Nauticor: Distribution Costs for the LNG Value Chain Jan Schubert, Senior Manager Sales & Business Development

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1 Nauticor: Distribution Costs for the LNG Value Chain Jan Schubert, Senior Manager Sales & Business Development MS Stavangerfjord, April 10th 2018

2 The Linde Group is active worldwide with a global presence in more than 100 countries Countries home to operational companies of The Linde Group Comments The Linde Group, leading global player in industrial gases German Blue Chip Company (DAX 30) 135+ years of experience in gases, cryogenics and process engineering 17 bn EUR revenue with approx. 51,000 FTE Active in >100 countries 10/04/2018 Source: The Linde Group, Nauticor 2

3 Nauticor: part of The Linde Group and dedicated supplier of LNG as marine fuel The Linde Group selected LNG projects Comments The Linde Group is a front runner in the development of LNG infrastructure Nauticor (former Bomin Linde) was set up in 2012 in order to develop the market for LNG as a marine fuel Since its startup Nauticor has established itself as a leader in this market, including through the development of physical assets and a substantial customer base. 10/04/2018 Source: The Linde Group, Nauticor 3

4 Nauticor covers the LNG value chain from large-scale terminals to endcustomers The LNG value chain from the production to the end user Comments LNG value chain includes gas production, liquefaction, transport and supply to end-users Nauticor is active in medium- and small-scale LNG Nauticor sources LNG from large-scale terminals in Northwest Europe Storage in own mid-scale terminal in Nynäshamn (Sweden) Supply of LNG to endcustomers with trucks and bunker vessels 10/04/2018 Source: Wärtsilä, Nauticor 4

5 The LNG price at the large-scale terminal accounts for roughly up to 2/3 of the endcustomer price of LNG Development of TTF Settlement Prices in EUR/MWh Comments TTF settlement prices fluctuated between 13 and 28 Euro/MWh in the last years Those numbers are exl. terminal loading fees, seller margins, etc. Spot prices vs. Long-term sourcing contracts 10/04/2018 Source: The ICE, Nauticor 5

6 Increasing number of vessels running on LNG; diversity of operational profiles requires customized supply concepts Examples for ships running on LNG Comments > 200 ships running on LNG or ordered The majority of vessels will be placed in North & Baltic Sea LNG tank sizes range from 12 m³ to 18,000 m³ Point-to-point services vs. changing routes Pit-stop-bunkering vs. staying overnight Spot contracts vs. Long-term agreements with fixed volumes 10/04/2018 Source: Nauticor 6

7 LNG supply by Nauticor with (1) trucks and (2) bunker vessels in Northwest Europe based on the type of customer Nauticor s LNG supply network for maritime customers in Northwest Europe 10/04/2018 Source: Nauticor, Google Maps 7

8 1. LNG transport by truck is a flexible and efficient mode of supply for smaller volumes & back-up for ship-to-ship supply Examples for truck-to-ship customers of Nauticor in Northwest Europe Ostfriesland: world`s first retrofitted LNG ferry Helgoland: first newbuild LNG ferry in Germany SeaRoad Mersey II: first RoRo ferry with a mobile LNG tank Fure West: world`s first chemical tanker retrofitted with an LNG engine 10/04/2018 Source: Nauticor Scheldt River: world`s first dredger with an LNG engine Wes Amelie: world`s first container vessel retrofitted with an LNG engine 8

9 1. Increasing efficiency and reducing costs for TtS operations by using parallel unloading equipment Truck-to-ship operations with parallel unloading of trucks Details T-piece developed and operated by Nauticor Availability of T-piece bunker operations in various ports in Northwest Europe Unloading rate of up to 40 tons/hour Fastest truck-to-ship unloading operation in Europe, e.g. delivery of 120 tons LNG in approx. 4.5 hours Shorter time in port and delivery of volumes up to 140 tons reduces the number of port calls and improves the customer business case 10/04/2018 Source: Nauticor 9

10 2. LNG supply by ship is most suitable for larger drop sizes and benefits from economies of scale The Linde Group bunker vessels The Seagas has performed1,500+ safe ship-to-ship bunkering operations since 2013 with less than 45 minutes per refuelling operation Unloading rates between 200 and 1,250 cbm/hour = up to 500 tons/hour Larger transport volumes reduce unit costs to a level that makes bunkering outside of the current LNG bunker centres near large import terminals attractive 10/04/2018 Source: The Linde Group, Nauticor 10