Stefano Bertilone General Manager Greece, Middle East and Africa LNG Eco - nomical aspects BIMCO, Dubai April 2014
LNG as marine fuel The market currently does not exist An effective mechanism to create such a market is needed The capital involved has to cover investments for : new LNG fuelled Fleet existing ship retrofit logistic infrastructures Not all existing infrastructures are fit to serve the LNG ship related market
Market start up Four Main Actors Shipowners New buildings & retrofits Shipbuilders & Makers Strategic view Regulations Authorizations Governmental Authorities Gas supply & pricing Infrastructure develop. Management of logistic Gas providers
LNG price Price highly dependent on the considered country. Difference: from 3 to 19 $/MMBtu. However The difference between U.S. and Asian gas is poised to drop by more than 60 percent by 2020. Source Bloomberg Jan 2013
LNG price 650 USD/t (=15.3 USD/mmBTU) for HFO. 900 USD/t (=21.2 USD/mmBTU) for MGO. 13 USD/mmBTU for LNG (considering 4 USD/mmBTU + small scale distribution costs).
Financial Issues Medium Range 2 (MR2) 50,000 dwt prepared by: banchero costa research
$/day 50 MR2 Product Tanker - Newbuilding Prices 40 +8.5 Mill $ 30 20 10 0 Standard Unit Dual Fuel prepared by: banchero costa research
$/day 12,000 MR2 Product Tanker - Capital daily Cost * 10,000 8,000 +2,000 $/day 6,000 4,000 2,000 - Standard Unit Dual Fuel *Assuming 100% financed, swap 20 yrs + 3.5% margin, annuity repayment 20 yrs to zero. prepared by: banchero costa research
$/day 12,000 MR2 Product Tanker - Opex 10,000 8,000 +1,300 $/day 6,000 4,000 2,000 0 Insurance Maintenance Crewing Others Total Opex Standard Unit Dual Fuel prepared by: banchero costa research
$/day 25,000 MR2 Product Tanker - Capital Daily Cost + OpEx 20,000 +3,300 $/day 15,000 10,000 5,000 - Standard Unit Dual Fuel prepared by: banchero costa research
Mill Usd per Year Dual Fuel Performance Vs. Standard Unit Days Trading ECAs 4 3 (basis 50,000 dwt Produtc Tanker) LNG Prices $/mmbtu 11 2 1 13 15 17 0-1 -2-3 % days trading in ECAs prepared by by: banchero costa costa research research - 10
Dual Fuel Performance Vs. Standard Unit Days Trading ECAs Dual Fuel Hypothetical ECA Trade Rotterdam New York Amsterdam Huston Load Port Discharge Port Total miles In ECAs Days In ECAs Total days In Port % Rotterdam New York 3282 1602 5.13 10.52 4 49% New York Huston 1900 1752 5.62 6.09 2 92% Huston Amsterdam 5043 1357 4.35 16.16 4 27% 15.10 32.77 10.00 35% prepared by by: banchero costa costa research research - 10
Dual Fuel Performance Vs. Standard Unit Days Trading ECAs Product Tanker Trade West of Suez Rotterdam New York Amsterdam Huston Fujairah Aruba Lagos Load Port Discharge Port Total miles In ECAs Days In ECAs Total days In Port % Fujaira Rotterdam 6032 419 1.34 19.33 4 7% Rotterdam Lagos 4141 419 1.34 13.27 4 10% Lagos Rotterdam 4141 419 1.34 13.27 0 10% Rotterdam New York 3282 1602 5.13 10.52 4 49% New York Huston 1900 1752 5.62 6.09 2 92% Huston Aruba 1774 381 1.22 5.69 2 21% Aruba Huston 1774 381 1.22 5.69 4 21% Huston Amsterdam 5043 1357 4.35 16.16 4 27% 21.57 90.02 24.00 19% prepared by by: banchero costa costa research research - 10
Dual Fuel Performance Vs. Standard Unit Days Trading ECAs Product Tanker Trade West of Suez Rotterdam New York Amsterdam Huston Fujairah Aruba Lagos Load Port Discharge Port Total miles In ECAs Days In ECAs Total days In Port % Fujaira Rotterdam 6032 2522 8.08 19.33 4 42% Rotterdam Lagos 4141 419 1.34 13.27 4 10% Lagos Rotterdam 4141 419 1.34 13.27 0 10% Rotterdam New York 3282 1602 5.13 10.52 4 49% New York Huston 1900 1752 5.62 6.09 2 92% Huston Aruba 1774 381 1.22 5.69 2 21% Aruba Huston 1774 381 1.22 5.69 4 21% Huston Amsterdam 5043 1357 4.35 16.16 4 27% 28.31 90.02 24.00 25% prepared by by: banchero costa costa research research - 10
Dual Fuel Performance Vs. Standard Unit Days Trading ECAs Med effect on ECA Trade Rotterdam? Fujairah Load Port Discharge Port Total miles In ECAs Days In ECAs Total days In Port % Fujaira Rotterdam 6032 419 1.34 19.33 4 1.34 19.33 4.00 6% Load Port Discharge Port Total miles In ECAs Days In ECAs Total days In Port % Fujaira Rotterdam 6032 2522 8.08 19.33 4 8.08 19.33 4.00 35% prepared by by: banchero costa costa research research - 10
Coal Oil Wind LNG Are we going to experience a similar epochal change? Thank You!