LNG SHIPPING OVERVIEW

0 INDEX

1. FLEET EVOLUTION & SHIPPING COSTS

• Worldwide traded volumes
• Countries involved in LNG (1990, 2003, 2013, Future?)
• LNG Spot Charter Rates
• Shipping costs

2. FLEET FEATURES
• General Features
• Orderbook to be delivered 2013-2015

3. TRENDS
• Fleet trends
• Propulsion technologies
• Cargo containment system
• Floating LNG (FLNG)
• Regasification projects
• Mini-LNG carriers
• Compressed Natural Gas (CNG)
• Contracts

4. CONCLUSIONS

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 FLEET EVOLUTION
1 & SHIPPING COSTS

3
 1 MARKET EVOLUTION (I)

Worldwide LNG traded volumes:

300

250

200

Mtpa 150

100

50

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Year

In 2012, the interbasin trade grew by 31%... Mtpa

2011 2012
Increased spot demand in the Far East (post Fukushima) Atlantic
Pacific 17 23
Reduced spot demand in Europe (recesion) Pacific
Atlantic 2 2

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 1 MARKET EVOLUTION (II)

1993

U.S. UK S. Korea
Spain Malaysia Japan
France Indonesia Taiwan
Italy Brunei Libya
Countries involved in LNG shipping Algeria Australia
Belgium UAE
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 1 MARKET EVOLUTION (II)

2003

Portugal Greece
Dom. Rep. Turkey
T&T Oman
Puerto Rico
Countries involved in LNG shipping
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 1 MARKET EVOLUTION (II)

2013

Peru Norway Yemen Egypt

Chile Lituania Russia Nigeria
Argentina Nedherlands India Equatorial
Brazil Brunei China Guinea
Countries involved in LNG shipping Mexico Angola? Thailand
Canada Kuwait
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 1 MARKET EVOLUTION (II)

Future

Colombia Iran? Croatia?

Israel Jamaica? Cyprus?
Papua N.G. Bahamas? Pakistan?
Poland Germany? Philipines?
Countries involved in LNG shipping Singapore Venezuela? Cameroon?
Uruguay? Mozambique?
8 Tanzania?
1 MARKET EVOLUTION (III)

The maturing of the LNG shipping business and its expansion worldwide has led to
increased trades, mainly interbasin. The effect of this has been seen in the spot rates over
the last couple of years and record hires have been paid (150 k$/day).

Source: Fearnleys AS
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 1 MARKET EVOLUTION (IV)

Costs in US$ per Mmbtu delivered (Non-spot shipping)

138K ST 170K DFDO

20 Days 60 Days 20 Days 60 Days

Distance (Miles) 4,000 12,870 4,000 12,870

Delivered 3.05 2.90 3.84 3.65

Quantity(TBtu)
Total Cost (MM$) 3.23 9.53 2.77 8.03

Unit Price 1.06 3.28 0.72 2.20

(US$/MMBtu)

Assumptions 138K ST 170K DFDO

Charter rate (US$) 80,000 80,000
Bunker Price (US$) 600 HFO 600 / MDO 900
Port Costs (US$) 200,000 200,000
LNG Price ($/MMBtu) 8 8
Boil Off (%/day) 0.15 0.15
Speed (Knots) 18.5 18.5
Propulsion Steam Turbine Dual Fuel Diesel Electric
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 1 MARKET EVOLUTION (V)

Furthermore, a strong global market under expansion has lead

to:

 More players (new owners, producers and traders)

 More vessels
 Diversity of technology solutions
 Innovation
 New contracting models

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 FLEET
2 FEATURES

1
2
 2 FLEET FEATURES (I)

Fleet evolution
450
400
350
300

Num. 250
Vessels 200
150
100
Current distribution
50
0
3%
49%
Year
48%

Producers: RasGas, QatarGas, NLNG, Tangguh, Sonatrach, etc.

Majors: Stream, BG, GdF-Suez, BP, etc.
Traders: Vitol, Trafigura, MorganStanley, Gunvor, etc.
Producers Majors Traders
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 2 FLEET FEATURES (II)

Number of Cargo containment

vessels 3%

21 100 30%
32%
MOSS
Under Construction NO 96
Existing MARK I,III
380 Scrapped 36%
Other

Vessels age Cargo capacity

49 87 38 45 Q-flex/Q-max (>200,000
26 0-5 years cbm)
68
5-10 years Big (150-200,000 cbm)
67
25-20 years
229 Standard (100-150,000
151 20-30 years cbm)
> 30 years Small (<100.000 m3)

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 2 FLEET FEATURES (III)

New building orderbook to be delivered 2013-2017

Cargo containment
Shipbuilder STX Moss
Offshore&Shipbuilding 7 (7%)
3
5 4 8 Daewoo
16
GT NO 96
Hyundai Heavy 31 (31%)
37 Industries Mark III
27 Samsung 62 (62%)

Kawasaki Heavy
Industries
Mitsubishi Heavy
Industries

Cargo capacity Owner Alpha

1 5 4 2 2 Awilco LNG
2 2 3 2
4
2 Brunei Gas Carriers
30 4 5
3 5 BW Gas
6
170.000 - 180.000 m3 Cardiff
70 145.000 - 165.000 m3 Chevron
10
Dynagas
9
GasLog LNG
13 Golar LNG
15
1 2 SK Shipping/Marubeni
15 K-Line
 3 TRENDS

1
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 3 TRENDS

Fleet trends

New “conventional” vessel size stablished in 155/165,000 cbm. The Q-

Flex/Q-Max sizes have been project specific.

New players

Spot Market development

Potential underutilised in backhauls

New technologies in both shipping and floating liquefaction and

regasification

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 3 TRENDS (I)

Propulsion technologies

Engines Reliquefaction unit

Compression
Re-heat ST

Economizer

Reheater

Reheater burner
Main burner

ME-GI Boiler

Images from LNG journal & MHI.co.jp

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 3 TRENDS (I)

Consumptions comparison

PROPULSION SYSTEMS

ST DFDE SS-RL SSDF

Speed (kn) (140.000 m3) (170.000 m3) (210.000 m3) (170.000 m3)

Ldn (T/day) Bllst (T/day) Ldn (T/day) Bllst (T/day) Ldn (T/day) Bllst (T/day) Ldn (T/day) Bllst (T/day)

16 126 122 76 87 90 102 60 70

18 148 140 104 106 122 125 80 82

19.5 180 173 136 131 160 155 105 102

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 3 TRENDS (II)

Containment system

Preferred systems for NBs :

• NO96, 31% of the orders:

• Consists of a thin, flexible (primary membrane), which is in contact with the cargo, a layer of plywood boxes filled with Perlite
called (primary insulation), a second flexible membrane similar to the first (secondary membrane) and a second layer of
boxes also filled with Perlite in contact with the inner hull (secondary insulation).

• The first and the second barriers are identical and are fabricated from cryogenic Invar.

• Mark III, 62% of the orders

• Consists of a thin flexible membrane as primary barrier (1.2 mm stainless steel), which bears against a supporting insulation
structure embodying a secondary barrier (triplex scab) and further secondary insulation bolted o the inner hull.
• Insulation sandwich panels consisting of two layers of foam assembled by bonding with polyurethane or epoxy glue.

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 3 TRENDS (II)

New cargo containment systems (under development)

• ACT-IB (Aluminium Cargo Tank – Independent Type B):
• Developed by Daewoo Shipbuilding and Marine Engineering.
• Cargo capacity up to 210,000 m3
• Independent prismatic tanks.
• Aluminium and Polyurethane Insulation
• Increased security and flexibility in partial loads

• ADBT (Aluminium Double Barrier Tank System):

• Developed by Aker yards and DNV.
• For operations in harsh environments such as the Arctic.
• Independent prismatic tank barriers built in Aluminium.
• Capacities from 1,000 to 150,000 m3
• Short building time and cost efficient.

• FSP (Flat-Panel, Semi-Membrane, Prismatic-Shaped)

• Developed by General Dynamics and Wavespec.
• Semi-membrane prismatic tanks.
• Small-scale applications, offshore tanks or storage units.
• Short and cheap building processes.
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 3 TRENDS (III)

Floating LNG (FLNG)

Firm Projects;
Prelude (Australia)
Malaysia
• Facilities
Colombia
• Platform.
• Anchoring and swelling systems.
• Liquefaction system.
• Cargo containment.
• Unloading system.

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 3 TRENDS (IV)

Regasification projects

Existing and under construction FSRU`s projects

18
16
14
17
12
10
8
6
8
4
2
0
0
2005 2010 2015

• Vessels with facilities to regasificate LNG to high-pressure natural gas.

• Annual emission capacities up to 7 bcm.
• Tank capacity up to 170,000 cbm in last generation vessels.
• More than 20 potential projects under study

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 3 TRENDS (V)

Mini-LNG carriers
• Vessels designed for small scale LNG distribution.
• LNG bunkering trade.
• Double manifold height.
• C-Type pressurized tanks (3 – 5 bar).
• No Boil-off management system.
• Ship to ship operation capability.

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 3 TRENDS (VI)

• Compressed Natural Gas (CNG)

• CNG Market opportunities

• Reduced distance between production and clients.

• Reduced gas volumen.
• Lack of infraestuctures.

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 3 TRENDS (VII)

Contracts

Time charter party still the most frequent choice

 Spot, medium and long term contracts
 ShellLNGtime1 used on spot fixtures
 Charterer specific formats for long term

However, backhaul opportunities and a market progressively

more focused on the spot (more liquidity) demand new
solutions:

 Contracts of affreightment
 Voyage charter party

…but the LNG shipping is very rigid due to the Take or Pay
contracts characteristic of the business tied together with very
narrow laycans so these formats are challenging to implement.
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 4 CONCLUSIONS

2
7
 4 CONCLUSIONS

There has been a dramatic increase in the fleet and players over the last 10
years.

The traffics have become globalised and the fleet has suffered the
corresponding constraints, very well reflected in the spot market rates.

The increase in vessel sizes and the implementation of new technologies in

propulsion have reduced the unit shipping costs significantly.

There have been no significant breakthroughs in cargo containment

technologies.

LNG shipping has expanded somewhat into the liquefaction and regasification
ends of that part of the value chain and this tendency is here to stay.

Developments in mini-LNG and CNG are at their first stages.

The Time Charter Format is still the most frequent choice but there are
interesting challenges that may require more flexible contract formats; Voyage
Charters, Contracts of Afreightment, etc.

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Thanks for your attention

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