Environmentally Superior VLGC with LPG as Fuel. "Achievements and Prospects for the Near Future" International LP Gas Seminar 2018.

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International LP Gas Seminar 2018 Environmentally Superior VLGC with LPG as Fuel "Achievements and Prospects for the Near Future" 7th March 2018 Takashi Unseki Chief Engineer, Energy & Environment Ship & Ocean Engineering Department

Contents 1. Environment Issues 2. Topics of Gas Fuel 3. Comparison & Concern by Engine type 4. Fuel Price Trend 5. Future Hypothesis 6. Reference of LNG Fueled ship 7. Possibility of Gas Fuel Supply Points 8. MITSUBISHI VLGC with LPG as Fuel 1

1. Environment Issue ( International Shipping) World Wide Ocean Lane Distribution 2

1. Environment Issue ( International Shipping) CO 2 emissions from Transportation total amount: 22% from International Shipping: 2.2% (800 million tons) Ship has highest transport efficiency. However, its proportion can not be ignored. If we do not take further measure, it is predicted to increased 1,200~2,800 million tons in 2050. MARPOL ANNEX VI proposed amendment was adopted in IMO after several years of discussion, which is a regulation on CO2 emissions EEDI (Energy Efficiency Design Index) form new ship. 3

1. Environment Issue (IMO Regulation) IMO NOx Emission Limits (Tier III: Only for ECA / SOx ECA ) IMO Fuel-Sulfur Content Limits ~2016.01.01 Keel lay Sulfur (wt%) Global Area 2020.1 Start SOx Emission Control Area IMO EEDI (CO 2 Emission reduction) Year UNFCCC COP21 Paris Agreement (12 Dec. 2015) Historical turning point to tackle climate change. Global Temperature Limit (Temp.) : To be kept well below 2, with an ambition to limit the temperature increase to 1.5 above pre-industrial levels. Mitigation (Emissions) : GHG must peak as soon as possible and reach net Zero in the second of the century. What Action is needed? 4

1. Environment Issue (SOx) Fuel-Sulfur Contents Limit by Sea Area Source: (DNV GL) 5

1. Environment Issue (Counter-measure) To Comply with IMO MARPOL Annex VI Measure 1 2 3 Sulfur limit Fuel Change (MGO, LSFO) HFO with Exhaust Gas Cleaning System NOx Tier-III SCR or EGR SCR or EGR Gas Fuel Otto Cycle Gas Engine or Diesel Cycle Gas Engine with SCR or EGR SCR EGR Scrubber Gas Engine & Fuel Gas Supply System 6

2. Topics of Gas Fuel Properties HFO LNG LPG In comparison with HFO (Depend on (Almost production (RMH380) equality) LNG LPG area) Specific Gravity Lower Calorific value kg/m3 app 991.0 app 420 app 580 To keep same energy supply MJ/kg app 40.4 app 50 app 46 MJ/m3 app 40.0 app 21 app 27 Weigh: Nearly equivalent Volume: Around two (2) times, but to accommodate independent LNG tank in Ship, it will be requested three (3) times space To keep same energy supply Weigh: Nearly equivalent Volume: Around one half (1.5) times, but to accommodate independent LPG tank in Ship, it will be requested two half (2.5) times space Boiling point Boil Off Gas < 60-162 -42 -- -- Generate Suppressible by normal temperature pressurization Independent tank (s) Heat Insulation BOG treatment unit Independent pressurized normal temperature tank (s) Neither heat insulation nor BOG treatment unit are requested Sulfur % 3.5 0.0 0.0 No SOx emissions No SOx emissions CONFIDENTIAL 7

3. Comparison & Concern by Engine type Type of Fuel Diesel / Gasoil Light Fuel Oil (LFO) Heavy Fuel Oil (HFO) Liquefied Petroleum Gas (LPG) Liquefied Natural Gas (LNG) ISO specification ISO 8217 Grades DMX through DMC ISO 8217 Grades RMA through RMD ISO 8217 Grades RME through RMK Propane Butane C Carbon [ g CO 2 / t Fuel ] 3,206,000 (1.030) 3,151,040 (1.012) 3,114,400 (1.000) 3,000,000 3,030.000 (0.9634) (0.9730) 2,750,000 (0.8831) Diesel engine Fuel injection Ignition method Gas fuel supply pressure NOx-Tier III LNG Fuel CONFIDENTIAL LPG Fuel 2 cycle 4 cycle 2 cycle Gas phase direct Gas phase Lean burn Pilot fuel injection Liquid phase direct 300 bar 16 bar 50 bar With SCR or EGR Remarks -- Applicable Methane slip: 1~2% With SCR or EGR LNG Fuel 2-cycle and 4-cycle diesel engines are in service. LPG Fuel 2-cycle diesel engine will be in service, applying with Diesel combustion method. It will be enjoyed almost same environment benefits as with LNG Concern item on 4 stroke engine using with LPG as Fuel 1 2 3 Lean-Burn "Otto" combustion Direct Injection "Diesel" combustion Gas Reforming LPG Methane Propane gas has high risk in the knocking than Methane by better ignitability, so compression ratio should be decrease to avoid knocking, the maximum output should be de-rated under more 70 % compared to Methane engine's one. LPG has lower ignitability than diesel oil, therefore another igniting sauce such as pilot fuel injection will be required. But, it could not use of existent diesel oil injection system, should be developed to secure a reliability and durability. Propane can be reformed to Methane rich gas through gas reformer, then existent LNG DF engine have a possibility to use reformed Methane rich gas as fuel. -- Negative No news of development work. Negative No news of development work. Positive Several vendor in development. 8

4. Fuel Price trend 9

4. Fuel Price trend Past history till 2016 Source: CIMAC2016 No.132 (DNV GL) 10

5. Future Hypothesis Source: CIMAC2016 No.132 (DNV GL) Trial Calculation Vessel : 75 LDWT P max Tanker 11

5. Future Hypothesis LNG 0.1-0.5% MDO ~ 0.1% MDO 3.5% HFO 3.5% HFO with Scrubber Not noticed in Big Potential on LPG as Fuel, yet!!! 12

6. Reference of Gas Fueled Ship (2017.09.01) LNG Fuel Ship Operating Area (Existing) 13

6. Reference of Gas Fueled Ship (2017.09.01) Yearly development of fleet LNG fueled fleet by Classification society In operation 116 ships In Order 112 ships LNG ready 93 ships 77 89 93 93 93 93 93 35 21 56 59 68 91 102 105 109 110 112 112 15 21 25 35 46 56 76 14 97 116 116 116 116 116 116 116 116 116 116 112 93 In operation In order Fleet by vessel type Comparison of LNG and Scrubber 14 In operation Scrubber retrofit In order Scrubber new build 34 4 LNG retrofit 3 2 2 2 12 3 14 17 33 1 4 1 1 8 1 21 4 2 3 5 9 11 3 4 10 LNG new build LPG Fueled Ship has big potential to become popular for various kind of ships by its easy handling with pressurized normal temperature containment system 14

7. Possibility of Gas Fuel Supply Points 15

8. MITSUBISHI VLGC with LPG as Fuel Conceptual view: VLGC 84,000m3 LPG FUELTANK ME-LGIP Patent pending CONFIDENTIAL 16

8. MITSUBISHI VLGC with LPG as Fuel Estimated Fuel Consumption of One-round voyage Condition 84,000m3 VLGC Route : PG -JPN (About 6,700SM, No ECA) Engine Load: 90%, Loading : 1day,Unloading : 2days (2 ports) LPG Fuel : As LCV Ratio HFO:LCV=40.4 MJ/kg,LPG:LCV=46.0 MJ/kg Pilot Fuel : abt. 4.2% Comparison Fuel Consumption HFO (Current) LPG as Fuel HFO [t] 1,700 230 LPG [t] 0 1,290 Full Ballast 2,000 1,500 1,000 500 0 Consumption Weight [t] Consumption Volume [m3] 3,500 3,000 2,500 2,000 1,530 1,290 1,290 1,500 2,890 2,230 1,000 1,610 60 60 500 70 70 170 170 170 0 180 180 180 HFO LPG LPG HFO LPG LPG 焚き LPG LPG 焚き HFO 焚き (Base) LPG 焚き (Cargo Tank) LPG 焚き (Deck Tank) HFO 焚き (Base) (Cargo Tank) (Deck Tank) [ρ = 0.58] [ρ = 0.447] Main 主機燃料 Engine Pilot Pilot Fuel 補機燃料 Gen. Engine Patent pending CONFIDENTIAL 17

8. MITSUBISHI VLGC with LPG as Fuel Fuel system: LPG Fuel: Deck tank 3,000m3 (PG~JPN One-round voyage) MGO MAN Diesel & Turbo (MES) Main Engine:ME-LGIP FVT LFSS LPG Fuel Vent Post LPG Fuel Handling room Double wall LPG Fuel piping LPG Deck tank (18bar) P 1000m3 P 1000m3 P 1000m3 N2 Buffer tank LPG Service tank Patent pending CONFIDENTIAL 2018 MITSUBISHI SHIPBUILDING CO., LTD. All Rights Reserved. 18

8. MITSUBISHI VLGC with LPG as Fuel LPG Fuel Flow Diagram LPG Fuel tank Engine Type ME-LGI ME-GI Fuel MeOH LPG LNG Fuel Inlet Cond Liquid Liquid Vapour Supply Press. 8 bar 50 bar 300 bar Source: MAN Presentation Material Injection Press. 550 bar 600 bar 300 bar 19

8. MITSUBISHI VLGC with LPG as Fuel LPG Fuel, Deck tanks and/or combination with the cargo Case-1 Service TK P Deck TK Re-liq.. P High press. Manifold Boost PP & HTR P Cargo Manifold 1 LPG Fuel consumption AG-JPN one round: abt 3,000m3 Independent LPG Fuel Deck Tank Pros On Deck Fuel LPG tank Cargo Cargo tank for Fuel 3,000 m3 84,000 m3 - No influence on Cargo capacity Decrease of Oil bunkering frequency Increase of voyage frequency M/E Cargo PP P Concern Exclusive High pressure bunkering facility On deck boost pumping system if high pressure bunkering facility is not available Case-2 Service TK P M/E Re-liq. Boost PP & HTR P Cargo PP P Cargo Manifold 2 Usage of Cargo LPG as fuel Pros Concern - 81,000 m3 (3,000 m3) Not required high pressure bunkering facility Decrease of Oil bunkering frequency On a parity with Cargo transport per year On deck boost pumping system Cargo volume will change depends on fuel consumption Accuracy of Cargo unloading metering Consider the Cargo tank volume enlarge Deck tank as a buffer use for cargo change, dry dock preprocessing, etc. CONFIDENTIAL 20

8. MITSUBISHI VLGC with LPG as Fuel 21

8. MITSUBISHI VLGC with LPG as Fuel A) Great reduce the workload on ship s crew using with LPG as Fuel No fuel heating/purification requested, means no sludge treatment system and it s no cleaning work, otherwise no incineration work will be required. Easy handling fuel containment system by independent pressurized normal temperature tank (s), neither heat insulation nor BOG treatment unit are requested compared to LNG one. B) Fuel LPG Specification for MAN ME-LGIP engines ME-LME-LGIP engine can be drive by both pure Propane and pure Butane and any mix between them with up to 25mol% Ethane can be used in the ME-LGIP engine without need for modification, and also it can change during engine running condition. 22

8. MITSUBISHI VLGC with LPG as Fuel Points to Overcome Revised IGC Code Chapter 16 Use of Cargo as Fuel 16.9 Alternative fuels (other than natural gas) ; may be used as fuel, providing that the same level of safety as natural gas in this Code is ensured. Requirements (LNG Fuel) Difference in case of LPG Fuel 1 Arrangements 2 Purging 3 Ventilation 4 Leak Detection Liquefied Gas Fuel Supply LPG Fuel in Liquid Phase 2 Stroke Engine(Liquid Injection) Supply Pressure 50bar LPG is heavier than air. Obscurity Requirements Consultation and Risk Assessment with Class 23

8. MITSUBISHI VLGC with LPG as Fuel Points to Overcome Revised IGC Code Chapter 16 Use of Cargo as Fuel Sec. Ref. Items Contents 16.9 Alternative fuels and technologies 16.9.1 Use other fuel than LNG 16.9.3 Fuel Supply System 16.4.1.1 16.4.1.2 Fuel gas Pipe arrangements Provisions for inerting and gas-freeing may be used, providing that the same level of safety as LNG in this Code is ensured shall comply with the requirements of 16.4.1, 16.4.2, 16.4.3 and 16.5 as applicable Fuel piping shall not pass through accommodation spaces, service spaces, electrical equipment rooms or control stations. The routing of the pipeline shall take into account potential hazards, due to mechanical damage, in areas such as stores or machinery handling areas. Provision shall be made for inerting and gas-freeing that portion of the gas fuel piping systems located in the machinery space. 16.4.2 Leak Detection Shut down the gas fuel supply in case of leak detection 16.9.4 16.9.5 16.4.3 Routing of fuel supply pipes 16.5 Gas fuel plant and related storage tanks Liquefied gas fuel supply system Additional requirements for Ventilation 1. a double-wall design 2. with mechanical exhaust ventilation having a capacity of at least 30 air changes per hour (Ref. Chap. 12 for Ventilation) Requirements of location for the systems of gas fuel handling shall comply with 16.4.5(Gas consumer isolation) In addition to the requirements of 16.4.3.2, both ventilation inlet and outlet shall be in a non-hazardous area external to the machinery space 24

8. MITSUBISHI VLGC with LPG as Fuel Points to Overcome Revised IGC Code Chapter 16 Use of Cargo as Fuel (MAN Diesel & Turbo) Fix Support Engine inlet condition: 0~50 LNG 300bar (Supercritical) LPG 50bar (Liquid phase) Flexible Support 25

8. MITSUBISHI VLGC with LPG as Fuel Points to Overcome Revised IGC Code Chapter 16 Use of Cargo as Fuel Class NK AIP Risk Assessment (HAZID) : National Maritime Research Institute CONFIDENTIAL 26

Zero Emission Load MAP for Reduction of GHG Non Fossil Fuel/Bio Fuel Propulsion Plant Renewal Energy : Solar Power, Wind, Wave Less GHG Gas Fuel/Low-Flash point Fuel Propulsion Plant Weather routing/toughness at Sea High Efficiency Power Plant/Heat Recovering System Low Friction Resistance Technologies Conventional Technologies improve (Hull form, Propeller design etc.) 2010 2015 2020 2025 Year 27