An introduction to Shell LNG fuel

Transcription

1 An introduction to Shell LNG fuel Gibraltar 9 November 2016 Arjan Stavast Business Development Manager Global Marine photo: copyright Aida cruises 1

2 Definitions & cautionary note Reserves: Our use of the term reserves in this presentation means SEC proved oil and gas reserves. Resources: O ur use of the term resources in this presentation includes quantities of oil and gas not yet classified as SEC proved oil and gas reserves. Resources are consistent with the Society of Petroleum Engineers 2P and 2C definitions. O rganic: O ur use of the term O rganic includes SEC proved oil and gas reserves excluding changes resulting from acquisitions, divestments and year-average pricing impact. Shales: O ur use of the term shales refers to tight, shale and coal bed methane oil and gas acreage. The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this presentation Shell, Shell group and Royal Dutch Shell are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words we, us and our are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. Subsidiaries, Shell subsidiaries and Shell companies as used in this presentation refer to companies over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to joint ventures and joint operations respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as associates. The term Shell interest is used for convenience to indicate the direct and/ or indirect ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest. This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forwardlooking sta tements. Forward-looking statements are statements of future expectations that are based on management s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking sta tements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as anticipate, believe, could, estimate, expect, goals, intend, may, objectives, outlook, plan, probably, project, risks, schedule, seek, should, target, will and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transa ctions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. A ll forward-looking sta tements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking sta tements. A dditiona l risk fa ctors tha t ma y affect future results are contained in Royal Dutch Shell s 20-F for the year ended December 31, 2015 (available at investor and ). These risk factors also expressly qualify all forward looking statements contained in this presentation and should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, N ovember 9 th, Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking sta tements conta ined in this presenta tion. W e may have used certain terms, such as resources, in this presentation that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. U. S. Investors are urged to consider closely the disclosure in our Form 20-F, File N o , available on the SEC website 2

3 Em issions and the maritime industry Shipping globa lly emits (2012 estima te): Source: Equivalent to more 972 million than the total annual Tonnes CO Global 2 e 3% = emissions of G erma ny emissions or the UK and Spain O R + combined! Source: IMO 3 rd GHG Study 2014 Federal Environment Office, Germany (Umwelt Bundesamt) Department of Energy & Climate Change, UK Ministry of Agriculture, Food and Environment, Spain Source: shipmap.org The International Maritime Organization (IM O), made a landmark decision to implement a global sulphur cap of 0.5% m/ m by 1 January 2020! Source: / en/ MediaCentre/ PressBriefings/ Pages/ MEPC sulphur.aspx World coastlines as defined by shipping routes 3

4 A mosaic of fuel options w ill be required There is no silver bullet Biofuels Conventional fuel M osaic of fuel options GTL LN G is one option in an evolving fuel mix H2 mobility E-mobility LN G Available Acceptable Affordable 4

5 LNG can offer a compelling value proposition 1 Co st competitive fuel 2 Cleaner burning fuel* Can contribute to lower local exhaust emissions and global greenhouse gas emissions 3 Proven and reliable LNG engine technology availability 5 LNG Availability, Safe and reliable supply chain *Lowest carbon fossil fuel and Shell LNG contributes virtually zero sulphur emissions and has reduced particulates and NOx emissions, compared to heavy fuel oil. 5

6 LNG has low er local emissions vs heavy fuel oil in marine engines 90% Emissions of particulates from natural gas combustion are 90% lower. Natural gas emits virtually no sulfur diox ide, so using more natural gas as fuel could emit less of the pollutants that cause acid rain. Source: IMO 3 rd GHG Study

7 LNG may help to reduce WtW em issions in som e marine* & road engines vs conventional fuels 27%** LN G CH 4 W tw GHG emissions savings vs conventional fuels 23% 9% 10% 19% Engine1 Engine 2 Engine 3 Engine 4 *Marine scenario accounted for medium-large engines, >1 MW.**LNG has 27% lower emissions per unit of fuel energy than diesel (gco 2 e/ MJ) and this translates directly into WtW emissions savings (gco 2 e/ km) if used at the same efficiency as diesel (MJ/ km). Higher or lower engine efficiency and supply chain emissions impact WtW savings proportionally. Unburned methane in the exhaust (methane slip) has higher GHG impact than fuel completely combusted to CO 2. Source: 1 & 3) Shell SR ) Private communication with engine manufacturer. 4) Kofod, M. and Stephenson, T., "Well-to Wheel Greenhouse Gas Emissions of LNG Used as a Fuel for Long Haul Trucks in a European Scenario," SAE Technical Paper , 2013, doi: / Values are calculated using AR4. Actual WtW emissions reduction is eroded by several factors, including those related to the engine (efficiency, unburned fuel in exhaust) and the supply chain (losses during production, liquefaction, transport, storage). The higher the gas engine efficiency, the higher the emission reductions can be for LNG vs conventional fuels; conversely, lower efficiency in the gas engine or supply chain could result in higher GHG emissions vs conventional fuels. 7

8 Developing infrastructure 2 8

9 Developing a global marine LNG bunker supply netw ork EU: Rotterdam Gibraltar Norway Clear focus on Rotterdam, G ibraltar, Middle Ea st, Singapore, and Houston AM: G ulf Coast Ea st C oast Linked to customer demand, further bunker locations to be considered A PM E: Middle East Singapore Development Areas Focus bunkering location 9

10 GATE: long-term LNG for transport Shell has announced investment into a break bulk jetty a t the G ATE (G a s A ccess To Europe) terminal. To serve marine customers in the port of Rotterdam, Shell is constructing together with STX shipyard and co-funded by the European Union, a LN G bunker vessel facilitate ship to ship transfer operations, and also deliver LN G to seconda r y distribution termina ls outside the port area. In addition, LN G will be loaded onto trucks and delivered to road customers. 10

11 Supplying LNG: LNG Bunker Vessel Contract Signing 2014 Launching 2016 Ready for Service Rotterdam Steel Cutting 2015 Delivery

12 Secure and sustainable energy for Gibraltar G ibraltar is the busiest bunkering port in the Mediterranean. Shell was selected to supply fuel for the facility. The Port envisions ship-to-ship fueling of LN G vessels. The Port of G ibraltar sees the use of LN G as a marine fuel as inevitable if not exactly imminent, and is talking with Shell about LN G bunkering* there as a natural adjunct to a new, natural gas-powered electricity plant. LN G V ESSEL A small scale LNG carrier will bring the LNG to the Gibraltar Port. This will be done approximately twice a month at night, when other port and airport activities are minimal. LNG TERMINAL The LNG will be stored in five double-walled stainless steel tanks, from where it will gradually be warmed with existing heat from the power plant and returned to gas. From here the gas will travel along a short pipeline to the power plant. POW ER PLAN T The gas is used to fuel the new power plant, which will ultimately provide electricity to the homes and businesses of Gibraltar. *Project is still in development, as FID not yet taken. 12

13 Collaborations in Middle East to develop LNG fuel Apr 17 th, 2016 MoU between QG, Shell, UASC Feb 22 nd, 2016 MoU between QG, Shell, Maersk 13

14 As w ith all new mark ets, there are challenges ahead. Collaborative relationships are key. How to grow marine LNG demand? How to drive dow n the LNG infrastructure costs? When w ill the global sulphur cap be implemented? LNG market development is challenged by various factors that can only be mitigated through collective industry efforts. 14

15 LNG demand expected to have a sustained increase* To capture opportunities, we need to: EXTERNAL AVERAGE W oodmac 2014 FGE 2014 NLS 2014 Exxon 2015 LR Deep Sea 2012 IHS 2016 Unlock demand in key hubs through collaborative partnerships Focus on cost competitive supply chain Strengthen customer value proposition Keep moving & Increase pace! * extrapolated numbers 15

16 Thank you! 16

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