LNG as fuel: Its future from DNV\'s point of view

1. The future of LNG as fuel
Technical and infrastructure aspects and considerations
Lars Sørum
Director
DNV

2. CONTENTS
BENEFITS OF LNG AS A FUEL
CURRENT BARRIERS
INNOVATIONS
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3. Areas affected by MARPOL 73/78 Annex VI
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4. The effect of implementing Tier III requirements on NOx
Source; CNSS
Volker Matthias
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5. Environmental benefits of natural gas as a fuel
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6. 30 LNG fuelled ships in operation worldwide
Ships in operation
Year Type of vessel Owner Class Year Type of vessel Owner Class
2000 Car/passenger ferry Fjord1 DNV 2012 Car/passenger ferry Fjord1 DNV
2003 PSV Simon Møkster DNV 2012 PSV Eidesvik DNV
2003 PSV Eidesvik DNV 2012 PSV Olympic Shipping DNV
2006 Car/passenger ferry Fjord1 DNV 2012 PSV Island Offshore DNV
2007 Car/passenger ferry Fjord1 DNV 2012 General Cargo Nordnorsk Shipping DNV
2007 Car/passenger ferry Fjord1 DNV
2007 Car/passenger ferry Fjord1 DNV
2007 Car/passenger ferry Fjord1 DNV
2008 PSV Eidesvik Shipping DNV
2009 PSV Eidesvik Shipping DNV
2009 Car/passenger ferry Tide Sjø DNV
2009 Car/passenger ferry Tide Sjø DNV
2009 Car/passenger ferry Tide Sjø DNV
2009 Patrol vessel REM DNV
2009 Car/passenger ferry Fjord1 DNV
2010 Patrol vessel REM DNV
2010 Car/passenger ferry Fjord1 DNV
2010 Patrol vessel REM DNV
2010 Car/passenger ferry Fjord1 DNV
2010 Car/passenger ferry Fjord1 DNV
2010 Car/passenger ferry Fosen Namsos Sjø DNV
2011 PSV DOF DNV
2011 Chemical tanker Tarbit Shipping GL
2011 Car/passenger ferry Fjord1 DNV
2011 PSV Solstad Rederi DNV
Updated 06.08.2012
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7. 32 confirmed LNG newbuilds
Confirmed orderbook
Year Type of vessel Owner Class Year Type of vessel Owner Class
2012 PSV Eidesvik Shipping DNV 2014 Car/passenger ferry Society of Quebec ferries
2012 Ro-Ro Sea-Cargo DNV 2014 Car/passenger ferry Society of Quebec ferries
2012 Ro-Ro Sea-Cargo DNV 2014 Tug Buksér & Berging DNV
2012 High speed RoPax Buquebus DNV 2014 PSV Harvey Gulf Int. Marine ABS
2012 PSV Island Offshore DNV 2014 PSV Harvey Gulf Int. Marine ABS
2012 PSV REM DNV 2014 PSV Remøy Shipping
2012 Car/passenger ferry Torghatten Nord DNV
2012 Car/passenger ferry Torghatten Nord DNV
2012 Car/passenger ferry Torghatten Nord DNV
2012 Car/passenger ferry Torghatten Nord DNV
2012 Harbor vessel Incheon Port Authority
2013 RoPax Fjordline DNV
2013 RoPax Fjordline DNV
2013 General Cargo Eidsvaag DNV
2013 Car/passenger ferry Norled
2013 Car/passenger ferry Norled
2013 Ro-Ro Norlines DNV
2013 Ro-Ro Norlines DNV
2013 RoPax Viking Line LR
2013 Tug Buksér & Berging DNV
2013 PSV Harvey Gulf Int. Marine ABS
2013 PSV Harvey Gulf Int. Marine ABS
2013 Patrol vessel Finish Border Guard GL
2013 Car/passenger ferry Society of Quebec ferries
2013 Tug CNOOC
2013 Tug CNOOC
Updated 06.08.2012
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8. Barrier: Lack of suitable infrastructure
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9. Barrier: Regulatory Frameworks
LNG supply infrastructure LNG bunkering options LNG received as shipping fuel
LNG truck Truck-to-ship
loading station LNG ISO container
LNG
Onshore LNG
LNG tank ADR
Port State Legislations Receiving
LNG Accreditation Vessel
Environmental permit Terminal
Safety case (Seveso)
Building permit
Jetty-to-ship
IMO IGC LNG
Port State Legislations
Class Rules Bunkerbarge
LNG
Flag state
Bunkerbarge Receiving
Port State Vessel IMO IGF
Accreditation Class Rules
Flag state
Ship-to-ship
LNG FSU
LNG
Bunkerbarge
IMO IGC Code ISO Guideline (draft by end 2012) Receiving
Class rules Local bunkering procedures Vessel
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10. Barrier: Development of bunkering practices
Gas fuelled ships: Port and bunker operations:
DNV class rules published 2001 Limited experience and documentation
Norwegian Maritime Directorate has rules Standards do not cover all bunkering
Interim Guidelines for IGF (International Safety Code Development under way:
for Gas Fuelled Ships), 2010 - STS Gothenburg (Got LNG)
- “Bungas” – Port of Hamburg
- Rotterdam JIP
- Singapore JIP
- ISO project
- More initiatives
underway…….
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11. Ongoing: ISO standard on LNG bunkering
DNV proposed the topic to ISO TC67/WG10 (ISO workgroup for the LNG industry)
Objective: Develop standard for LNG bunkering equipment and procedures
30+ companies and regulators are participating
- 15 countries.
- 8 oil, gas and energy companies
- 2 regulators
- 3 shipping companies
- 7 equipment providers
- Sigtto and 3 class societies
6 work meetings have been held
Ambition is to publish draft standard by the end of 2012
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12. With a predicted 1000 ships fuelled by LNG in 2020 – the
global bunker demand is equivalent to 4-7Mill Tons of LNG
Europe & the Baltic Sea
1.4 – 2.2 million
China
0.3 – 0.8 million Japan & Korea
0.07 – 0.09 million
North America 0.3 – 0.5 million
0.9 – 1.4 million Middle East & India
0.3 – 0.7 million
SEA
0.4 – 0.7 million
South America
Australia & NZ
0.3 – 0.4 million
0.1 – 0.2 million
LNG Bunkering demand 2012
LNG Bunkering demand 2020
Equivalent to 4 -7 million tons of LNG
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13. Innovation – Technical, Commercial and Operational
• Which bunkering operations
• Price gap between LNG &
fit your needs? 2-6 USD/mmbtu other fuel types?
• What kind of small-scale LNG 10-11 USD/mmbtu
• What will be the price of
distribution fits your needs? 15-17 USD/mmbtu
LNG in the future?
• What are the hazards during
• What kind of incentives
bunkering operations? Government LNG price gap globally
LNG bunker available for the players?
station-to-ship
LNG Port • Will regulations
supplier authority & standards be
ready in time?
Ship-to-ship LNG • How to convince
bunker public that LNG
is safe?
Truck-to-ship LNG DNV rules & STS bunkering
bunker procedure
Terminal LNG as • How much
• How to solve Ship
operator investment to
situation of
supplying LNG
a fuel owner be made to
retrofit
from large scale
• What are
LNG terminals?
Bit Biking retrofit hazard & risks
• How to ensure
during ship
Small LNG carrier at large reliability of • What is the best design &
scaled LNG terminal infrastructure, strategic investment – development?
equipment? newbuild or retrofit?
Financial Engine
• Is bunkering facility
• Will demand be institution manufacturer available outside
large enough?
ECA zones?
Tadoussac
Duluth
Europe*
• Will funding be
Incheon
Tacoma New York
Shaanxi
• How to identify the
Fujairah Tokyo Bay
Fourchon Hubei Busan
available? Singapore
right locations for
Buenos Aires
bunkering?
Bass Strait
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14. Summary
LNG is the preferred solution to meet environmental requirements
The technology is proven, 30 ships in operation and 32 new ships contracted
Barriers include lack of suitable infrastructure, regulation and bunkering practices
These barriers are currently being broken
Regulations and working practices are now being developed for LNG fuelling
infrastructure
To realise the potential for LNG as fuel is dependent on Innovation, not only
technical or operational (procedures) but also commercial
The construction of new LNG bunkering infrastructure needs to begin now
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15. Safeguarding life, property
and the environment
www.dnv.com
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