Methanol An Ultra Clean Marine Fuel Solution for North America Methanol Policy Forum June 13, 2017 Washington, D.C. Jason Chesko, Sr. Manager, Global Market Development Methanex Corporation
Methanex The world s largest producer and supplier of methanol to major international markets 2 Production Sites Global Office Locations Distribution Terminals and Storage Facilities Shipping Lanes
Waterfront Shipping 28 vessels, including 7 methanol dual-fuel vessels Medium Range Fleet 45,000-50,000 DWT Class Cabo Negro II Caribbean Spirit Global Spirit Magellan Endeavour Patagonian Mystic Falkanger Finnanger Medium Range Fleet 50,000 DWT Methanol Dual Fuel Engine Class Handy Size Fleet 20,000 to 30,000 DWT Class Coastal Fleet 1,000 to 10,000 DWT Class Fjellanger Sabrewing Scarlet Ibis Tamiat Navigator World Navigator Taranger Lindanger Taranaki Sun Mari Jone Leikanger Mari Boyle Manchac Sun Mariline Marinex Medalta Adventurer SCT Matterhorn Sakhara Lotus Marit Cajun Sun 3 Yelena Argo Chemist
IMO Regulations Leading to Adoption of Cleaner-Burning Marine Fuels in North America 4 Methanol Emissions Reductions 1 - Rationale - Emissions reduction: SOx, NOx, Particulate Matters - U.S. EPA Significant air quality & resulting health benefits/cost savings - Methanol offers significant emissions reductions compared to main compliance option MGO (0.1% diesel) 1 Source: Stena
and Methanol is Cost Competitive versus Diesel (MGO) Methanol is an economically viable alternative marine fuel over the cycle $ / tonne $1,200 $1,100 $1,000 $900 $800 $700 $600 $500 $400 $300 North America (Gulf Coast) MGO North America (East Coast) MGO North America (West Coast) MGO Methanol (Energy Equivalent) $200 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 5 Chart source: Platts and IHS Chemical MGO NA GC Average of Houston and New Orleans; MGO NA EC average of New York, Philadelphia, Norfolk, Montreal and Charleston; NA WC average of LA, San Francisco, Portland, Seattle and Vancouver. Methanol: USGC spot price; adjusted to energy equivalent of MGO (2.16 factor)
U.S. Domestic Methanol Production Growth U.S. Production has grown including Methanex relocation of two plants from southern Chile to Louisiana Domestic Resource Use Job Creation Energy Security Environmental & Health Cost Benefits 6 Geismar, Louisiana
Methanol is Widely Available Methanol infrastructure already in place to reliably supply the North American marine industry 7 Red flags/circles represent existing methanol supply locations; lines represent rail networks Source: Methanex
Methanol - Environment, Health and Safety Methanol is a clear, colourless liquid that quickly and naturally biodegrades More environmentally benign than conventional marine fuels (i.e. HFO and MGO) Long history of methanol safe handling Industry standards established for the safe handling of methanol and other low flashpoint fuels Methanol 8
Innovative Clean Technology Methanol has minor modification requirements and modest incremental cost New high pressure common rail system High pressure double walled pipe High pressure pump Methanol tank in double bottom Inert gas system (nitrogen) 9 Source: Stena Line
Methanol in Use as a Marine Fuel Today: Waterfront Shipping The world s first methanol-fuelled tankers Commercial-ready technology Cajun Sun Mari Jone Taranaki Sun In 2016, Waterfront Shipping launched seven vessels with methanol dual-fuel MAN ME-LGI 2- stroke engines Leikanger Mari Boyle Lindanger Vessels have been operating safely and reliably across the globe Medium Range Fleet 50,000 DWT Methanol Duel Fuel Engine Class Manchac Sun 10
Methanol Research & Development Projects Several other initiatives are underway to support further commercialization Large Engine Market (i.e. cruise ships and ferries) Funded by German government to support further commercialization work for new methanol cruise ships and ro-pax ferries Small Engine Market (i.e. tug and barge) LeanShips: Sponsored by the EU to support commercialization of the smaller engine market GreenPilot: Co-funded by Swedish Maritime & Transport Administrations & Methanol Institute to support commercialization of the smaller engine market China Market China Classification Society (CCS) methanol for marine fuel guidelines under development Ministry of Agriculture methanol marine fuel pilot project 11
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