Maintaining a Fleet at Optimal Efficiency 3rd Annual Japan Ship Finance Forum 7 November 2018 Peninsula Hotel, Tokyo Michihiko Nakano General Manager Bunker Business Division Mitsui O.S.K. Lines 1
Prevention of Pollution of the Sea Act Jurisdiction United Nations IMO MEPC International Maritime Organization MEPC Maritime Environment Protection Committee PPR Pollution Prevention and Response IMO HQ, London 2
Prevention of Pollution of the Sea Act 2 Conventions with 6 Annexes MARPOL International Convention for the Prevention of Pollution from Ships Adoption: 1973 (Convention), 1978 (1978 Protocol), 1997 (Protocol - Annex VI); Annexes I Regulations for the Prevention of Pollution by Oil (entered into force 2 October 1983) II Regulations for the Control of Pollution by Noxious Liquid Substances in Bulk (entered into force 2 October 1983) III Prevention of Pollution by Harmful Substances Carried by Sea in Packaged Form (entered into force 1 July 1992) IV Prevention of Pollution by Sewage from Ships (entered into force 27 September 2003) V Prevention of Pollution by Garbage from Ships (entered into force 31 December 1988) VI Prevention of Air Pollution from Ships (entered into force 19 May 2005) 3
Prevention of Pollution of the Sea Act History MEPC 58 th session : 6-10 October 2008 Changes to Marpol Annex VI Sulphur 2020 limit was adopted The main changes will see a reduction in sulfur oxide (SOx) emissions from ships, with the global sulfur cap reduced initially to 3.50% (from the current 4.50%), effective from 1 January 2012; then progressively to 0.50%, effective from 1 January 2020, subject to a feasibility review to be completed no later than 2018. MEPC 70 th session : 24-28 October, 2016 2020 global sulphur cap implementation date decided The 0.50% limit on sulphur in fuel oil on board ships (outside designated emission control areas or ECAs, where the limit is 0.10%) will come into effect on 1 January 2020. MEPC 72 nd session : 9-13 April, 2018 Implementation of Sulphur 2020 limit - non-compliant fuel oil ban approved The MEPC approved, with a view to adoption at MEPC 73, draft amendments to MARPOL Annex VI to prohibit the carriage of non-compliant fuel oil for combustion purposes for propulsion or operation on board a ship. MEPC 73 rd session : 22-26 October, 2018 Implementation of Sulphur 2020 limit - carriage ban adopted The complementary amendment is expected to enter into force on 1 March 2020. The amendment does not change in any way the entry into force date of the 0.50% limit from 1 January 2020. 4
MOL Bunkering Operation to arrange over 800 ships over 300 ports/areas about 300,000 MT per month 5 FACTORS to consider Economical Factors Price Logistics Technical Factors Reliability and Endurance Safety Assurance Operability and Maintainability
2020 Global Sulphur Cap Options MGO/Diesel Pros Wide supply network, Stable quality Cons High price fuel Compliant Oils De-Sulphurized Heavy Fuel (LSFO) Less concern about quality Limited supply volume Blended Fuel (LSFO) Lower price fuel No spec standard, Unstable quality Counter Measures Non-Compliant Oils (HSFO) Scrubber Low price fuel Initial investment, Difficulty of water disposal (if closed type) LNG High potential of supply volume, Clean fuel Initial investment, Poor supply network LPG High potential of supply volume Poor supply network, Poor achievement result Alternative Fuels Methanol Clean fuel Limited supply volume, Toxic fuel Hydrogen (Fuel Battery) Ammonia Extreme clean fuel Clean fuel Experimental stage, No go for big ships (as of today) Experimental stage, Toxic fuel 6 3rd Annual Japan Ship Finance 6Forum Mitsui O.S.K Lines
2020 Global Sulphur Cap Compliant Oil NO Specification for the Compliant Oil only exception Sulphur contents at 0.5% or less ISO is working to issue PAS (Publicly Available Specification) which is expected to be published in May 2019 Without waiting PAS, some of oil major companies have announced their production and sales LSFO or compliant oil with their own specifications: Shell : Singapore, Fujairah, Rotterdam, Antwerp, Barcelona, Piraeus, Danish strait, Houston, New Orleans, Freeport Bahama, Durban, Richards Bay, Malicious, etc ExxonMobi Rotterdam, Antwerp, Genoa and Marseille, Singapore, Laem Chabang, more ports including North America which are announced within 2018 Announced that they will start selling their LSFO products before Jan 2020 Having had MOU or CA, Mitsui O.S.K Lines started collaboration work with oil companies for technical evaluation of LSFO MOL Technology Research Center 7
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2020 Global Sulphur Cap Optimum Procurement Fuel Oil Quality Assurance Engineering/Operation Analysis Supply Analysis Scientific and Technical Intelligence - Test and Analysis Sample Check Combustion Test Lubricant Oil Matching - Information Gathering Application Main & Auxiliary Unit -Fuel System Supply Line System Tank Configuration - Power System - Control System Trade Analysis - Trade Route Ports of call Interval - Availability Suppliers Place to Supply Grade or Quality Individual Supply Plan On Board Preparation Procurement Planning Compliant Fuel Oil MGO PURCHASING HFO w/scrubber 9
敗兵先戰而後求勝勝兵先勝而後求戰10 孫子 Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win. Sun Tzu
Thank You 11