The future of LNG Carriers

Transcription

1 The future of LNG Carriers - Probability of Further Upsizing and Fuel-Efficiency Improvements Takeshi Hashimoto Member of the Board Senior Managing Executive Officer Mitsui O.S.K. Lines, Ltd. 5 th April, 2017

2 Topics Part 1 Optimization of LNG Trade MOL business profile Global LNG trade overview Part 2 Diversification of Demand for LNG Transportation History of technological innovation of LNG carriers - Upsizing of tank capacity and vessel size - Improvement of propulsion engines - Limiting factors to decide Most favorable LNG carriers shape in the future

3 Topics Part 1 Optimization of LNG Trade MOL business profile Global LNG trade overview Part 2 Diversification of Demand for LNG Transportation History of technological innovation of LNG carriers - Upsizing of tank capacity and vessel size - Improvement of propulsion engines - Limiting factors to decide Most favorable LNG carriers shape in the future

4 MOL Corporate Data Corporate Data Established: 1884 Head Office: Tokyo, Japan Number of Group Employees: 10,500 Public Company with 104,202 Shareholders Financial Highlights *(Unit: Billion \) For the Year Ended March 2016 Revenue: 1,712 At the End of March 2016 Total Assets: 2,220 Shareholders Equity: 458 4

5 MOL s Fleet Composition LNG CARRIERS CONTAINERSHIPS FERRIES OTHERS BULK CARRIERS CAR CARRIERS (PCC) *As of March 2017 (est.) / Consolidated TANKERS 5

6 Historical Development of LNG Trade Since the first commercial shipment in 1964, LNG trade has been steadily growing to reach million tons of traded volume 17 exporting countries 33 importing countries in 2015 Development of LNG Traded Volume and Numbers of LNG Exporting/Importing Countries (IGU) 6 (source: IGU World LNG Report 2016)

7 Tank Capacity ( m3 ) 27,400 25,500 71,500 41,005 50,240 75,056 86,234 87, , , , , , , , , , , , , , , , , , , , , , , , , , , , ,383 No. of Vessels 216, , , , , , , , ,000 Historical Development of LNG Vessels LNG vessel fleet has also been growing along with LNG market expansion to reach- 408 vessels in operation (excl. FSRU/FSU, vessel size less than 100,000 cbm) 152,000cbm average tank capacity at the end of 2015 Number of LNG Vessels Delivered in Each Year / Tank Capacity 300, , , , ,000 50, No. of Vessels Average Size 7 Max Size

8 LNG Trade Volume Forecast 2015~2030 China, India, Southeast Asia, Latin America would be the center of growth. In the mid- and short-term, Europe has strengthened its presence as an absorption destination of surplus LNG. LNG Import country-wise Trade Volume Forecast 2015~ (MT) Other Asia 15.1% Latin America 2.6% Middle East, Africa 3.1% Europe 5.2% India 7.7% China 8.4% Taiwan 0.3% South Korea 0.9% Japan -0.3% (Source : MOL based on Wood Mackenzie, IHS) Annual average growth rate 8

9 Requirement for LNG Vessels There would be around 100 additional vessels required in 2030 compared with the number of existing vessels and vessels on order in Additional Demand for New Build Vessels LNG Trade Volume (MT, est.) No. of vessels to cover trade volume Vessels in operation+on order Additional Demand for New Build Vessels (Source : MOL based on Wood Mackenzie, IHS)

10 Topics Part 1 Optimization of LNG Trade MOL business profile Global LNG trade overview Part 2 Diversification of Demand for LNG Transportation History of technological innovation of LNG carriers - Upsizing of tank capacity and vessel size - Improvement of propulsion engines - Limiting factors to decide Most favorable LNG carriers shape in the future

11 How large will the LNG carriers grow? Elements to decide vessel size. Depth, Panama Canal, Turning Basin, Berth Length, Quay Strength, Onshore cargo handling equipment etc. Infrastructure Business Optimum Hull Form Economic Practice Efficiency Cargo lot, Onshore inventory etc. Speed, Fuel Consumption, Ship Price etc.

12 History of LNG Vessel Size Development 125,000cbm(mid 70 s~) BGT ship 285x43.9x11.5m (LOA/Beam/Draft) 135,000cbm(mid 90 s~) Qatar ship 298x45.8x11.3 Rapid increase in Tank Capacity (00 ) KHI(145/MOSS) 290x49.0x11.9 HHI(155/MKIII) 288x44.2x12.2 MHI(165/MOSS) 293x48.9x11.9 HHI (174/MKIII) 298x46.0x11.9 (Reference) Q-Flex(DSME) Q-Max(HHI)

13 History of LNG Tank Capacity Development Standard Tank Capacity increased from 125,000cbm to 175,000~180,000cbm now. 13

14 LNG Vessels are not getting larger? The standard tank capacity has increased by about 40% from 125,000cbm to 174,000cbm in the past 40 years, however, external size of vessels has not changed that much ADGAS(MOSS) 125,000cbm QatarGas(MOSS) 135,000cbm HHI 174(MK Ⅲ) 174,000cbm In terms of the operation of the LNG carriers, the ship s width does not become such a big problem, and all the ships except for Q-FLEX and Q-MAX can pass the expanded Panama canal (ship width limit 49m). 14

15 LNG Vessels are not getting larger? Despite huge increase of tank capacity, external size of ships (LOA/Beam/Draft)has not expanded in the same way Has the enlargement of the ship almost ended? There are LOA limitation of 300m at several terminals, width limitation of 49m at expanded Panama canal. (LOA, BEAM, DRAFT, m) 350 Representative hull form of each age (TANK CAPA, m3 ) 200, , ,000 50,000 0 BGT 125K NWS 125K QatarGas 135K DSME 135K KHI 145K SHI 145K HHI 155K SHI 165K DSME 175K DSME 180K TANK CAPA LOA BEAM DRAFT

16 No. of ships completed by tank capacity 60 (No. of ships completed) Tank Capacity( m3 )

17 Technological innovation of LNG carriers - Progress of propulsion engines LNG Carriers Delivered (As of 26 th May 2016) LNG Carriers Orderbook (As of 26 th May 2016) * Steam engines on orderbook are the advanced steam turbine that fully reuse all the waste heat. The propulsion system of LNG Carriers have long been mainly steam turbine, but since the middle of the 2000s technical development to achieve dual fuel burning in diesel engines has been made. Dual fuel technology started with 4-stroke medium speed diesel engines with electric motor drive (DFDE) and latest development is 2-stroke slow speed diesel engines (MEGI or X-DF) which are most fuel efficient. 17

18 Transition of propulsion engines of LNG carriers (No. of ships completed) (excluding FSRUs) Currently the state-of-the-art vessels in operation have switched to DFDE / MEGI. Most vessels to be ordered in the future are expected to be MEGI / XDF. 18

19 Transition of ship size optimization and fuel efficiency improvement A remarkable technical innovation from the middle of the 2000s settled in. 19

20 LNG Carriers Design in 5-10 years Summary - We foresee LNG carriers design below to be the most common in the industry. Tank Capacity : 180,000 m3 Tank : Membrane Tank Propulsion Engine : MEGI / X-DF 20

21 Factors to decide LNG Carriers Design Panama canal with 49m of width restriction There are views that this will be relaxed up to 50-51m. Terminals with 300m of LOA restriction Loading Port Bonny Island(Nigeria), Bethioua(Algeria), Hammerfest(Norway), Withnell Bay(Australia), Iduku(Egypt), Bilbao(Spain), Huelva(Spain), Sines(Portugal) etc. Discharging Port Tong Yeong(South Korea), Dabhol(India) etc. Some Japanese ports started accepting Q-FLEX ships after Great East Japan Earthquake. Terminals with 315m of LOA restriction Loading Port Damietta(Egypt), Soyo(Angola) Discharging Port ElFerrol(Spain), Cartagena(Spain), Mina Al Ahmadi(Quwait), Futtsu(Japan), Himeji(Japan) etc. 21

22 LNG Carriers Design in 5-10 years Whether or not relaxation of the upper limit of the hull size lead to an increase in tank capacity requires consideration from the commercial aspect. Here are examples of other ship types. VLCC (Maracca Max) LOA increased from 333m to 339.5m, but DWT remained at 300,000ton. Instead, fuel efficiency has improved. Capesize Bulk Carrier Vessel upsized from Dunkirk-MAX (45m width) to New Castle- MAX (50m width) and DWT increased accordingly. Currently both size of ships coexist with transport at separate trades. Meanwhile, as for mainly China, larger ships appeared. (250,000DWT/from Australia, 300, ,000DWT/from Brazil) 22

23 Q-MAX & Q-FLEX The external size of ships i.e. LOA, width and draft has not significantly changed since the 1970s, with the exception of Q-MAX and Q-FLEX (212, ,000 m3 ). Q-MAX and Q-FLEX are good has advantage over unit cost competitiveness. Although there is a possibility that they will be deployed into some specific trades, we think that it will not become a most common vessel design. 23

24 LNG Carriers Design in 5-10 years Conclusion; Further progress in upsizing of the vessel size (especially LOA 300m) is not anticipated in the coming 5-10 years. The possibility of drastic improvement of the propulsion systems is limited. - Propulsion systems of other vessels than LNG carriers have been slow-speed diesel for a long time. LNG shipping technology is maturing after series of technical innovations. 24

25 LNG Carriers Design in 5-10 years Regarding the obsolescence risk of vessel specs, we evaluate as follows. Tank Capacity could increase up to 190,000 m3 (+6%), if restriction of Panama canal width is relaxed to 50.5m. No new propulsion systems overtaking MEGI / X-DF will emerge. 25

26 THANK YOU 26