LNG$BUNKERING - Platts · LNG$BUNKERING $ Manuel$Carlier$ Member$of$the$Board$of$Directors$...
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LNG BUNKERING Manuel Carlier Member of the Board of Directors European Community Shipowners’ AssociaDons ECSA
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Transcript of LNG$BUNKERING - Platts · LNG$BUNKERING $ Manuel$Carlier$ Member$of$the$Board$of$Directors$...
LNG BUNKERING
Manuel Carlier Member of the Board of Directors
European Community Shipowners’ AssociaDons -‐ ECSA
Established in 1965, ECSA comprises the naDonal shipowners’ associaDons of the EU plus Norway
Aims:
promoDng the interests of European shipping so that the industry can best serve European and internaDonal trade and commerce
in a compeDDve free-‐enterprise environment to the benefit of shippers and consumers
European Community Shipowners’ Associa7ons ECSA
European shipping
controlling over 40% of the world merchant fleet
European Community Shipowners’ Associa7ons ECSA
European Community Shipowners’ Associa7ons Manuel Carlier PhD in Naval Architecture and Marine Engineering
CEO -‐ Spanish Shipowners’ AssociaDon (ANAVE) Member of ECSA’s Board of Directors since 1996 Chairman -‐ ECSA’s Shipping Policy CommiTee
(up to June 2011) President -‐ Shortsea PromoDon Center-‐Spain Assistant Professor of Shipping Economics
Polytechnic University Madrid – Since 1986
Embracing LNG as a clean and economical fuel for shipping EvaluaDng the economic viability of LNG as a shipping fuel
Is universal conversion feasible?
Overcoming the barriers to developing LNG bunker supply infrastructure
References Trending topic Some recent studies Greenship.org (2012): Green ship of the future. ECA retrofit study. Det Nosrke Veritas (2012): Shipping 2020. Danish Mari7me Administra7on (2012): North European LNG Infrastructure Project. Feasibility Study.
TRI-‐ZEN (2012): LNG market perspecEve. Wär7lä (2012): Turning gas to ship power
Germanischer Lloyd (2011): MSC.285(86) and Code for gas-‐fuelled ships
Marintek (2008): MAGALOG – MariEme Gas Fuel LogisEcs.
Main drivers
REGULATORY PRESSURE SOx/Nox:
MARPOL Annex VI
EU Direc7ve
CO2: EEDI -‐ Future Market Based Measures
BUNKER MARKET PRICE Record year-‐average bunkers prices in 2011
and 2012
LNG price lower than oil bunkers
CO2 Other SOx NOx Balast
A 7ght environmental agenda (source: DNV)
Crude Oil Price Evolu7on Brent ($/barrel)
Source: Bunkerworld
“2012: record of annual average price of crude oil”
27 Nov: 634 $/t 27 Nov: 986 $/t Heavy Fuel Oil Marine Gas Oil
Year Average HFO price Average MGO price MGO/HFO
2010 461 716 +55%
2011 632 978 +55%
2012 658 1003 +53%
Distillates about 55% more expensive than HFO
The ECA regulatory dilemma (source: DNV)
Dis/llates? Scrubbers? LNG as bunker?
LNG environmental advantages
LNG / Oil prices In 2012, energy from HFO is 48% more expensive than from LNG
0
2
4
6
8
10
12
14
16
18
20 $/MMBtu
European LNG imports
HFO Gibraltar
LNG / Oil prices Forecast future evolu7on (DNV study)
?
LNG / Oil import prices Scenarios considered at DMA study
MGO price/HFO price between 1.6 and 2.2
LNG price/HFO price between 0.5 and 0.9 LNG price/MGO price between 0.36 and 0.65
LNG / MGO prices (delivered on board) Scenarios considered at DMA study
Including es7mated distribu7on costs: LNG price on board expected to be between 0,40 and 0,84 of MGO price
MGO/LNG
0,55
0,69
0,84
0,40
0,50
0,61
LNG drawbaks Larger bunker storage on-‐board space: double for LNG than for HFO, triple space in case of dual fuel.
Higher investment cost for newbuildings (10 %to 20%, possibly lower in the future).
Higher maintenance costs (some studies say about 20%).
Trade restric7ons depending on availability of bunkering infrastructure.
Second hand ship market value (?)
Time being, lack of binding IMO regula7on (to be solved soon)
LNG drawbaks Higher investment costs AddiDonal costs for a newbuilding:
Fuel storage tanks Gas engine Safety systems
Approval Building costs differenDal:
Marintek: Ro-‐Pax 35,000 GT: +10%
Is universal conversion feasible?
Technically surely YES
Economically, indeed NO, depending on:
Ship’s age (remaining operaDng life up to recycling)
Trade (% Dme in ECAs)
Ship type, bunker costs share in total costs (funcDon of speed)
Retrofiing Main technical elements
Engine change or adapta7on: Easier and less expensive in ships with ME (electronic controlled) engines
LNG storage on board: Two main opDons: inside hull or on deck.
Vaccum/perlite insulated tanks at about 10 bar.
greenship.org ECA retrofit study
Large consorDum: Maersk, DSA, Man, LRS, DNV, etc.
2 retrofit soluDons compared: scrubber and LNG 2 scenarios: 2015-‐2019 and 2020-‐2024 Ship analyzed: 38,500 dwt products tanker
greenship.org ECA retrofit study
Conclusions: Investment cost of the LNG soluDon: 7.56 mUSD (including 40 days off-‐hire: 0.68 mUSD)
LNG soluDon 1.7 mUSD more expensive than scrubber
LNG soluDon payback period of 3 years for 100% operaDon in ECA
Investment costs
Payback 7mes
Retrofiing First Experience (2011) Bit Viking: 25.000 dwt product tanker
Retrofiing First Experience (2011) Bit Viking: 25.000 dwt product tanker Conversion of 2 engines from Wärsilä 46 to Wärsilä 50 DF (dual) with 2 x 5700 kW at 500 rpm
Wärtsilä’s new LNGPac onboard storage system: 2 x 500 m3 C type (cilindrical presurized) storage tanks at 9 bar isolated by perlite/ vacuum, mounted on the deck, 400 t each tank (full). 33 x 7,5 m
Bunkering LNG rate: 430 m3 / hour (less than 2,5 h). Sufficient for 12 days of autonomous operaDon at 80 % load, with the opDon of switching to MGO if an extended range is required.
When in EU ports (0.1 % sulphur limit), the vessel operates on gas. Retrofinng duraDon: 6 weeks.
Retrofiing First Experience (2011) Bit Viking: 25.000 dwt product tanker
Retrofiing First Experience (2011) Bit Viking: 25.000 dwt product tanker
LNG Storage on board (source Wärtsilä)
Retrofiing, a Spanish proyect by BALEARIA and COTENAVAL Fast ferries, monohull and catamaran.
Speed between 32 and 40 knots.
81 m – 4305 GT – 17280 kW 83 m – 2616 GT – 14800 kW
82 m – 5517 GT – 6500 kW 81 m – 4305 GT – 17280 kW
Retrofiing, a Spanish experiencie by BALEARIA and COTENAVAL
Shipping company Engineering company
www.balearia.com www.cotenaval.es
LNG Bunkering supply infrastructure 4 possibili7es Based on Danish MariDme AdministraDon study
STS
TPS TTS
LNG Bunkering supply infrastructure 4 possibili7es Based on Danish MariDme AdministraDon study
Possible infrastructure arrangement Source: Danish MariDme AdministraDon study
Possible infrastructure arrangement Small LNG feeder tanker loading in large terminal
LNG Bunkering supply infrastructure Bunkering barge (source Wärsilä)
Possible infrastructure arrangement Source: Danish MariDme AdministraDon study
ECSA LNG Fuelled Ships Working Group Conclusions High interest. Many papers just in the last 12 months.
Numerous but fragmented ongoing iniDaDves. In the EU, EMSA is playing an useful co-‐ordinaDng role.
An internaDonal LNG quality standard should be developed and be fully respected by suppliers.
In the meanDme, EU/EMSA Guidelines/Guidance could be helpful.
Ships using LNG as bunker should have the same (high) safety level than LNG carriers.
Availability of Public (State or EU) support to pilot projects essenDal. Some industry forum/body should consider all aspects of LNG bunkering (safety, economics, etc.)
Conclusions Environmental aspects LNG has significant environmental advantages with regard to: NOx: 80% lower emissions
SOx: Virtually no emissions PM: Virtually no emissions CO2: 25% lower emissions
All basic technology elements necessary for engine conversion and for on board storing are available and proved.
First key-‐in-‐hand on-‐board storing solu7ons already available. Safety:
Normally no higher risk with LNG. IMO specific regulaDons are s7ll under way.
Some safety procedures for bunkering operaDons are sDll to be developed.
Retrofiing:
Technically viable in most cases. Easier and less expensive in ships with ME engines
Conclusions Technical aspects
Conclusions Economic aspects The LNG soluDon is very aTracDve for newbuildings in medium/ long term.
A high % of operaDon inside ECA is key But retrofinng can also be economically aTracDve in some special cases (e.g. high speed craps).
Conclusions Infrastructure development • Partnerships (shipowner, LNG and equipment suppliers, port) are key for development of LNG supply infrastructure.
• Bunkering infrastructure developing should start based on regular services operaDng 100% in ECAs.
• SSS and Motorways of the Sea lines could be the starDng point.
• Possible use of EU TEN-‐T funds for developing the bunkering net?
Co-‐opera7on is essen7al
Port
Authority
LNG
supplier
Shipping Co.
Equipment supplier
Conclusions, DNV Study
For 2020, about 1,000 ships will be fuelled by pure LNG or dual LNG/HFO
About 10/15% of expected newbuildings
Thank you
ECSA
