Marine Policy Voyage Ahead - PDF Free Download

Policies Focus on Emissions and CO 2 Biofuels and lowcarbon in center stage Marine and non-road Fuel economy stds FQD, RED and GHG emission reduction in center stage Sulfur reduction is key Changes driven by refinery upgrades Diverse region Some harmonization efforts Varied FQ Levels + BF Blends Air quality and refinery investments as drivers Leader in BF introduction Almost unleaded Focus on imported diesel specs Diverse region Major exporter All rights reserved 2012, Hart Energy

MARPOL Annex VI - Revised Formally approved Oct. 2008 (into force, July 2010) Reduction in sulfur limits for marine fuel Agreement on NO X emissions from new and existing ships engines Three different Emission Control Areas (ECAs) (SO X and PM, NO X and all three) ISO reviewed marine fuel quality standard It s not just about sulfur though (H 2 S, biodiesel,.) All rights reserved 2012, Hart Energy

Sulfur Limits Timeline Global* max 4.5 wt% S max 3.5 wt% S max 0.5 wt% S SO x ECA* Review Availability max 0.5 wt% S max 1.00 wt% S max 0.10 wt% S NA ECA becomes effective U.S. Virgin Island/Puerto Rico ECA becomes effective * For IMO, abatement technology (such as exhaust-gas scrubbing) is allowed as an alternative to using compliant fuel California max 1.5 wt% S MGO max 0.5 wt% S MGO max 1.0 wt% S MGO max 0.5 wt% S MD max 0.10 wt % S EU: Revised Proposal May 2012 Within ECA max 1.00 wt% S max 0.10 wt% S Passenger ships in EU waters outside ECA max 1.50 wt% S In EU waters, but outside ECA max 0.50 wt% S max 0.50 wt% S 2010 2012 2014 2016 2018 2020 2024 2026 2030 Source: Compiled by IFQC from Various Sources All rights reserved 2012, Hart Energy

NO x Emissions Limits No limits apply NO x Tier I: Globally, with exceptions NO x Tier I: Globally NO x Tier II: Globally Date of when Ship was Built NO x Tier III: only in NO x ECAs 1990 1994 1996 2000 2004 2006 2010 2014 2016 2020 NO x Limits Tier I Tier II Tier III In revised Annex VI 17.0 9.8 g/kwh 14.4 7.7 g/kwh 3.4 2.0 g/kwh Within ranges shown above, exact limit applicable depends on engine speed. Source: Compiled by IFQC from Marpol Annex VI All rights reserved 2012, Hart Energy

Bunker Fuel Compliance: Scrubber Discussion Supplier Systems & Status Type (So x ) Operational Units Aalborg Industries One system 21MW on Tor Ficaria Ferry Hybrid Yes - Marine Belco Refinery industry expertise. First installation commenced with AP Open Yes Marine/Industrial Moller Maersk Clean Marine One system 12 MW on mv Baru Hybrid Yes Marine Couple Systems One system on Timbus Dry Yes Marine Hamworthy Krystallon Four systems installed, Largest 8MW on mv Zaandam Open Yes Marine MAN 2 stroke One system on Alexander Maersk for Exhaust Gas Recirculation Open/Hybrid (NO X Only) Yes Marine MES 15 units on large yachts Open (Soot only) Yes Marine Wartsila One system on mv Suula Tanker Closed Yes Marine/Industrial Source: Hart Energy analysis and forecast (2011) All rights reserved 2012, Hart Energy

Refined Product Market Share Middle Distillate by Sector (2010) Industrial & Heating Oil 27% Marine Diesel 4% Non-Road & Agricultural 12% On-Road Transport 57% 2011 2015 2020 2025 2030 Increment 2011-2030 Other LPG Heavy Fuel Oil Distillate Jet Fuel/Kerosene Naphtha Gasoline Source: Hart s World Refining and Fuel s Service, 2011 All rights reserved 2012, Hart Energy

Trends in Bunker Fuel Composition 7.0 6.0 5.0 4.0 3.0 2.0 1.0 MILLION BARRELS PER DAY 40% 35% 30% 25% 20% 15% 10% 5% Process Crude Distillation Light Oil Processing Reforming Isomerization Alkylation/Polymerization Conversion Coking Catalytic Cracking Hydrocracking Hydroprocessing REQUIRED IN THE FUTURE 0.0 2010 2011 2012 2013 2014 2015 2020 2025 2030 0% Gasoline Naphta Middle Distillates Distillate Bunker Residual Bunker % Diesel Heavy Oil/Residual Fuel Source: Hart s World Refining and Fuel s Service, 2011 All rights reserved 2012, Hart Energy

GHG from Shipping Still to be Resolved Implementation of Different Mechanisms Raise Complex Issues Burden of sharing & addressing Common but differentiated responsibility vs. equal treatment for all MS Legal framework used to introduce controls (MBMs) MEPC 63 in February/March 2012: Agreed on introduction of mandatory fuel efficiency regulations MEPC 64 in October 2012 All rights reserved 2012, Hart Energy

Conclusions Air quality: Pressure to shift policy focus to heavier fuels and other transportation and stationary sources. Carbon footprint still to be resolved Shift in fuel demand and crude quality will create challenges for refiners. Compliance options for Marpol Annex VI Technology implementation (SOx scrubbers / NOx SCR ) Lower-sulfur distillate Fuel switch to LNG All rights reserved 2012, Hart Energy

LNG as a marine FUEL IFQC meeting, Houston, August 2 nd, 2012 Tony Teo, Business Development Director

DNV ORGANISATIONAL CHART (10500 Employees) Purpose: Safeguarding Life, Property and the Environment 2

AGENDA Background & Properties LNG fuelled Ships Fuel Efficient Ships 3

Background - Environment Geiranger Fjord 4

The Challenge: New IMO SOx Emission Control Areas in 2015 with limited abatement options (0.1% sulphur in fuel) 1. 1 LNG as fuel 2 2. Exhaust gas scrubbers 3. 3 Low sulphur fuel or fleet redeployment, i.e. give up trading in ECAs! Sail ships Coal fuelled ships Oil fuelled ships LNG fuel Scrubber 1850 2012 2015 Low sulphur fuel In addition: NOx demands in 2016, more comprehensive SOx demands in 2020 5

LNG Properties 96% methane (CH4) Flammable 5 to 15% conc. in air Liquefied at -259 deg F (-162 deg C) Stored in Cryogenic materials Density 42% of water Expands 600 times Cleanest burning fuel Colorless Odorless Non Toxic Non Corrosive 6

1 st Gas fuelled Ferry, January 2000 Prototype Passenger/car ferry GLUTRA Capacity: 300 pax and 96 cars Engines:4 Mitsubishi Engs. @ 2 bars Speed: 12 knots Refuel: 6 days International Gas Fuel Code: 2000 DNV Rules 2006 Introduced to IMO 2009 IMO Interim Guidelines (w/similar DNV Tech contents) 2010 Other Class issue Rules 2014 IGF Guidelines 7

GLUTRA 2 x 1000 ft3 Lesser of B/15 or 2m. Min 760mm Lesser of B/5 or 11.5m. Min 760mm 8 Tank Location Protection from: 1. Ship side / bottom 2. External fire 3. Mechanical impact

LNG Vessels in Operation 2011 28 9

Looking ahead 2020: 1000? 2012: 2014: 2011: 28 39 63 10

12 Ferries from 2007 Capacity: 587 pax / 212 cars Speed: 21 knots with 2x16 cyl, 3530kW + 2x12cyl, 2650kW Engine: Rolls Royce, Bergen 11

3 Passenger Ferries, 2009 Capacity: 600 passengers Engines: 2 x 6 cyl., 380 kw Mitsubishi Max Speed: 12 knots Tank Size: 1000 cu ft Refueling: 7 days Refueling time: 1 hour Tide King Tide Queen Tide Princess 12

Tank Room Arrangement VACUUM INSULATED TANK VENTILATED, GAS DETECTION, BILGE WELL ALARM COLD BOX, Gas: GAS +15 DETECTORS C DUCT PIPE - GAS LINE, VENTILATED, GAS DETECTORS Block / Bleed valve MAINTAINS TANK PRESSURE 13

Bunkering Arrangement & Piping Manual / Remote Valve P Drip Tray P Gas detectors GD GD M Ventilation to open air Min. 760 mm Duct withstand pressure from rupture To gas tank Requirements: Operational Procedures Emergency Procedures 14

7 OSVs with Wartsila DF Engines, 2003 + 10 On Order Reduction in NOx emission = 20,000 cars LADY VIKING VIKING ENERGY STRIL PIONEER STRIL PIONEER 15

3 High Speed Light Crafts + 1 On Order Builder: Myklebust yard, Norway 3 Norwegian CG patrol crafts Power Generation: DF (Gas + Diesel) Max Speed: 20 knots, Range: 7 days Owner: Buquebus, Montevideo 1000 pax 153 cars ferry Argentina/Uruguay GE LM 2500 Gas Turbine 50 knots, 99 m Length - Builder: Incat 16

RoRo ship on Order, 2008, Coaster 2011, Tug 2012 Fish Farm Product Vessel Engine: RR 1650 KW Bergen, 14 knots Dwt: 2650 tonnes Tank: 90 m3 Type: RoRo/Containers Main Engine: RR Bergen 35:40, V12, 5250 kw, 15 knots Capacity: 94 TEU, Tanks: 430 m3 Owner: Bukser og Berging Dimension: 35x 15.4m Engine: 2 x 1705 KW Bergen C6 Crew: 7 Aquamaster azimuth thrusters Bollard Pull: 65 tonnes Redundancy (New): Take me Home AGA Cyro Tank system, Refuel: 7 days, 45 mins duration. 17

Ferry Terminal and LNG Storage & Refueling Area (Bergen) Ferries LNG BunkerStation LNG Storage Tanks Luxury Waterfront Cottages Safety Culture 18

Experiences with LNG Fuel Some 200 000 hours (20 ships x 2000 hours x 5 years) of operation logged Qualitative feedback: - Less soot - Clean engine room => Crew Safety - Less maintenance Quantitative feedback: - No major incident is recorded 19

DNV extraordinary innovation projects ECORE, Ore Carrier Lloyd s List Global Award, 2011. OSHIMA ECO 2020 20

GREEN DOLPHIN and CATCHY LNG Fuel Capable Waste Cold Recovery 21

Safeguarding life, property and the environment www.dnv.com C LNG FUEL AIR EMISSION CHALLENGES ENERGY EFFICIENCY IMO s EEDI, SEEMP RISK ASSESSMENT Contact: tony.teo@dnv.com 22