Retrofit Opportunities for Existing Fleet

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Retrofit Opportunities for Existing Fleet Optimization of Energy Consumption Steen Sander Jacobsen, Head of Fuel Efficiency for Maersk Tankers, Copenhagen March 27th 2014 Slide no. 1

Maersk Maritime Technology - Introduction and Services Newbuilding & Conversion We ensure design, construction testign and delivery of new ships and major conversions throughout all phases of the process Vessel Optimisation We develop and specify technical solutions to increase profitability of existing fleet Performance Management We optimise vessel performance by monitoring and optimising operating conditions Technical Innovation We aim to explore, verify and mature new technological opportunities together with key clients and suppliers. Regulatory Affairs Develop Group Positions, influence developments externally, help identify needs for preparing internally to be compliant Ship Management Support We stimulate best-practise and assist in running the technical vessel management in the safest, most cost and energy efficient manner.

The world is consistently changing... Cost focus is setting new requirements to technical performance and provide opportunities for retrofitting High energy cost, resulting in general need for energy efficiency Overcapacity of tonnage in most ship segments, driving strong competition Newbuilding yards offering ships at relatively low cost High-performance, optimized technology becoming available Speed has significantly reduced compared to original design conditions Retrofitting of existing fleet is an interesting opportunity

Energy Efficiency is all about vessel energy optimisation, Voyage optimisation and Retrofit of new technologies Vessel energy optimization Voyage optimization Technical retrofits Energy management - Aux - Boiler - WHR Base load optimization Voyage planning - Optimum speed - Trim optimisation Voyage execution - Super slow steaming Hull & Propeller Efficiency - Cleanings Engine efficiency Cargo capacity - Lashing systems Retrofit - Bulbous bow - Energy efficiency devices - Base load consumers - Capacity boost 2013 Slide no. 4

ECO-Retrofit has been applied to improve energy efficiency of existing fleet ME Derating ME Autotuning TC cut-out Frequency control of SW pumps Harbour circulation pump Auxiliary Economizer Engine room ventilation Anti-Fouling Etc. Maersk Maritime Technology Slide 5

distributio n Impact of technologies is analysed and evaluated Vessel Data - Power table - ME SFOC curve - Auxiliary power production - Base load - Reefer load - Added resistance in waves - etc. Schedule data - Speed & loading profile - Sea passage and harbour - ECA / non-eca distribution Impact of technology Evaluation - Fuel savings - NPV - Pay-Back - Etc Events 0 0,06 0,04 0,02 0,00 Vessel speed, [knots] 5 230 15 10 220 20 210 30 25 Normalised operational profile 6 8 10 12 14 16 18 20 22 24 26 0 1 2 3 4 5 6 7 8 9 10 11 12 BF 8 28 SFOC - Sulzer 2-stroke 12RTflex96C (Lindø G & M) 10 12 14 16 Draught, [m] 2010 weather distribution 2010 - Weibull fit 0,04-0,06 0,02-0,04 0,00-0,02 SFOC Fuel - Fuel grades - Fuel prices (and forecast) 200 190 180 170 0 10000 20000 30000 40000 50000 60000 70000 ME Power, [kw] Maersk Maritime Technology

Most vessels, today typically operate at much lower engine loads than design Typical engine load profile for a large containership in 2008 and 2012. Source: Maersk Maritime Technology Maersk Maritime Technology

There is a large potential in upgrading the existing fleet as a good alternative to procuring new ships The global fleet of containerships include more than 5000 vessels with several hundred BUSD tied up in assets. Most ships are relatively modern but not necessarily optimised for current network speeds, new technologies and fuel cost Retrofitting of existing fleet is a viable alternative to newbuilding, and offer good potential for improvements by optimising to current operational conditions. Cargo Capacity: Supply and Demand Capacity Utilisation Propulsion and machinery Anti-fouling drag reduction Bullbous bow optimisation Slide no. 8

Verification of savings are very important but at same time rather complex due to varying operating conditions Modification of bow Maersk Maritime Technology

Retrofit can bring the performance of existing ships far at reasonable investments Example: Stepnica Class Eco-Retrofit Business Case Stepnica Eco-Retrofit: - Machinery, bulbous bow, capacity boost. - 18% reduction in index

In April 2013 Maersk Tankers completed a comprehensive test campaign of various retrofit technologies for a VLCC. With the technologies annual savings of around 8% has been demonstrated Slide no. 11

Technologies has been tested and verified on-board Maersk Ingrid Mewis duct PBCF VTI turbo-charger optimisation Frequency control of SW pumps Frequency control of engine room ventilation LED lighting Auxiliary economizer Propulsion Improvement Devices Auxilliary systems Maersk Maritime Technology

Benefit tracking and technology verification is very important for making the right decisions Baseline PBCF Mewis Duct Mewis Duct + PBCF Trial 01 Trial 02 Trial 03 Trial 04 page 13

Banker s Day Page 14 Maersk Tankers is retrofitting VLCCs towards top performance to save millions Fuel Efficiency Index for VLCCs Index Fuel/NM at full load VLCC at 12.5 knots

Joint Industry Research Project focussing on Radical Retrofit opportunities MMT and Maersk Line in joint research project with the Technical University of Denmark and MAN Diesel & Turbo. Objective is to reduce the energy consumption of containerships by 10-20%.

Radical Retrofit The industry challenge is to adjust existing fleet to new operational condition and at same time meet energy efficiency of new ECO-designs For this, more radical modifications may be required, ie. - Radical de-rating of main engine - Change of propeller - Modification of bow -? Maersk Maritime Technology

Summary and Conclusions Existing ships can be upgraded to high energy efficiency with high certainty on the marginal return-on-investment. Retrofit is a real alternative to buying new, even if newbuilding prices are low and promises of energy efficiency are high Various interesting retrofit technologies already exist, but more radical solutions must be considered to achieve significant fuel savings Slide no. 17