www.alfalaval.com© Alfa Laval

© Alfa Laval

ScrubbersGothenburg May 16 2018

Peter Leifland

President Marine division

www.alfalaval.com© Alfa Laval

Steam and hot water production

Thermal fluid heating systems

Heating and cooling

Desalination

Ballast water treatment

Inert gas system

Gas combustion

Tank cleaning

Waste heat recovery

EGR water treatment

Exhaust gas

cleaning

Crankcase gas

cleaning

Cargo

pumping

Sold and serviced

by Framo AS only

Oily waste

treatment

Fuel conditioning

Filtration Oil cleaning

Environmental protection

- 25% of our capital sales

Container ship Bulk carrier

Gas tankerTanker

Alfa Laval on board

www.alfalaval.com© Alfa Laval

Sulphur emissions - Compliance options

Slide 3

SWITCH TO LNG

Always in compliance

High investment cost

Limited infrastructure

Price uncertain

USE LOW-SULPHUR FUEL

Low investment cost

Higher price than HFO

Fuel quality issues

INSTALL A SCRUBBER

Continued use of HFO

Payback time depends

on fuel price delta

www.alfalaval.com© Alfa Laval

Continuous product development

Vast experience with PureSOx projects

Quality, reliability

Technical support & service presence

∑ A major supplier to the industry

IN GENERAL

SPECIFICALLY

Systems in compliance since 2009

PureSOx - the Alfa Laval scrubber

www.alfalaval.com© Alfa Laval

Scrubbers and the environment

Slide 5

• Further destillation of HFO at the refineries will be

costly.

• SOx is a result of combustion and is harmful. The

scrubbing process converts SOx to harmless sulphate

salts which are naturally present in the oceans. The

world oil reserves contain 0,0002% of the sulphate in

the oceans.

• Particulate matters (unburned HFO, lube oil, soot,

calcium, nickel, vanadium = PM) is caught in the

scrubber. The scrubber catches 50-70% of PM in open

loop and 95% of PM in closed loop operation.

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“The economics for scrubbers

are going to become very clear

in January 2020 – and very

compelling.”

Iain White, ExxonMobil

• Low-sulphur fuel

availability might be

under pressure after

2020

• Fuel prices are

difficult to predict

In the top 4 ports the

price difference between

HFO and MGO is

$225.00 - $285.00 /mt

*Based on global average per mt at Bunkerworld.com as per 1-02-2018

$0

$100

$200

$300

$400

$500

$600

$700

2015-0

2-0

1

2015-0

4-0

1

2015-0

6-0

1

2015-0

8-0

1

2015-1

0-0

1

2015-1

2-0

1

2016-0

2-0

1

2016-0

4-0

1

2016-0

6-0

1

2016-0

8-0

1

2016-1

0-0

1

2016-1

2-0

1

2017-0

2-0

1

2017-0

4-0

1

2017-0

6-0

1

2017-0

8-0

1

2017-1

0-0

1

2017-1

2-0

1

Bunker price difference $/mt*

HFO MGO

Fuel availability and price development

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• Yearly fuel cost low Sulphur mix

9 MUSD

• Install a scrubber as retrofit

o 3.7 MUSD (open loop) or

o 4.2 MUSD (closed loop)

• Yearly fuel cost HFO plus

scrubber 7 MUSD

Exhaust Gas Cleaning on board VLCC

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MARKET POTENTIAL 2017-2025

~5,000 vessels

TOTAL MARKET

RETROFIT

Worldwide fleet

~60,000 vessels

NEWBUILD

Yearly average

~1,500 vessels

MARKET MODEL BASED ON EG

• Fuel price difference

• Investment cost

• Vessel: – operating profile

– fuel consumption

– remaining lifetime

• Financial position

ship segment

• Charter/owner

Scrubber market potential− How many vessels will install a scrubber?

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Scrubbers- Expected market development, (MEUR)

KEUR

In September 2017

M€

0

100

200

300

400

500

600

700

800

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

New build

Retrofit

www.alfalaval.com© Alfa Laval