The COSTA Project - The Financials of LNG as Fuel Dr. Panayotis - PowerPoint PPT Presentation

The COSTA Project - The Financials of LNG “as Fuel” Dr. Panayotis Zacharioudakis Senior Researcher NTUA R&D Consultant OceanFinance – COSTA Greek Member State Coordinator SNAME seventh technical meeting 6 March 2014 COSTA Project – The Financials of LNG as Fuel

Presentation Outline Introd roduct ction on  The Persp spective ective of LNG “as Fuel”  COSTA TA Project ect @ a a Glance ce  Facts ts and Figures res for LNG Financials ncials  Ports ts / Terminals minals  Short rt Sea Shippin ing  Transi nsiti tion on to the LNG Era  Conclusions lusions  COSTA Project – The Financials of LNG as Fuel 1

Intr troduct oductio ion LNG as Fuel Perspective LNG Fuelled Vessels  COSTA Project – The Financials of LNG as Fuel 2

Intr troduct oductio ion LNG as Fuel Perspective LNG Indust stry ry Has an an Excel ellen ent t Safety ety Record rd  LNG has been Safely Delivered Across the Ocean for  Over 40 years  Over 45,000 LNG Carrier Voyages  More than 100 Million Miles,  Without Major Accidents or Safety Problems either in Port or at Sea  We should Follow a Mindful Approach for LNG as Fuel  An Accident Would Set Back the Planning for LNG as Fuel for Decades!!! COSTA Project – The Financials of LNG as Fuel 3

Intr troduct oductio ion LNG as Fuel Perspective 4 COSTA Project – The Financials of LNG as Fuel

Intr troduct oductio ion LNG as Fuel Perspective Sulphur Cap Regulations  COSTA Project – The Financials of LNG as Fuel 5

Intr troduct oductio ion LNG as Fuel Perspective EU Directives  COM(2013) 17. Clean Power for Transport: A European alternative fuels strategy : Union  strategic approach must build on a comprehensive mix of alternative fuels  COM(2013) 18. DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the deployment of alternative fuels infrastructure. All maritime and inland ports and roads of the TEN-T Core Network wil be equipped with LNG refuelling points. It also requires providing a sufficient number of CNG refuelling points.( by 31/12/2020) COSTA Project – The Financials of LNG as Fuel 6

Intr troduct oductio ion LNG as Fuel Perspective The Use of LNG as Fuel Mainly y Depends ds on :  LNG Spread over HFO and MGO  Financial Feasibility of LNG-as-Fuel Projects:  Retrofitting Existing Ships  New Buildings  Availability of a Critical Mass of LNG Bunkering Facilities  COSTA Project – The Financials of LNG as Fuel 7

Intr troduct oductio ion LNG as Fuel Perspective Intera eractio ctions ns Betwe ween n Shippi ping g Syste stem, m, LNG Industry, ustry, National onal and  Europe pean n Instituti stitution ons Major Driving Factor for Ports and Ship Projects is LNG Spread  National & EU Support is a Catalyst in Initiating & Promoting LNG Use.  Simultaneously, Green Face of LNG Justifies National & EU Support. The Rest is a “Chicken and Egg” Situation:  Supply point of View: Number of Available Facilities & Port Surcharge on  LNG Price are Critical for LNG Vessel Projects Demand Point of View: Number of LNG Fuelled Vessels Influences  Investment in LNG Facilities. COSTA Project – The Financials of LNG as Fuel 8

CO COSTA STA Pr Proje ject ct @ a Glance COSTA - EU Co-funded Project   COSTA Project CO 2 Transport emissions Abatement by LNG (2012 – 2014). Development of an LNG adoption Masterplan in the Mediterranean Sea. COSTA Project – The Financials of LNG as Fuel 9

CO COSTA STA Pr Proje ject ct MasterPlan Where? How much? Demand Analysis Supply Analysis Recommendation How? Decision Technical and Logistics Sustainability of the Solutions solutions COSTA Project – The Financials of LNG as Fuel

CO COSTA STA Pr Proje ject ct Continuation COSTA Political Closure – European Parliament, 19 02 2014 , Brussels   EU Foresees 2 Regional Projects (2014 - 2015) COSTA Project – The Financials of LNG as Fuel 11

CO COSTA STA Project Facts and Figures LNG Bunkeri ering g in Med is a Niche Market et but not a Blank k Page anymo more! re!  Results Based on a Comprehensive Model for Macro-Analysis Considering:  Vessel Trends towards LNG as Fuel  Critical Age Limit for Retrofitting  Various types Orderbook and Future Deliveries  Estimation on Refueling Quantities etc.  Obtain Information for Major Hubs, Satellite Ports:  LNG Demand per Site & Annum  Infrastructure Investment Costs  OPEX per Annum  Projects Viability  Required Bunkering Surcharge  COSTA Project – The Financials of LNG as Fuel 12

Facts ts & & Fig igures es Ports / Terminals Research arch Activi iviti ties es – Market et & Feasi sibi bility ity Studie ies: s:  Piraeus, Thessaloniki and Patra  Quantify Fleet Profile & Potential Users in 2020 – 2030  Reveal Accordingly LNG Needs in each Port  LNG Flow Simulation and Infrastructure Requirements  Financial Modeling and Investment Evaluation Under Uncertainty  Calculate “Sweet” - Break Even LNG Surcharge by Port  COSTA Project – The Financials of LNG as Fuel 13

Facts ts & & Fig igures es Ports / Terminals Market ket Surve vey: y:  Collect Statistical Data  Port Authorities  Statistic Agency  Construct truct Database base- sea-web eb.com .com  Preliminary Classification based on Vessel Type  Extended Classification based on Vessel Particulars:  Capacity (e.g. Dwt, TEU, berths)  Age  Installed Horse Power (kW)  Service Speed  COSTA Project – The Financials of LNG as Fuel 14

Facts ts & & Fig igures es Ports / Terminals LNG Demand nd Assessmen ssment: t:  Assumptions on Vessel Trends towards LNG as Fuel (e.g. Short Sea vs Deep Sea)  Define Age Limit for Retrofitting (e.g Below 10 or 15 years)  Estimate Refueling Quantities per Vessel Type & Route  Select Appropriate Dual Fuel Installations (MAN, Wärtsilä)  Calculate Refueling Demand and Number of Refuelings on a Daily and Yearly Bases.  Assess Seasonality Especially for Cruise and Ro-Pax Vessels  COSTA Project – The Financials of LNG as Fuel 15

Facts ts & & Fig igures es Ports / Terminals LNG Storage age Tanks: nks:  Distance from LNG Import Terminal is Critical  Lease Space in Terminal for Bunkering Activities  Offshore Installations, FSRU  LNG Refuel ueling ng Means: ns:  Assess Logistic Solution and Seek for Optimum Solution  Ships & Terminal Operation Profile (Vessels sequence, arrivals profile etc.)  Estimated Demand for LNG (per Vessel, Day, Year, High Low Season)  COSTA Project – The Financials of LNG as Fuel 16

Facts ts & & Fig igures es Ports / Terminals Piraeu eus: s:  Vehicles Carrier - Car Terminal  716 Port Calls / 202 Vessels  Container Ship - Container Terminal  2.398 Port Calls / 302 Vessels  Cruise Ship - Passenger Terminal  770 Port Calls / 110 Vessels  Ro-Pax Ship - Passenger Terminal  4.293 Port Calls / 31 Vessels  COSTA Project – The Financials of LNG as Fuel 17

Intelligence in Shipping Intro ntroduction duction LNG as Fuel Perspective If not In Piraeus then where?  COSTA Project – The Financials of LNG as Fuel 18

Facts ts & & Fig igures es Ports / Terminals Piraeu eus s (Container tainer Vessels): sels):  Three Classes:  Class Α (0 -1.999 TEU) – Small Feeder Vessels Connecting Hubs with Small Ports  Class Β (2.000 -7.999 TEU) – Feeder Vessels Connecting Hubs with Small Ports  Operating in Larger Distances Class C (8.000+ TEU) – Mother Vessels Performing Transcontinental Routes  COSTA Project – The Financials of LNG as Fuel 19

Intelligence in Shipping Facts cts & Fi & Figure res s Ports / Terminals Piraeu eus: s:  Piraeus is a Major Short & Deep Sea Hub  Age Determines Retrofit Potential  Size Determines LNG Demand  Preprocessing Container Vessels: COSTA Project – The Financials of LNG as Fuel 20

Facts ts & & Fig igures es Ports / Terminals Piraeu eus: s:  Destination and Installed Power are also Critical for LNG Demand  Preprocessing RoPax Vessels: “ Small Ro-Ro/Pax ” “ Large Ro-Ro/Pax ” Number of Arrivals 1132 756 Average Installed Power [kW] 12.735,6 29.090,4 Average Service Speed [ knots ] 22,2 36,0 Average Age 20,4 10,2 COSTA Project – The Financials of LNG as Fuel 21

Facts ts & & Fig igures es Ports / Terminals Piraeu eus: s:  Same Preprocessing Analysis for all Critical Vessel Types  Calculating for Each vessel Category:  Expected Number of Port Calls in 2020 & 2030  Average Refueling Quantity (m3)  Expected Percentage of LNG Fuelled Vessels  Expected Percentage of Vessels Refueling in Port  Expected Number of Annual Refuelings  Expected Annual Demand for LNG (m3)  COSTA Project – The Financials of LNG as Fuel 22