A Braemar Seascope Plc. Group Company October 2005

1
Factors involved in selecting a propulsion
system for your LNG shipping project

• Presentation by Ian Harper, Wavespec
• to LNG Shipping 2005
• London, 27th October 2005

2
Contents

• What has changed recently?
• Should you burn gas?
• What solutions are available and which are
  realistic?
• Evaluating economic factors
• Evaluating the technical risks
• Impact of choice on safety, environment and
  training
• Solutions for the future

3
First Diesel Engined LNG Carrier
4
Changing Factors in Propulsion

• The old LNG carrier world was simple!
• Recent surge in demand for natural gas and LNG in
  Europe and USA
• New trading patterns are developing
• Massive increase in LNG fleet numbers
• More supply sources and destinations
• Bigger ships and new trade routes

5
Should You Burn Gas?

• Gas is clean and green?
• Lower emissions of carbon, SOx and NOx
• BOG needs to be disposed of or recycled
• All non-steam ships need a Gas Combustion Unit
  (GCU) for backup gas disposal
• Environmental and safety issues have to be
  tackled
• Depends on the value of gas to the project

6
Alternative Propulsion Options

• Conventional Steam Turbine
• Slow Speed Diesels with Reliquefaction
• Gas Injection Slow Speed Diesels with Reliq
• Dual Fuel Diesel Electric
• Combined Cycle Gas Turbine Electric
• Hybrids

7
Traditional Steam Plant
8
Engine Power for LNG Carriers
9
Slow Speed Diesel Solutions

• High thermal efficiency
• Traditional ship propulsion system
• Same emissions as conventional oil tanker
• Requires reliquefaction plant and GCU
• Maintenance only possible in port with twin screw
• LPG ships have similar machinery
• Benefit for crew sourcing

10
Twin Screw Slow Speed Diesels
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MAN BW 7S50ME-C
12
Gas Injection Slow Speed Diesel
13
Dual Fuel Diesel Solutions

• Direct replacement for the steam boiler and
  turbine system
• Higher efficiency than steam
• Can only burn HFO or MDO or Gas
• Flexibility of operation with electric drives
• Maintenance possible at sea and in port

14
Dual Fuel Diesel Direct Drive
15
Dual Fuel Diesel Electric (DFDE)
16
Wartsila 6L50DF Engine
17
Gaz de France Energy on trialsthe worlds first
dual fuel diesel propelled LNGC
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Gas Turbine Solutions

• Simple Cycle not efficient but very small
• Combined Cycle aero derivative and industrial
• Waste heat recovery and steam turbo-alternator
• R-R, GE and Siemens have differing solutions
• Different but share benefits and challenges
• Potential for extra cargo is yet unproven
• Very low maintenance on boardbut!
• Only feasible if burning gas

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COGES Plant Rolls-Royce
20
GE LM2500 Marine Gas Turbine
21
Combined Cycle Gas Turbines
Siemens
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Hybrid Solution MHI

• Combines diesel engines and steam turbines
• Direct drive propeller with Contra Rotating Pod
• Reliquefaction plant for base BOG
• Excess BOG produces steam for electricity

MER
23
Economic Factors

• Choice is dependent on fuel costs
• The relationship between HFO and LNG costs is
  critical in determining choice
• Maintenance costs vary
• Operators require longer docking cycles
• Crew for diesels may be easier to find and train
• Will the trade require a ship to heel out cargo?
• Different projects will make different choices

24
Technical Risks

• Steam propelled LNG ships are a known factor
• Alternatives involve levels of perceived risk
• Technical risks can be qualified
• Classification societies are assessing options
• New entrants cannot easily benchmark risks
• Project risks are project specific
• Industry should remain self regulating IMO and
  SIGTTO forums

25
Environmental Factors

• Over 95 of World Trade is carried in ships
• The vast majority of these ships are propelled by
  slow speed diesel engines e.g. container ships
  and oil tankers
• The efficiency of these shipping operations means
  that CO2 emissions per tonne/km are very low
• NOx and SOx emissions are legislated by MARPOL
  Annex VI and Flag States (e.g. EU)
• The current limits will be reduced with time

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Annual Exhaust Emissions
MAN BW
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Annual Exhaust Emissions
Wartsila
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Solutions for the Future

• Qatars major projects driving size up and costs
  down
• Trading and chartering options require
  flexibility in shipping operations
• Do we still expect to see new technology
  introduced, or an industry standard emerge? If
  so, which one?
• Environmental factors will have to be addressed

29
2005 is the Watershed Year

• There are 136 LNG ships on order
• Over 30 of these have diesel propulsion systems
• 20 are twin screw SSD with reliquefaction
• Approx 25 are single screw DFDE
• About 40 LNG ships ordered in 2005, but less than
  20 have conventional steam plants

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Thank you for your kind attention Ian Harper