Antonis Trakakis, Arista Shipping PoseidonMed II Conference ,

Dec.08 2016

LNG Fuelled Vessel Design

Was envisioned in March 2013 by:

In May 2015 additional prestigious entities joined the group

and a Joint Development Project was founded:

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TCO (Total Cost of Ownership) calculations proved that in

shipping which is a constantly evolving industry, it is important

to adapt in order to maintain a highly competitive position.

Objective:

To develop a Bulk Carrier vessel which will comply with all

known environmental regulations, current and forthcoming,

with a highly competitive capex and opex

Objective of Project Forward

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• CO2 : Reduction of EEDI by 30% until 2025, applicable only to NB’s

• NOx : Additional reduction by 75% in NECA, applicable only to NB’s, after 2016

• SOx : Reduction of Sulfur in fuel to 0.5% globally after 2020 for ALL VESSELS

NB’s will become more expensive but with reduced emissions

This additional capex should have a payback, not only for the society but for the shipowner as well

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Regulatory Frame

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LNG as Fuel

ADVANTAGES

EEDI is significantly reduced

Provides direct solution to SOx

Meets NOx Tier III (lean burn Otto cycle only)

Abundance (proven reserves 6,900 Trillion cubic ft)

Geopolitical stability (significant deposits in too many

countries-GR)

ISSUES

Chicken-an-egg dilemma for its supply

Requires much bigger storage volume for same

range than HFO

Requires high investment cost

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Business As Usual is no longer an Option

in Fujairah

in Singapore in Rotterdam

in Houston

MGO is 3-5 USD/MMBTU more expensive than HFO/LNG

Fuel Price / MMBTU

Observation: “MGO is 3-5 USD/MMBTU more expensive than HFO/LNG”

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Rapid developments, GLOBALLY

Drivers :

• Global Sulfur cap in fuel

• Low S% fuel prices

Coal and Oil used to be

the God, but…

LNG Infrastructure

1

Coal (anthracite) 228.6

Coal (lignite) 215.4

Diesel fuel 161.3

Gasoline 157.2

Propane 139

Natural gas 117

0

50

100

150

200

250

lb CO2/MM

BTU

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Even tramp shipping bunkers in major ports

Project Forward and Shell have come together to discuss and investigate the

options of supplying LNG-powered vessels, and assess the bunker requirements

for globally-trading bulk carriers, tankers and container vessels.

Bunker Ports

Singapore 25%

Fujairah 10%

Gibraltar 8% Durban

3% Korea

6%

Shanghai 6%

USA 14%

Brazil 5%

Panama 5%

ARA / EU 10%

Others 8%

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B.delta 82

Top energy efficiency

• Main particulars : 229 x 32.26 x 14.45

• MCR : 8,830 kW @ 80.0 rpm

• Service speed : 14.5 kn @ 7,100 kW

Vessel Design

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Type of LNG Tanks

- GTT membrane tanks present the highest volumetric efficiency &

geometrical flexibility of any currently available LNG containment

system, yet at min cost and weight involved.

- Less loss of cargo space & less loss of DWT vs Type B or A tanks.

- Ideal for large dry or wet cargo ships.

- Tank adaptable to shape of hull or deck space – hull integrated tanks.

- GTT specialists in LNG containment and gas handling systems with

vast references in LNG ship systems.

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The B.Delta82LNG will have new

DWT of 83.500 t: + 1.500 tons cargo

No implication on stability and stresses

Possibility to adjust size depending on

Owner’s requirements

Concept equally applicable for

conversion of existing ships

Position & Size of LNG Tanks

GTT Membrane type tanks

+10m in length

40 days at sea

2500 m3 capacity

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Key factors in the technology selection process

Main Engine Selection

Reliability (port-to-port operation on

gas)

Environmental friendliness

Lowest possible investment and operating costs

Simple and maintenance friendly installation

Redundancy in case of gas system failures

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DF Engines : Low vs. High Pressure

Low Pressure High Pressure

- Low gas pressure (<12 bar, target 10 bar) - Gas pressure 300 bar

- Higher SFOC in diesel - Maintains low SFOC

- Homogenous combustion meets Tier III - Diffusion burning needs SCR/EGR

after treatment

- Transient response

- Methane slip

- 4-stroke DF track record - Very limited track record

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Main features

• Selected prime mover :

2 x Wärtsilä W31DF

Only two engines

Optimal efficiency at eco speed

NO generators

Twin Input/Single output gearbox

PTO driven alternators with variable frequency

One engine capable to handle total el.load demand

No NOx after treatment necessary

Controllable pitch propeller

Both CPP and variable rpm modes possible for

highest efficiency

W31DF

W31DF

Equally applicable to bulkers, tankers and containers

Machinery Arrangement

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W31 – Methane Slip

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Main Engine Main Engine Main Engine Main Engine

Fuel Gas Handling

Fuel Gas Handling

Fuel Gas Handling

SCR

SCR

Generators

Generators

Generators

Shafting

Shafting

Shafting

Shafting

Reduction Gear

VFD Alternators

LNG Tank LNG Tank

LNG Tank

0

1

2

3

4

5

6

7

8

9

10

11

12

Diesel & SCR 4S LP 2S LP 2S HP

mill

ion

USD

Capex

Main engine selection is of key importance for cost (Own & FGHS & SCR) Budgetary prices are shown 16

Long term projections indicate that the price of LNG will range close to 9 USD/MMBTU

or even lower (including 3.5 USD/MMBTU premium for delivery onboard)

Price of LNG

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Opex – Maintenance Costs - TBO

• A conventional ship’s load profile

• LNG price of 9.0 USD/MMBTU

• Better SFOC & Reduced transmission losses of the option with 2 stroke + SCR

• Maintenance costs are very much similar

Calculations Made Taking Into Account

Annual OPEX between two alternatives matches when 0.5% sulfur fuel is priced at abt.360 USD/MT

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Annual Difference in Fuel Cost: LNG vs 0.5 S% Fuel

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LNG

PR

ICE

(USD

/MM

BTU

) FUEL PRICE (0.5% S PRICE, USD/MT)

300 350 400 450 500 550 600

2 1.287.179 1.586.980 1.886.781 2.186.583 2.486.384 2.786.186 3.085.987

3 1.031.364 1.331.165 1.630.967 1.930.768 2.230.569 2.530.371 2.830.172

4 775.549 1.075.350 1.375.152 1.674.953 1.974.755 2.274.556 2.574.357

5 519.734 819.536 1.119.337 1.419.138 1.718.940 2.018.741 2.318.543

6 263.920 563.721 863.522 1.163.324 1.463.125 1.762.926 2.062.728

7 8.105 307.906 607.707 907.509 1.207.310 1.507.112 1.806.913

8 -247.710 52.091 351.893 651.694 951.495 1.251.297 1.551.098

9 -503.525 -203.723 96.078 395.879 695.681 995.482 1.295.283

10 -759.340 -459.538 -159.737 140.064 439.866 739.667 1.039.469

11 -1.015.154 -715.353 -415.552 -115.750 184.051 483.852 783.654

12 -1.270.969 -971.168 -671.366 -371.565 -71.764 228.038 527.839

The proposed design of Project Forward with LNG as fuel offers a significant commercial advantage for most

projections of price variation

Daily Difference in Fuel Cost: LNG vs 0.5 S% Fuel

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LNG

PR

ICE

(USD

/MM

BTU

) FUEL PRICE (0.5% S PRICE, USD/MT)

300 350 400 450 500 550 600

2 3.527 4.348 5.169 5.991 6.812 7.633 8.455

3 2.826 3.647 4.468 5.290 6.111 6.933 7.754

4 2.125 2.946 3.768 4.589 5.410 6.232 7.053

5 1.424 2.245 3.067 3.888 4.709 5.531 6.352

6 723 1.544 2.366 3.187 4.009 4.830 5.651

7 22 844 1.665 2.486 3.308 4.129 4.950

8 143 964 1.785 2.607 3.428 4.250

9 263 1.085 1.906 2.727 3.549

10 384 1.205 2.026 2.848

11 504 1.326 2.147

12 625 1.446

Despite the current condition of saturated market, savings of that magnitude are bound to make an LNG fuelled ship of this design a

much sought after option

LNG Price 0.5% Fuel Price (USD/MT)

(USD/MMBTU) 300 350 400 450 500 550 600

3 3.1 2.5 2.0 1.7 1.5 1.3 1.2

4 4.0 3.0 2.3 1.9 1.7 1.4 1.3

5 5.6 3.8 2.8 2.3 1.9 1.6 1.4

6 9.3 5.1 3.5 2.7 2.2 1.8 1.6

7 27.3 8.0 4.7 3.3 2.6 2.1 1.8

8 18.3 7.0 4.3 3.1 2.4 2.0

9 13.8 6.2 4.0 3.0 2.3

10 35.0 11.1 5.6 3.7 2.8

11 35.0 9.2 5.1 3.5

12 26.6 7.9 4.7

13 18.0 6.9

14 13.6

15 35.0

300350400450500550600

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

3

5

7

9

11

1315

Fuel Price ($/MT)

Pay

bac

k in

Yea

rs

LNG Price ($/mmBTU)

Conclusions : The payback period for NB is very reasonable for most of the price scenaria In case price of 0.5% fuel goes above 550 USD/MT then conversion of modern, highly energy efficient ships (HP DF) also becomes feasible and meaningful

Payback Period of Extra CAPEX

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Conversion

Conversion will require local strengthening of hull structure and insert of a pre fabricated section.

Such works are NOT considered as “major conversion”.

For Solas (compliance with new rules)

For Marpol (NOx Tier III)

The development of infrastructure from PF vessels, may allow more frequent bunkering and will make possible the use of a smaller LNG tank and keep overall conversion cost moderate.

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Approval In Principle

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Summary / Conclusions

©

The payback period for NB is very reasonable for most of the price

scenarios.

The expected advantages from reduced bunker costs are significant

The new regulations give a clear sign for the industry to proceed in

adjusting and changing towards meeting the new trends; This will

inevitably establish new leaders in the market.

One should not stay inert but instead capture the advantages offered.

Infrastructure : There is no chicken-and-egg issue.

When proven designs are in place, supply chain and shipbuilding

develop in parallel.

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