Harald Gundersen20-06-2013

LNG feasibility study

Retrofitting to meet new ECA requirements

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LNG feasibility study

20-06-2013

2

Ship owners must respond to gradually stricter regulations to stay in business, while dedicated ECAs are introduced

2010: Sulphur < 1.0%2015: Sulphur < 0.1%

ECA SOX REQUIREMENTS

Build after 2016: NOX Tier III, -80%

ECA NOX REQUIREMENTS

2020 / 2025*: SOX < 0.5% Build after 2011: NOX Tier II, -20%

* Date TBD pending 2018 review – but 2020 will apply in EU waters

GLOBAL REQUIREMENTS

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LNG feasibility study

20-06-2013

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There are currently 74 confirmed LNG fuelled ship projects globally

Updated 15.04.2013Excluding LNG carriers and inland waterway vessels

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LNG feasibility study

20-06-2013

4

LNG consumption in Norway from 2004 - 2017

Kilde: NOx-fondet

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LNG feasibility study

20-06-2013

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Status for the Norwegian LNG market

74%

19%7%

Drivstoff solgt i Norge til maritimt bruk 2011*

*Målt per energimengde

63%

14%

24%

Drivstoff forventet solgt i Norge til maritimt bruk 2016*

MGO/MDO

HFO

LNG

Barents Naturgass5 %

Gasnor50 %

Skangass20 %

Skagerak Naturgass

3 %

Naturgass Møre3 %

AGA3 %

Leverandør ikke avklart16 %

Suppliers of LNG in Norway from 2016

Kilde: NOx-fondet

© Det Norske Veritas AS. All rights reserved.

LNG feasibility study

20-06-2013

6

LNG?

SCRUBBER?MGO?

© Det Norske Veritas AS. All rights reserved.

LNG feasibility study

20-06-2013

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DNV has assessed the financial attractiveness and technical risks of available ECA compliance measures for the case ship

The case ship

1. Switching to low sulphur fuel

2. Installing a scrubber system

3. Converting to Dual Fuel engines and installing LNG tanks

Evaluated solutions

LOA: 130-150 m

Ship type: Container ship

Cargo capacity: 700-900 TEU

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LNG feasibility study

20-06-2013

8

The total cost of DF conversion for the case ship is estimated to $6,5 - 8,3 million

Cost estimate for DF configuration with 300 m3 LNG tank

Cost estimate for DF configuration with 600 m3 LNG tank

6.5

2.5

2.6

1.4

0 1 2 3 4 5 6 7

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Main engine DF conversion

LNG tank + gas equipment

Yard cost

TOTAL COSTS

Costs [MUSD]

8.3

3.0

3.9

1.4

0 1 2 3 4 5 6 7 8 9

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Main engine DF conversion

LNG tank + gas equipment

Yard cost

TOTAL COSTS

Costs [MUSD]

© Det Norske Veritas AS. All rights reserved.

LNG feasibility study

20-06-2013

9

Cumulated costs for 55% ECA operation

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

-$5,000,000

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

Cumulative Total Cost [MUSD] compared to baseline with HFO

Baseline (HFO)

Rea

l co

sts

[201

2 M

US

D]

ENGINE AND OPERATION

Emission compliance ECA SOX

Time in ECA 55%

Installed power ca. 8 000 kW

Baseline HFO

FINANCIAL

Discount rate 8%

Investment decision Retrofit

Tax regime None

FUEL PRICE

HFO 2012 Europe level

MGO 2012 Europe level

LNGHFO equivalent and 2012 European gas+ distribution cost

© Det Norske Veritas AS. All rights reserved.

LNG feasibility study

20-06-2013

10

Cumulated costs for 55% ECA operation

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

-$5,000,000

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

Cumulative Total Cost [MUSD] compared to baseline with HFO

Fuel Switch

Baseline (HFO)

Rea

l co

sts

[201

2 M

US

D]

ENGINE AND OPERATION

Emission compliance ECA SOX

Time in ECA 55%

Installed power ca. 8 000 kW

Baseline HFO

FINANCIAL

Discount rate 8%

Investment decision Retrofit

Tax regime None

FUEL PRICE

HFO 2012 Europe level

MGO 2012 Europe level

LNGHFO equivalent and 2012 European gas+ distribution cost

© Det Norske Veritas AS. All rights reserved.

LNG feasibility study

20-06-2013

11

Cumulated costs for 55% ECA operation

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

-$5,000,000

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

Cumulative Total Cost [MUSD] compared to baseline with HFO

Fuel Switch

Scrubber

Baseline (HFO)

Rea

l co

sts

[201

2 M

US

D]

ENGINE AND OPERATION

Emission compliance ECA SOX

Time in ECA 55%

Installed power ca. 8 000 kW

Baseline HFO

FINANCIAL

Discount rate 8%

Investment decision Retrofit

Tax regime None

FUEL PRICE

HFO 2012 Europe level

MGO 2012 Europe level

LNGHFO equivalent and 2012 European gas+ distribution cost

© Det Norske Veritas AS. All rights reserved.

LNG feasibility study

20-06-2013

12

Cumulated costs for 55% ECA operation

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

-$5,000,000

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

Cumulative Total Cost [MUSD] compared to baseline with HFO

Fuel Switch

Scrubber

LNG High price w/600 m3 tank

Baseline (HFO)

Rea

l co

sts

[201

2 M

US

D]

LNG reference price w/600 m3 tank

ENGINE AND OPERATION

Emission compliance ECA SOX

Time in ECA 55%

Installed power ca. 8 000 kW

Baseline HFO

FINANCIAL

Discount rate 8%

Investment decision Retrofit

Tax regime None

FUEL PRICE

HFO 2012 Europe level

MGO 2012 Europe level

LNGHFO equivalent and 2012 European gas+ distribution cost

© Det Norske Veritas AS. All rights reserved.

LNG feasibility study

20-06-2013

13

Cumulated costs for 55% ECA operation

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

-$5,000,000

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

Cumulative Total Cost [MUSD] compared to baseline with HFO

Fuel Switch

Scrubber

LNG High price w/600 m3 tank

Baseline (HFO)

Rea

l co

sts

[201

2 M

US

D]

LNG reference price w/600 m3 tank

LNG High price w/300 m3 tank

LNG reference price w/300 m3 tank

ENGINE AND OPERATION

Emission compliance ECA SOX

Time in ECA 55%

Installed power ca. 8 000 kW

Baseline HFO

FINANCIAL

Discount rate 8%

Investment decision Retrofit

Tax regime None

FUEL PRICE

HFO 2012 Europe level

MGO 2012 Europe level

LNGHFO equivalent and 2012 European gas+ distribution cost

© Det Norske Veritas AS. All rights reserved.

LNG feasibility study

20-06-2013

14

Cumulated costs for 100% ECA operation

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

-$5,000,000

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

Cumulative Total Cost [MUSD] compared to baseline with HFO

Fuel Switch

Scrubber

LNG High price w/600 m3 tank

Baseline (HFO)

Rea

l co

sts

[201

2 M

US

D]

LNG reference price w/600 m3 tank

LNG High price w/300 m3 tank

LNG reference price w/300 m3 tank

ENGINE AND OPERATION

Emission compliance ECA SOX

Time in ECA 100%

Installed power ca. 8 000 kW

Baseline HFO

FINANCIAL

Discount rate 8%

Investment decision Retrofit

Tax regime None

FUEL PRICE

HFO 2012 Europe level

MGO 2012 Europe level

LNGHFO equivalent and 2012 European gas+ distribution cost

© Det Norske Veritas AS. All rights reserved.

LNG feasibility study

20-06-2013

15

Safeguarding life, property and the environment

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