SAMSUNG HEAVY INDUSTRIES Company name Gas Fuelled Container Ship ( Evaluation of Economic Analysis ) H.C. Jung October 16, 2015 1
Contents Background - Environmental Issue - IMO Future Regulation Gas Fuelled Ship - Lay-out of Gas Fuelled Ship - Configuration of Propulsion System - LNG Fuel Storage Tank, Gas Fuelled Engine, Gas Supply System - Initial Cost Estimation Economic Analysis - Market Trend of Fuel Price - Economic Analysis - Conclusion 1/17
Background Environmental Issue Emission Reduction Apprx. 25% apprx. 80% apprx. 97% Comparison betweens Item Convent. Ship Gas Fuelled Ship Low P. High P. CO 2 NOx SOx CO2 100% 75% 75% NOx 100% 20% 20% with SCR / EGR SOx 100% 3% 3% Gas Fuel Supply System LNG Storage Tank Design Goal GHG Reduction 25% Gas Fuelled Engines Satisfying IMO NOx Tier III Satisfying IMO SOx Limit 2/17
Background IMO Future Regulation NOx 18 16 14 Tier III - 2016.01.01 Tier II - 2011.01.01 Tier I - 2000.01.01 NOx (g/kwh) 12 10 8 6 4 2-80% 0 0 200 400 600 800 1000 rpm 1200 1400 1600 1800 2000 SOx EEDI 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1 0.1 EU Port ECA Global 3.5 0.5 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 SOx (% m/m) 2021 2022-97% - Existing ECA: Baltic Sea, North Sea, Coasts of USA, Hawaii and Canada - Possible future ECA: Mediterranean sea, Coasts of Mexico, Puerto Rico, Norway, Singapore and Japan 3/17
Lay-Out of Gas Fuelled Ship Gas Supply & Bunkering System LNG Fuel Storage Tank Main Engine ME-GI or X-DF Generator Engine Dual Fuel 4/17
Configuration of Propulsion System 4 Stroke Engine with Low Pressure GSS BOG 5 bar Single Engine with 4 Stroke Gen-sets LNG Storage Tank Forcing Vaporizer LD Comp. DF Genset Electric Motor Elec. Service Single Gas Supply System (L.P) Electric Motor Driven Propeller Fuel Consumption High Experienced & Proven Design 2 Stroke Engine with Low Pressure GSS BOG LNG Storage Tank Forcing Vaporizer LD Comp. 5 bar DF Genset 16 bar Main Engine Elec. Service Two(2) Type of Engines with Low Pressure Injections Single Gas S. System with Different Pressures Engine Direct Driven Propeller Fuel Consumption Low 2 Stroke Engine with High Pressure GSS BOG LNG Storage Tank HP Pumps L/D Comp. HP Comp. HP Vaporizer 5 bar DF Genset 300 bar Main Engine Elec. Service Two(2) Type of Engines with High & Low Pressure Injection Two(2) Type of G.S.S with High & Low Pressure System Engine Direct Driven Propeller Fuel Consumption Low 5/17
GF Design LNG Fuel Storage Tank Capacity Required for Storage Tank 20,000 m3 - Cruising 23,000 NM - Service Speed 23 kts 10,000 m3 - Cruising 18,000 NM - Service Speed 19 kts 8,000 m3 - Cruising 18,000 NM - Service Speed 15 kts Type of LNG Fuel Tank Type SPB Membrane Type-C Tank Shape Tank Material Aluminum Stainless Steel Stainless Steel Design Pressure 0.25 bar 0.25 bar 9 bar Tank Size Unlimited Unlimited Limited (Max. 4,000 m 3 ) Partial Filling No restriction Restriction No restriction Cost 100 % 80% 120 % SPB : Self-supporting Prismatic shape IMO type-b 6/17
GF Design Main Engine (1/2) Technical Comparison of Main Engine Item Conventional Engine High Pressure Gas Fuelled Engine Low Pressure Fuel Burning Oil Gas / Oil Gas / Oil Cycle of Engine Diesel Cycle Diesel Cycle Otto Cycle Pressure of Gas Injection N/A 300 bar 16 bar Engine Operation Limit (Gas Mode) Min. 10% ~ Max. 100% of MCR Min. 10% ~ Max. 100% of MCR Min. 10% ~ Max. 85% of MCR Emission NOx High Low with CSR/EGR Low SOx Low Low Low Cost Base +8% +17% Diesel Cycle Gas ignited when injected Unchanged Power No pre-ignition / knocking High pressure gas injection High NOx Emission Otto Cycle Gas pre-mix before ignition Reduced Power (abt. 15%) Pre-ignition / Knocking Risk Low pressure gas injection Low NOx Emission 7/17
GF Design Main Engine (2/2) Comparison of Fuel Consumption Item Unit Conventional Gas Fuelled Remark Engine Efficiency Burning Fuel - Oil Gas ME & ME-GI Energy Consumption kj/kw.h 6,624 (100%) 6,489 (98%) at same Power Using Fuel - HFO MDO Gas Fuel Consumption Fuel Cost SFOC g/kw.h 161.4 7.7 123.2 DFOC MT/day 142.9 (100%) 6.8 109.1 115.9 (81%) Fuel Price USD 400 600 400 Fuel Cost / Day USD 57,160 (100%) 47,720 (84%) at same Power at same Price 7,300 T. E. C. (kj/kw.h kw.h) 7,100 6,900 6,700 6,500 6,300 MAN_Oil/Diesel MAN_Gas 20 30 40 50 60 70 80 90 100 Engine Load (%) 8/17
GF Design Generator Engine Comparison of Generator Engine Item Conventional Gas Fuelled Remark Gas Supply System N/A Low Pressure (5bar) Required Power Base Base +α(+600 kw) for Gas Supply System Fuel Consumption Emission Energy Consumption 100% 98% DFOC (ton/day) 100% (HFO Based) 87% (LNG Based) NOx High Low SOx Low Low HFO: 41,025 kj/kg LNG: 50,000 kj/kg 220 210 Diesel_W32 Gas Fuel_34DF SFOC (g/kwh) 200 190 180 170 40 50 60 70 80 90 100 Egine Load (%) 9/17
GF Design Gas Supply System Type of Gas Supply System Low Pressure High Pressure Major Equipment List Equipment Low Pressure High Pressure Remark Fuel Gas Pump O O H.P for 5~6 bar, L.P for 16 bar High Pressure Pump & Vaporizer X O H.P of 300 bar LP Forcing Vaporizer X O for High pressure LP Vaporizer O X for Low pressure NG Heater O O Same Re-Condenser X O for High pressure BOG Compressor O O Same Pressure Relief Valve O X Pressure down : 16 6 bar 10/17
Initial Cost Estimation Major Equipment & System Cost Estimation [ Unit: USD ] Item Cost (%) Remark Machinery & Electric 5.5 m 20% Engines, Boiler, GCU and Others LNG Fuel Tank 11.0 m 40% LNG Fuel Tank, Insulation, Support Gas Fuel Supply & Bunkering System 9.5 m 35% Fuel Pump, Vaporizer, Compressor, Piping, etc. Others 1.2 m 5% Hull Design (Structure & Outfitting) Total 27.2 m 100% USD/Ship 11/17
Market Trend of Fuel Price Price Trend of Oil & Gas Type of Fuel Equivalent Price (USD) WTI 46.3 USD/bbl = 291 USD/ton N. Gas 2.8 USD/mmbtu = 133 USD/ton USD 140 BRENT:$104.6/bbl DUBAI:$100.9/bbl 120 WTI: $96.0/bbl 100 80 DO:$88.0/100kg 60 40 20 IFO180:$60.1/100kg IFO380:$57.6/100kg IFO380:$14.2/mmbut N. Gas:$4.0/mmbtu WTI: $46.3/bbl IFO380: $23.0/100kg N. Gas: $2.8/mmbtu WTI: West Texas Intermediate IFO 380: Intermediate Fuel Oil with a maximum viscosity 380 centistokes 12/17
Unit Conversion of mmbtu Definition - mmbtu: Million Metric of British Thermal Unit - Calorific value of a necessary heating to raise one pound of water by one Fahrenheit degree Unit Conversion - 1 mmbtu = 1,055,056 kj (1) - LNG calorific value = 50,000 kj/kg (2) - LNG density = 0.47 ton/m3 (3). 1 mmbtu = 21.101 kg (4) = (1)/(2) = 0.02110 ton (5) = (4)/1,000. 1 ton (LNG) = 47.4 mmbtu Price of LNG 1 ton (47.4mmbtu). 6$/mmbtu x 47.4 = 284 USD. 7$/mmbtu x 47.4 = 332 USD. 8$/mmbtu x 47.4 = 379 USD. 9$/mmbtu x 47.4 = 427 USD. 10$/mmbtu x 47.4 = 474 USD. 11$/mmbtu x 47.4 = 521 USD. 12$/mmbtu x 47.4 = 569 USD. 13$/mmbtu x 47.4 = 616 USD. 14$/mmbtu x 47.4 = 664 USD. 15$/mmbtu x 47.4 = 711 USD USD / ton 800 700 600 500 400 300 200 100 758 664 569 474 379 284 190 4 6 8 10 12 14 16 USD / mmbtu 13/17
Economic Analysis Introduction RFR (Required Freight Rate) Service Route : Asia Europe (Round cruising range : 23,000NM) RFR = Total Expense Carrying TEU ($/TEU) - Total Expense (Annual) : Fuel cost + Capital Cost + Other cost + etc. - Carrying Container : No. of Operating trip x No. of Carrying cargo - Service Speed : 22.5 kts In-put Data for RFR Total Expense (Annual) - Annual Fuel Cost : Operating day ( ooo day/yr.) x DFOC (ton) x Fuel Price ( ooo USD/ton) - Capital Cost : Interests, Depreciation, etc. - Other Cost : Maintenance, Voyage Cost, etc. Carrying Container(Annual, TEU) - Carrying Container : No. of Operating trip x No. of Carrying cargo (70% of Nominal capacity) - No. of Operating trip : Cruising range(23,000 NM) / (Operating Speed(22.5kts) x Operating day(270days/yr.) 14/17
Economic Analysis 1/2 In Case of Same Price between Oil and Gas Item Unit Conventional Ship Gas Fuelled Ship Remark Ship Price % 100% 121% Nominal Capacity (TEU) TEU 14,300 (100%) 13,920 (97%) 380 TEU Sacrifice M/E G/E Type - 11G90ME-C 11G90ME-GI Power kw 44,280 44,280 DFOC (Fuel + Pilot) t/day 175.3 135.1 + 7.2 175.3 (100%) 142.3 (82%) Type - W32 34DF General kw 8,260 8,860 Power Gas S. S. kw - 600 DFOC (Fuel + Pilot) t/day 37.4 32.2 + 0.5 37.4 (100%) 32.7 (87%) DFOC (Total) t/day 212.7 (100%) 175.0 (82.3%) Service Speed: 22.5 kts HFO: 41,025 kj/kg LNG: 50,000 kj/kg HFO: 41,025 kj/kg LNG: 50,000 kj/kg Fuel Price - 379 USD/ton 8 USD/mmbtu 8USD/mmbtu=379USD/ton Revenue kteu 119.2 (100%) 116.1 (97%) Total Carrying TEU/year CAPEX musd 16.2 (100%) 19.5 (121%) Economic Index OPEX musd 36.0 (100%) 36.2 (101%) Fuel Cost / year musd 22.2 (100%) 18.5 (83%) Total Annual musd 74.4 (100%) 74.2 (99.8%) Required Freight Rates USD/TEU 624 (100%) 639 (102%) Cost per TEU 15/17
Economic Analysis 2/2 Case Study of Various Prices between Oil and Gas Item Unit Conventional Ship Gas Fuelled Ship Remark Economic Analysis (RFR) 8 $ /mmbtu (379 $/t) 10 $ /mmbtu (474 $/t) 12 $ /mmbtu (569 $/t) 300 $/t USD/TEU 578 (100%) 647 (112%) 450 $/t USD/TEU 655 (100%) 651 ( 99%) 600 $/t USD/TEU 732 (100%) 655 ( 89%) 300 $/t USD/TEU 578 (100%) 687 (119%) 450 $/t USD/TEU 655 (100%) 691 (106%) 600 $/t USD/TEU 732 (100%) 695 ( 95%) 300 $/t USD/TEU 578 (100%) 727 (126%) 450 $/t USD/TEU 655 (100%) 731 (112%) 600 $/t USD/TEU 732 (100%) 735 (100%) 810 760 710 660 610 578 112% 647 99% 655 651 89% 732 655 120% 100% 80% 60% 40% 20% 810 760 710 660 610 578 119% 105% 95% 732 687 691 695 655 120% 100% 80% 60% 40% 810 760 710 660 610 578 126% 655 112% 100% 727 731 732 735 130% 110% 90% 70% 50% 560 0% 560 20% 560 30% 510-20% 510 0% 510 10% 460 8-300 8-450 8-600 -40% 460 10-300 10-450 10-600 -20% 460 12-300 12-450 12-600 -10% 16/17
Conclusion Emission View - CO2 : about 25% reduced - NOx : about 80% reduced - SOx : about 97% reduced Commercial View - CAPEX : about 21% increased - Revenue : about 3% decreased - Fuel Cost : about 17% saved - RFR will be 2% higher than Conventional at same fuel prices Oil & Gas. Technical View - Engine Efficiency: 2% better - Total Energy Efficiency : 18% better - Special Gas Supply System required Conclusion For early adopting of Gas Fuelled Ship, it is needed that - Gap of fuel prices to be of over 10% - Initial Cost of GFS should be reduced - Loss of cargo space should be minimized - Potential risk should be eliminated 17/17