LNG BUNKERING -A Perspective - Executive Events

1 LNG BUNKERING -A Perspective4thInternational Business Meet on BUNKERING Destination Cochin is LNG ?Natural Gas is liquefied by cooling it to -160 degree Celsius (-260 degree Fahrenheit) at atmospheric Infrastructure,Cost/ Liquefaction/ Storage& as a Bunker Fuel Liquid Natural Gas (LNG) has characteristics that impact ship design and operation Liquid only at cryogenic temperatures (-163 C) so it requires special storage tanks, pipe systems, and handling. Slowly evaporate when stored so a means to deal with boil off gas (BOG) is required venting to air is not allowed. Can be explosive in an enclosed space at the right mixture with air ventilation system needed.

2 Clean burning so low SOx, Particulate, and NOxemissions compliant with ECA regulations. LNG has half the density of diesel fuel -larger storage tanks for the same range are needed tanks are not at high pressure - can be stored below deck, unlike CNG Drivers for LNG as Bunker Fuel:Environmental & Regulatory Compliance: Emission Norms post 2020 Global Sulphur cap in Marine Fuels. Nil Sulphur Content in LNG Low NOX Compared to Fuel oil & Marine Diesel Oil Economic Advantage: Traded on Calorific Value basis With Increased availability & falling crude prices LNG prices are lower than global bunker fuel prices.

3 MARPOL Annex VI Requirements: Annex VI of the International Maritime Organization (IMO) for the Prevention of Pollution from Ships (MARPOL) entered into force in May 2005. The mandate limits the sulfur content of marine fuels on a global Sulphur from May VI also imposed a sulfur limit on marine fuels in Emission Control Areas (ECAs) effective May 2006. Limit was reduced to sulfur effective 1 July 2010 Limit further reduced to sulfur beginning January 2015- Sulfur global cap from January 2012. - The larger effect from Annex VI will come when the requirement to reducesulfur content of marine fuels to on a global basis effective 2020.

4 The issue for ship owners and operators is how to find alternatives to economically meet the low sulfur fuel mandate from year Annex VI Compliance:Marpol Annex VI SOX reduction requirementOptionsIssuesPros & ConsLow Sulphur Fuel oilMDO/MGOS crubber +High SulphurFuel OilLNGLow SulphurFuel AvailabilityPrice Relative to AlternativesInstallation Cost, Waste Disposal, High Sulphur Fuel CostLNG Equipment cost, Conversion Time & CostLNG,LNG Bunker FacilityAvailability &CostNoextra fuel tanksorhandling needed-Scrubbers neededtomeetNOx-Lowsulphurfuel availabilityandcost-Ships required touselowsulphurfuel.

5 But refiners notrequired toproduce/ supplyScrubbers available+HFO and BUNKERING facilitiesavailable+Fuel price-Capital investment and off hire timefor conversion-Waste disposal facilityavailabilityand complianceMeets SOx, particulate and Noxrequirements-More shipboard storage capacity Capital investment in LNG equipmentLNG and fuelling facility availability outside limited areas-PriceLNG Handling : International Regulations LNGB eingstoredandhandledincryogeniccondition s DealingwithSafetyRequirements. TheVariousStandards&CodesinuseforLNGB unkeringare:oIACS142 InternationalGasCarrierCodeforcarryingLi quefiedgasesinBulkadoptedbyIMOoIGF :2015-Guidelinesforsystemsandinstallatio nsforsupplyofLNGasfueltoshipsoISO20519:2 017-Specificationforbunkeringofliquefied naturalgasfuelledvesselsoTR-56:2017 TechnicalReferenceforLNGB unkering SingaporeStandard.

6 Technicalcommittee-comprisingexpertsfrom OISD,DGShipping,IndianRegisterofShipping ,PESO,GAIL,OIDB,DNV-GL,LloydsRegister,Bu reauVeritas,Petronet,MinistryofShippingt odevelopguidelinesontheTechnicalRequirem entsofLNGfuelledships&bunkeringInfrastru cture. Functionalcommittee-WorkingunderOISD consistingofExpertsfromIndustrytoformula teguidelinesinsafetyinLNGB unkeringfacilitiesatPorts,forlargeshipsC oastalShipping& BUNKERING :LNG BUNKERING by vessel LNG BUNKERING by truck Two Main Options for BUNKERING From Barges or Small Ships From Shore by Truck or Pipeline Barges or Small Ships similar to fuel BUNKERING , at pier or anchorage Truck or Pipeline Trucks have limited volume 38 m3 so for small ships only, pipelines require dedicated LNG storage facilities and piers LNG as Bunker fuel.

7 Potential Demand Futuregasdemandis expectedtoOutpaceOildemandAnnualgasdeman dcurrentlyaround3500 BCFexpectedtoreach4500 BCFby2025andover5000 BCFby2035. 8000 Seaportin 200 Countries: 46portsareplanningforLNGinfrastructurean d15 PortsopenforgeneralLNGbunkerbusiness. LNGdemandforshipfuelis estimatedtoincreaseto30 MTPAby2030. EuropeleadingthewaywithGovernmentInitiat ives& Financialsupport ECAregulationsin USA RegulatoryCompliance/ Economics/Localavailability AsiaPacific- OilIndexedLNGpricesreduceeconomicincenti ves- Singapore China: Worlds1 Japan sMitsuiOSKlines LNGfuelled20000 TEUC ontainerships.

8 India: Governmentpushingforincreasingtheshareof Naturalgasin EnergyMixfrom6 % to15%. of LNG fuelled shipsOperational areas for LNG fuelled vesselsLNG BUNKERING : Challenges ChickenandEggsyndrome ShipsarechasingLNGbunkerports&ViceVersa. InvestmentRequired Inshipspropulsion FuelhandlingSystem BunkeringInfrastructure BargeswithTrainedCrew InternationalSafetyRegulations: InternationalConformity, Co-ordinationandCo-operationis neededinLNGbunkeringworld. Availability& CostofLNGasbunkerFuelLNG BUNKERING -The Kochi Advantage Kochiallweathernaturalharborport- locatedstrategicallyclosetothebusiestint ernationalsearoutes:GulftoSingapore& FarEast( At11 NauticalMiles)SueztoSingapore& Fareast( At74 NauticalMiles) PetronetLNGhasfullyoperationalLNGT erminalatKochiwithcapacitytohandleavolum eof5 MMPTA withfacilitiestoreceiveandreloadLNGcargo es.

9 SpareberthcapacityavailableatPLLterminal atKochi,itoffersanidealportlocationforsu pplyofLNGbunkersbydirectpipelinetransfer You