1

FIRST EVER ETHANE AS FUEL SHIP – CASE STUDY

Martial CLAUDEPIERRE – Business Development Manager LNG as fuel BUREAU VERITAS

Hans WEVERBERGH – Senior LNG Operations Manager

EVERGAS

Paolo CENINI - Project Manager WÄRTSILÄ

1) Introduction The maritime industry has already taken steps on the way to reduce CO2 and harmful SOx, NOx and PM emissions and in general air pollution, but pressure is increasing for the industry to make greater improvements in the fight against climate change, especially in the aftermath of the recent Paris COP21 congress.

If the marine industry is willing to meet the targets of emissions reductions set by different governing bodies and countries, drastic improvement of the propulsion systems, use of alternative fuels and technological progress need to be achieved.

Arising recently on the field of alternative fuels and clean propulsion is the use of ethane as a marine fuel. Bureau Veritas and Evergas, associated with major industry partners such as Wärtsilä made this dream a reality whilst improving the profitability of the operations. In fact, if efficiency and low emissions cannot be traded against safety, it is also absolutely necessary for the success of such a project to ensure mutual economic benefits for both the owner and charterer.

The fleet of eight multigas carriers known as the “Evergas Dragon Class Series” are the world’s largest ethane carriers. They create a virtual pipeline for American shale gas and especially ethane across the Atlantic, to transport the gas to be used by European petro chemical industrial INEOS. This paper will recall the emission regulations in place, and will develop the path for the use of ethane as a fuel for emissions compliance while simultaneously increasing the profitability of the ship’s operation through improved fuel flexibility and more efficient boil-off management. The paper will also detail the different technical measures that were taken into account in order to facilitate the use of Ethane as an alternative fuel to Methane. The last part of the paper will give the initial feedback from operation on ethane as fuel.

2) International environmental regulation on emissions

In January 2015 and in January 2016, new regulations decided by the International Maritime Organization (IMO) in 2008 for the shipping industry regarding air emissions became fully applicable.

2

2.1) IMO ECA and SECA

Figure 1 - ECA & SECA localisations

2.2) IMO limitation on SOx (regulation 14)

Sulfur oxide emissions released by ships exhaust gas which was already limited to 1% since July 2010 must now be lower than 0.1% since January 2015 in Northern European waters (North Sea, Baltic Sea and English Channel), and along the United-States and Canadian coasts and parts of the Caribbean sea. SOx and particulate matter emission controls apply to all fuel oil combustion equipment and devices onboard and therefore include both main and all auxiliary engines together with items such as boilers and inert gas generators. Alternatively, there are other means of compliance that are accepted, such as exhaust gas cleaning systems which operate by water washing the exhaust gas stream prior to discharge to the atmosphere. When using such arrangements there would be no constraint on the sulphur content of the fuel oils as bunkered provided the relevant after-treatment system is properly certified. More and more regions are considering implementing similar Emission Control Areas, and eventually a cap on the sulfur emissions of ships will be implemented worldwide in 2025 at the latest1. 2.3) IMO limitations on NOx (regulation 13)

Since January 2016, MARPOL Tier III requirement on NOx is in force for ships with keel-laying on or after 1 January 2016 and with engine output of 130kW and above in North American and US Caribbean ECA zones. Consequently, emissions of NOx are to be reduced by 80% compared to initial reduction level Tier I. Tier III requirement is not retroactive.

1 Depending on the result of a final availability review

3

Figure 2 NOx level according to Tier

Available technological solutions for compliance with the IMO NOx Tier III limits are:

Selective catalytic reduction (SCR) systems acting on eliminating NOx from exhaust gas on a catalyst bed,

Exhaust gas recirculation (EGR),

Alternative fuels such as liquefied natural gas (LNG), or ethane. 2.4) IMO limitation on CO2 (EEDI)

The CO2 emission represents total CO2 emission from combustion of fuel, including propulsion and auxiliary engines and boilers, taking into account the carbon content of the fuels in question. If energy-efficient mechanical or electrical technologies are incorporated on board a ship, their effects are deducted from the total CO2 emission. The energy saved by the use of wind or solar energy is also deducted from the total CO2 emissions, based on actual efficiency of the systems. The transport work is calculated by multiplying the ship’s capacity (dwt), as designed, with the ship’s design speed measured at the maximum design load condition and at 75 per cent of the rated installed shaft power. The EEDI, in establishing a minimum energy efficiency requirement for new ships depending on ship type and size, provides a robust mechanism that may be used to increase the energy efficiency of ships, stepwise, to keep pace with technical developments for many decades to come. It is a non-prescriptive mechanism that leaves the choice of which technologies to use in a ship design to the stakeholders, as long as the required energy-efficiency level is attained, enabling the most cost-efficient solutions to be used.

3) Monitoring, Reporting and Verification (MRV) European regulation on CO2 empssions

The EU Regulation on the monitoring, reporting and verification of emissions of CO2 from maritime transport (EU 2015/757) (hereafter: EU MRV Regulation) lays down rules for the accurate monitoring, reporting and verification of CO2 emissions and other relevant information from ships above 5,000GT calling at EU ports. Article 4 of the EU MRV contains the principles and Article 5 together with Annex I contain the methods for monitoring and reporting emissions of CO2 emissions and other relevant information on maritime transport. Annex II contains rules on the monitoring of other relevant information including distance travelled, time spent at sea and cargo carried (for passenger, ro-ro and container ships).

4

Figure 3 - MRV scheme

Each year the company with responsibility on the ship's operations has to report the results of previous year's annual monitoring of aggregated CO2 emissions emitted and other relevant information. In order to do so, companies shall apply the monitoring methodology incorporated in the monitoring plan (MP) as assessed by the verifier. The MP lays down the detailed monitoring rules to be followed when monitoring the CO2 emissions and other relevant information data for a specific ship. It is therefore a fundamental document. Regular and at least annual checks of the MP by the company are required so as to ensure that the MP reflects the nature and functioning of the ship. Also, according to the regulation, some specific circumstances, as the change of the company or some findings by the verifiers, will trigger the modification of the MP by the company. The CO2/fuel conversion factors to be used for the calculation of CO2 emissions will be most probably the EEDI conversion factors, which give a favorable CO2 emission to gas fuels.

Figure 4 - MRV implementation planning

4) Others regulations on air emissions

Three emission control areas have been established in the Zhujiang (Pearl River) Delta, the Yangtze River Delta, and in the Bohai Sea. The new regulations apply to all commercial trading vessels since 1st January 2016.

5

To comply with the new requirements, vessels are to use fuel oil with a sulphur content of no more than 0.5% m/m, or other equivalent measures to reduce emissions including exhaust gas scrubbing, alternative clean fuels and shore power (cold ironing). Hong Kong has also implemented a local restricted area for air emissions since 2015.

5) Gas as fuel

5.1) Natural gas (methane) as fuel

Using Liquefied Natural Gas (LNG) or Liquid Ethane Gas (LEG) as marine fuel is one of the options cumulating the most advantages on a long-term basis, in terms of air pollutant emissions and CO2 reduction. This statement is however subject to specificities depending on technologies (2 or 4 stroke, low pressure or high pressure gas injection).

Figure 5 - DF exhaust emissions

When we analyse 2 stroke dual fuel engines, it is interesting to see the differences between the 2 engines proposed on the market place, one using high pressure gas injection (above 300 bar) as per Diesel thermodynamic cycle (MAN B&W), the other one fulfilling Otto thermodynamic cycle with gas injection at a much lower pressure (WinDiesel).

Figure 6 - Emissions performances of 2 stroke DF engines

The MAN B&W Diesel cycle HP 2 stroke engine consumes a little bit less gas fuel, and emits much less methane slip. There is no change in power and no knocking issue. However it is necessary to have a SCR or EGR for the compliance to Tier III requirements.

6

The XDF is compliant to Tier III in gas mode. 5.2) Ethane as fuel

Burning Ethane as a fuel brings the same advantages for emissions compliance as LNG when used in a dual fuel engine operating on the Otto combustion principle. It should also be noted that given the current price development of LEG it also provides a feasible economic opportunity to achieve a lower fuel price in comparison to LNG, especially for an LEG carrier whom presumably has convenient access to LEG at a competitive price.

6) Presentation of EVERGAS

EVERGAS is part of JACCAR Group, through the GREENSHIP branch. The Greenship Gas / Evergas fleet is modern, environmentally friendly and fuel efficient.

7) Presentation of BUREAU VERITAS

Created in 1828, Bureau Veritas is a global leader in Testing, Inspection and Certification (TIC), delivering high quality services to help clients meet the growing challenges of quality, safety, environmental protection and social responsibility.

As a trusted partner, Bureau Veritas offers innovative solutions that go beyond simple compliance with regulations and standards, reducing risk, improving performance and promoting sustainable development.

Bureau Veritas is recognized and accredited by major national and international organizations. There are more than 60000 BV employees worldwide located in 1400 offices.

8) INEOS contract

Evergas won the first contract ever awarded for US shale gas (ethane) transportation from US to Europe

Long term contract with global chemical major Ineos

Transporting ethane gas from US East Coast to Northern Europe for Ineos

The contract was won through a highly competitive tender process

World #1 in offshore supply services

+ 480

Holding company of bulk and gas shipping

Premium seafood company in tuna & lobstering

Shipbuilding and repair of medium sized vessels

Property and asset management

3,000

Evergas Gas shipping

Setaf Saget Dry bulk shipping

7

Figure 7 - INOES operating routes

9) Description of the first ever ethane as fuel multigas carriers for IENOS : the 27500 cbm Dragon class vessels

6.1) General description

Figure 8 - Dragon vessels – Evergas courtesy

The Dragon vessels were originally designed with a dual-fuel LNG/diesel power using two 1,000m³ LNG tanks on deck powering two Wärtsilä 6L50 DF main engines, connected to two shaft generators. The propeller can be declutched to allow running the shaft generator also in port. In addition, 2 dual fuel 6L20 DF auxiliary engines are installed to provide electrical power. The ability to also burn ethane was added to allow use of the cargo gas as the vessels are destined initially for transport of ethane from the US to the UK INEOS petrochemical installations. The capability to efficiently burn ethane boil-off gas as engine fuel significantly reduces the need of gas re-liquefaction during the voyage. This means that less power is needed for the cargo handling, thus providing more efficient cargo and propulsion systems. It will also greatly reduce the need for bunkering, with all its related deviation, downtime, etc. 6.2) Main dimensions

Length oa: 180.30m Length bm: 170.80m Beam: 26.60m Design draft: 8.30m

6.3) Capacities & Deadweight

Cargo tanks: abt. 27,500m³ HFO tank: abt. 1,300m³ LNG tank: abt. 2,000m³

8

Diesel oil tank: abt. 400m³ Fresh water tank: abt. 250m³ Ballast tanks: abt. 8,500m³ Deadweight: abt. 20,400mt 6.4) Accomodation

Modern bridge with dual ECDIS and all features for North Atlantic trade Cabins for 26P, MLC 2006 compliant 6.5) Service speed & Consumption

Service speed: 16knots M/E consumption HFO mode per day around 30 Mt/24h M/E consumption LNG mode per day approx: 25 Mt/24h2 6.6) Class and Flag

BV Liquified Gas Carrier Gas fuelled Ship Type 2G (-163°C, 0.65 t/m3 , 4.5 bar), E0, NAUT-OC, PLUS, BWM-TP, TMON, BIS, IWS, EEDI. 6.7) Hull and propeller optimization

The ship’s hull and propeller system hydrodynamic performances have been optimized thanks to a towing tank test campaign at HSVA.

10) Fuel supply systems The vessels can carry LNG as well as Ethylene/Ethane and other LPGs. This means boil off from cargo tanks when carrying LNG/Ethane can be utilized as fuel in order to maintain a low tank pressure. Fuel to the engines can either be supplied from cargo tanks, from the dedicated fuel system or from both in parallel. The installed fuel supply system comprises two 1000 m3 fuel tanks, 2 fuel pumps, vaporizer, heater and a buffer tank. In addition, there is a tank head condenser, that allows condensation of ethane cargo versus vaporization of LNG fuel, thus limiting the requirement to use the reliquefaction system in case LNG is used as a fuel. The auxiliary equipment for the fuel supply system comprises 2 glycol pumps, 1 main glycol cooler, 1 steam heater and a glycol expansion tank. When boil off from cargo tanks is used as fuel, the fuel pressure must be 6 barg or above which means pressure of the cargo tanks alone is not sufficient. The cargo plant machinery used for this operation comprises of a NG heater, Knock-out drum (KOD), cargo compressor, cargo condenser and condensate return valve. Cargo from the cargo tanks is sent to the fuel system upstream the heater. There is also a connection from the outlet of the fuel pumps to the KOD in order to protect against too warm suction temperature.

11) DF engines principle As explained below, Wärtsilä’s four-stroke dual-fuel engines 50 DF are based on the Otto thermodynamic cycle, which means that it is necessary to first compress a pre-mixed air-fuel mixture inside the combustion chamber until an external source of ignition starts the combustion.

2 This is highly depending on the way to operate the vessel: 1 / 2 engines - cooling down requirements, etc..

9

Figure 9 - Source Wärtsilä

12) Comparison methane versus ethane as fuel

Switching from LNG to Ethane as fuel will influence most parts of the current cargo and fuel system. Each sub-system influenced is listed below with a comparison between methane and ethane fuel gas.

Properties Methane CH4 Ethane C2H6

Boiling point, 1 bar [deg.C] -161,5 -88,63

Density, gas 1 bar, 0 deg.C [kg/m3] 0,717 1,35

Density, saturated liquid 1 bar [kg/m3] 422 526

Critical pressure [barg] 46,41 47,83

Critical temperature [deg.C] -82,45 32,3

Latent heat of vaporization [kJ/kg] 511 490

BOG rate Cargo Tanks, 1 atm. [kg/h] 914 600

Lower calorific value MJ/kg 50.1 47.6

Lower calorific value MJ/m3 35.9 64.4

13) The issue of methane number

13.1) General

Manufacturers of gas engines use the so-called methane number (MN) for specification of gas quality requirements. MN characterizes the knock tendency of a certain gas when used in a gas engine operating on the Otto combustion process. The lower the MN of the gas, the more sensitive the gas will be to knocking.

13.2) Knocking issue

Wärtsilä’s four-stroke dual-fuel engines 50 DF are based on the Otto thermodynamic cycle, which means that it is necessary to first compress a pre-mixed air-fuel mixture inside the combustion chamber until an external source of ignition starts the combustion.

10

The necessary condition needed to provide full engine power is that the gas-air mixture is able to withstand the pressure generated inside the combustion chamber without pre-igniting, since that would generate the phenomenon known as “knocking”, which would have harmful consequences on the engine.

Figure 10 - Source Wärtsilä

The MN of pure methane is 100 whereas the MN of Ethane is approximately 43. This makes Ethane naturally more susceptible to knocking than Methane. Consequently, to maintain a constant knock margin, it is necessary to operate an Otto engine at lower load (BMEP) when burning Ethane than when burning Methane. The flow control system of a dual fuel engine controls the gas quantity by admitting the correct amount of gas to achieve the requested power output. The higher volumetric LHV of Ethane thus does not pose problems and the standard gas admission system of the Wärtsilä 50DF engine is suitable for Ethane.

14) Available gas engines for burning ethane as fuel There was no 2-stroke engine able to burn ethane as fuel available in the market at the time of contract signed. Today, two different technologies of DF engines are proposed: 14.1) 2 stroke MAN ME-GIE

The first test and operation of a MAN ME-GI (G50) on ethane gas will take place once ethane gas has been bunkered, after which the engine will officially be named a 7G50ME-GIE (Gas Injection Ethane) type. 14.2) 4 stroke 6L50DF Wärtsilä

The new capability of burning ethane as fuel meets the IMO Tier III regulations without the need of after treatment device such as EGR or SCR while using either LNG or LEG as fuel. The engines have the capability to seamlessly switch between Liquified Natural Gas (LNG), Ethane (LEG), Light Fuel Oil (LFO) or Heavy Fuel Oil (HFO).

An additional auxiliary benefit is that it requires relatively low gas pressure, in the range of 5-10 bar to operate. Alternative dual-fuel engines that operate on the gas diesel principle require gas pressures of approximately 300 bar for Methane and even higher pressure when using Ethane,

In this project some hardware modifications were required to tune the engine from an LNG capable engine to an ethane capable engine. Once ethane tuned, it can still run on LNG, but at a slightly lower efficiency.

The paragraph hereafter details the path for ethane as fuel operability and compliance to Tier III requirement.

11

15) Adaptation of the existing DF engines for burning ethane as fuel

15.1) General approach

A first meeting was organized in BV in order to review the main challenges brought by the change of gas fuel, including a potential revision of the HAZID. The applicable rules for this project are :

Bureau Veritas NR 467 - Rules for the Classification of Steel Ships, PtC Ch1,

IGC Code Chapter 16 Art. [16.9] and Chapter 19.

15.2) Description of the main technical and administrative challenges

The original propulsion design includes 2 main engines (two 6-cylinder in-line Wärtsilä 50DF engines mechanically coupled with a controllable pitch propeller), 2 shaft generators and 2 auxiliary engines, all possible to operate on dual fuel thus provides superior redundancy compared to conventionally built vessels. The gas as fuel is supplied either by natural boil-off, or when no enough natural boil-off is available from the cargo tanks, by forced gasification of the liquefied gas contained in two separate C-type tanks mounted on the weather deck. Since the main purpose of the vessels is to transport liquefied ethane gas (LEG), a request was made by Ineos and Evergas to the main partners of the project (Wärtsilä and Bureau Veritas) to study the possibility of not being limited to the use of LNG as fuel but also to use natural ethane boil off or forced ethane boil-off from the separates tanks as fuel in the Wärtsilä 50DF engines. Using ethane required extra engine room ventilation and additional gas detection, plus modifications to the main engines including a lower compression ratio, different turbocharger nozzles and de-rating of the engine to cope with the lower knocking resistance of ethane. 15.3) Power derating

The Wärtsilä engine was originally tuned to be able to accept gases having a methane number higher than 70 otherwise the power would need to be reduced in order to avoid knocking. Pure ethane is characterized by an MN of 43 which, following standard derating calculations, would lead to a maximum possible power output of 63% of maximum continuous rating (MCR). Since this output was deemed to be too low to guarantee normal vessel operations, Wärtsilä decided to re-configure the engine and tune the combustion parameters to mitigate the self-detonation problem.

12

Figure 11- Wärtsilä courtesy

. After testing and validating the new configuration, the target of attaining 73% MCR while operating on ethane was achieved with sufficient knock margin. The engines have the capability to switch between LNG or LEG to light fuel oil or heavy fuel oil without interruption of operation. When operating in liquid mode, the engines are still able to deliver 100% MCR. 15.5) Lubrication oil

Same rules as existing now for DF engines are to be followed, i.e. no differences in this aspect between Ethane and Methane. However the absorption capability is higher with ethane than with methane as ethane is heavier than methane. Taking into account that Wärtsilä is producing other engines using LPG (propane + butane) as fuel, that is heavier than ethane, with the same oil specification without any problem on absorption noted, this aspect was not considered as a critical issue. 15.6) Gas detector

The most appropriate device, capable to detect both Methane and Ethane mixtures have been selected (only for the installation running with both fuels). Due to the case of ethane gas fuel systems, additional gas detectors have been fitted where gas may accumulate including low down (lower zone) in the vicinity of the bilge wells. It should be noted that Ethane is slightly heavier than air, whereas Methane is significantly lighter than air. Extra care should thus be taken to ensure proper gas detection at lower levels where Ethane gas could potentially accumulate.

16) Agreement of the Flag administration for the use of ethane as fuel The owner had to seek the agreement of flag administrations for ethane as a fuel as ethane is not mentioned in the IGC code. A relevant justification file was prepared by BV and presented to the Flag for acceptance. Port state control authorities from Norway, UK, Belgium, Netherlands, and USA were also contacted for their approval of the flag endorsement. These authorities have confirmed they will accept this fuel, as long as the Flag confirms their approval.

17) EIAPP certificate on ethane as fuel mode for Tier III compliance

EIAPP certificate was delivered end of July 2015 after the results from Wârtsilä testing bench in Bermeo were available and accepted under witnessing by Bureau Veritas. The performances of the engine are even better in terms of NOx reduction when running on ethane as fuel compare to methane as fuel. Wärtsilä has also confirmed the thermal efficiency is higher using LEG than LNG

13

and the Total Hydrocarbon (THC) emissions are reduced when burning LEG compared to LNG. This in turn results in a tangible reduction in CO2 equivalent emissions when using LEG as an alternative to LNG which already has significantly reduced CO2 emissions compared to using liquid fuels in a diesel engine.

18) Other adaptation from methane to ethane as fuel

The fuel tank design was made initially for LNG as fuel. As LEG has a higher density compared to LNG it could affect the structural integrity of the tank and supports. In order to be within design limits for the tanks either pressure or loading limit might be lowered. Lowering the set pressure of the safety valves has been considered and it was found that the minimum set pressure can be lowered without changing the safety valve itself, only the pilot valve.

Design documentation was re-submitted to class for additional approval;

- Safety valve calculation, - Vent system calculation, - Filling limit calculation for fuel tanks, - Structural calculation of tanks and supports, - Ventilation, - Gas detection.

19) First operations of the INEOS Dragon ships

Figure 12 - Evergas & INEOS courtesy

The INEOS Intrepid, the world’s largest LNG multi gas carrier, left early March 2016 the Marcus Hook terminal near Philadelphia bound for Rafnes in Norway carrying a cargo of US shale gas ethane. This was the first time that US shale gas has ever been shipped to Europe and represents the culmination of a long-term investment by INEOS. The shale gas is cooled to -90ºC (-130ºF) for the journey of 3,800 miles, which is expected to take nine to ten days. US shale gas will complement the reducing gas feed from the North Sea. To receive the gas, INEOS has built the largest two ethane gas storage tanks in Europe at Rafnes in Norway and Grangemouth in Scotland. INEOS will use the ethane from US shale gas in its two gas crackers at Rafnes and Grangemouth, both as a fuel and as a feedstock. It is expected that shipments to Grangemouth will start later this year.

20) Feed back from ethane as fuel conversion and first operations

The derating of the engines, explained earlier in § 15.3, limits the maximum power available for the propulsion when operating in gas mode to 73% of the nominal maximum power. Due to the fact that Evergas vessels have more installed power that required, there is no impact on the operations since the operational speed is maintained.

14

Future LEG building projects using Wärtsilä 50DF should in any case take the available power using LEG into account to ensure the correct power is installed to maintain normal sailing speeds when operating in gas mode.

As a general remark, which applies to any gas fuelled ships, special care should be paid to ensure a very clean atmosphere during installation of the DF engines and auxiliaries equipment.

Evergas is currently still optimizing the ethane as a fuel for the Ineos trade. All parties had to learn how to deal with BL issues, how to account for the heel that is required for the ballast trip, etc. As Evergas gather experience, we will be able to streamline and optimize these operations for all departments, including receivers, accounting, and technical and of course the vessels.

21) Conclusions

With the Dragon fleet Ethane as fuel has proven to be the new alternative fuel for emission compliance. Bureau Veritas is very proud to have been selected by Evergas as a major partner, amongst other innovative companies such as Wärtsilä for this breakthrough project. The use of ethane as fuel reduce emissions and improve operational efficiency.

This new class of Dragon Multi Gas carriers from Evergas demonstrates that a new era of responsible and sustainable transport has become a reality.