American Institute of Marine Underwriters State of the LNG Industry: A Class Perspective William J. Sember Vice President, Energy Development ABS New York City 30 September 2005 1
Overview Ship Capacity and Trends Technology Update Offshore LNG Terminals 2
LNG Carrier Outlook LNG Demand LNG is a major share of the total natural gas currently consumed in several countries, particularly in Asia LNG imports to the US market are expected to rise significantly, tripling by 2010 and quadrupling by 2015 More ships, more terminals, more LNG LNG trade is widely forecast to grow by at least 7% per annum over the next decade, almost tripling the quantity traded today Rapid growth has attracted new entrants Short-term and spot trades will become increasingly more common Many Offshore regasification terminals are under consideration Source: IEA, Drewry, OSC & Fairplay 3
Major Natural Gas Trade Movements Source: BP Statistical Review of World Energy 2005 4
40 35 30 25 LNG Carrier Fleet Number of Ships & When Built September 2005 September 2005 Orderbook = 66% of existing fleet (In number of ships and a larger % in capacity) Existing Fleet (185) Orderbook (123) Scheduled delivery 20 15 10 5 0 14 3 6 3 8 6 5 5 6 3 4 5 3 1 1 2 1 1 9 5 7 6 5 7 12 1 15 23 10 9 11 26 <73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 The significant fleet expansion experience the past few years will continue at an even higher level 36 40 10 5
LNG Order Book Deliveries (by Shipyard) 2005 2006 2007 2008 2009 2010 Daewoo S.B. 2 9 8 12 0 0 Samsung S.B. 4 7 9 11 4 0 Hyundai H.I. 1 1 10 7 3 0 Mitsui S.B. 1 0 0 1 0 0 Kawasaki H.I. 2 3 2 3 1 0 Mitsubishi H.I. 1 3 3 4 1 0 Hudong Zhonghua 0 0 1 1 0 0 Izar 0 0 1 0 0 0 De l'atlantique 0 3 0 0 0 0 Universal S.B. 0 0 1 0 1 0 Koyo Dock K.K. 0 0 1 1 0 0 Total 11 26 36 40 10 0 Source: Clarksons, September 2005 6
Annual Capacity Growth - Based on Cubic Meters Seaborne LNG Trade Outlook 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Gas Carrier - LNG 13.0% 15.8% 20.0% 21.3% 13.8% 9.3% 8.0% 7.8% 7.3% 7.2% 7.3% Long term annual trade capacity growth forecast is based on seaborne LNG transport outlook Near term includes speculative growth, or growth to support new initiatives, both reflected by the current orderbook LNG trade demand will likely be very strong over the next 10 years, with near term double digit annual growth ABS Long Term Annual Trade & Market Sector Outlook - Feb 2005 Forecast Based primarily on US Dept of Energy Macro Economic & Energy Demand forecast 7
LNG Fleet Capacity Growth 86% Capacity (million cubic meters) 39.29 40.74 35 32.29 30 26.99 25 20.69 23.29 20 15 10 176 ships 196 Ships 222 Ships 258 Ships 298 Ships 308 Ships 5 0 Dec 2004 Dec 2005 Dec 2006 Dec 2007 Dec 2008 Dec 2009 Timeframe Clarksons September 2005 8
LNG Fleet Forecast 550 500 Number of ships*- At Year End New Demand (cumulative) Replaced Ships (cumulative) 484 From Y.E 2004 450 Remaining Original Initial Fleet 400 350 300 250 200 150 Y.E. 2004 Fleet = 176 Ships 196 21 41 75 112 152 357 180 204 307 278 251 227 10 12 14 15 Fleet Growth Replacement Tonnage 100 50 Original Fleet Remaining 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 New Demand will drive newbuilding deliveries Replacement tonnage will comprise only a very small share of the total newbuildings Fleet will double in size by YE 2010 and grow another 35% by YE 2015 Based on ABS Shipping & Shipbuilding Outlook - Feb 2005 Forecast * Considering average size steadily increases 9
Cubic Meters 300,000 m3 Evolution of LNG Carrier Size 250,000 200,000 m3 210/215 120,000 125,000 133,000 135,000 153,000 100,000 m3 71,500 87,600 27,400 25,500 0 1964 1965 1969 1973 1975 1981 1995 2005 2007 2009- Finima 2010 Independent Prismatic Aluminum Cargo Tanks Independent Cylindrical Tanks First Membrane Ships First Moss Rosenberg Independent Spherical Tanks Ben Franklin & El Paso Kayser 10
Larger LNG Carriers Technical Considerations Structural Design Terminal Compatibility Propulsion Systems 11
LNG Transport System Technology Next Generation of LNG Ships Require Advanced Technology that Addresses the Transport System Propulsion Technology Containment System Technology Structural Integrity Technology Pump Tower Analysis Ship to Terminal Interface Technology 12
LNG Carriers - Containment Systems GTT MK III Kvaerner Moss GTT CS-1 GTT No 96 IHI - Self Supported IMO Type B (SPB) 13
Total World LNG Fleet - Containment Total Number of LNG ships - 185 Independent Prismatic Tank Type B - IHI Conch 1% 2%1% Cylindrical 90 2 3 1 89 48% 48% Membrane GT &TGZ Spherical Type B Kaeverner Moss Containment System Distribution 14
Current Order Book - 123 Moss -23 19% 81% Membrane 100-41 No 96, - 56 Mk III, - 3 CS-1 15
LNG Fleet Existing Fleet Order Book 110 100 Moss 90 NO96 80 70 Ships 60 50 40 30 20 Moss Gaz Transport MK3 10 Conch ESSO Technigaz IHI CS-1 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2009 Delivery 16
GTT Membrane - No 96 Containment System 17
GTT MK III - Membrane Design 18
Kvaerner Moss - Spherical Tank Design 19
LNG Ships Technical Issues Size Increase from 138,000 CbM to 250,000+ CbM Re-gasification plants on board Ice strengthening requirem ts for various trade routes Fatigue life up to 50 years Offshore Terminal discharging which exacerbates loads due to sloshing 20
Dual Fuel Electric Propulsion (Diesel and Electric) 185 LNG ships in service Steam turbine 123 LNG ships on order 77 Steam turbine 45 -Diesel 25-dual fuel diesel electric 20 slow speed diesel direct drive 21
Propulsion For Next Generation LNG Carriers Alternative Propulsion (Existing fleet is all steam turbine) Propulsion efficiency New technology developments Dual fuel - Natural Gas & Fuel Oil - slow & medium speed diesels & gas turbines - shipboard re-liquefaction plants Class societies offering technical guidance for alternative propulsion. Example: ABS Guide for Design and Installation of Dual Fuel Engines. 22
Special Concerns for LNG Gasification of LNG Loss of Containment Liquid Spill on Deck Gas Release Disposal of Boil-off Fire and Explosion Over-pressure or Under-pressure Ship to Terminal Transfer of LNG Partial Loading Layout Constraints 23
Energy Bridge Regas Vessel Specially built LNG carrier fitted with onboard re-gasification equipment to transfer gas through a buoy, which is connected to a pipeline end manifold (PLEM) on the seafloor 24
Offshore LNG Terminals/Concepts Cabrillo Port Offshore California Floating ship shaped hull CGI Floating or fixed Bishop process Storage of LNG in Salt Caverns 25
Offshore LNG Terminals/Concepts Compass Port Gulf of Mexico Concrete Gravity Based (GBS) Chevron-Texaco s Baja, California Concrete Gravity Based (GBS) 26
Offshore LNG Terminals/Concepts Main Pass Energy Hub Gulf of Mexico Floating fixed platform TM 27
Closing Points First Transport of LNG by Sea was Methane Pioneer in 1959 Today 185 LNG carriers transporting LNG from one region of the world to another All of these vessels are classed Class societies serve as an independent third party verification agency..safety & Compliance With Rules (Standards) are our Main Concern.. 28
Closing Points LNG Fleet is Expanding Rapidly to Handle Increased Demand Larger ships Changing propulsion systems Changes in operations Expanding owner base Offshore LNG Terminals various concepts, Technical considerations Class provides Rules and Technical Guidance for LNG carriers and terminals www.eagle.org 29