LNG Shipping Market

© 2018 Bureau Veritas Marine & Offshore 1 S. Korea – September 3, 2019

LNG Shipping Market

IGU Joint Meeting of LNG and Transmission Committee

September 3, 2019 – Gyeongju (S.Korea)

Carlos GuerreroGlobal Market Leader - Tankers & Gas CarriersBureau Veritas Marine & Offshore


ORIGINS

Foundation

of the “Information

Office for Maritime”

MODERN INDUSTRIAL

REVOLUTION

New activities to accompany

industrial expansion

TECHNICAL

PROGRESS

Active role in modernizing ship

building standards

for classification of vessels

Reinforcement of expertise

in construction and energy

efficiency

TECHNICAL

PROGRESS

Inspectorate and Maxxam

joined BV group to develop

the Commodities business

and in high-potential markets

Expansion of the geographical

footprint in the construction

and consumer products

industries in China

GLOBALIZATION

Development of Certification

& Government services

Reinforcement of the network

with new offices in Africa,

China, the US and in Europe

1828

1920’s

1960’s

2010’s

1990’s

Bureau Veritas - More than 190 years of history


Forecast on LNG TradeSupply and Demand Balance

On short term approx. 30 mmtpa add for 2019 and 2020 (8-10% growth yoy)

Analysts see a path of around 5% growth yoy thereafter

LNG expected to double by 2040 (approx. 650 mmtpa)


A Highly Dynamic LNG Market

LNG Market is evolving and growing� New terminals in Australia, US, Africa and Russia

� New routes (Panama canal, NSR-Arctic, etc)

� Japan, S. Korea, China leading the importers

� Qatar and Australia leading the exporters

� Increasing appetite from new countries (S.E.A, S.A. M.E., etc)

� Quick response to demand with floating solutions (FSRU/FSU)

� New markets (small scale and LNG as bunker fuel)

362 373 372386

415445

472

504

535

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017 2018

2014: Longest voyage 13,809 nm2017: Longest voyage 15,605 nm

Data from Clarsons Research + Bureau Veritas stats ( 1st January 2019)

Fleet evolution end of year. Active fleet of any size

Courtesy of LNG World Report - IGU


Fleet removal. Assumed 5 ships/year removed by:� Demolitions (number started to growth in 2018)

� Conversions (several ongoing and under discussion mainly for MOSS 125k)

Fleet additions. Assumed:� 2019 to 2021. Average fleet deliveries ~ 40 ships/year (some slippage from 2019 to 2020 and 2021)

� 2022 to 2023. Average fleet deliveries ~ 35 ships/year

� 2019 new orders ~ 60-65 LNGc (deliveries 2021, 2022 and 2023)

� 2020 & 2021 new orders to slow down, otherwise pressure on charter rates may rise

Net Fleet Evolution and ForecastLNGc Over 40,000 m3 (active fleet)

2 16 33 28 30 27 524 3 3 3 2 2 5

348 361 390 415 442 466 513 548 583 618 648 678

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Deliveries No. Demolition No. Net Fleet No. Forecast Fleet No.


Present Challenges and OpportunitiesSpecific Solutions for Standard and Niche Markets

Standard LNG carriers. Charterers demand full flexibility� Low BOR / Efficient Propulsion / Reliquefaction

� High terminal compatibility (ships design)

� Ship operations evolving. Reloads, partial deliveries, STS, etc

Part of demand driven by fast track projects� FSRU and FSU

� Conversions will also remove tonnage (double advantage)

LNG as fuel for marine applications� IGF fleet growing at a low pace for the moment

� Small scale and LNG bunkering solutions

� Demand negligible on short term (2-3 mmtpa expected in 2020)

Swift from coal/oil to gas for power plants� Floating power plants in combination with FSU and FSRU soon using LNG

� LNG to power applications. Small scale S.E.A. and Caribbean sea


CCS - Some Stats of the Standard LNGc FleetLNG carriers over 40,000 m3 (as of Jan 2019)

385

1253

CCS Fleet in number of ships

Membrane

Type B - Moss

Type B - IHI

Membrane systems

Old systems (10 ships)

� Gaz Transport 85&88

� Technigaz Mark I

� GTT CS1

Modern systems (375 ships)

� GTT NO96

� GTT Mark III

� Korea Gas KC-1

104

10 3

CCS On order in number of ships

Membrane

Type B - Moss

Type B - IHI

Membrane systems

GTT systems

� GTT NO96 (47 at DSME and Hudong-Z.)

� GTT Mark III (57 at HHI/HSHI, SHI and Imabari)

Type B systems

� Moss (10 at KHI and MHI)

� IHI SPB (3 at JMU)


Propulsion - Some Stats of the Standard LNGcLNG carriers over 40,000 m3 (as of Jan 2019)

80

33

22

Propulsion on order in number of ships

2-Stroke

DFDE

Non Disclosed

Steam

2-Stroke DF

� MEGI (36 ships)

� XDF (44 ships)

DFDE (TFDE)

� Mainly MHI, KHI and Hudong-Z.

256

49

170

38

Propulsion Fleet in number of ships

Steam

Diesel

DFDE

2-Stroke

2-Stroke DF

� MEGI (31 ships by DSME, SHI, HHI and Imabari)

� XDF (8 ships by SHI and HHI)

Modern steam turbine systems (18 ships)

� MHI, KHI and HHI


Tailor Made vs. Integrated Systems

� DSME XDF and MEGI MRS (up to 3.8 t/h) � Babcock ecoSMRT(R)� Air Liquide Turbo Brayton sub-cooling system

Reliquefaction and Subcooling SystemsAdditional Flexibility – Choosing the Fuel

Courtesy of DSME

ME-GI with MRS


BV World BV Share

Fleet 95 559 ~17%

BV World BV Share

Orderbook 27 144 ~18,75%

BV holds 20% of world 2018 orders

Innovative LNG carriers at the core of BV

LNG carriersBV at the Core of the Business

Solutions in line with client’s needs� New propulsion and containment systems

� Regasification and storage ships (FSRU/FSU)

� New routes: Arctic LNG carriers

� Small scale and LNG bunkering

� Multipurpose gas carriers

155,000 m3 LNGc

HHI for Dynagas (2013)

Data from Clarsons Research + Bureau Veritas stats ( 1st March 2019)


Classification and SolutionsThe BV Scope of Work

GAP analysis. IGC Code

� Free access document for the industry stakeholders

� Deep involvement in IACS and IMO for the ongoing discussions

Comprehensive List of Solutions (Provided by BV Solutions)� Ship’s energy efficiency services� Structural assessment including ice reinforcement� Vibration and noise analysis� Shaft alignment� Emergency response services� Condition assessment programs and life extension programs� Sloshing studies� Risk analysis

Classification Rules & Flag Delegation


182,000 m3 LNGc

KHI for K-LINE (2018)

BV in Expert Shipyards

180,000 m3 LNGc

DSME for MOL (2018)172,000 m3 ARC7 LNGc

DSME for Dynagas (2019)

180,000 m3 LNGc

SHI for SK Shipping (2017)

170,000 m3 LNGc

HHI for SCI&J3 (2016)

160,000 m3 LNGc

STX for Alpha Gas (2015)

180,000 m3 LNGc

SHI for SK Shipping (2017)

Largest ever and first ever DFDE Moss type

First ever XDF & largest Mark III 4 tanks

First XDF at DSME Largest 4 tanks NO96


SHI / SK Shipping

2 x 180,000 m3 LNGc

� Largest 4 tanks Mark III Flex

� First XDF ever

� 2 x 6X62DF

� No Reliq

� Optimized hull form (CFD - Hydrocean)

� SEECAT tool

� Comparison XDF / MEGI / DFDE

Item Propulsion System

Consumption

(tons)DFDE HPLS LPLS

GCU 187 290 228

FBOG 978 690 738

NBOG 2,633 2,633 2,633

Total Gas 3,424 3,032 3,143

Pilot fuel 32 150 65

Total CO2

10,019

(Base)

9,549

(-4.7%)

9,449

(-5.7%)


DSME / MOL

1 x 180,000 m3 LNGc

� Largest 4 tanks GTT NO96

� First XDF for DSME

� Tier III compliant in gas mode

� Zero GCU operation

� New full reliquefaction system (FRS) ~ 3.1-3.8 t/h

� Optimized hull form

� Combined GCU/IGG

I ��HULL ��MACH Liquefied gas carrier, -dualfuel, ESA,Unrestricted Navigation, ��Veristar-Hull CM DFL 40 years,CPS(WBT), ��AUT-UMS, MON-SHAFT, INWATERSURVEY,��SYS-NEQ-1 , CLEANSHIP, BWT, LI-HG-S3, ERS-S,GREENPASSPORT


PC3 (Arc7) LNGc Dual class BV/RMRS (DSME to SCF, MOL, Teekay and Dynagas)

� FID in 2012

� 15 ships for YAMAL LNG terminal

� Membrane ships NO96 with DFDE propulsion

� Capacity and flexibility to call different terminals

� Prepared for operation down to -51 Celsius

YAMAL LNG

IN SERVICE ARCTIC LNG CARRIERS (end 2018)

CHRISTOPHE DE MARGERIE

BORIS VILKITSKY

FEDOR LITKE

EDUARD TOLL

VLADIMIR RUSANOV

VLADIMIR VIZE

RUDOLF SAMOYLOVICH

GEORGIY BRUSILOV

Risk HAZard IDentification

� Marine HAZID 2011� PROCAL risk analysis� Shipyards Arctic LNGc design

Ice Hazards

Selection of containment system

Selection of propulsion system

Winterization

� Navigation in ICE, structural analysis� IceSTAR combined with FEM analysis

� Accelerations for ice conditions


BV is pioneering and leading class society

� BV has become leader on classification of FSRU andassociated services for shipowners, shipyards and otherstakeholders

� First newbuilt FSRU in 2005

� The largest ever (263,000 m3)

� Services to the industry to offer 2nd party assessment

� BV leader in the development of specific notations,regulations and tools

12 BV ClassIn Service

Dedicated Rules and Tools

BV ClassDeep involvement in FS(R)Us

Regasification notation “RV” developed

Classification of the first newbuilt FSRU“EXCELSIOR”

Classification of the 173.400 m3 FSRU“EXPERIENCE”

“REGAS” notation replaces “RV”

New set of Classification Rules NR.645

Classification of the largest ever FSRU

2005

2014

2017

Guidelines for the conversion of LNGc intoFSRU or FSU (NI.655)

2018


Largest FSRU ever built (DSME / MOL)

� MOL FSRU Challenger - 263 000 m3 capacity (Q-Max)

� 5 cargo tanks NO96 membrane system

� Extensive structural and sloshing analysis

FSRU’s at SHI and HHI with BV

� HHI / Turquoise 170,000 m3 – just delivered

� Hi-ReGAS System

� SHI / PT Jawa Satu (Indonesia) signed in 2018

MOL FSRU Challenger & Other FSRU’s on Order


Supporting STS LNG Bunkering

NR.620 “LNG Bunkering Ship” notation� Additional notations (optional) cover key aspects

� RE: Recovery of LNG

� Initial-CD: Cooling down

� IG: Inert gas supply

� BOG: Boil off gas management

� Specific assessment for LNG bunker systems

� Flexible hoses plus cranes, transfer arms or a combination

� Assessment Bureau Veritas rule NR.620 (section 4) / Risk analysis

LNG bunkering guidelines ( NI.618 / IACS / SGMF )

Risk analysis full LNG as fuel chain4

2

1

1

LBV Fleet in service

BV (5,100+5,800+660+7,500 m3)

LR (6,500+7,500 m3)

ABS (2,200 m3)

DNV GL (180 m3)

BV Class LNG Bunkering Vessels & BargesName / Yard Cap. (m3) StatusCORAL METHANE 7.500 Converted / In serviceENGIE ZEEBRUGGE 5.100 Delivered / In serviceCORALIUS 5.800 Delivered / In serviceOIZMENDI 660 Converted / In serviceBUNKER BREEZE (*) 1.200 Delivered / In serviceFLEXFUELLER 1.480 On order / 2019FLEXFUELLER II 1.480 On order / 2020LNG London 3.000 On order / 2020Hudong-Z. 18.600 On order / 2020Damen Yichang 6.000 On order / 2020Keppel Nangtong 5.800 On order / 2020Sembacorp 12.000 On order / 2021(*) LNG bunkering ready


The 1st Ever Newbuilt LNG bunkering ship…

2 x Type C tanks 5.100 m3 + DF

� Project development started in 2012

� HAZID of the bunker vessel operation in the port of Zeebrugge - March 2013

� Classification at HHIC in 2014 & delivery in February 2017

� HAZOP of LNG transfer system in order to support its qualification as per BV NR620

� Complete assessment of the transfer system as per NR.620

5.100 m3 LNG bunkering vessel “ENGIE ZEEBRUGGE” built at HHIC - Courtesy of ENGIE


MOL 18,600 m3 LNG Bunkering ship under construction at Hudong (China)� Ship chartered by TOTAL

� Cargo capacity as per client request (ultra large container ships dualfuel for CMA-CGM)

� 2 x Mark III Flex membrane cargo tanks / No filling restrictions. Sloshing assessment

� DF engines / DE propulsion

� Reliquefaction system

� High manoeuvrability

� High bunkering rate

� Delivery date Q1 2020

… and The largest LNG bunkering ships

MOL 12,000 m3 under construction at Sembcorp (Singapore) also with GTT technology


The first ever ethane fueled ships

� Dragon Series built in Sinopacific and Jiangsu New Yangzi (8 ships)

� One of the largest multipurpose gas carriers in service

� 4-stroke main engines Wartsila 50DF (ethane)

� Large bilobe type C tanks (27,500 m3 total volume)

Multipurpose Gas Carriers

Coral Methane built by Remontowa for Anthony Veder

(2009)

Ineos Insight built by Sinopacificfor Evergas (2015)

First multi-purpose gas carrier. Upgraded forbunkering operations

� Size (7,500 m3) very suitable for bunkering purposes

� Specific bunkering transfer system

� Sub-cooling system Air Liquide (0,5 t/h)


BV at the forefront and ready to support

� Mark III Flex + (December 2017)

� NO 96 Flex (September 2018)

� CCS crossing (filling limits vs. vapor pockets)

� NO96 pressurization system evolution

� Reduced cooling down

� Application of the latest CCS technologies for PC3

Assessment of the Latest Technologies

GTT new technologies and evolutions

Modern Systems� 2 Stroke HP and LP solutions (ME-GI and XDF)

� FGSS. 6-stage cryostar, Burkhardt, etc

� Reliquefaction systems (Air Liquide, ecoSMRT®, etc)

� Regasification systems (experience with DSME, SHI and HHI)


Significant LNG trade growth & enlarged buyers club (Asia and Europe to lead)

Average voyage distance key in the equation of future LNGc demand

LNGc: the backbone of global LNG infrastructure

Modern standard LNGc designs target full flexibility

Growing path for niche markets (FSRU/FSU, LNG to power, LNG bunkering)

Bureau Veritas fully skilled and prepared to assist (Class and Services)

Conclusions


Thank YouContact:

Carlos [email protected]

+33 640 177 982

Documents

LNG Shipping Market