Methanol l A A Cl Clean, Co Cost-Effective Marine Fuel Solu - - PowerPoint PPT Presentation

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Methanol l A A Cl Clean, Co Cost-Effective Marine Fuel Solu - - PowerPoint PPT Presentation

Methanol l A A Cl Clean, Co Cost-Effective Marine Fuel Solu lutio ion MTCC Car Carib ibbean Reg egional Wor orkshop Jul uly 2, 2, 20 2019 19 I Cha haguaramas, s, Trinidad Jas ason Chesko, Sr Sr. . Mana anager, Glo


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SLIDE 1

Methanol l –

A A Cl Clean, Co Cost-Effective Marine Fuel Solu lutio ion

MTCC Car Carib ibbean Reg egional Wor

  • rkshop

Jul uly 2, 2, 20 2019 19 I Cha haguaramas, s, Trinidad Jas ason Chesko, Sr Sr. . Mana anager, Glo lobal Mar arket De Development Methanex Corp Corporation

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SLIDE 2
  • Methanex Corporation
  • Methanol Marine Fuel
  • Attributes/Business Case
  • Commercial Developments

Agenda

2

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SLIDE 3

Methanex Corporation

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SLIDE 4

The world’s largest producer and supplier of methanol to major international markets

Methanex

Production Sites Distribution Terminals and Storage Facilities Global Office Locations Shipping lanes

Headquartered in Vancouver, Canada, Methanex operates production sites in Canada, Chile, Egypt, New Zealand, the United States and Trinidad and Tobago. Our global operations are supported by an extensive global supply chain of terminals, storage facilities and the world’s largest dedicated fleet of methanol ocean tankers.

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SLIDE 5

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28 vessels, including 7 methanol dual-fuel vessels with 4 more on order

Waterfront Shipping

Cabo Negro II Caribbean Spirit Global Spirit Magellan Endeavour Patagonian Mystic Falkanger Finnanger Fjellanger Sabrewing Scarlet Ibis Tamiat Navigator World Navigator Taranger

Lindanger er Tara ranaki i Sun un Mari ri Jon

  • ne

Leik eikanger Mari ri Bo Boyle le

Medium Range Fleet 45,000 - 50,000 DWT Class Me Medi dium Rang nge e Flee eet 50,00 000 0 DWT WT Me Metha hanol

  • l Dual

al Fuel el Engi gine e Clas ass Handy Size Fleet 20,000 - 30,000 DWT Class Coastal Fleet 1,000 - 10,000 DWT Class

Mariline Marinex Medalta Adventurer Sakhara Lotus Marit Yelena Argo Chemist

Manc nchac Sun un Ca Cajun un Sun un

SCT Matterhorn

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SLIDE 6

Methanol Marine Fuel

Attributes/Business Case

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SLIDE 7

Source: IMO

IMO Sul Sulphur Lim Limits s – Mar arpol An Annex VI VI

IMO limits SOx content of fuel to 0.1% in ECAs. Global sulphur cap of 0.5% (from current 3.5%) to come into effect in 2020.

IMO Nitr itrogen Oxid xides s Lim Limits s – Mar arpol An Annex VI VI

Methanol & other clean burning marine fuels being phased in due to increasingly strict emissions regulations

Marine Fuel Emissions Regulations

Tier III NOx limits effective in North America in 2016 and North and Baltic effective 2021 (newbuilds only)

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SLIDE 8

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Methanol is an innovative, economical alternative fuel solution with many benefits

Methanol for marine

Diesel bunker fuel

Methanol l marin ine fu fuel

  • Low emissions
  • Safe, environmentally friendly
  • Wide availability
  • Simple technology with low

incremental cost

  • Competitive fuel costs
  • Fuel flexibility
  • Successfully in use today &

commercialization activity expanding Methanol

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SLIDE 9

Methanol is a clean-burning fuel that meets stringent emissions regulations

Emissions Reductions

Source: Stena Lines Emission reductions when compared to heavy fuel oil

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Tier III Com

  • mplia

liant With With Water Inj njectio ion

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SLIDE 10
  • Methanol (typically produced from natural gas) is a lower carbon content fuel compared to HFO,

resulting in ~13% CO2 reduction (Energy Efficiency Design Index)

  • Methanol production from renewables and/or utilizing excess CO2 streams can reduce CO2

significantly more

Methanol Reduces CO2 emissions

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Source: Methanol Institute

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SLIDE 11

Methanol is a clear, colourless liquid that quickly and naturally biodegrades

Methanol - Environment, Health and Safety

  • More environmentally benign than

conventional marine fuels i.e. HFO and MGO

  • Long history of methanol safe handling
  • International guidelines (IMO - IGF Code)

for methanol as marine fuel being developed

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SLIDE 12

Methanol infrastructure already in place and well positioned to reliably supply the global marine industry

Wide Availability

Source: Methanex

Methanol global terminal locations based on available information; not a complete list

Methanol Global Terminal Locations

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SLIDE 13

Source: Stena Line

Methanol has minor modification requirements and modest incremental cost

Simple Technology

New high pressure common rail system High pressure double walled pipe High pressure pump Methanol tank in double bottom Inert gas system (nitrogen)

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SLIDE 14
  • Methanol is an economically viable alternative marine fuel over the cycle
  • Methanol technology offers fuel flexibility – operate on methanol or MGO

Cost Competitive Fuel Cost vs. Marine Gas Oil (MGO)

*Chart source: Platts and IHS Chemical

  • Methanol: Average of North America / Europe / Asia published spot prices. Price adjusted to energy equivalent of MGO (2.16 factor)
  • World MGO price based on Bunker Index all port benchmark

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  • Global 6% discount to MGO

historically

  • Discount expected to rise post

2020

  • Economics vary by region
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SLIDE 15
  • Liquid fuel at ambient temperature & pressure
  • Low cost infrastructure
  • Compatible with diesel infrastructure
  • Methanol: Competitive fuel costs, fuel flexibility & low incremental investment = potential for

short payback

Low-Cost Infrastructure and Capital Costs

Mo Mode dest incr incremental l cos

  • st to
  • con
  • nvert

rt or

  • r build

build ne new engin ngines to ope perate on n methan hanol

  • Engine technology straightforward/minor

modifications required

  • Small amount of diesel used as pilot fuel
  • Flex fuel (diesel or methanol) maintained

mitigating commodity price & technology risks

Uti tili lize existin ing g sup upply ly chain in/i /infrastructure

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Eur European Mar aritim time Saf afety ty Agency y Study y – 2-3 3 ye year ar pa payb yback k on n me meth thanol l vessels ls – ne new or retrofit it

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SLIDE 16

Methanol Marine Fuel

Commercial Developments

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SLIDE 17
  • Stena Germanica ferry converted to run
  • n methanol in 2015
  • Gothenburg to Kiel
  • Powered by four Wärtsilä 4-stroke

engines (24 MW total)

  • Straightforward fueling (liquid fuel)
  • Fuel switching (Methanol or MGO) is fast,

simple and reliable. No loss in engine speed or output

  • Small efficiency improvements observed

versus diesel

The world’s first methanol-fueled ferry

Methanol in Use Today: Stena Germanica Ferry

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SLIDE 18

The world’s first methanol-fueled tankers

Methanol in Use Today: Waterfront Shipping Tankers

Lindanger Taranaki Sun Mari Jone Leikanger Mari Boyle

Medium Range Fleet 50,000 DWT Methanol Duel Fuel Engine Class

Manchac Sun Cajun Sun

  • Commercial-ready technology
  • In 2016, Waterfront Shipping launched 7

vessels with methanol dual-fuel MAN ME- LGI 2-stroke engines

  • 4 new methanol dual-fuel vessels on order

for 2019 delivery

  • Multiple ship owners
  • Operating safely and reliably, across the

globe: ~54,000 operating hours. Modest efficiency improvement over MGO demonstrated

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SLIDE 19

Methanol Marine Fuel Projects

Several Initiatives Supporting Commercialization of Methanol in Large & Small Engine Segments

Methanol Fueled Pilot Vessel, GreenPilot Project, Sweden Swedish Road Ferry, SUMMETH Project

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Proje

  • ject

Lo Locatio ion Descrip scriptio ion Part artners Tim Timeline line

LeanShips Europe Engine Conversion (Volvo Penta D7) Ghent University, Methanex & partners 2015-2019 SUMMETH Sweden Road Ferry Conversion Swedish Maritime Assn, SSPA, Methanol Institute & partners 2015-2018 GreenPilot Sweden Pilot Boat Conversion ScandiNaos, SSPA, Methanol Institute & partners 2015-2018 MethaShip Germany Passenger shipping study Caterpillar, Flensburger, Helm, Lloyd’s, MAN, Meyer Werft 2014-2018 China MOT China Fishing Boat Conversion China Ministry of Transport (MOT), Methanex, Tianjin University, CCS 2017-2018 Fastwater Europe Waterborne transport; four vessel types Consortium of partners incl. Methanex & Methanol Institute 2019+ Green Maritime Methanol Netherlands Study of nine vessel types: 1 – 12MW TKI Maritiem & partners 2019-2020

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SLIDE 20

Thank you!

www.methanex.com linkedin.com/company/methanex- corporation @Methanex

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SLIDE 21

Summary

Methanol Marine Fuel Video

https://www.methanex.com/about-methanol/methanol-marine-fuel

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SLIDE 22
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SLIDE 23

ADDITIONAL SLIDES

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  • Methanol significantly reduces NOx compared to diesel with current engine technology, but not quite to Tier III levels
  • Tier III NOx limits can be met with water + methanol (without need for EGR or SCR)

Emissions Reductions – Tier III NOx

Source: MAN

EGR 1 2 3 SCR CR Water er + + Meth thanol

  • MAN has developed technology

demonstrating Tier III NOx can be met with a mixture of methanol & water

  • Reduced additional capital and operational

expenses related to SCR/EGR after treatment

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Positive Reception on Methanol from Marine Industry

“We ha have fou

  • und the

he te technolo logy y for

  • r ha

handlin ling me meth thanol l is s well ll de develo loped and nd offers a saf safe dual dual-fuel l solu solutio tion for

  • r low
  • w-fla

lashpoin int t liquid fuels”

Patrik Mossberg Chairman Marinvest/Skagerack Invest

“We are very enth thusia iastic ic abou

  • ut

methanol’s possibilities and nd it has has the he po potentia ial l to to be be the he mar maritim time fue uel l

  • f the future”

Carl-Johan Hagman CEO Stena Line

“Investing in technology that enc ncou

  • urages the

he us use of f a fue uel l like me meth thanol l tha hat si signif ific icantly ly reduces emis missio ions is s a step tep for

  • rward for
  • r bo

both th our com

  • mpany

y and the shipping industry”

Akio Mitsuta Senior Managing Executive Officer Mitsui O.S.K. Ltd

“We have found methanol to be be one ne of f the he be best t alt lternati tive fue uels ls due due to to its ts wi wide de avail ilabili ility, the he use use of f exis xisti ting infr nfrastr tructure, and d the he si simpli licit ity y of f the he engin ngine design and ship technology”

Rolf Westfal-Larsen Jr. CEO Westfal-Larsen Management

ST STEN ENA LI LINE NE MITSUI O.S.K. LI LINE NES, LT LTD. WES ESTFAL-LARSEN N MANA NAGEMENT NT MARINV NVEST / SKA SKAGERACK INVEST 25

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SLIDE 26

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Strong partnership between reliable stakeholders

Vessel concept developed together with MAN Diesel & Turbo, Alfa La Laval, DNV‐GL and the Norw

  • rwegian Mari

aritim ime Directorate. Se Seven ship ships in total from Hy Hyundai Mip ipo Dockyard and Min inaminippon Shipbuilding for Mari arinvest, Westfal‐Larsen and MOL on long term time charter with Waterfront Sh Ship ippin ing

  • wned by Methanex.
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From Idea to Reality

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Novel ideas based on proven technology

Centered around the MAN Ultra‐long‐stroke dual fuel en engine (6G50ME‐B9.3‐LGI), ensuring a soli solid an and reli liable framework. Designed with instantaneous, automatic fall‐back to co conventional fuel in the unlikely event of a disruption of methanol supply. Able to operate at unrestrict cted po power, eq equivale lent efficiency, reduce ced em emis issions, with 5% pilot fuel. Fuel Booster Injection Valves with integrated pr pressure boo booster allo low for

  • r low pr

pressure su supply of

  • f me

methanol l fuel, through double wall pipes from the Liquid Fuel Supply System on main deck.

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Safety features

 Fail ail Safe System – Immediate, auto change over from Secondary Fuel to Primary Fuel  Nit itrogen Purging  Dou Double Walle lled Piping and Components  Leakage De Detectio ion  Continuous Ventilation  In Intr trinsic ically sa safe components  Fixed CO2 O2 Exti Extinguishing System  CC CCTV Monitoring  Alarms with shutdown and purging  Fi Fire fi fightin ing on dec deck & in en engin ine room

  • om
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Accolades from the marine industry for use of clean-burning methanol

Recognitions and Milestones

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Status

40% 40% of

  • f fl

fleet operating on Methanol by mid 2019  ~54 ~54,0 ,000 operating hours 3 3 fue fuel op

  • pti

tions s (HFO, MGO, Methanol): flexibility in many price scenarios Cylinder chambers are muc uch cl cleaner Engineering crew transfer their ir kno knowle ledge from conventional engines MAN provides LGI GI-M spe specific trainin ing to engineers Technical improvement and lea earnings continue