IHS Maritime: Shipping ! Gary Li, Senior Analyst, IHS Maritime Richard Hurley, Senior Analyst, IHS Maritime IHS Maritime Unrivalled capabilities and depth of coverage

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Only IHS is the sole Only IHS has the Only IHS operates the Only IHS can provide Only IHS has Only IHS can combine originating source for world’s largest maritime world’s largest network maritime and defence the maritime the world’s leading assigning IMO database, an of land-based data in one product experience and information and insight Ship and information gathering receivers, solution expertise, a sources in the industries Company numbers, heritage spanning over supplemented with combined 547 years • IHS Energy guaranteeing an 250 years including satellite surveillance of of maritime data, • IHS Chemicals unmatched accuracy comprehensive mid-ocean positions, editorial, publishing • IHS Autos and depth of coverage information on all giving unrivalled global knowledge and • IHS Aerospace & of vessel vessels of 100 GT and coverage of live experience Defence characteristics and the over ship positions • IHS Finance global newbuilding • IHS Electronics orderbook Arctic Routes ! • How safe is it? • What advantages will it bring? • What sectors are set to benefit from it? • How soon can I use it? • Can it be an alternative to Suez? Trade Factor Asian Seaborne Trade Forecast 9,000,000,000,000 • Asian import/export • Forecasted steady growth 6,750,000,000,000

! Asian Exports $) 4,500,000,000,000 Asian Imports • Container shipping to Europe • Third largest in terms of 2,250,000,000,000

regional trade (Trillions Value Nominal SeaborneTrade 0 2011 ! 2003 2004 2005 2006 2007 2008 2009 2010 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 • COSCO ‘Yong Sheng’ – 2013 • Dalian – Rotterdam via NSR Source: IHS World Trade Service © 2013 IHS • Nine days faster than Suez Ice Capable Container Ships • Relatively few in number • Maersk currently in the ‘lead’ • Total TEU numbers quite low ! ! • Currently only 15% of container fleet are ice capable • Only 1% of new orders are for ice capable ships LNG Demand • LNG demand forecasted to grow strongly • Asia stands to be largest importing region ! • Top five Asian economics have huge appetite for LNG • China and Japan fuelling imports Ice Capable LNG Tankers • Relatively small percentage of current fleet- 29 out of 375 • Also small percentage of orderbook- 10 out of 88 • Japan and Norway has largest % of tankers ! • Russia leading the way with new orders • Delivery of Veliky Novogorod in Jan 2014 • Aim to dominate Arctic LNG transport • Critical for navigating NSR, even during summer months • Russia holds near monopoly • US and Canada lagging in capabilities ! • Atomflot- six icebreakers available for escort duties • Others mainly used in Arctic ports ! • New icebreaker LK60 class in build- in service by 2017 Alternative to Suez? • Total Suez transits in 2013 were not impacted • More than 16,000 ships transited the canal in 2013 ! • Vital to Egyptian economy • Military will not allow it to be threatened • Current volumes in NSR 2nd Army • 2nd Mechanized Division nowhere near Suez • 16th Mechanized Division • 18th Mechanized Division • Will remain vital for • 2 x Divisions in reserve international shipping for the indefinite future 3rd Army • 7th Mechanized Division • 19th Mechanized Division • 2 x Divisions in Reserve Regulatory Bottlenecks

• Varying classifications for ice capable ships • NSR uses Russian class • Non-standardisation • Polar Code- 2015 • International Maritime Organisation Safety Concerns • Few assets, overstretched if traffic increases • Icebreakers have to maintain escort as well as SAR duties • Few aircraft assets in region • 10 new SAR centres due to open in 2015 Arctic Shipping Routes

• With shrinking ice coverage in Arctic, the seaways is opening up • The “” (NSR) and “” (NWP) are navigable during the summer months • A further “Central” corridor is envisioned to have opened up by 2040 2013 Ice Coverage • Ice coverage in the Artic is annually at its greatest extent in February and least in September • Navigation season for the NSR is late June to September • In recent years Artic Warming has made most difference to extent of ice in summer

Ice Extent in February 2013

• In 2012 the NSR was considered ice free from August 2012 • In 2013 the summer minima was 29% higher than predicted • Ice breakers were still required for vessels passing North of the East Siberian island throughout the season Ice Extent in September 2013

Images courtesy of the National Snow and Ice Data Center, University of Colorado, Boulder. NSR Transits

Year No. of Transits

2011 41 2012 46 2013 71 The number of ships transiting the NSR Source: NSR Administration/AISLive increased in 2013 by 54% ! • 267: Total traffic in the area June to October • 25: Non-Russian vessels from 11 Flags • 10: Vessels made the through passage • 9: Vessels carried export cargoes from Russian ports • 6: Total number of icebreakers employed?

! Photo: riamotor.ru ! ! 2013 SAR Incidents

! • The holing of the tanker Russian Flag Tanker Nordvik in the Matisen Strait on September 4. ! • The loss of the helicopter from the CCGS Amundsen on 9th September ! ! ! ! ! Nordvik Incident- September 2013 Date: 4 September Ice Class: Ice Class I Cargo: 4,944 tons diesel Damage: 1m hole in ballast tank ! Date: 9 September Ship: Icebreaker Taimyr ! Date: 11 September Ship: Tanker Boris Vilkitsky ! Date: 14 September Ship: Icebreaker Vaigach CCGS Amundsen Incident • 9 September: helicopter of CCGS Amundsen collide with ice and crashes ! • Injured crew perish despite being in survival suits ! • Amundsen was ordered to return ! • Helicopter eventually recovered • Helicopter was only effective asset for this section of NW passage Nordic Orion: NSR & NWP voyages Source: MINT/IHS Maritime Source:MINT/IHS • During the summer months of 2013, Nordic Orion transited both Northern Sea Route and North West Passage • NWP route shaved over 1,000 miles off the Panama Canal Route • ..and was able to carry 25% more cargo !18 Photo:Environment Canada Icebreakers

• Russia has the largest fleet of ‘escort’ icebreakers • Most icebreakers used for port clearance duties

Sea-going Icebreaker Fleet by Nationality

Russia 31 Canada 7 Finland 7 United States Of America 6 Sweden China, People's4 Republic Of Estonia Germany2 Korea,2 South UkraineLatvia1 Argentina1 1 Grand Total 64 Photo: Rosatomflot Photo: !19 Source: IHS Maritime Thank You!

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