Company name

SAMSUNG HEAVY INDUSTRIESGas Fuelled Container Ship

( Evaluation of Economic Analysis )

1

H.C. Jung

October 16, 2015

정현채 / 운반선그룹(컨테이너선) / 2015-10-14 17:02:00

Background

- Environmental Issue

- IMO Future Regulation

Gas Fuelled Ship

- Lay-out of Gas Fuelled Ship

- Configuration of Propulsion System

- LNG Fuel Storage Tank, Gas Fuelled Engine, Gas Supply System

- Initial Cost Estimation

Economic Analysis

- Market Trend of Fuel Price

- Economic Analysis

- Conclusion

Contents

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Gas Fuelled Engines

Gas Fuel Supply System

LNG StorageTank

ItemConvent.

Ship

Gas Fuelled Ship

Low P. High P.

CO2 100% 75% 75%

NOx 100% 20% 20%

SOx 100% 3% 3%

� Emission Reduction

SOx

apprx.97%

apprx.80%

Apprx.25%

NOxCO2

� GHG Reduction 25%

� Satisfying IMO NOx Tier III

� Satisfying IMO SOx Limit

� Design Goal

with SCR / EGR

Background – Environmental IssueBackground – Environmental Issue

2/17

� Comparison betweens

정현채 / 운반선그룹(컨테이너선) / 2015-10-14 17:02:00

- Existing ECA: Baltic Sea, North Sea, Coasts of USA, Hawaii and Canada- Possible future ECA: Mediterranean sea, Coasts of Mexico, Puerto Rico, Norway, Singapore and Japan

� NOx

0

2

4

6

8

10

12

14

16

18

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Tier III - 2016.01.01

Tier II - 2011.01.01

Tier I - 2000.01.01

rpm

NO

xN

Ox

NO

xN

Ox

(g/k

Wh)

(g/k

Wh)

(g/k

Wh)

(g/k

Wh)

-80%

0.1

1

3.5

0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

EU Port ECA Global

SO

xSO

xSO

xSO

x(%

(%

(%

(%

m/m

)m

/m)

m/m

)m

/m)

-97%

Background – IMO Future RegulationBackground – IMO Future Regulation

� SOx � EEDI

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Main Engine� ME-GI or X-DF

Generator Engine� Dual Fuel

Gas Supply & Bunkering System

LNG Fuel Storage Tank

Lay-Out of Gas Fuelled ShipLay-Out of Gas Fuelled Ship

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� Two(2) Type of Engines with

Low Pressure Injections

� Single Gas S. System with Different Pressures

� Engine Direct Driven Propeller

� Fuel Consumption Low

� Single Engine with 4 Stroke Gen-sets

� Single Gas Supply System (L.P)

� Electric Motor Driven Propeller

� Fuel Consumption High

� Experienced & Proven Design

Elec. Service

LNG Storage Tank

Main Engine

ForcingVaporizer

BOG

LD Comp.

16 bar

5 bar

DF Genset

HP PumpsHP Vaporizer

LNG Storage Tank

Main Engine

BOG

HP Comp.

300 bar

5 bar

Elec. Service

DF Genset

L/D Comp.

Configuration of Propulsion System Configuration of Propulsion System

� Two(2) Type of Engines with

High & Low Pressure Injection

� Two(2) Type of G.S.S with

High & Low Pressure System

� Engine Direct Driven Propeller

� Fuel Consumption Low

5/17

� 2 Stroke Engine with Low Pressure GSS

� 2 Stroke Engine with High Pressure GSS

� 4 Stroke Engine with Low Pressure GSS

Electric Motor

BOG 5 bar

LNG Storage Tank

ForcingVaporizer

LD Comp.

DF Genset Elec. Service

정현채 / 운반선그룹(컨테이너선) / 2015-10-14 17:02:00

Type SPB Membrane Type-C

Tank Shape

Tank Material Aluminum Stainless Steel Stainless Steel

Design Pressure 0.25 bar 0.25 bar 9 bar

Tank Size Unlimited UnlimitedLimited

(Max. 4,000 m3)

Partial Filling No restriction Restriction No restriction

Cost 100 % 80% 120 %

� Type of LNG Fuel Tank

� Capacity Required for Storage Tank

20,000 m3

- Cruising 23,000 NM

- Service Speed 23 kts

10,000 m3

- Cruising 18,000 NM

- Service Speed 19 kts

8,000 m3

- Cruising 18,000 NM

- Service Speed 15 kts

GF Design – LNG Fuel Storage TankGF Design – LNG Fuel Storage Tank

6/17※ SPB : Self-supporting Prismatic shape IMO type-B

정현채 / 운반선그룹(컨테이너선) / 2015-10-14 17:02:00

Item Conventional EngineGas Fuelled Engine

High Pressure Low Pressure

Fuel Burning Oil Gas / Oil Gas / Oil

Cycle of Engine Diesel Cycle Diesel Cycle Otto Cycle

Pressure of Gas Injection N/A 300 bar 16 bar

Engine Operation Limit(Gas Mode)

Min. 10% ~ Max. 100%of MCR

Min. 10% ~ Max. 100%of MCR

Min. 10% ~ Max. 85%of MCR

EmissionNOx High Low with CSR/EGR Low

SOx Low Low Low

Cost Base +8% +17%

� Gas ignited when injected

� Unchanged Power

� No pre-ignition / knocking

� High pressure gas injection

� High NOx Emission

� Gas pre-mix before ignition

� Reduced Power (abt. 15%)

� Pre-ignition / Knocking Risk

� Low pressure gas injection

� Low NOx Emission

Diesel Cycle Otto Cycle

GF Design – Main Engine (1/2)GF Design – Main Engine (1/2)

� Technical Comparison of Main Engine

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� Comparison of Fuel Consumption

Item Unit Conventional Gas Fuelled Remark

Engine

Efficiency

Burning Fuel - Oil Gas ME & ME-GI

Energy Consumption kJ/kW.h 6,624 (100%) 6,489 (98%)at same Power

Fuel

Consumption

Using Fuel - HFO MDO Gas

SFOC g/kW.h 161.4 7.7 123.2

at same PowerDFOC MT/day

142.9

(100%)

6.8 109.1

115.9 (81%)

Fuel Cost Fuel Price USD 400 600 400

at same PriceFuel Cost / Day USD 57,160 (100%) 47,720 (84%)

6,300

6,500

6,700

6,900

7,100

7,300

20 30 40 50 60 70 80 90 100

T.

E.

C.

T.

E.

C.

T.

E.

C.

T.

E.

C.

(kJ/

(kJ/

(kJ/

(kJ/

kW.h

kW.h

kW.h

kW.h

)) ))

Engine Engine Engine Engine Load Load Load Load (%)(%)(%)(%)

MAN_Oil/DieselMAN_Oil/DieselMAN_Oil/DieselMAN_Oil/Diesel MAN_GasMAN_GasMAN_GasMAN_Gas

GF Design – Main Engine (2/2)GF Design – Main Engine (2/2)

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170

180

190

200

210

220

40 50 60 70 80 90 100

SFO

C (

g/k

Wh)

SFO

C (

g/k

Wh)

SFO

C (

g/k

Wh)

SFO

C (

g/k

Wh)

Egine Load (%)Egine Load (%)Egine Load (%)Egine Load (%)

Diesel_W32Diesel_W32Diesel_W32Diesel_W32 Gas Fuel_34DFGas Fuel_34DFGas Fuel_34DFGas Fuel_34DF

GF Design – Generator Engine GF Design – Generator Engine

9/17

Item Conventional Gas Fuelled Remark

Gas Supply System N/A Low Pressure (5bar)

Required Power Base Base +α(+600 kW) for Gas Supply System

FuelConsumption

Energy Consumption 100% 98%

DFOC (ton/day)100%

(HFO Based)87%

(LNG Based)

HFO: 41,025 kJ/kg

LNG: 50,000 kJ/kg

EmissionNOx High Low

SOx Low Low

� Comparison of Generator Engine

정현채 / 운반선그룹(컨테이너선) / 2015-10-14 17:02:00

� Type of Gas Supply System

Equipment Low Pressure High Pressure Remark

Fuel Gas Pump O O H.P for 5~6 bar, L.P for 16 bar

High Pressure Pump & Vaporizer X O H.P of 300 bar

LP Forcing Vaporizer X O for High pressure

LP Vaporizer O X for Low pressure

NG Heater O O Same

Re-Condenser X O for High pressure

BOG Compressor O O Same

Pressure Relief Valve O X Pressure down : 16 � 6 bar

High PressureLow Pressure

GF Design – Gas Supply SystemGF Design – Gas Supply System

� Major Equipment List

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정현채 / 운반선그룹(컨테이너선) / 2015-10-14 17:02:00

Initial Cost EstimationInitial Cost Estimation

� Major Equipment & System

Item Cost (%) Remark

Machinery & Electric 5.5 m 20% Engines, Boiler, GCU and Others

LNG Fuel Tank 11.0 m 40% LNG Fuel Tank, Insulation, Support

Gas Fuel Supply &

Bunkering System 9.5 m 35% Fuel Pump, Vaporizer, Compressor, Piping, etc.

Others 1.2 m 5% Hull Design (Structure & Outfitting)

Total 27.2 m 100% USD/Ship

� Cost Estimation

11/17

[ Unit: USD ]

정현채 / 운반선그룹(컨테이너선) / 2015-10-14 17:02:00

• WTI: West Texas Intermediate• IFO 380: Intermediate Fuel Oil with a maximum viscosity 380 centistokes

N. Gas:$4.0/mmbtu

IFO380:$14.2/mmbut

IFO380:$57.6/100kg

IFO180:$60.1/100kg

DO:$88.0/100kg

WTI: $96.0/bbl

DUBAI:$100.9/bbl

BRENT:$104.6/bbl

★

■

◆20

60

100

140

80

120

40

USD

WTI: $46.3/bbl

IFO380: $23.0/100kg

N. Gas: $2.8/mmbtu

Market Trend of Fuel PriceMarket Trend of Fuel Price

� Price Trend of Oil & Gas Type of Fuel Equivalent Price (USD)

WTI 46.3 USD/bbl 291 USD/ton

N. Gas 2.8 USD/mmbtu 133 USD/ton

=

=

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정현채 / 운반선그룹(컨테이너선) / 2015-10-14 17:02:00

� Definition

- mmbtu: Million Metric of British Thermal Unit

- Calorific value of a necessary heating to raise one pound of water by one Fahrenheit degree

� Unit Conversion

- 1 mmbtu = 1,055,056 kJ (1)

- LNG calorific value = 50,000 kJ/kg (2)

- LNG density = 0.47 ton/m3 (3)

. 1 mmbtu = 21.101 kg (4) = (1)/(2)

= 0.02110 ton (5) = (4)/1,000

. 1 ton (LNG) = 47.4 mmbtu

� Price of LNG 1 ton (47.4mmbtu)

. 6$/mmbtu x 47.4 = 284 USD . 7$/mmbtu x 47.4 = 332 USD

. 8$/mmbtu x 47.4 = 379 USD . 9$/mmbtu x 47.4 = 427 USD

. 10$/mmbtu x 47.4 = 474 USD . 11$/mmbtu x 47.4 = 521 USD

. 12$/mmbtu x 47.4 = 569 USD . 13$/mmbtu x 47.4 = 616 USD

. 14$/mmbtu x 47.4 = 664 USD . 15$/mmbtu x 47.4 = 711 USD

190

284

379

474

569

664

758

100

200

300

400

500

600

700

800

4 6 8 10 12 14 16

US

D /

to

n

USD / mmbtu

Unit Conversion of mmbtuUnit Conversion of mmbtu

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� RFR (Required Freight Rate)

� In-put Data for RFR

- Total Expense (Annual) :

Fuel cost + Capital Cost + Other cost + etc.

- Carrying Container :

No. of Operating trip x No. of Carrying cargo

- Service Speed : 22.5 kts

Service Route : Asia ↔ Europe (Round cruising range : 23,000NM)

RFR = Total Expense

Carrying TEU ($/TEU)

� Total Expense (Annual)

- Annual Fuel Cost : Operating day ( ooo day/yr.) x DFOC (ton) x Fuel Price ( ooo USD/ton)

- Capital Cost : Interests, Depreciation, etc.

- Other Cost : Maintenance, Voyage Cost, etc.

� Carrying Container(Annual, TEU)

- Carrying Container : No. of Operating trip x No. of Carrying cargo (70% of Nominal capacity)

- No. of Operating trip : Cruising range(23,000 NM) / (Operating Speed(22.5kts) x Operating day(270days/yr.)

Economic Analysis – IntroductionEconomic Analysis – Introduction

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Item Unit Conventional Ship Gas Fuelled Ship Remark

Ship Price % 100% 121%

Nominal Capacity (TEU) TEU 14,300 (100%) 13,920 (97%) 380 TEU Sacrifice

M/E

Type - 11G90ME-C 11G90ME-GI

Service Speed: 22.5 kts

HFO: 41,025 kJ/kg

LNG: 50,000 kJ/kg

Power kW 44,280 44,280

DFOC (Fuel + Pilot) t/day175.3 135.1 + 7.2

175.3 (100%) 142.3 (82%)

G/E

Type - W32 34DF

HFO: 41,025 kJ/kg

LNG: 50,000 kJ/kg

PowerGeneral kW 8,260 8,860

Gas S. S. kW - 600

DFOC (Fuel + Pilot) t/day37.4 32.2 + 0.5

37.4 (100%) 32.7 (87%)

DFOC (Total) t/day 212.7 (100%) 175.0 (82.3%)

Fuel Price - 379 USD/ton 8 USD/mmbtu 8USD/mmbtu=379USD/ton

Revenue kTEU 119.2 (100%) 116.1 (97%) Total Carrying TEU/year

Economic Index

CAPEX mUSD 16.2 (100%) 19.5 (121%)

OPEX mUSD 36.0 (100%) 36.2 (101%)

Fuel Cost / year mUSD 22.2 (100%) 18.5 (83%)

Total Annual mUSD 74.4 (100%) 74.2 (99.8%)

Required Freight Rates USD/TEU 624 (100%) 639 (102%) Cost per TEU

Economic Analysis – 1/2Economic Analysis – 1/2

� In Case of Same Price between Oil and Gas

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Item Unit Conventional Ship Gas Fuelled Ship Remark

Economic

Analysis

(RFR)

8 $

/mmbtu

(379 $/t)

300 $/t USD/TEU 578 (100%) 647 (112%)

450 $/t USD/TEU 655 (100%) 651 ( 99%)

600 $/t USD/TEU 732 (100%) 655 ( 89%)

10 $

/mmbtu

(474 $/t)

300 $/t USD/TEU 578 (100%) 687 (119%)

450 $/t USD/TEU 655 (100%) 691 (106%)

600 $/t USD/TEU 732 (100%) 695 ( 95%)

12 $

/mmbtu

(569 $/t)

300 $/t USD/TEU 578 (100%) 727 (126%)

450 $/t USD/TEU 655 (100%) 731 (112%)

600 $/t USD/TEU 732 (100%) 735 (100%)

578

655

732

647651

655

112%99%

89%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

460

510

560

610

660

710

760

810

8-300 8-450 8-600

578

655

732

687 691 695

119%105%

95%

-20%

0%

20%

40%

60%

80%

100%

120%

460

510

560

610

660

710

760

810

10-300 10-450 10-600

578

655

732727 731 735

126%112%

100%

-10%

10%

30%

50%

70%

90%

110%

130%

460

510

560

610

660

710

760

810

12-300 12-450 12-600

Economic Analysis – 2/2Economic Analysis – 2/2

� Case Study of Various Prices between Oil and Gas

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정현채 / 운반선그룹(컨테이너선) / 2015-10-14 17:02:00

� Technical View

- Engine Efficiency: 2% better

- Total Energy Efficiency : 18% better

- Special Gas Supply System required

For early adopting of Gas Fuelled Ship, it is needed that

- Gap of fuel prices to be of over 10%

- Initial Cost of GFS should be reduced

- Loss of cargo space should be minimized

- Potential risk should be eliminated

Conclusion

� Emission View

- CO2 : about 25% reduced

- NOx : about 80% reduced

- SOx : about 97% reduced� Commercial View

- CAPEX : about 21% increased

- Revenue : about 3% decreased

- Fuel Cost : about 17% saved

- RFR will be 2% higher than Conventional

at same fuel prices Oil & Gas.

� Conclusion

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