The European Fuels Conference

Transcription

1 The European Fuels Conference

2 CV of Steffen Kortegård! Shipyard fitter Marine engineer Seagoing career Superintendent OW Bunker Director OW Bunker Technical Department !

3 First diesel engine 1912 build to EAC line M/S Selandia! B&W engine 2 x 8 cylinders 4 stroke 2500 ihp 11 knots 32 crew members DWT 3!

4 4!

5 Facts:! According to IMO, total annual worldwide bunker consumption is 270,000,000 mt and > 300 Mt included domestic inland waterways (2007 figures) OW Bunker s total annual volume is about 20,000,000 mt corresponding to 7,5 % of the global market. (2011 figures) Our split between residual fuels and destilates is roughly 90-10"

6 Contents! Legislation Availability Prices Energy Emmisions Conclusions 6!

7 Legislation:! 7!

8 Legislative Bodies! IMO International Maritime Organisation. The UN organisation that regulates global shipping EU European Union plus Turkey! CARB California Air Resources Board 8!

9 The regulatory landscape " 1st Jan 2010; 0.1% in EU ports" " " 1st July 2010; 1.0% in designated ECAs" " " 1st Jan 2012; 3.5% for all global bunkers" Page 9

10 The regulatory landscape " 1st Jan 2014; 0.1% (DMA) and 0.1% (DMB) in 24 nm of California coastline" " " 2015; 0.1% in designated ECAs" " " 1st Jan 2020; 0.5% for all global bunkers (may be postponed until 2025 subject to feasability review completed by 2018) Page 10

11 The regulatory landscape Source OW Bunker Page 11!

12 The regulatory landscape Top Container Ports :" 1. Singapore" 2. China, Shanghai" 3. China, Hong Kong" 4. China, Shenzhen" 5. South Korea, Busan" 6. Netherl., Rotterdam" 7. UAE, Dubai" 8. Taiwan, Kaohsiung" 9. Germany, Hamburg" 10. China, Qingdao" Most used trading routes existing ECAs: Baltic Sea, North Sea adopted ECAs: Coasts of USA, Hawaii and Canada year. discussed ECAs: Coasts of Mexico, Coasts of Alaska and Great Lakes, Singapore, Hong Kong, Korea, Australia, Black Sea, Mediterranean Sea (2014), Tokyo Bay (in 2015) Source MAN Diesel Page 12! 12

13 The regulatory landscape ICOADS and AMVER Ship Position Data for ICOADS and AMVER Ship Position Data for American ECA 13!

14 Avaiablility:! 14!

15 During the next ten years ( ), refineries will be investing in building capacity, most of which are in the Asia Pacific and Middle Eastern Regions! A total of 151 refinery expansions have been identified in the period ! The expansion plans are all believed to have been approved / initiated, i.e. to be realized during the period.! 50% The majority of expansion will take place in the regions of Asia Pacific and Middle East constituting more than 50% of the identified initiatives.! 15!

16 HFO Production vs. Capacity by Region The supply of HFO is not going to be a problem in any region in most cases demand is stagnant or dropping" North America! South America! Europe! HFO vs. capacity! HFO vs. capacity! HFO vs. capacity! Middle East! Africa! Asia Pacific! HFO vs. capacity! HFO vs. capacity! HFO vs. capacity! 16!

17 Middle Distillates Production vs. Capacity by Region - The supply of middle distillates is expected to constitute a bottleneck in APAC and Europe. Marine applications only drives a small proportion of the new demand. Middle east will export heavily." North America! South America! Europe! Middle distillates vs. capacity! Middle distillates vs. capacity! Middle distillates vs. capacity! OBS! Middle East! Africa! Asia Pacific! Middle distillates vs. capacity! Middle distillates vs. capacity! Middle distillates vs. capacity! OBS! 17!

18 From a global perspective on total supply, the industry is expecting future production to lie well within the combined capacity thresholds! HFO vs. capacity! Unit: Million metric tons/year Middle distillates vs. capacity! Fuel split by Sulfur content! 340! 384! 411! Inferences! Residual capacity expected to meet demand" Middle distillate capacity sufficient for the period. However, the demand-capacity gap is expected to reduce to a minimum by 2020." Due to limited number of ECA zones until 2020, residual fuels are expected to form bulk of the demand for this period. " Global MARPOL limits of 0.5% S in 2020 will fuel distillate demand in the period " As such, the market will expect a continued demand for residuals beyond 2020, which is largely due to either; a large utilization of scrubbers, or expectations to the provision of a grace period - of the two, the latter seems most reasonable." 18!

19 World bunker fuel production is expected to increase from ~340 to ~410 mn. tons, during , primarily driven by the Asia Pacific and Middle East regions" Supply by region! 384! 411! Growth rates! Global growth rate! 340! 2,5%! Global growth rate! 1,3%! 19!

20 ! Prices:! 20!

21 Split between HFO & GO! 21!

22 Forward curve on products! 1,200" Bunker price development! As finer fuels are adopted as a means to comply in ECAs, these fuels are expected to increase in price however, this should also reflect a drastic drop in demand for HFO, and subsequently a price drop this is however not currently expected in the industry! USD/ton! 1,000" 800" 600" 400" 200" 0" 2005" 2006" 2007" 2008" 2009" 2010" 2011" 2012" 2013" 2014" 2015" 2016" 2017" 2018" 2019" 2020" MGO: < 0,1% MDO: < 2,0% HFO: < 1,0% HFO/LS180: < 4,5% HFO/LS380: < 4,5% Continued sales of HS HFO post 2020, will imply the use of scrubbers nonetheless, as the penetration of such technology will be low these price estimates appear to be overrated HFO max. 4.5% - IFO 380" HFO max. 4.5% - IFO 180" HFO max. 3.5%" HFO max. 1.5%" HFO max. 1.0%" Distillate max. 2.0% - MDO" Distillate max. 1.5% - MGO" Distillate max. 0.5% - MGO" 22!

23 Energy 23!

24 Bunker purchase! The two main issues at every bunker purchase:" To get a substance harmless for personnel and machinery. " To get as much energy as possible for the price." Density" Sulphur" Water" Ash" " Fuel calculator on OW Iphone app Just seek OW Bunker & Trading " " 24! "

25 Typical values.! Density "991 kg/m3" Sulfur "3,5%" Water "0,5%" Ash" "0,15%" Specific energy content = kj/kg" Density "920 kg/m3" Sulfur "2,0%" Water "0,1%" Ash" "0,05" Specific energy content = Kj/kg Δ E content = kj/kg - or 3,7%" Corresponding to 24,2 USD/mt (at fuel price of USD/mt)" 25! " "

26 Snapshot Dec 2011! 2012 Quality Density Sulphur Water Ash Qnet QIndex Price per mt Price per mj RMK3803,5% ,5 0,5 0,15 39, ,0 USD 630 USD 15,88 RMG3803,5% 991 3,5 0,5 0,15 39, ,7 USD 640 USD 16,03 RMG3801% ,5 0,15 40, ,0 USD 670 USD 16,39 Murmansk100 cst ,79 0,1 0,01 41, ,8 USD 650 USD 15,48 DMA1, ,5 0 0,005 42, ,6 USD 930 USD 21,98 DMA0, ,1 0 0,005 42, ,3 USD USD 23, DMA0, ,1 0 0,005 42, ,3 USD USD 32, Pure guess 26!

27 Emissions:! 27!

28 Emissions:! By burning one tons of fuel oil we creates about 3,2 mt CO2 (86 87% Carbon)!! One tons of GO creates about 3,15 mt CO2! If we count in 15 % extra energi for deep cracking of an Straight Fuel and desulphurization we will create about 3,6 mt CO2 by burning GO! So seen from a holistic environmental point of view, we should go back to produce straight run FO the old fashion way and install abatement technology to discharge the SOx from our exhaust.!! There are developed two different abatement technologies a wet and a dry scrubber.! 28!

29 Ways to comply with Legislation < For ships seldom trading in ECAʼs" " Change all fuel consumers to burn max 0,1% Gasoil when inside an ECA" For ships frequently trading in ECAʼs" " Installation of Scrubbers" " Dry" " Wet" " 29!

30 Scrubber Dry by Couple Systems The sulphur and particle matters are removed by an acid gas sorbent usually hydrated lime Ca(OH) 2 or soda ash Na 2 CO 3 30!

31 Scrubber wet by Alfa Laval Sulphur and other particles in the exhaust gas are washed out by sea water in an open system or by fresh water in a closed system 31!

32 ! THANK YOU!! ANY QUESTIONS?! 32!