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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 .