T-401 Martin Lepage LNG: How to Make it Work

T-401 Martin Lepage LNG: How to Make it Work

LNG: How to Make it Work Presented by: Martin Lepage, Eng., Business Development Manager MARI-TECH 2014 "Breaking Waves- A New Marine Era" May 7-9, 2014 Niagara Falls, Ontario

As naval architects and marine engineers, we offer innovative and customized solutions to ship operators and shipyards since 1987. Continually expanding, we are now recognized as a key player in eastern Canada's shipbuilding industry. Our solid reputation is the result of more than 500 successful design and construction projects on a variety of vessels. Martin St-Amant - Wikipedia - CC-BY-SA-3.0

1. Our Experience With LNG

1. Our Experience With LNG 1.1 Feasibility studies for new vessels and conversions.

1. Our Experience With LNG 1.2 Conceptual designs of ferries and LNG bunker vessels.

1. Our Experience With LNG 1.3 Functional design of TBSC Ferries.

2. New Regulations On Air Emissions

2. New Regulations On Air Emissions 2.1 Regulations Description SO X for all vessels and NO X for new vessels International Ship Engines & Fuel Standards: MARPOL Annex VI Emission Control Area Global Year SO X NO X To July 2010 1.5% 2010 1.0% 2015 0.1% 2016 Tier III (after treatment forcing) To January 2011 Tier I (engine based controls) 2011 Tier II (engine based controls) 2012 4.5% To January 2012 3.5% 2020* 0.5% *Subject to fuel availibility study 2018, could be deffered to 2025

2. New Regulations On Air Emissions 2.1 Regulations Description 1st ECA zones, then global. Source: DNV GL

2. New Regulations On Air Emissions 2.2 How to meet regulations? 2.2.1 Low sulphur diesel. 2.2.2 Exhaust gas after treatment systems. 2.2.3 LNG (Liquified Natural Gas).

2. New Regulations On Air Emissions 2.2 How To Meet Regulations 2.2.1 Low sulphur diesel. High cost and expected to increase. Availability. Source: img.cublic.com

2. New Regulations On Air Emissions 2.2 How To Meet Regulations 2.2.2 Exhaust gas after treatment system. High capital cost. Space requirements. Operational cost. Operational challenges. SOURCE: CONCEPT NAVAL

2. New Regulations On Air Emissions 2.2 How To Meet Regulations 2.2.3 LNG (Liquefied Natural Gas). Clean. Inexpensive. Meets all known and upcoming regulations. Very high capital cost. New technical challenges. SOURCE: WWW.GREENOPTIMISTIC.COM

3. The Path For a Green Ship

3. The Path For a Green Ship 3.1 Simple methodology dealing with 3 main concerns. Technical challenges: novelty, space requirements, hazards/safety. Financial concerns due to high capital cost. Bunkering, fuel availability.

3. The Path For a Green Ship 3.2 Stepped approach. 3.2.1. Feasibility study 3.2.2 Conceptual design 3.2.3 Functional design 3.2.4 HAZID/HAZOP 3.2.5 Detailed engineering 3.2.6 Construction 3.2.7 Trials 3.2.8 Service

3. The Path For a Green Ship 3.2 Stepped approach. 3.2.1. Feasibility study 3.2.2 Conceptual design 3.2.3 Functional design 3.2.4 HAZID/HAZOP 3.2.5 Detailed engineering (not treated today) 3.2.6 Construction (not treated today) 3.2.7 Trials (not treated today) 3.2.8 Service (not treated today)

3. The Path For a Green Ship 3.2 Stepped approach. 3.2.1 Feasibility study 3.2.2 Conceptual design 3.2.3 Functional design 3.2.4 HAZID/HAZOP

3. The Path For a Green Ship 3.2 Stepped approach. 3.2.1 Feasibility study 3.2.2 Conceptual 3.2.1.1 Objectives design 3.2.1.2 Important considerations 3.2.1.3 ROPAX Repower 3.2.1.4 RORO Import 3.2.1.5 BULK CARRIER 3.2.3 Functional design 3.2.4 HAZID/HAZOP 3.2.1.6 RORO New Construction 3.2.1.7 ROPAX New Construction

3. The Path For a Green Ship 3.2 Stepped approach. 3.2.1 Feasibility study 3.2.1.1 Objectives 3.2.1.2 Important considerations 3.2.1.3 ROPAX Repower 3.2.1.4 RORO Import 3.2.1.5 BULK CARRIER 3.2.1.6 RORO New Construction 3.2.1.7 ROPAX New Construction 3.2.2 Conceptual design 3.2.3 Functional design 3.2.4 HAZID/HAZOP

3. The Path For a Green Ship 3.2.1 Feasibility Study 3.2.1.1 Objectives Preliminary evaluation of business case. Capital and operational costs (differential, ROI) Early validation of technical viability. Space and other technical constraints Identification of LNG source, availability and budgetary pricing. Comparison with other options.

3. The Path For a Green Ship 3.2.1 Feasibility Study 3.2.1.2 Important points to consider Operation profile: Technical matters: Annual fuel consumption Navigation zone (ECA?) Time in port Regular route Space available Cargo loss Hazardous zones Fuel supply logistic: Distance from liquefaction plant Trucks/bunkering vessel coordination Delivered cost

3. The Path For a Green Ship 3.2.1 Feasibility Study 3.2.1.3 ROPAX REPOWER FAR FROM LIQUEFACTION PLANT Vessel and Application Description Year round operation Long terms contract Tight schedule with quick turn around port Repower + Low sulphur in ECA Repower + Scrubber 500+km from liquefaction plan - - 2 days LNG autonomy with space available 100% in ECA 25+ years old Proposed life extension, 20 years All engines need replacement If done before 2016 If done after 2016 (needs SCR except LNG) Fuel burnt/year, over 5000 Tonnes LNG Repower Cargo loss NO NO NO ROI REF 9 YEARS 5 YEARS Cost over 20 years

3. The Path For a Green Ship 3.2.1 Feasibility Study 3.2.1.4 RORO IMPORT EASY ACCES TO LNG NEEDS 1 WEEK AUTONOMY Vessel and Application Description Year round operation Long terms contract, but revenues not guarantied ½ day turn around in port 60% in ECA Low sulphur in ECA Scrubber Less than 50 km from Liquefaction plant - - 1 week LNG autonomy takes a lot of space LNG Upgrade LNG Repower Cargo loss NO 5% 10% 10% 15 years old Proposed life extension, 20 years Current engine in excellent condition Acquisition before 2016 0 Acquisition after 2016 (needs SCR except LNG) Fuel burnt/year, over 10000 Tonnes ROI REF 2.5 to 5 years 2 to 4.5 years 3 to 6 years Cost over 20 years

3. The Path For a Green Ship 3.2.1 Feasibility Study 3.2.1.5 BULK CARRIER SHORT TERM CONTRACT UNPREDICTABLE ROUTE Vessel and Application Description Seasonal (9 months) Short term contract Various destinations 100% in ECA Overhaul + Low sulphur in ECA Overhaul + Scrubber LNG Upgrade LNG Repower Unpredictable distance from Liquefaction plant RISK RISK Unpredictable availability and cost of LNG RISK RISK 20 years old Proposed life extension, 20 years Current engine needs overhaul Modification before 2016 Modification after 2016 (needs SCR except LNG) Fuel burnt/year: 6000 Tonnes Cargo loss NO 5% 10% 10% ROI REF??? Cost over 20 years RISK RISK

3. The Path For a Green Ship 3.2.1 Feasibility Study 3.2.1.6 RORO NEW CONSTRUCTION 100% ECA CLOSE TO LIQUEFACTION PLANT Vessel and Application Description Low sulphur fuel HF + Scrubber LNG Year round operation Long terms contract Tight schedule with quick turn aroud in port 100% in ECA Less than 5 km from Liquefaction plant New construction Acquisition before 2016 Acquisition after 2016 (needs SCR except LNG) Fuel burnt/year: 6000 Tonnes ROI REF 3 years 2 years Cost over 20 years

3. The Path For a Green Ship 3.2.1 Feasibility Study 3.2.1.7 ROPAX SEASONAL OPERATION SMALL FUEL CONSUMPTION Vessel and Application Description Low sulphur fuel HF + Scrubber LNG Seasonal Operation (6 months) Long terms contract Tight schedule with quick turn aroud in port 100% in ECA 500 km from Liquefaction plant New construction Acquisition before 2016 Acquisition after 2016 (needs SCR except LNG) Fuel burnt/year: 2000 Tonnes ROI REF 7 years 10 years Cost over 20 years

3. The Path For a Green Ship 3.2 Stepped Approach 3.2.1.8 Feasibility study conclusion All cases studied were technically feasible. Most cases studied were financially attractive over a period of 20 years. The bunkering infrastructure and logistic is often challenging.

3. The Path For a Green Ship 3.2 Stepped Approach 3.2.2 Conceptual design. Standard design process with additional equipment and constraints related to LNG propulsion: - Tank, - Tank connection space (cold box), - Gas valve units, - Ventilation with monitoring, - Bunkering station, - Layouts, - etc.

3. The Path For a Green Ship 3.2 Stepped Approach 3.2.2 Conceptual design. Regulatory challenges are being resolved 2009 IMO Guidelines 2010 Class statement guidelines 2012 IGF Code Novelty factor for every parties involved. Everything is carefully analyzed, discussed and questioned before agreement and adoption.

3. The Path For a Green Ship 3.2 Stepped Approach 3.2.3 Functional design Additional systems challenges: - Interpretation of regulation relative to tank location, detailed review - Thermal analysis in case of LNG leak (between tank walls), to prevent brittle fracture (-30 C) - Access to tank connection space (Cold Box) for occasional maintenance. - Bunkering Station: Design, Position, hazardous locations, fire suppression, water curtain or spray, spill management - Hazardous Zones, mostly related to venting and ventilation, regulations interpretation Importance of continuity between stakeholders.

LIKELYHOOD OF OCCURENCE 3. The Path For a Green Ship 3.2 Stepped Approach 3.2.4 HAZID/HAZOP: Hazard Identification Studies IMO / Class requirements. Very unlikely (A) Negligible (1) Slight (2) HAZARD SEVERITY Moderate (3) High (4) Very High (5) LOW LOW LOW LOW MEDIUM Unlikely (B) LOW LOW LOW MEDIUM MEDIUM Possible (C) Likely (D) Very Likely (E) LOW LOW MEDIUM MEDIUM HIGH LOW MEDIUM MEDIUM HIGH HIGH LOW MEDIUM HIGH HIGH HIGH

4. Bunkering

4. Bunkering 4.1 Available now: trucks Very small scale that works for some applications. Example: - Regular schedule - Fixed location SOURCE: GASNOR / SEANEWS TURKEY

4. Bunkering 4.2 Coming up soon: LNG bunkering vessels SOURCE: CONCEPT NAVAL

4. Bunkering 4.2 Coming up soon Kuujjuaq & Great North Suggestion: LNG infrastructure combining multiple markets: marine, industrial, remote power generation, etc. Sept-Îles & Côte Nord Montreal (Liquefying plant) Québec Gaspésie Îles-de-la- Madeleine

5. Conclusion

5. Conclusion No unique solution to meet new and upcoming regulations, it is a case by case solution. Simple step by step approach to compare options. Bunkering solutions are available but need further development Presented by: Martin Lepage, Eng., Business Development Manager