1 | Asian ME Conference | 10/14/15

By Harun Rashid

Technical Manager - VPS

Date: 14 Oct 2015

Post ECA Fuel Management Challenges @ Asian Marine Engineering Conference

2 | Asian ME Conference | 10/14/15

Agenda• Owners Options

• Issues with LSMGO & hybrid fuels

• Segregation & Change over challenges

• Users Feedback

3 | Asian ME Conference | 10/14/15

3

Regulation and legislation

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2025

Aug 11th

SECA 1, directive into force 1.5% S

Aug 11th

SECA 2, directive into force 1.5% S

Marpol Annex VI ratified

May 19th

Marpol Annex VI global S limit 4.5%

May 19th

Marpol Annex VI SECA1, S limit 1.5%

Nov 11th

Marpol Annex VI SECA2, S limit 1.5%

July 1st

ECA limit down to 1.00% S

Jan 1st

Global limit down to 3.50% S

Jan 1st

ECA limit down to 0.10% S

Global S limit down to 0.50% (subject to review)

Jan 1st

Directive S limit of 0.1% at berth

July 1st CARB Phase 1, MGO (max 1.5%) or MDO (max 0.5%) use only within 24NM

Jan 1st CARB Phase 2, max 0.1% distillate use only within 24NM

Aug 1st CARB Phase 1, MGO (max 1.0%) or MDO (max 0.5%) use only within 24NM

July 1st

Hong Kong max 0.50% S at berth

4 | Asian ME Conference | 10/14/15

MARPOL Annex VI revisions

Sulphur limit for fuel oil Sulphur content In effect

Global 3.50%

0.50%

1 January 2012

1 January 2020*

ECA 1.00%

0.10%

1 July 2010

1 January 2015

4

*Subject to a review of fuel availability in 2018, with the option to delay the 0.5% sulphur global cap by five years

The Baltic Sea

The North Sea

North American ECA

US Caribbean ECA.

5 | Asian ME Conference | 10/14/15

5

Owners Options

• 0.10% fuels - Distillate, hybrid etc.

• SCRUBBER + HSFO

• LNG

• Don’t enter ECA

6 | Asian ME Conference | 10/14/15

Post ECA Distillate Growth

6

77%

23%

62%

38%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

HFO Distillate

Jan ~ Aug'2014 Jan ~ Aug'2015

7 | Asian ME Conference | 10/14/15

ECA compliant Fuels

7

93.60%

1.60% 3.70%0.90% 0.20%

92.90%

1.30%

4.50% 1.00% 0.30%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

LSMGO/DMA LSMDO/DMB ULSFO/RMB30 ULSFO/RMD80 ULSFO/>80 cst

Jan-Apr'2015 Jan-Aug'2015

8 | Asian ME Conference | 10/14/15

Bunkering regions – ECA Fuels

8

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

EUROPE ASIA M EAST AMERICA

50.5%

12.5%

7.7%

29.4%

52.2%

12.0%

7.2%

28.6%

Jan-Apr'2015 Jan-Aug'2015

9 | Asian ME Conference | 10/14/15

ECA fuels – Top 10 ports (Jan ~ Aug’15)

9

21.02%

12.03%6.71% 5.48% 5.48% 4.84% 3.75% 3.63% 3.02% 2.67%

68.63%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

10 | Asian ME Conference | 10/14/15

Hybrid Fuels – Top 10 Ports (Jan ~ Aug’15)

10

27.3%24.0%

7.5% 6.5% 6.1% 5.8% 5.4% 5.1% 3.8% 3.8%

95.4%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

11 | Asian ME Conference | 10/14/15

11

92.9% of ECA fuels is gas oil

Issues with Gas oil

12 | Asian ME Conference | 10/14/15

12

Looks bright & clear but problems are ugly!!!!

13 | Asian ME Conference | 10/14/15

Bunker Alerts

3

12

2

1 1

13

10

13

12

7

2

1

0

2

4

6

8

10

12

14

LSMGO- LowViscosity

LSMGO- LowFlash Point

HSFO - HighSediment

HSFO- High Al+Si HSFO- HighDensity

HSFO-HighSodium

HSFO - Highwater

HSFO -contaminated

fuels

2015 2014

14 | Asian ME Conference | 10/14/15

Serious Ones..

14

Loss of Propulsion

15 | Asian ME Conference | 10/14/15

15

Cold Flow Properties of Distillates

Parameter Unit Limit DMX DMA DMZ DMB Test Method

Cloud point °C Max -16 — — — ISO 3015

Pour point (upper)d winter quality summer quality

°C °C

Max Max

−6 0

−6 0

0 6

ISO 3016 ISO 3016

d. Purchasers should ensure that this pour point is suitable for the equipment on board, especially if the ship operates in cold climates.

16 | Asian ME Conference | 10/14/1516

-30

-20

-10

0

10

20

30

40

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

CP, CFPP & PP

CP CFPP PP CP-CFPP CFPP-PP CP-PP

17 | Asian ME Conference | 10/14/15

Hybrid Fuels

17

HDME50

18 | Asian ME Conference | 10/14/15

Hybrid fuels - typical characteristics

• Mostly resemble ISO RMB 30 or RMD 80 grades

• Mainly hydrocracker based with relatively high pour point

ISO Grade Density Range Viscosity @ 50°C Range

Al+Si Range Pour Point Range CCAI Range Energy Range

(kg/m3) (CST) (mg/kg) (°C) (MJ/kg)

RMB30 830.3 to 980.5 6.2 to 29.9 <2 to 54 -15 to 33 747 to 885 40.33 to 43.25

RMD80 890.8 to 935.6 30.1 to 79.9 <2 to 30 -12 to 33 784 to 829 41.91 to 42.45

19 | Asian ME Conference | 10/14/15

Hybrid Fuels

• Ignition & Combustion Quality – Good

• Viscosity - Need not to worry about internal leakage

• Al+Si content – can easily reduce to maker’s spec

• Energy Value - OK

• Cold Flow Properties - Need not to worry

• Lubricity property – no issue

• Cheaper than LSMGO

20 | Asian ME Conference | 10/14/1520

Compatibility

Pour point

Issues with Hybrid fuels

Availability??

21 | Asian ME Conference | 10/14/15

Transfer difficulty during bunkering – PP issue

21

Bunker Port: Rotterdam

Grade – RMD80

Outside temp 9°C but the fuel PP is 30°C

22 | Asian ME Conference | 10/14/15

22

Excessive sludging (compatibility issue)

Bunker Port: Antwerp

Grade – RMD80Bunker Qty: 400 mt

Tank had unpumpable fuel from previous bunker, Serv. Tank 7 m3 and sett tank<1.0m3

23 | Asian ME Conference | 10/14/15

Segregation & Change over challenges

Segregation

• Sulfur Compliance

• Compatibility

Change Over

• Damage to Engine

• Loss of Propulsion

23

99.5% of S 0.09%

0.5% of S

3.50%

S 0.11%

ECA Non-compliance

24 | Asian ME Conference | 10/14/15

Hybrid fuel feedback - Customer 1

• Using hybrid ULSFO fuel since December 2014

• Carried out full testing of all products including inter

compatibility. Continuous close communication with VPS and

fuel supplier throughout

• No major problems experienced

• Feedback from Chief Engineers have been that hybrid ULSFO

fuel runs “smoother” than MGO on the systems designed for HFO

• Substantial savings of >USD 50 per MT with current fuel prices

25 | Asian ME Conference | 10/14/15

Hybrid fuel feedback - Customer 2

• Using hybrid ULSFO fuel since Jan 2015

• Mainly from SK @ Busan and occasionally from Shell @ Rotterdam

• No problems experienced

Density

Kg/m3

Viscosity

cSt

MCR

%m/m

Al+SiMg/Kg

PP

°C

CCAI Energy

MJ/Kg

906~941 19 to 62 1.5~ 4.7 2~ 30 3 to 30 792~844 41.8~42.5

26 | Asian ME Conference | 10/14/1526

27 | Asian ME Conference | 10/14/15

www.v-p-s.com

Thank you for your attention

Harun Rashid

M +65 92985232 | D: +65 68876107

Harun.rashid@v-p-s.com