tote lng conversion and construction filetote vessel fuel/bbl. crude oil/bbl. marine diesel oil/bbl....
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TOTE LNG Conversion and Construction
Saltchuk Resources, Inc.
Niche Ro/Ro Liner Service to Alaska Speed-10 hour port turnaround Flexibility - all equipment types Vehicles
• Dedicated service
between Washington and Alaska
• Weekly Round Trip
Dedicated Service
The Problem
The North American Emission Control Area (ECA)
Coming Soon To Puerto Rico
Possible Methods of Compliance
• Do nothing: Current pricing for compliant fuel is an increase of 40% over current fuel, more in 2015
• Install exhaust gas cleaning system: Scrubbers use existing fuel with added costs
• Convert to Natural Gas: Potentially lower fuel costs, meets current and future emissions requirements, cleanest of all options
The Solution
Convert to LNG • Secure, reliable fuel source • Technically feasible with our vessels • Cost saving over all other solutions • Provides greater emissions benefits • Provides greater community opportunities • Began analysis of LNG in 2010
Fuel Cost Comparison
104 103 103 103 106 106 103
102
96 98 105
109 111 108 103
106 105 104
102 102 102 101 101 103 103
102
108 109 112 113 113 108 109 108 110 110 110 112 113 115 114 117 117 118 118 119 118 118 117
113 115 114 115 113 110
114 107
103 103 105 106 105
101 97
103 105
107 108 105
95 98 98 103
105 103
102 96 94
100 103
104 104
106 98 97
100 101 100 100 101 103 102 101 100 98 100
103 101 109 107 107 108 107 105 104 104 105
106 98
95
149 143 146 146
142 140 140
132 126
132 136 134 135 134
130 135 137
142 141 137 137 135 133 140
144 143 142 145 145
133 131 130 126 127
131 135 136 133 130 133
138 141
149 154 154 155 156 156
160 158
151 150 152 149 148
25 24 25 25 27 27 26 24 25 24 25 25 25 23 24 23 23 24 24 23 23 21 21 21 24 24 24 22 22 21 24 23 21 20 19
18 19 17 17 16 16 17 17 14 13 14 13 12 12 11 10 11 13 13 15
0
25
50
75
100
125
150
175
5/25/95/165/235/306/66/136/206/277/47/117/187/258/18/88/158/228/299/59/129/199/2610/310/1010/1710/2410/3111/711/1411/2111/2812/512/1212/1912/261/21/91/161/231/302/62/132/202/273/53/123/193/264/24/94/164/234/305/75/14
$/B
BL
Week Starting
2011 - 2012 Fuel Cost Comparison - $/Bbl
TOTE Vessel Fuel/Bbl Crude Oil/Bbl Marine Diesel Oil/Bbl Natural Gas BOE
EPA & USCG Partnership
• Aug. 2012 - limited waiver from North American ECA during conversion to LNG
• First permit issued under Annex VI, Reg. 3 • Required completion Sept. 2016
Shorepower
Orca Class Inboard Profile
The Conversion Project
• Procure a supply of LNG • Convert the vessel to operate on LNG • Receive regulatory approval to fuel and
operate on LNG • Improve public perception of LNG
LNG
The Future of Domestic Shipping
Low Cost Energy • LNG costs 41% less than IFO-380
Stable Pricing • Large fixed capital costs
• Low feed-stock costs • Domestic sourcing reduces
volatility from geopolitical impacts
Clean • Sulfur Oxide (SOx) emissions are
95% lower than ECA limits • Reduces SOx, Particulate Matter (PM) and Nitrous Oxide (NOx) by
almost 100%
Safe • Zero fatalities over the
40-year life of the industry
Benefits of LNG
Project Overview • First conversion in the world
of vessels of this type • Eight MAN engines will be
converted to dual fuel diesel – LNG propulsion
• Exchange four auxiliary engines for four dual fuel engines
• 4 year timeline • Estimated $80+ million
budget for vessel conversion
New Auxiliary Diesel Generators
Structural components built during regulatory dry docking in Q1
2014
Use of regularly scheduled single-
sailing weeks
LNG available for in-port use in
Q2/3 2014
Phased Project 35-40% of work will be conducted underway, limiting the
out of service time to regular dry docking schedule
Shore Side Capacity
• Project helps establish long-term supplies of LNG for use by other sectors of the transportation industry in the Puget Sound
Gas/LNG Supply
Puget Sound Energy is preferred provider
• Local company with good reputation • Cost of capital and returns are based on
utility model • LNG pricing model is built up from cost,
not down from the price of diesel
Breaking Barriers
• Environmental benefits will extend throughout the region
• Break through supply barriers that have constrained the growth of LNG in the transportation industries
New Vessel Project
New Vessel Project
• Replace existing steam vessels with new motor ships
• First container ships using LNG as fuel, not the first cargo ships fueled by LNG
• First application of slow speed, diesel cycle dual fuel propulsion engine
• Providing all of the benefits previously mentioned
New Vessel Design
Project Drivers
• Need to replace existing vessels • Emission control area coming to Puerto
Rico, eventually to the entire Caribbean • 2020 world wide fuel sulfur limits for
vessels of .5% (1/2 percent) • 2016 tier III engine requirements limiting
NOX for large displacement marine engines
