LNG Fuel for Advanced Ships

JOINT DINNER MEETING SNAME SD-5 PANEL AND INTERNATIONAL HYDROFOIL SOCIETY Thursday, 30 May 2013 Army Navy Country Club, Arlington, VA

30.05.2013 < 1 > MAN Group Corporate Structure

MAN SE

Business Commercial Vehicles Power Engineering

MAN MAN MAN Company Truck & Bus* Latin America Diesel & Turbo RENK (76,0%)

Revenues ’10: 7.5 bn€ Revenues ’10: 3.1 bn€ Revenues ’10: 3,8 bn€

Investments Sinotruk (25,0% +1 Share), Scania (17,4%**)

* MAN Nutzfahrzeuge MAN Group 2010: 14.7 bn€ Revenues, 47,700 Employees until December 28, 2010 ** Voting Rights

30.05.2013 < 2 > < MAN Group Business Areas

MAN Group focuses on two business areas:

. Commercial Vehicles: Commercial Power . Power Engineering: Vehicles Engineering MAN Diesel & Turbo RENK ’

30.05.2013 < 3 > < Rudolf Diesel (1858 – 1913) First Marketable Diesel Engine (1897)

Introduction 30.05.2013 < 4 > <4 Diesel engine programme from 450 kW to 87 000 kW

30.05.2013 < 5 > Areas of Activity MAN Diesel & Turbo in World Trade

50% of World Trade is Powered by MAN Diesel Engines!

30.05.2013 < 6 > < LNG for Propulsion What is Natural Gas ?

Liquefied natural gas or LNG is natural gas (predominantly methane, CH4) that has been converted to liquid form for ease of storage or transport.

•Liquefied natural gas takes up about 1/600th the volume of natural gas in the gaseous state. It is odorless, colorless, non-toxic and non-corrosive.

•The liquefaction process involves removal of certain components, such as dust, acid gases, helium, water, and heavy hydrocarbons, which could cause difficulty downstream. The natural gas is then condensed into a liquid at close to atmospheric pressure (maximum transport pressure set at around 25 kPa/3.6 psi) by cooling it to approximately −162 °C (−260 °F).

•LNG achieves a higher reduction in volume than compressed natural gas (CNG) so that the energy density of LNG is 2.4 times greater than that of CNG or 60% of that of diesel fuel

•LNG is principally used for transporting natural gas to markets, where it is regasified and distributed as pipeline natural gas.

30.05.2013 < 7 > LNG for Propulsion What is Natural Gas ?

. Sources: Oil fields (byproduct from oil exploitation) Gas fields

. Composition: Methane (≈ 94%vol)

Ethane (< 5%vol) H Higher grade hydrocarbons (≈ 1%vol) H C H Nitrogen H Sulphur Traces Composition of natural product varies between sources

. Gaseous under ambient conditions . Stored in liquid phase: -162°C (-260°F) at atmospheric pressure

. Calorific value: 49,5 MJ/kg (CV of HFO ≈ 40 MJ/kg)

30.05.2013 < 8 > LNG for Propulsion Benefits & Challenges

. Benefits:

No additional measures to reach NOx and SOx-limits

Reduced PM and CO2 emissions Reasonable fuel prize Safe and redundant operation Excessive heat recovery possible

. Challenges: Installation of storage equipment Regulations not finally settled Infrastructure and refuelling

30.05.2013 < 9 > Market Driver - Fuel Prices Selected Fuel Prices – related to Energy Content

Source: USD per GJ Florian Keiler / GMM-Atlas MAN 28,00 HFO - Rotterdam 26,00 MDO/MGO - Rotterdam

24,00 Gas (Europe)

22,00 Gas (Japan) Gas (USA) 20,00 Coal 18,00

16,00

14,00

12,00

10,00

8,00

6,00

4,00

2,00

0,00

30.05.2013 < 10 > Market Driver Fuel Prizes Selected Fuel Prizes – related to Energy Content

USD per GJ 28,00 Prices of LNG do not consider distribution HFO - Rotterdam cost! But 26,00 MDO/MGO - Rotterdam

24,00 Gas (Europe) Acc DNV: 22,00 Gas (Japan) Gas (USA) •Gas price FOB @ Brunsbüttel will 20,00 Coal be on HFO-Level 18,00 •In general, DNV expects a prime of 16,00 about 3-6$/MMBtu for distribution

14,00 Acc GL: 12,00 •In general, GL expects cost-based a 10,00 prime of about 4.5$/MMBtu for 8,00 distribution Rotterdam  Hamburg 6,00 Acc Mr. Fahimi, MSF-NA: 4,00 GDF Suez expects a prime for 2,00 distribution of abt. 1-2$/MMBtu 0,00 above Henry Hub (relates to abt. 4$/GJ LNG FOB)

30.05.2013 < 11 > Future LNG Fuel Price Scenario

Fuel price scenario

50 HFO 2.7% S LSHF 0.5% S MGO 0.1% S LNG 40

30

20 USD/mmBTU

10

0 2010 2015 2020 2025 2030 2035 2040 2045 2050

Source: GL-MAN container vessel advanced propulsion roadmap

30.05.2013 < 12 > Global Bunkering Demand 2020

Basis: 1100 vessels Source: DNV Demand is equivalent to 0.2-0.3% of global LNG production 2010

30.05.2013 < 13 > Global Bunkering Facilities

Source: DNV

30.05.2013 < 14 > European Bunkering Infrastructure

Source: DNV

30.05.2013 < 15 > Legislation IMO Emission Controlled Areas (12/2010)

Top Container Ports : 1. Singapore 2. China, Shanghai 3. China, Hong Kong 4. China, Shenzhen 5. South Korea, Busan 6. Netherl., Rotterdam Most used trading routes 7. UAE, Dubai 8. Taiwan, Kaohsiung existing ECAs: Baltic Sea, North Sea 9. Germany, Hamburg adopted ECAs: Coasts of USA, Hawaii and Canada (08/2011) discussed ECAs: Coasts of Mexico, Coasts of Alaska and Great Lakes, Singapore, Hong Kong, Korea, Australia, Black Sea, 10. China, Qingdao Mediterranean Sea , Tokyo Bay

30.05.2013 << 1616 >> Legislation

IMO NOx-Limits over Engine Speed

20

18

16

14

12 )

10 - 20 %

kWh Tier I: (global)

(g/

x 8 Tier II: 2011 (global) NO 6 - 80 % 4 Tier III: 2016 2 (ECA’s) 0 0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 Rated engine speed (rpm)

30.05.2013 < 17 > <

LNG for Propulsion

NOx Emissions

NOx [g/kWh]

IMO Tier II Diesel Mode

Tier III Gas Mode

Already IMO Tier III compliant in Gas mode without additional measures

30.05.2013 < 18 > LNG for Propulsion

SO2 and CO2 Emission

SO2 reductionSO 2inreduction gas operation >99%

1000 800 600 400

[mg/m³@15%O2] 200 2 0 SO 100% 85% 75% 50% 25% MCR

CO reduction in gas operation = 20% 2 CO2 reduction

6 5

4 [%]

2 3

CO 2 1 0 100% 85% 75% 50% 25% Diesel operation Gas operation MCR 30.05.2013 < 19 > Drivers and Obstacles

. Main drivers: . Long-term expectations that LNG price will be on the level or below HFO . Several potential LNG suppliers invested already in e.g. small LNG- carriers as small scale supplier  “the chickens are here, only the eggs are missing” . First ship owners orders vessel for ECA-international trade e.g. Fjordlines, Viking Lines . 0.1%S 2015 for all vessels

. Main obstacles: . Unclear bunkering procedures  all major classes work on that already . Crisis in shipping  no money for investment, charterer reluctant to pay more for LNG-fuelled ships . Investments into infrastructure . No price guarantees for pioneers

30.05.2013 < 20 > LNG for Propulsion Types of Engines operating with Gas as Fuel

. Pure gas engine: Gaseous fuels only Ignition: Spark, PGI, pilot oil Disadvantage: No fuel flexibility

. Dual-fuel engines: Operating on liquid and gaseous fuels Seamless switch over from liquid to gaseous fuel and vice versa at any time and load Fully redundant operation

30.05.2013 < 21 > Mr. Diesel vs Mr. Otto Diesel to Dual Fuel Combustion

Mr. Diesel’s Process Mr. Otto’s Process . Gas in cylinder before fuel . Fuel in cylinder before gas . Otto process gas-air pre-mix . Diesel process maintained . Power reduction (>15%) = more cylinders . Unchanged Power Density . Load ramp needed . Load response unchanged . Pre-ignition / knocking risk . No pre-ignition / no knocking . Gas mixture important . Insensitive to gas mixture . Methane slip significant -up to 4%+ . Negligible methane slip . Retrofit? . ME-GI retrofitable on ME-C.

ME-GI is a Diesel Cycle Engine,

3338198.2012.03.05 (LS/OG) 30.05.2013 < <22 22 > > Diesel Cycle PV Diagram

Change Diesel Heat Cycle Processes of State A to B Compression Stroke. Adiabatic compression of air in the cylinder. No fuel added yet.

B to C Ignition Isobaric heat addition. Fuel introduced into the compressed air at the top of the compression stroke. Fuel mixture ignited while the pressure is essentially constant. C to D Expansion (Power) Stroke. Adiabatic expansion of the hot gases in the cylinder.

D to A Exhaust Stroke Ejection of the spent, hot gases . Induction Stroke Intake of the next air charge into the cylinder. The volume of exhaust gasses is the same as the air charge.

30.05.2013 < 23 > Otto Cycle PV Diagram

Change Otto Heat Cycle Processes of State A to B Compression Stroke. Adiabatic compression of air / fuel mixture in the cylinder

B to C Ignition of the compressed air / fuel mixture at the top of the compression stroke while the volume is essentially constant. C to D Expansion (Power) Stroke. Adiabatic expansion of the hot gases in the cylinder. D to A Exhaust Stroke Ejection of the spent, hot gases . Induction Stroke Intake of the next air charge into the cylinder. The volume of exhaust gasses is the same as the air charge.

30.05.2013 < 24 > LNG for Propulsion Dual Fuel Engines – In Detail

. All dual fuel engines are based on well established diesel engines

. Major modifications are: Double-walled gas piping Pilot fuel injection system Larger bore  new piston & liner Modified rocker arm casings Slight power reduction

. Same speeds and cylinder numbers available as for original diesel engine

. Retrofit possible

30.05.2013 < 25 >

LNG for Propulsion Dual Fuel Engines – Cross Section

Double wall gas pipe

Gas valve arrangement

Rocker arms

Charge air manifold

Gas flow control pipe

Conventional fuel injection nozzle

Pilot fuel injection nozzle

Main fuel injection pump

30.05.2013 < 26 >

LNG for Propulsion Fuel Gas Piping and Gas Valve

. Double wall gas pipe . Internal compensator . External enclosure

. Encapsulated Gas admission valve

gas safe design

30.05.2013 < 27 > < LNG for Propulsion Dual Fuel Engines - Operating Mode

Gas admission valve Main fuel nozzle Natural gas MDO (DMA, DMB) (vaporized LNG) HFO

> 99% > 99%

Pilot fuel nozzle Pilot fuel nozzle MDO MDO < 1% < 1%

Gas mode Liquid mode

30.05.2013 < 28 > LNG for Propulsion Methane Slip – Facts about Methane Slip

. All low-pressure dual-fuel & gas engines have methane slip

H . Methane slip is unburned CH4 which is not participating the combustion in gas engines

. Methane as GHG is 20-25 times more harmful than CO 2 H C . No limitations regarding Methane slip exist in H marine applications

H . Minimizing Methane slip is a major target to improve engine efficiency

30.05.2013 < 29 > LNG for Propulsion Methane Slip – Root Causes

. Crevices: . Crevices are mainly fireland, valve pockets and starting air orifice . Methane trapped in crevices will not be reached by combustion . Incomplete combustion: . Quenching: near-wall temperature too low to maintain combustion Crevices

. Inhomogeneities in the air/gas mixture Quenching zones . Misfiring  Seldom in modern engines . Scavenging losses  higher for DF to maintain diesel / HFO operation . Blow-by of trapped fireland gas through the piston rings  vented by crank case ventilation

30.05.2013 < 30 > First ME-GI Order For Two 3,100 TEU LNG-Powered Containerships

TOTE Inc., USA

Vessel Technical Specifications Propulsion Plant Length Overall: 764 ft. Main Engine Type: Dual Fuel Slow Speed (x1) Breadth: 106 ft. (Panamax) Main Engine Model: MAN B&W 8L70ME-C8.2-Gl Depth: 60 ft. Main Engine MCR: 25,191 kW x 104.0 rpm Draft: 34 ft. Main Engine NCR: 21,412 kW x 98.5 rpm Speed: 22.0 kts Aux Engine Type: Dual Fuel Medium Speed (x3)

Scheduled delivery for the first ship: Q4 2015 / Scheduled delivery for the second ship: Q1 2016

30.05.2013 < 31 > Second ME-GI Order Teekay Fuel-Efficient LNGC2 x 5G70ME-GI

At 19,5 knots, the ME-Gi engine can give more than 30-tonnes-per-day savings of heavy fuel oil (HFO) over a dual-fuel diesel- electric (DFDE) engine while still maintaining very efficient fuel consumption at speeds down to 15 knots.

At today’s fuel prices this could stack up to $20,000 per day, plus a 10% shaving off operating costs. ”This is the next evolution,”

Tony Bingham, Teekay’s technical manager of LNG, Tradewinds 21-12-2012

30.05.2013 < 32 > ME-GI Development Combustion Concept

1 From actual footage (colorized)

Yellow = pilot oil Blue = gas fuel

2 Conventional slide fuel valve

3 3 Gas fuel valve 2 4 5 4 High pressure safety valve 6 5 Gas distribution channel (yellow) 1 6 Gas distributor block

7 Gas chain link double-walled pipes

7

30.05.2013 < 33 > Sources of Propulsion Power Losses with DFDE Propulsion

DFDE Solution . Power requirement at propeller = 12,600kW – but more has to be installed due to electrical losses.

12,600kW 12,600kW 13,0100W 13,200W 13,900kW 13,400kW 13,900kW

Propulsion Frequency Transfomer Switchboard Generator Main Engine Motor Converter

96.5% 98.5% 99% 99.5% 96.5%

13,400KW 13,900KW 12,600kW 12,600kW 13,0100W 13,200KW 13,3900W

Propulsion Frequency Transfomer Switchboard Generator Main Engine Motor Converter

96.5% 98.5% 99% 99.5% 96.5%

30.05.2013 < 34 > Title < ME-GI Propulsion Mode - Best Efficiency

DF or CR GenSets

FPP 25,280kW 7G70ME-GI 25,480 kW

30.05.2013 < 35 > Title < ME-GI Development ME-GI Concept: Layout with FGS System

ME-GI concept takes control 300 bar gas supply

More than 6 FGS systems Ventilated double-walled gas pipes Small gas volume in engine room suppliers available

30.05.2013 < 36 > ME-GI Gas Injection Control

Interlocked Gas Injection Sequence

Window Valve

Gas Injector

Gas Control Block Gas Channel

30.05.2013 < 37 > ME-GI Design updates Gas block

. More compact design . Pipes removed

Window valve

Flange coupling Blow-off valve

Blind flange

ELWI

Adaptor block Purge valve

ELGI

30.05.2013 < 38 > < ME-GI Development Design Updates: Gas Injection System

Gas injection system details:

. Hydraulic activation of blow-off and purge valves

. Reduction of number of pipes on gas block

. Pipes assembled on common flange for easy maintenance/ overhaul of gas valve

. Connection block included for easy maintenance

30.05.2013 < 39 > ME-GI Double Walled Piping - Leakage Control

Gas distribution in ventilated, monitored duct No escape of gas to engine room

30.05.2013 < 40 > ME-GI Development Design Updates: Double-walled Pipes

Double-walled pipes details:

Chain pipe design features . Easy maintenance . Secure necessary strength . Avoid mechanical vibrations

Design improvements . Compact design . Reduction of unique parts by 70% . Pipe flexibility secured . All welded design . Few flange connections used . Dedicated gas sealings

30.05.2013 < 41 > ME-GI Gas Combustion Control

Gas Combusts when Injected - No Accumulation, No Knocking PMI

GCSU

Cyl. pressure sensor

30.05.2013 < 42 > LNG for Propulsion Gas Storage & Supply – Gas System

Required per engine

H2O-Glycol-Circuit Silencer

Rupture Valves

High Efficiency Boiler GVU Gas Preparation Storage and supply system Purge Fan Pressure DF Engine Tanks Control / Gas Dump

Bunkerstation Fuel Pilot Inertisation Oil Oil 30.05.2013 < 43 > LNG for Propulsion Gas S & S - Double Barrier Concept

P0 Outside

Propulsion Room P2 P1

Gas Valve Unit

P0 > P2 ; P1 > P2

30.05.2013 < 44 > LNG for Propulsion Study Gas-Fuelled Feeder CV Neptun 1200 DF

. Gas as realistic option to fulfil future emission requirements (IMO TIER III, EU ships on berth) . Feasibility study: Gas-fuelled container feeder for ECA operation . Partners: Germanischer Lloyd TGE Neptun Stahlkonstruktion / WIG . Realised between 05-11/2009

30.05.2013 < 45 > Hi-GAS System

Booster Pump(LP) Vaporizer & G.W Heating System HP Pump(HP) Gas Train

ME-GI

Buffer Tank Gas Heater GVU DF Genset (Gas Valve Combined Test with HiMSEN DFUnit) scheduled in 2013

Engine & Machinery Division 46 Hi-GAS System(Control System Configuration)

Engine & Machinery Division 47 LNG for Propulsion Tank Construction and Transport

Fabrication 8,200 m³ and 8,400 m³ Bilobe and Cylindrical Tanks for Ethylene Service Fabrication Bilobe Cargotanks for 5x22,000 m³ Ethylene Carriers

Transportation of Stainless Steel cargo tanks for a 7,500 m³ LNG carrier on a heavy lift carrier to a shipyard in Europe

Cargo tanks type A for a 23,000 m³ Fully Refrigerated LPG Carrier

30.05.2013 < 48 > LNG for Propulsion Engine Map for Mechanical Drive

30.05.2013 < 49 >

Summary

 Safe  Reliable  Flexible  Clean

30.05.2013 < 50 > INCAT #069 Buquebus “Lopez Mena”

99 metre LNG ship was contracted by South American company Buquebus for operation on their River Plate service between , Argentina and in .

30.05.2013 < 51 >

INCAT #069 Buquebus “Lopez Mena”

Capacity:1000 passengers plus 140 cars Lightship speed: 53 knots Operating speed: 50 knots. Crossing the River Plate at high speed will allow service to compete with airline traffic between Uruguay and Argentina. 30.05.2013 < 52 >

INCAT #069 Buquebus “Lopez Mena”

. Powerered by 2 x GE LM2500 Gas Turbines . 44 MW (59,000 hp) Total Propulsion Power

30.05.2013 < 53 > INCAT #069 Buquebus “Lopez Mena”

30.05.2013 < 54 > INCAT #069 Buquebus “Lopez Mena”

. Propulsion Machinery Arrangement

30.05.2013 < 55 > INCAT #069 Buquebus “Lopez Mena”

30.05.2013 < 56 >

Thank you for your attention

30.05.2013 < 57 > <