The ME-LGIP Engine fueled by LPG

The ME-LGIP Engine fueled by LPG Niels B. Clausen Senior Manager EELEE/Engine and System Application Marine Two-Stroke, Engineering < 1 >

Towards Greener Future Portfolio of solutions Countermeasures for SO x NO x MGO Wet Scrubber SCR EGR Dual Fuel Technology < 2 >

ME-GI and ME-LGI Gas Technologies Development Milestones Demonstration test at HHI Demonstration test at MES ME-GI retrofit of Nakilat First sea trial on Methanol ME-GI DEMO at DRC Engine delivery for TOTE Maritime Ethane development and operation at MES ME-GI PVU DRC Engine delivery for TEEKAY LNG Development of ME-LGI LPG testrig DSME FGSS 2011 2012 2013 2014 2015 2016 2017 < 3 >

ME-GI and ME-LGI Gas Technologies Dual Fuel Combustion Concept Fuel gas qualities Fuel Methane Ethane Methanol LPG* Diesel Density at injection pressure (kg/m 3 ) 194 440 814 562 860 Typical injection pressure (bar) 300 380 550 600 800 Lower calorific value (LCV) (MJ/kg) 50.0 47.5 19.9 46.3 42.7 Boiling temperature at 1 bar ( C) -162-89 64-42 180-360 Critical pressure (bar) 46 49 82 43 435 Kinematic viscosity at injection pressure (cst) 0.12 0.17 0.67 0.29 2.5-3.0 Bulk modulus at injection pressure (mpa) 78.4 373 1,419 820 1,550 Sulphur content Negligible Negligible No Negligible Max. 2% *Values are based on pure propane Fuel technology platforms for alternative clean fuels Engine type ME-GI ME-GIE ME-LGIM ME-LGIP Fuel type Methane Ethane Methanol LPG Dual fuel capability Yes Yes Yes Yes Pilot oil MDO/HFO MDO/HFO MDO/HFO MDO/HFO System supply pressure (bar) 300 380 10 50 Tier III SCR/EGR option available Yes Yes/No Yes Yes < 4 >

ME-GI and ME-LGI Gas Technologies Dual Fuel Combustion Concept Benefits of Diesel-type versus Otto-type combustion Combustion concept Diesel cycle Otto cycle Power density Unchanged Power reduced Gas mode efficiency Increased Unchanged Diesel mode efficiency Unchanged Reduced Gas quality/requirements (LCV) Insensitive Sensitive Methane number dependent No Yes Pilot fuel oil (amount) MDO/HFO (3-5%) MDO (approx. 1%) High ambient temperature Insensitive Sensitive Combustion processes Diesel process Premixed Cylinder max. pressure variations Stable and low Unstable and high Knocking during load change None Possible Misfiring None Possible Methane slip 0.1% of SFOC 2-4% of SFOC GWP Reduced by 20% Increased Scavenge air receiver explosion risk No Yes Crankcase explosion risk No Yes Exhaust receiver explosion risk No Yes < 5 >

ME-GI and ME-LGI Gas Technologies FGSS Simplification The new ME-GI PVS reduces the size of the FGSS installation significantly Prototype system volume: 60 m3 17 ton Simplification and design optimisation New system volume: 8 m3 2 ton < 6 >

Tier III NO x Control Technologies Tier III compliance for MAN B&W two-stroke Engines EGR SCR SCR On-Engine High-pressure Low-pressure Relevant information is found in the Emission Project guide and CEAS Engine Calculations < 7 >

Alternative Fuels Expected reduction of emissions for same engine setting NOx SOx PM EEDI (CO 2 ) *Compared to Tier II engine on HFO and conventional fuel valve Fuel cost Fuel availability LNG* 20-30% 90-95% 90% 25% ++ ++ $$ Ethane* 90-95% 15% +++ - $$ LPG* 10-15% 90-95% 90% 12% ++ +++ $ Methanol* 30-40% 90-95% 90% 7% - ++ $ CAPEX Incl. tanks < 8 >

Introduction to case study (DNV GL & MDT) June 2016 Compare alternatives for a specific ship 75 000 DWT LR1 tanker Focus on comparing fuels High and low fuel price scenario < 9 >

Application trading route Transit (87%) 53% load including PTO Speed: 12.5 knots Approach (3%) Port (10%) MW Propulsion MW Auxiliary MW PTO 0 1 2 3 4 5 6 Power (MW) Leg State Total distance (nm) Approach (h/leg) Port (h/leg) Houston Rotterdam Rotterdam Ventspils Ventspils Houston Cargo (diesel) 5,052 10 36 Ballast 961 10 36 Cargo (MGO) 5,670 10 36 < 10 >

LR1 example investment cost distribution As of June 2016 Methanol - Total 3.1 musd LNG - Total 9.6 musd 7% 16% 15% 32% 37% Engine upgrade Installation and yard engineering 49% 39% Fuel tank Auxiliary systems 5% LPG - Total 4.7 musd 26% 10% 37% 27% LPG represents a relatively low investment since LPG tanks are relatively cheap < 11 >

Fuel price scenarios High price scenario based on mid 2014 prices For LNG and LPG distribution costs are added Fuel price ($/GJ on LHV basis) 45 40 35 30 25 20 15 10 HFO (380 cst) HFO/LSFO: High price MGO/MDO MGO: High price Methanol Methanol: High price LNG LNG: High price LPG LPG: High price 5 0 2012 2014 2016 2018 2020 2022 Time < 12 >

Fuel price scenarios High price scenario based on mid 2014 prices For LNG and LPG distribution costs are added Low price scenario based on mid 2015 prices Less price reduction for methanol and LNG Fuel price ($/GJ on LHV basis) 45 40 35 30 25 20 15 10 5 HFO (380 cst) HFO/LSFO: Low Price MDO/MGO MGO: Low Price Methanol Methanol: Low Price LPG LPG: Low Price LNG LNG: Low Price 0 2012 2014 2016 2018 2020 2022 Time < 13 >

Study results Low- and high price scenario LPG results in shortest pay-back time Largest annual cost saving with LNG Methanol: Requires ~18% discount on MGO to be comparable to LNG Paper available: http://marine.man.eu/two-stroke/technical-papers 8 Annual cost difference (musd) 2 0-2 -4-6 -8-10 Investments High-price scenario LNG LPG Methanol ULSFO 0.1% 2017 2018 2019 2020 Time Global sulfur cap: 0.5% -10% 0% 10% 20% 30% 40% Payback time (years) 6 4 LPG: Low price scenario LPG: High price scenario Payback time (years) 12 10 8 6 High price scenario Payback time methanol Payback time LPG Payback time LNG 4 2 12 13 14 15 Speed (knots) 2-2 0 2 4 6 8 Price spread to LSFO ($/mmbtu) < 14 >

ME-LGIP LPG injection profiles Simulation of injection profiles with traditional FBIV: Constant pressure and different temperatures results in delay of injection Different composition of LPG results in delay of injection Solved by independent control of cut-off shaft in FBIV-Hybrid Injection delay Injection delay < 15 >

ME-LGIP LPG injection and control - Design Cylinder cover with LPG injection valve and gas block Valve control block: ELVA-valve (fuel pressurisation) ELGI-valve (injection timing) Hydraulic accumulator Hydraulic and sealing oil connections LPG inlet LPG return < 16 >

ME-LGIP LPG injection and control - Design Sleeve for FBIV-Hybrid FBIV-Hybrid < 17 >

ME-GI and ME-LGI Gas Technologies ME-LGIP: LPG System layout - Simplified Vent HC Standard single-walled piping Double-walled piping, ventilated Knockout Drum Vapour return Liquid return Vent Constant recirculation Deck New purge/return system LS LPG FVT Fuel Valve Train LPG LFSS Low Flashpoint Fuel Supply System Service tank LPG@18bar & amb. temp. LPG cargo tank Air supply 7 bar N 2 Purging LPG supply pressure 50 bar @45 +10/-20 C. < 18 >

ME-GI and ME-LGI Gas Technologies ME-LGIP: LPG System layout - Simplified Vent HC Standard single-walled piping Double-walled piping, ventilated Knockout Drum Vapour return Liquid return Vent Tank example Constant recirculation Deck New purge/return system LS LPG FVT Fuel Valve Train LPG LFSS Low Flashpoint Fuel Supply System Service tank LPG@18bar & amb. temp. LPG cargo tank Air supply 7 bar N 2 Purging LFSS example LPG supply pressure 50 bar @45 +10/-20 C. Deliver LPG at specified conditions Speed controlled high pressure pump In tank/below tank low pressure pump < 19 >

ME-GI and ME-LGI Gas Technologies ME-LGIP: LPG System layout - Simplified Vent HC Standard single-walled piping Double-walled piping, ventilated Knockout Drum Vapour return Liquid return Vent Constant recirculation Deck New purge/return system LS LPG FVT Fuel Valve Train LPG LFSS Low Flashpoint Fuel Supply System Service tank LPG@18bar & amb. temp. LPG cargo tank Air supply 7 bar N 2 Purging LPG supply pressure 50 bar @45 +10/-20 C. Recover liquid during purging Recirculation ensure stable temperature Cubic design with maintenance access from one side < 20 >

ME-LGIP Milestone Plan Year Effort area 2015 2016 2017 2018 Concept ME-GI vs LGI Injection concept decided HAZID on concept LFSS Low Flashpoint Fuel Supply System Sub-suppliers selected HAZID/HAZOP on LFSS done LFSS delivered LFSS initial start Engine Design Test rig designed Research engine designed Engine design validated 50 or 60 bore engine designed First Costumer engines Research Test Shop test Test rig initial start Research engine initial start Test results verified & accepted Initial shop test 50 or 60 bore < 21 >

Why consider LPG as a fuel? LPG is widely accepted ( land based and marine ) Meeting SOx requirement ( SECA and future global fuel ) Potential fuel cost savings ( cheaper than MGO ) Comparable cost to down stream SOx scrubber solution Flexible fuel utilization to meet future fuel cost variation Retrofit possible Savings of both time and fees for fuel bunkering, when fuel can be taken from cargo tanks. < 22 >

Conclusions Clean gas fuels have a bright future Full dedication to develop superior gas engine technologies Development work is maturing fast for major gas qualities < 23 >

Disclaimer All data provided in this document is non-binding. This data serves informational purposes only and is especially not guaranteed in any way. Depending on the subsequent specific individual projects, the relevant data may be subject to changes and will be assessed and determined individually for each project. This will depend on the particular characteristics of each individual project, especially specific site and operational conditions. < 24 >