procurem & finance day henning mohn 20mar14 - · pdf file... dnv r&d 2013/ chryssakis...

21/03/2014

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DNV GL © 2013 JANUARY 2014 SAFER, SMARTER, GREENERDNV GL © 2013

JANUARY 2014

MARITIME

Energy Efficient and Green Solutions

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Procurement and

Finance Day

20 March 2014

By Henning Mohn, Head of Section

Shipping Advisory, DNV GL Singapore

DNV GL © 2013 JANUARY 2014

Managing your risks is essential and also has several key benefits

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� Eliminating unplanned expenses due to preventable accidents

� Safeguarding reputation through awareness and prevention

Prevention

� Reduced CAPEX costs by prioritizing spending on areas with high risks

� Reduced OPEX by appropriately dedicating resources to high risks

Costs

� Effective decision making based on clear understanding of risks

� Effective and streamlined auditing by focusing on risk exposure

Transparency

� Improved efficiency of resource by prioritizing high impact efforts

� Focusing on the areas of the organization that really matter

Prioritization

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Quiz: Years to remember

� 2008

� 2015

� 2015+

� 2020-2025

� 2030

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Future Greenhouse Gas Emissions from Shipping

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Source: DNV R&D 2013/ Chryssakis & Stahl

Status Quo

Realistic uptake of new fuels ex nuclear

Realistic uptake of new fuels incl nuclear

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ECA: The largest challenge yet; but good for the local air quality

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2015 2020 20252016

Max 0.10%Sulphur in fuel for ECAoperations

Tier-3 NOxstandard for newbuildsin ECA operations(- 70%)

Max 0.50%Sulphur in fuel for worldwideoperations

2021?

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RISKS:• Market &

Finance• Operational• Technology• Suppliers• Insurers• Yards• Class

2015 2020 20252016




2021?


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• LNG fuel

• HFO+ Scrubber

• Low-sulphur distillate

• LNG fuel

• Exhaust Gas Recirculation, EGR

• Selective Catalytic Reduction, SCR

• LNG fuel

• HFO+ Scrubber

• Low-sulphur distillate

• New solutions?

2015 2020 20252016




2021?

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Share of LNG fuelled newbuildings:

Now: 48 LNG fuelled ships

2020-2022:1000 new LNG fuelled ships5-7 M tonsLNG/year*

*: DNV 2012

2015 2020 20252016




2021?


30.38

38

35

30

0 10 20 30 40

% of worldgross tonnage

Number ofstates

Required for ratification

Required for ratification

Current status

Current status

The ballast water regulation are on the verge of realization. If an additional 6 % of world GT ratify, BW regulations will apply

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4.6%

If additional 4.6 % of world gross tonnage accept regulations, regulations will apply

Ballast Water regulations accepted by 36 states, sufficient for regulation ratification

Current status on ratification of Ballast Water Regulations Comment

%

%

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Years to remember

� 2008

� 2015: ECA

� 2015+: BWT

� 2020-2025: Global Sulphur cap

� 2030: 2x current need for maritime fuels

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ECA compliance options

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Basically 3 options available:

LNG as fuel

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…or fleet redeployment,i.e. give up trading in ECAs…

1

2

3

Scrubbers + HFO

Low sulphur fuel


There are different options for dealing with ECAs, each with unique risk aspects making investment decisions difficult

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The cheapest investment may be the most expensive option in the long-run

LNG Scrubber Fuel switch

Alternative options:

CAPEX,LNG availability,

tank size

CAPEX,corrosion (?)

Unit sizeHigh OPEXover time

Biofuels

Op

tio

nR

isk

Main options for most ships:

Methanol

Battery

Hydrogen

Other fuels?

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0

2

4

6

8

10

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2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

[M

US

D]

Year

Cumulative discounted cost difference compared to baseline [MUSD]

LNG = MGO - 25% LNG = MGO - 40% LNG = MGO - 50%Scrubber + HFO MGO HFO

The business case for the LNG fuelled bulk vessel

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FINANCIAL ANALYSIS

Indicates payback time of LNG investment compared to MGO and HFO + Scrubber

Explanation

Each line represents the additional cumulative costs of the respective configuration compared to baseline (HFO).

LNG has a high investment cost, but depending on the fuel price the operational savings can be significant.

An LNG price of 600 USD/tonne (LNG = MGO – 50%) ensures a payback time of 3.7 years compared to MGO and 4.5 years compared to Scrubber + HFO.


Summary of possible LNG tank locations

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TECHNICAL FEASIBILITY

Option 1 Option 2 Option 3 Option 4 Option 5 Option 6Location Front of

superstructureFront of



superstructureInside

superstructureAft of

superstructureDirection of the tanks

Vertical Vertical VerticalHorizontal

(transverse)Horizontal

(longitudinal)Vertical

# of tanks 1 2 3 3 1 2

Risk and impact on design

Tank entering the cargo area.Superstructure will need to be rearranged.

Tanks entering the engine room area.Engine room and superstructure will need to be rearranged.

Tanks entering the engine room area.Engine room and superstructure will need to be rearranged.

The engine room and superstructure will need to be rearranged.

Will occupy too much of the superstructure.

Not sufficient space for the required tank sizes(maximum 122 m3).

Feasibleoption?

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53 confirmed LNG fuelled newbuilds

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Year Type of vessel Owner Class

2014 Ro-Ro Norlines DNV

2014 Ro-Ro Norlines DNV2014 Patrol vessel Finish Border Guard GL2014 Car/passenger ferry Society of Quebec LR2014 Car/passenger ferry Society of Quebec LR2014 Car/passenger ferry Society of Quebec LR2014 Tug Buksér & Berging DNV

2014 PSV Harvey Gulf Int. ABS2014 PSV Harvey Gulf Int. ABS2014 PSV Harvey Gulf Int. ABS2014 PSV Harvey Gulf Int. ABS2014 Gas carrier SABIC BV2014 Gas carrier SABIC BV2014* Product tanker Bergen Tankers LR2014 General Cargo Egil Ulvan Rederi DNV

2014 General Cargo Egil Ulvan Rederi DNV2014 PSV Remøy Shipping DNV2014 Car/passenger ferry AG Ems GL2014* Car/passenger ferry AG Ems GL2014 Car/passenger ferry Samsoe Municipality DNV2014 Ro-Ro Sea-Cargo DNV2014 Ro-Ro Sea-Cargo DNV2015 PSV Siem Offshore DNV

2015 PSV Siem Offshore DNV2015 PSV Simon Møkster DNV2015 PSV Harvey Gulf Int. ABS2015 PSV Harvey Gulf Int. ABS

Year Type of vessel Owner Class

2015 LEG carrier Evergas BV

2015 LEG carrier Evergas BV2015 LEG carrier Evergas BV2015 Bulk ship Erik Thun LR2015 Container Ship Brodosplit DNV GL2015 Container Ship Brodosplit DNV GL2015 PSV Siem Offshore2015 PSV Siem Offshore2015 Container Ship TOTE Shipholdings ABS

2016 Container Ship TOTE Shipholdings ABS2016 Icebreaker Finnish Transport A. LR2016 PSV Siem Offshore2016 PSV Siem Offshore2016 Chemical tanker Terntank2016 Chemical tanker Terntank2016* Ro-Ro TOTE Shipholdings ABS2016* Ro-Ro TOTE Shipholdings ABS

2016 Car carrier UECC LR2016 Car carrier UECC LR2016 Car/passenger ferry Boreal Transport2016 Car/passenger ferry Boreal Transport2017 RoPax Brittany Ferries BV2017 Container Ship Crowley Maritime DNV GL2017 Container Ship Crowley Maritime DNV GL2018 Container Ship Matson Navigation DNV GL

2018 Container Ship Matson Navigation DNV GL

* Conversion project

Confirmed orderbook

Updated 07.03.2014Excluding LNG carriers and inland waterway vessels


Existing and forecast of global LNG bunkering infrastructure

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Existing Planned (Feasibility study, risk study, proposed locations, pending approval)

Proposed (currently being discussed)

* See detailed map

Europe*

BusanDubai

Singapore

Incheon

Nanjing

Wuhan

Buenos Aires

New York

Fourchon

Tadoussac

Tacoma

Duluth

GaolanHambantota

Turkish strait & Marmara Sea

JacksonvilleShanghai

Zhoushan

Santander

AlgecirasCartagena

ValenciaBarcelonaFerrol

SeattleVancouver

Sarnia

Mississippi river

Australia: Discussions

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ECA compliance options, little more futuristic

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Ships for pure battery operation

� Ships with frequent stays in port and relatively low energy needs

� Ferries, passenger vessels, short sea shipping

� Available port power

� Sufficient charging time, 5 to 10 minutes

� Max 30 minutes crossing and max 20 knots

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The battery in a hybrid ship will assist in powering the electric motors

AUXILIARIES

BATTERY

ENGINES

Photo: Thomas Førde, Stavanger Aftenblad


Battery hybridization – low utilization

Typical Load Profile Diesel Engine - No battery

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Optimal Load Factor

100%

50%

Tid

Optimal Load Factor

100%

50%

Tid

Optimized Load Profile Diesel Engine - Battery

Battery only

Battery only

� Batteries can reduce fuel

consumption, maintenance,

emissions of CO2, NOx, SOx and

particles

� Diesel engines run at optimal

load, when they first run

Battery-only mode

� In waiting situations

� In environmental sensitive areas

� In port

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Alternative fuels - parameters

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Fuel Consumption

(MTOE* in 2010)

Price

($/MTOE)

Flashpoint

(°C)

Heating value

(MJ/kg)

Density

(kg/m3)

Oil-based 4,028

7-8% for shipping

$600 (HFO)

$900 (MGO)

~60° 41.2 (HFO)

42.7 (MGO)

830-985

Natural Gas 2,858

(LNG: 250-300)

$250-$650 -188° 47.1

(LNG: 48.6)

0.763

LPG 275 $700-$750 -104° 46.5 505.4

Methanol 23 $970 11° 19.5 790

Ethanol 58 $950 16.6° 28.4 790

DME 3-5 $990-$1140 -41° 28.4 668

Synthetic fuels 15 N/A >101° 43.2 760-790

Biodiesel 18-20 $1000-$1200 >130° ~37.5 880

Biogas Very low N/A -188° ~48 ~0.76

Hydrogen Very low $1800-$2800 -253° 120.2 0.084

Nuclear 627 ~$450 - - -

Source: DNV R&I*) MTOE – million tonnes oil equivalents


Engine technology and infrastructure

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Source: DNV R&I

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And of course,the good old Energy efficiency focus must still be in place!

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Throughout the project vessel visits, interviews & workshops reveal the performance in 6 areas

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� Fuel quality and quantity� Bunkering procedures� Fuel sampling

� Fuel quality and quantity� Bunkering procedures� Fuel sampling

� Cargo operations� Thruster operations� Ventilation, HVAC, cooling/

freezing, lights, frequency drives� Insulation and heat losses � Misc. consumers

� Cargo operations� Thruster operations� Ventilation, HVAC, cooling/

freezing, lights, frequency drives� Insulation and heat losses � Misc. consumers

� Organizational setup, roles, responsibilities

� Policy, processes and procedures� Communication and training� Reporting, review and follow-up

� Organizational setup, roles, responsibilities

� Policy, processes and procedures� Communication and training� Reporting, review and follow-up

� Hull condition� Propeller condition� Autopilot & rudder� Trim and draft

� Hull condition� Propeller condition� Autopilot & rudder� Trim and draft

� Fleet planning and schedule assessment� Chartering/booking� Voyage execution� Speed management� Port efficiency� Cargo optimization

� Fleet planning and schedule assessment� Chartering/booking� Voyage execution� Speed management� Port efficiency� Cargo optimization

� Main Engine efficiency� Aux Engines efficiency

& utilization� Generator efficiency

� Main Engine efficiency� Aux Engines efficiency

& utilization� Generator efficiency

Management & OrganisationManagement & OrganisationFuel managementFuel management

ConsumersConsumersShip performanceShip performance

Voyage performanceVoyage performance Main and AUX enginesMain and AUX engines

21 March, 2014

Energy Management Advisory

21/03/2014

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DNV GL © 2013 JANUARY 2014JANUARY 2014

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� Prepare for the unexpected, rank risk and consequences also in your daily operations.

� The environmental scrutiny is increasing, andabatement solutions maturing

� Cost-issues are prudent

� Work systematically on energy efficiency initiatives, savings of 2-8% can mean ‘make it or break it’

� Proper purchasing routines is an important part of your cost-control initiatives

Conclusions

INCAT 2013

procurem & finance day henning mohn 20mar14 - · pdf file... dnv r&d 2013/ chryssakis...

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