5% Sulphur)
2 8-11 8-11 9-12 NOx
0.15-0.25 0.25-0.50 1.5 PM
430-480 580-630 580-630 580-630 CO2
08/10/2014 Source: MARINTEX, Bomin Linde LNG
Introduction: Bomin Linde LNG
LNG vs. traditional marine fuels
Status quo & outlook: LNG as ship fuel
LNG-fuelled fleet
Safety & regulations
Pricing
12
Bomin Linde LNG – Nautischer Verein zu Bremerhaven
Agenda
08/10/2014 Source: Bomin Linde LNG
08/10/2014 Source: DNV-GL, Bomin Linde LNG 13
Today ca. 50 vessels are using LNG as ship fuel – further
69 vessels on order
Comments
5044
Asia Norway Total
3
Europe USA
2 1
LNG-fuelled vessels today vs. order book [#]
LNG-fuelled vessels: today
26
20
19
69
USA Total Europe Asia
4
Norway
LNG-fuelled vessels: ordered
As of 01.09.2014 a total of 50 LNG-fuelled vessels are in operation – 69 vessels on order
Developments regarding the use of LNG as a ship fuel initially started in Norway mainly due to the NOx fund
Large-scale LNG carrier were not part of the count
Reputable companies such as UASC, Matson und Crowley have already ordered vessels
14
According to DNV the outlook for LNG-fuelled vessels is
positive – 400 vessels in Europe by 2020
LNG fuelled vessels worldwide & per region per shiptype [#]
DNV expects 1.000
vessels to be running
on LNG by 2020 of
which 400 will
operate in Europe
Expecially tanker and
Offshore segments
expected to grow
strongly after 2015
Slower developments
in the segments:
passenger ships,
RoRo‘s and container
vessels
Comments
08/10/2014 Source: DNV-GL, Bomin Linde LNG
Introduction: Bomin Linde LNG
LNG vs. traditional marine fuels
Status quo & outlook: LNG as ship fuel
LNG-fuelled fleet
Safety & regulations
Pricing
15
Bomin Linde LNG – Nautischer Verein zu Bremerhaven
Agenda
08/10/2014 Source: Bomin Linde LNG
08/10/2014 Source: SEA Consulting, Linde AG, Bomin Linde LNG 16
The transfer of LNG is subject to strict safety regulations
and occurs via high-tech equipment
Comments
Impressions: safety in LNG bunker operations
Regulations across the EU have to be consistent and harmonized
Break-away couplings prevent LNG leaks during bunker operations
LNG bunker vessels are equipped with emergency shutdown systems
In comparison to Heavy Fuel Oil (HFO) LNG is:
Non-toxic
Non-carcinogenic
Limited flamable
Bomin Linde LNG is a founding member of the
Maritime LNG Platform
Members of the Maritime LNG Platform
17
Maritime LNG Platform: Targets
Establish Liquefied Natural
Gas as fuel in the marine
industry
Support the construction of
LNG infrastructure to supply
freight- and cruise vessels
with LNG in German ports
Further high-calibre companies
expected to join
Levers
High-level political lobbying
Community building
Information exchange
Support for subsidy
applications
Comments
Partners:
Note: Maritime LNG Platform launched in February 2014
Ports:
08/10/2014 Source: OvB Consulting, Bomin Linde LNG
Introduction: Bomin Linde LNG
LNG vs. traditional marine fuels
Status quo & outlook: LNG as ship fuel
LNG-fuelled fleet
Safety & regulations
Pricing
18
Bomin Linde LNG – Nautischer Verein zu Bremerhaven
Agenda
08/10/2014 Source: Bomin Linde LNG
19
Spread between oil and gas has been growing for years –
U.S. LNG exports to support this trend
Price development of selected fuel types [Euro/MWh] Comments
Additional demand for MGO as of
2015 could lead to higher prices
Significant potential for decrease of
LNG prices:
1. Start of U.S. LNG export
2. Restart of nuclear plants in
Japan
3. Large LNG projects in Australia
going live
4. Russian-Chinese pipeline to
reduce future LNG demand in
China
0
10
20
30
40
50
60
70
12.2008 08.2009 04.2010 12.2010 08.2011 04.2012 12.2012 08.2013 04.2014
TTF GO 0.1% FO 3.5% MGO (0.1%) HFO (3.5%) Landed LNG
NWE
08/10/2014 Source: Reuters, Platts, Datagenic, Bloomberg, BominLinde LNG
20
Higher LNG prices in Asia due to shut-down of nuclear
plants – Lower prices in North America due to shale gas
U.S. pipe-gas and landed LNG prices in selected countries [USD/MMBtu]
Actual landed LNG prices for September 2014 Excluding the cost of liquefaction (natural gas)
Rio de Janeiro
USD 9.92
Spain
9.15 Euro
United Kingdom
USD 6.60
Belgium
USD 6.78
Lake Charles
USD 3.40
Cove Point
USD 2.44
Japan
USD 10.50
08/10/2014 Source: : Waterborne Energy Inc., IHS, Bomin Linde LNG
MGO LNG Small Scale
Logistics
Small scale mark-up Gasprice
LNG today competitive with Marine Gasoil – economies of
scale and location essential
Fuel costs
Fuel costs
Cost of
capital
Levers:
Subsidies &
learning effects B Economies of
scale
C Spread Oil-Gas
(-> Shale Gas)
Fuel: Cost perspective in shipping (MWh) Costs + optimisation from supplier perspective
Optimal mix of
A, B and C A
21 08/10/2014 Source: Bomin Linde LNG
Differentiate yourself with LNG as a
financially superior and clean marine solution.
Bomin Linde LNG ©
Bomin Linde LNG GmbH & Co. KG Dornbusch 2 - 20095 Hamburg, Germany
Tel: +49.40.468959-0
Fax: +49.40.468959-103
Mail: [email protected]
Web: www.bominlinde.com
23
In the LNG market we generally differentiate between
small-, mid- and large-scale LNG infrastructure
Large-Scale
> 50.000 cbm
Mid-Scale
10.000 – 50.000 cbm
Small-Scale
< 10.000 cbm
08/10/2014 Source: Bomin Linde LNG
08/10/2014 Source: Bomin Linde LNG 24
Storage and logistics of LNG more expensive and
complex than for traditional bunker fuels
Liquid Natural Gas Bullet Tanks
Cryogenic tanks with temperature
at -160° C
Highly pressurized at ca. 4 -7 bars
Vacuum-insulated piping – limited
flexibility
HFO/ MGO Tank
Heated storage with
temperatures from 60° - 80° C
Atmospheric pressure
Conventional pipes – highly
flexible
Key facts
EUR 17 bn in revenue (2013), ca. 9,280 employees
Businesses: oil trading, tank terminal storage, aviation fueling, gas supply,
biogas, biofuels, quality management
Offices in 30 countries on 5 continents
60+ years of experience in oil and energy business
Largest privately owned natural resource trader in Europe
EUR 16.7 bn in revenue (2013), ca. 63,500 employees
World-leading gases and engineering company: industrial and medical gases
sales, plant engineering, end-to-end supply chain solutions
German blue chip company (DAX listed)
452 offices on 5 continents
130+ years of experience in gases and engineering industry
Bomin Linde LNG is backed by solid and highly
committed shareholders
08/10/2014 Source: Marquard & Bahls, Linde, Bomin Linde LNG 25
Oiltanking and Linde Industrial Gases jointly have a
strong strategic presence with 326 locations worldwide
Comments
Oiltanking owns
and operates 73
tank terminals in
23 countries in
Europe, North
and South
America, as well
as in the Middle
East, India and
Asia
Linde Industrial
Gases operates
253 facilities in 84
countries on 6
continents
Locations: Oiltanking and Linde Industrial Gases
08/10/2014 Source: Marquard & Bahls, Linde, Bomin Linde LNG 26
Bomin Linde LNG is the exclusive supplier to the first
sea-going LNG-fueled vessel in Germany
Comments MS Ostfriesland: Germany‘s First LNG-Fueled Vessel
Bomin Linde LNG has
secured Germany’s first
marine LNG customer
Bomin Linde LNG
currently developing
LNG fueling solution
and procedures
MS Ostfriesland:
Connecting city of
Emden with the island
of Borkum in the
Wadden Sea
Operations starting in
Q4/ 2014
Truck-to-ship fueling
08/10/2014 Source: AG EMS, Bomin Linde LNG 27
28
Introduction of Emission Control Areas will impact waterborne trade of the world’s leading economies
ECA
ECA Under Evaluation
08/10/2014 Source: Bomin Linde LNG
29
Bomin Linde LNG is backed by solid and highly committed
shareholders with know-how accumulated over decades
Key Facts The Joint Venture
The Linde Group
Revenue: 16.7 bi. Euro
FTE: 63,500
Over 400 locations on 5
continents
130+ years of experience in
gases, cryogenics and process
engineering
Marquard & Bahls
Revenue: 17 bi. Euro
FTE: 9,280
Over 100 locations on 5
continents
60+ years of experience in
fuel storage, handling
bunkering, and trading
08/10/2014 Source: Bomin Linde LNG
Source: Oiltanking, Bomin Linde LNG
30
Hamburg small-scale terminal:
Ready to serve customers by late 2015
Comments Premises: Hamburg
Basic engineering finalized
Truck station and rail connection
available
Sufficient space at jetty to bunker
vessels via bunker barge; jetty
extension required
08/10/2014 Source: Bomin Linde LNG
Source: Bomin, Bomin Linde LNG
31
Bremerhaven small-scale terminal:
Engineering works ongoing
Comments Premises: Bremerhaven
Project initiated, basic
engineering started
Rail and road
connection available
Bomin bunker station
in Bremerhaven
currently supplies gas
oil, heating oil and
helium
Excellent location for
RoRo traffic (car
carriers)
08/10/2014 Source: Bomin Linde LNG
Source: Linde, Bomin Linde LNG
32
Basic engineering of
plattform with flexible
fueling hose already
initiated
Currently heavily
involved in permit and
spatial planning
processes
One of the key
strategic projects for
the Port of Rotterdam
Comments Premises: Rotterdam
Rotterdam small-scale terminal:
Focus on inland waterways
08/10/2014 Source: Bomin Linde LNG
Impressions: 3D illustration of the Bomin Linde LNG
fueling terminal in the port of Rotterdam
33 08/10/2014 Source: Bomin Linde LNG
34
Bomin Linde LNG inherits the unique experience of LNG
storage and ship-to-ship bunkering in Sweden (1/2)
LNG supply: 20,000 m³
Nynäshamn terminal in
operation since 2011
Full containment
atmospheric tank with
concrete outer shell and
several LNG bullet tanks
Terminal located next to
the Nynas refinery
Used for both industrial
and marine applications
Bomin Linde LNG has full
access to the terminal
Comments Case study: Nynäshamn Terminal
08/10/2014 Source: AGA, Bomin Linde LNG
35
Impressions: LNG carrier unloading at the mid-scale LNG
terminal in Nynashamn, Sweden
08/10/2014 Source: AGA, Bomin Linde LNG
36
Bomin Linde LNG inherits the unique experience of LNG
storage and ship-to-ship bunkering in Sweden (2/2)
Comments Case study: Seagas LNG Fueling Vessel
World‘s first LNG fueling
vessel in operation:
“Seagas”
Ferry “Viking Grace” as lead
customer (55,000 dwt)
Bunkering of “Viking Grace”
six times per week in less
than 40 minutes
No methane slip due to use
of dry cryogenic couplings
Above 350 ship-to-ship
fueling operations without a
single fault or accident
Bomin Linde LNG has full
access to the fueling vessel
08/10/2014 Source: AGA, Bomin Linde LNG
37
Impressions:
SEAGAS fueling vessel traveling near Stockholm
08/10/2014 Source: AGA, Bomin Linde LNG
08/10/2014 Source: Bomin Linde LNG 38
Depending on volume demand, bunkering location and
method BLLNG offers LNG prices in MGO & HFO range
Overview: price quotes1) for LNG supplied by Bomin Linde LNG
46
44
42
40
56
54
52
50
48
36
34
0
38
EUR/MWh [LCV]
MGO
HFO
1) Note: price quotes heavily dependent on bunkering location, bunkering method as well as volume demand – quotes depicted include supply via terminal, truck, ship and containers
66
64
62
60
58
As part of Linde Group, Bomin Linde LNG has access to
unique competencies in all areas along LNG value chain
Upstream Production/Sourcing Distribution Customers
World-scale LNG
Floating LNG
Biogas
Pipeline
Stranded gas
Truck
Marine
Industry
Utilities
Terminal
LNG plants
3rd party
Trucking
Shipping
Storage
Fuelling
08/10/2014 Source: Linde, Bomin Linde LNG 39
40
Liquefied Natural Gas has several advantages compared
to other fuel types or filtration systems like scrubbers
Summary: Advantages of LNG as Marine Fuel
Emissions: Reduces both sulphur and nitrogen-oxide emissions
Funding: Heavily supported on international and national level
Operations: Usage of LNG leads to lower maintenance cost for vessels
Price: LNG likely to be cheaper than Marine Gas Oil in the future
08/10/2014 Source: Bomin Linde LNG