LNG: The economic, environmental
and evolutionary marine fuelTHE INDUSTRY ADVOCATEWORKING ACROSS THE MARINE VALUE CHAIN

LNG AS A MARINE FUELTHE STRATEGIC OPPORTUNITY• Infrastructure – global LNG infrastructure is growing fast
• Economics – LNG offers a compelling commercial case
• Environment – LNG is a superior and future fit fuel

INFRASTRUCTURE CASE
BULK INFRASTRUCTURE ALREADY EXISTS – ‘LAST MILE’ INVESTMENTS HAPPENING• Plentiful and growing LNG
supply• Bulk LNG infrastructure exists
and is in the right places• ‘Last mile’ investments arehappening (globally)• LNG bunkering available orplanned in 9 of top 10 bunkeringlocations• Bunker vessels – 9 in operation
Source: SEA¥LNG Bunker Navigatorand many more on orderECONOMICS – ADDING VALUE THROUGH LNG• ECA Voyage times not so relevant
ASIA – USWC LINER ROUTEECONOMICS – INDUSTRY ACCEPTED FIGURESCONSERVATIVE ASSUMPTIONS REINFORCE BUSINESS CASE

• 14K TEU Newbuild vessel• Both strong freight markets sailing at designed operating speed and weakfreight markets involving slow steaming tested• Weighted Average Cost of Capital of 8% over 10 year investment horizon period• Multiple Fuel Cost Scenarios tested• LNG DF, HFO w/Scrubber and VLSFO engine options– Capital and Operating
costs modelled.

• Open Loop Scrubber assumed to be viableECONOMICS – ENERGY COSTS OUTWEIGH CAPEX

2020 PRICES FOR FIVE SCENARIOS (USD/MT)

$30
$700

$5

$410

$439
$476

$400

$476

$10$25

$410

$500

$469
$476

$15

$469
$476

$600

$35

$20

$571

$25
$20$300
Conventional

Total$5$33,731,963$30,045,642$26,860,221$18,357,661$-Delta$15,374301$11,687,981$8,502,560$-

2-s HP DF(vs Conventional)

2-s LP DF

Open Loop Scrubber

$200
$100

Conventional$0Main Engine

Auxiliaries

LNG tanks

LP gas supply

HP gas supply

Scrubber (inc. yard work)SCR

LNG Yard Work

Fuel Chiller

Total

Delta (vs Conventional)$8.8/MMBtu

Open Loop Scrubber$9.4/MMBtu

2-s LP DF$8.8/MMBtu

2-s HP DF$10$10.0/MMBtu$$10.0/MMBtu$15$661
$694

$800

$661
$694

$35

$661
$694

$900

$40

$30

USD Millions

$40

$793
$832

CAPEX SUMMARY

$779
$832

• Competitive Energy Costs

USD Millions• Diminishing CAPEX hurdle

BaU

Tight Supply forDistillates

LNG

LNG Economies Of LNG liquefaction tech
Scale
improvements

HSFO• Don’t underestimate costs of scrubbers and other auxiliary equipment

VLSFO

MGO

TightMGO
unavailableHFO
improveLNG

ECONOMICS – MORE WIDELY RECOGNISEDGROWING ADOPTION OF INVESTMENT CASE

“LNG is the fuel of the future for shipping,” Rodolphe Saade, Chairman & CEO CMA CGM• Number of LNG fuelled ships growing strongly:• 144 in operation• 139 on order• 20%-40% annual growth since 2010

LNG fuelled vessels
1600
1400
1200
1000800• Advancing across a range of vessel types

600
400

• Move from short-sea shipping to2002023

20222021

2020

2019

2018

20172016

20152014

2013

2012

2011

deep-sea shipping space

2010

0Source: DNV GL LNGi, January 2019

ENVIRONMENT – POSITIVE WAY FORWARD
LNG MEETS THE NEEDS OF TODAY AND TOMORROW• Provides a proven local emissions solution• Superior air quality benefits• Only marine fuel providing Greenhouse
Gas benefits• Relatively stable pricing

EMISSIONS CASE
UNMATCHED LOCAL EMISSIONS PERFORMANCE & MAJOR STEP FORWARD FOR GHG• Out performs conventional marine fuel• Zero SOx• 90% NOx reduction• 99% decrease in PM• No waste disposal or discharge issues• Significant GHG reductions:• 20% compared to existing• >40% with EEDI measures,• Further benefits with Bio or synthetic gas

EVOLUTIONARY – LNG A FUEL OF PROGRESS• Positive choice demonstrating strategic change tomatch consumer demands for environmentalstewardship• Addresses air quality, reduces Greenhouse Gasemissions, commercially viable and scalable now• Expanded Greenhouse Gas opportunity throughrenewable natural gas

WAY FORWARD FOR SEA¥LNG
EVOLVING & EXPANDING ENGAGEMENT• Promoting LNG with real data together withacademically reviewed Research Initiatives to assist
owners with the decision process• Additional Investment Cases for varying types of deepsea tonnage• Broadening the LNG knowledge base through outreachand education