Outlook Overview LPG Exports LPG Imports Fleet supply Ton-mile - - PowerPoint PPT Presentation

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Outlook Overview LPG Exports LPG Imports Fleet supply Ton-mile - - PowerPoint PPT Presentation

Aug 17, 2022 21 likes •203 views

Outlook Overview LPG Exports LPG Imports Fleet supply Ton-mile Freight rates Order book stands at Ton-mile demand is At current fleet supply A new wave of PDH Exports via VLGC from 14% of the total fleet. expected to increase level,

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Outlook Overview

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LPG Exports

Exports via VLGC from North America is estimated to continue growing. Middle East growth rate slows down due to Iranian sanctions and OPEC cuts.

LPG Imports

A new wave of PDH plants come onstream in China and South Korea in 2019. Retail demand from emerging markets in Asia such as India, Indonesia remain strong.

Fleet supply

Order book stands at 14% of the total fleet. 85% of the newbuild

  • rders are backed by

traders/TCs.

Ton-mile

Ton-mile demand is expected to increase driven by sustained export growth from the U.S. But increasing newbuild activities could offset the growing ton-mile demand.

Freight rates

At current fleet supply level, VLGC rate is estimated to gradually recover. However, seasonality, change of behaviors and technology would make the freight market less

  • ptimistic.
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VLGC freight market in last 3 years

  • $10,000

$20,000 $30,000 $40,000 $50,000 $60,000 $70,000 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Cash breakeven TCE

Source: Clarksons Historical, BW Analysis

For the past 3 years, TCE has been mostly under industry cash breakeven levels at ~$25,000/day

Jan 2019 avg.TCE = $15,000/day FREIGHT RATES

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Source: IHS Waterborne, NGL Strategy Research

LPG exports

15% 19% 24% 28% 32% 35% 38% 40% 51% 46% 43% 43% 40% 41% 40% 38% 34% 35% 33% 29% 28% 24% 23% 22% 0% 20% 40% 60% 80% 100% 2013 2014 2015 2016 2017 2018 2019F 2020F

North Americas Middle East Others

North America is estimated to become the largest exporting region

Key Export Regions – Yearly Market Share Forecast

  • 10

20 30 40 2013 2014 2015 2016 2017 2018 2019F 2020F

Million tons North Americas Middle East

Key Export Regions – Yearly Forecast North America exports continue to grow, Middle East stabilises

LPG EXPORTS

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LPG imports

Source: IHS Waterborne

15.2 10.4 9.8 7.3 7.4 12.2 16.5 10.9 12.0 7.5 6.2 10.2 17.4 10.7 12.5 8.2 6.8 11.2

  • 2

4 6 8 10 12 14 16 18 20 China Japan India Southeast Asia South Korea Europe Million tons 2016 2017 2018 Stable Stable

LPG IMPORTS

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Narrowing arbitrage from US to FE

Source: Argus, BW Analysis Note: 2015 terminal cost is assumed based on average terminal cost in 2016, 2017 and 2018

($100) ($50)

  • $50

$100 $150 $200 $250 $300 $350

  • $100

$200 $300 $400 $500 $600 $700 $800 US$/ton

US$/ton

Implied Arbitrage (RHS) FE Propane price US Propane price Implied Arbitrage = FE propane CFR price (M+1) – Mount Belvieu FOB price – Terminal costs

FREIGHT RATES

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VLGC fleet development

Source: Clarksons Historical, BW Analysis

2 6 11 26 11 9 3 2 13 8 35 46 25 10 18 19 1

  • 1
  • 2
  • 7
  • 6
  • 4
  • 6
  • 3
  • 2
  • 2
  • 5
  • 6
  • 4

100 102 98 129 137 140 140 137 152 142 179 227 260 265 277 292 293

  • 50

50 100 150 200 250 300 350 (10)

  • 10

20 30 40 50 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Recycling Potential Recycled To be delivered Delivered Total numebr of VLGC by year-end (RHS)

Fleet size has almost doubled in 6 years from 2014 to 2019

14% of

  • rderbook

FLEET SUPPLY

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VLGC asset price

Source: Clarksons Historical, BW Analysis

$73 $47 $65 $40 $45 $50 $55 $60 $65 $70 $75 $80 $85 $90 $95 $100

Million US$

Newbuild VLGC delivered price

  • Avg. Stock Market Price in NBE

5-year old NBE price

FLEET SUPPLY

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Entry Barriers Behaviors Technology & Innovation

Lower barrier to entry Increase efficiency and transparency Charterers increase their controls of ships

Disruptions in shipping

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Technology giants are eyeing at shipping industry

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Technology + Tech giants with high capitals Increased efficiency and transparency in shipping Pressures on margin

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How BW LPG “Think Different”

LPG Propulsion

Fuel for the future

Smart Ship

Innovating for the future

Product Services

Fully integrated product delivery

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No deviation Deck tanks Round voyage

Economical

Fuel flexibility Clean

Green Efficient Flexible Approved

BW LPG is charting a sustainable future through LPG propulsion

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Cost Efficient Today & Tomorrow

Houston - Chiba - Ningbo - Houston via Panama Canal

LPG HFO Compliant Fuel

Assumptions

Fuel prices Distance: 20,534 nm USD/mt 2019 YTFeb 2020E Speed: 16 knots, 5% sea margin LPG 370 350 ULSHFO 480 450 Carrying capacity 49.370 mt HFO 400 310 LPG available for fuel or sales 2.770 mt LPG fuel autonomy @ 36.5 tons per day 76 days Calculation includes Pilot Fuel consumption

  • Houston - Chiba - Ningbo - Houston (via Panama Canal)

57 days Safety range 19 days Source: Argus, TFS 12/2/2019 Fully ref Propane @ sg of 0.58

  • 5,000

10,000 15,000 20,000 25,000 2019 YTFeb 2020E

Fuel cost

USD/day

USD 6,600

per day savings

USD 6,200

per day savings

LPG HFO Compliant Fuel LPG HFO Compliant Fuel 13

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Embracing Innovation with

Smart Ships in Action Aimed at turning ships into digital enterprises, the smart ship project connects and controls the entire ecosystem within the vessel and transmits data to a digital cloud for remote monitoring and greater business value.

Key Advantages  Improved furl consumption  Enhanced operation efficiency  Increased compliance  Improved crew safety  Reduced risk of collisions  Lower manpower needs  Lower OPEX expenses  Reduced injury & cargo loss claims  Reduced human error with greater automation

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Commercial Services At a Glance

  • Approx. USD 2 Billion invested in VLGC’s

49 vessels, average age of owned VLGCs at 7 years (Global average age 9 years) Entered the gas transportation business in 1978 and have grown from 6 to 47 VLGCs Flexible Chartering Solutions CoA / Time Charter, SPOT, Storage / STS

Assets Fleet History Chartering Projects

24/7 Customer services

Dedicated team bringing together

  • ver 100 years of

market experience

Sale and purchase, newbuilding, adjacent segments

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Product Services Team

A team of 5 dedicated professionals with over 60 years

  • f LPG and trading experience

in blue chip organizations

  • Approx. USD 2 Billion invested

in VLGC’s Transported over 13 Million tons of LPG in 2018 State of the art systems to support cargo delivery A low-risk and fully-integrated product delivery service to customers

Assets Experience Systems Service Trade Finance

Support from BNP Paribas

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Projects Sale and Purchase

Chartering

Technical

Operations

Enhancing Our Value Proposition

Providing integrated product and shipping solutions

Product Services

OSLO

Chartering Technical & Operations

SINGAPORE

Chartering Product Services Projects Technical & Operations

HOUSTON

Technical & Operations Product Services : productservices@bwlpg.com Chartering : chartering@bwlpg.com Projects : projects@bwlpg.com Fleet Technical : fleettech@bwlpg.com Operations : fleetops@bwlpg.com

Contact Us 17

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SLIDE 18

https://www.bwlpg.com/investor-centre

THANK YOU

For more information please visit our official website for BW LPG business news, financial results, presentations, company reports and the latest share price. 18