Outlook Overview LPG Exports LPG Imports Fleet supply Ton-mile Freight rates Exports via VLGC from North America is estimated to continue growing. Middle East growth rate slows down due to Iranian sanctions and OPEC cuts. A new wave of PDH plants come onstream in China and South Korea in 2019. Retail demand from emerging markets in Asia such as India, Indonesia remain strong. Order book stands at 14% of the total fleet. 85% of the newbuild orders are backed by traders/tcs. Ton-mile demand is expected to increase driven by sustained export growth from the U.S. But increasing newbuild activities could offset the growing ton-mile demand. At current fleet supply level, VLGC rate is estimated to gradually recover. However, seasonality, change of behaviors and technology would make the freight market less optimistic. 2
Shipping industry vs Amazon US$ Billions 1200 Global Fleet value AMZN market cap 1000 800 600 400 200 0 2006 2007 2008 2009 2010 2011 2012 Series1 2013 2014 2015 2016 2017 2018 2019 2006 $15 billion CAGR 39% 2006 $695 billion CAGR 3% 2018 $800 billion Market Cap has increased 52 times since 2006 World s total fleet 2018 $950 billion Total value fell and remained flat for past 5 years Source: Clarksons Historical, Bloomberg 3
Technology giants are eyeing at shipping industry Technology + Tech giants with high capitals Increased efficiency and transparency in shipping Pressures on margin 4
VLGC freight market in last 3 years FREIGHT RATES $70,000 Cash breakeven TCE $60,000 $50,000 $40,000 For the past 3 years, TCE has been mostly under cash breakeven levels at ~$25,000/day $30,000 $20,000 $10,000 - Jan 2019 avg.tce = $15,000/day Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Source: Clarksons Historical, BW Analysis 5
Million tons LPG exports LPG EXPORTS Key Export Regions Yearly Forecast Key Export Regions Yearly Market Share Forecast North Americas Middle East North Americas Middle East Others 40 30 100% 80% North America is estimated to 29% 28% become the largest exporting region 34% 35% 33% 24% 23% 22% 20 North America exports continue to grow, Middle East stabilises 60% 40% 51% 46% 43% 43% 40% 41% 40% 38% 10-9.5 32.1 13.9 34.8 20.6 36.7 25.4 39.4 29.7 36.7 33.0 38.5 37.1 39.2 41.2 40.0 2013 2014 2015 2016 2017 2018 2019F 2020F 20% 0% 24% 28% 32% 35% 38% 40% 15% 19% 2013 2014 2015 2016 2017 2018 2019F 2020F Source: IHS Waterborne, NGL Strategy Research 6
Million tons LPG imports LPG IMPORTS 20 2016 2017 2018 18 16 14 12 Stable 10 8 15.2 16.5 17.4 Stable 6 4 2 10.4 10.9 10.7 9.8 12.0 12.5 8.2 7.3 7.5 7.4 6.2 6.8 12.2 10.2 11.2 - China Japan India Southeast Asia South Korea Europe Source: IHS Waterborne 7
US$/ton US$/ton Narrowing arbitrage from US to FE FREIGHT RATES $800 $700 $600 $500 Implied Arbitrage (RHS) FE Propane price US Propane price $350 $300 $250 $200 $400 $300 $200 $150 $100 $50 - $100 - Implied Arbitrage = FE propane CFR price (M+1) Mount Belvieu FOB price Terminal costs ($50) ($100) Source: Argus, BW Analysis Note: 2015 terminal cost is assumed based on average terminal cost in 2016, 2017 and 2018 8
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 VLGC fleet development FLEET SUPPLY 50 350 40 Recycling Potential To be delivered Total numebr of VLGC by year-end (RHS) Recycled Delivered 227 260 265 277 292 293 300 250 30 20 10 - (10) 129 100 102 98 26 11 6 2-1 -2-7 -6 137 140 140 137 11 9 3 2-4 -3-6 152 13 142 8 179 35 46 25-2 -2 10-5 14% of orderbook 18 19-6 -4 1 200 150 100 50 0-50 Fleet size has almost doubled in 6 years from 2014 to 2019 Source: Clarksons Historical, BW Analysis 9
Million US$ VLGC asset price FLEET SUPPLY $100 Newbuild VLGC delivered price Avg. Stock Market Price in NBE 5-year old NBE price $95 $90 $85 $80 $75 $70 $65 $60 $73 $65 $55 $50 $45 $47 $40 Source: Clarksons Historical, BW Analysis 10
2019 Utilisation estimated to improve at current fleet development level Ton-mile Increased demand for VLGC driven by export Fleet growth based on current order book Source: IHS Waterborne, NGL Strategy Research, BW Analysis 11
Disruptions in shipping Entry Barriers Lower barrier to entry Technology & Innovation Increase efficiency and transparency Behaviors Charterers increase their controls of ships 12
How BW LPG Think Different LPG Propulsion Fuel for the future Smart Ship Innovating for the future Product Services Fully integrated product delivery 13
BW LPG is charting a sustainable future through LPG propulsion Deck tanks No deviation Round voyage Clean Fuel flexibility Green Efficient Flexible Economical Approved 14
Cost Efficient Today & Tomorrow Houston - Chiba - Ningbo - Houston via Panama Canal Fuel cost USD/day USD 6,600 25,000 20,000 per day savings USD 6,200 per day savings 15,000 10,000 5,000 - LPG HFO Compliant LPG HFO Compliant Fuel Fuel LPG HFO Compliant Fuel 2019 YTFeb 2020E Assumptions Fuel prices Distance: 20,534 nm USD/mt 2019 YTFeb 2020E Speed: 16 knots, 5% sea margin LPG 370 350 ULSHFO 480 450 Carrying capacity 49.370 mt HFO 400 310 LPG available for fuel or sales 2.770 mt LPG fuel autonomy @ 36.5 tons per day 76 days Calculation includes Pilot Fuel consumption - Houston - Chiba - Ningbo - Houston (via Panama Canal) 57 days Safety range 19 days Source: Argus, TFS 12/2/2019 Fully ref Propane @ sg of 0.58 15
Embracing Innovation with Smart Ships in Action Aimed at turning ships into digital enterprises, the smart ship project connects and controls the entire ecosystem within the vessel and transmits data to a digital cloud for remote monitoring and greater business value. Key Advantages Improved furl consumption Enhanced operation efficiency Increased compliance Improved crew safety Reduced risk of collisions Lower manpower needs Lower OPEX expenses Reduced injury & cargo loss claims Reduced human error with greater automation 16
Commercial Services At a Glance Assets Approx. USD 2 Billion invested in VLGC s Fleet 49 vessels, average age of owned VLGCs at 7 years (Global average age 9 years) History Entered the gas transportation business in 1978 and have grown from 6 to 47 VLGCs Chartering Flexible Chartering Solutions CoA / Time Charter, SPOT, Storage / STS Dedicated team bringing together over 100 years of market experience 24/7 Customer services Projects Sale and purchase, newbuilding, adjacent segments 17
Product Services Team A team of 5 dedicated professionals with over 60 years of LPG and trading experience in blue chip organizations Assets Approx. USD 2 Billion invested in VLGC s Experience Transported over 13 Million tons of LPG in 2018 Systems State of the art systems to support cargo delivery Service A low-risk and fully-integrated product delivery service to customers Trade Finance Support from BNP Paribas 18
Projects Enhancing Our Value Proposition Providing integrated product and shipping solutions Sale and Purchase Chartering OSLO Chartering Technical & Operations HOUSTON Technical & Operations Technical Operations Product Services SINGAPORE Chartering Product Services Projects Technical & Operations Contact Us Product Services : productservices@bwlpg.com Chartering : chartering@bwlpg.com Projects : projects@bwlpg.com Fleet Technical Operations : fleettech@bwlpg.com : fleetops@bwlpg.com 19
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