SAILING “THE GREEN PLANET”BEYOND 2020
IMOSHIPPING INDUSTRY
OIL REFINING INDUSTRY
01 02 03
IMOSHIPPING INDUSTRY
OIL REFINING INDUSTRY
01 02 03
IMO
INTERNATIONAL MARITIME ORGANIZATION
“Safe, Secure, and Efficient Shipping on Clean Oceans”
OBJECTIVE
174 STATESMEMBER & 3 ASSOCIATE
MEMBERS(Faroes, Hong Kong, & Macao)
“Creates regulation”
ROLE
Thailand
3
IMO REGULATING INTERNATIONAL MARITIME SHIPPING
IMO
Annex VI
“Air pollution from ships”
KEY PREVENTION
CONVENTION
MEMBERSHIP
MEMBERS IN ASEAN
Vietnam
Indonesia
Singapore
Philippines
“THAILAND is not a member,but might need to follow
the regulation”
4
SULFUR CAP IN BUNKER FUEL UNDER MARPOL ANNEX VI
Annex IV
Annex V
THE OF THE MARINE SULFUR REGULATION
0.1%S cap in ECA zones
20150.5%S globally in 2020
Jul 2017
0.5%Scap globally
7X REDUCTION OF %S IN GLOBAL BUNKER FUEL
4.5%S to 3.5%S globally
2012
North America ECA
Baltic & North Sea ECA
2020
5
IMO
0.5%S in some China’s ECA zones
Oct 2018
China ECA
TO SULFUR CAP (1/2)
6
(97% of global shipping tonnages)
91 Countries Ratifying
IMO
GOVERNMENT ENFORCING IMO REGULATIONS, NOT IMO
HSFO Carriage Ban
on Ships without Scrubbers
X
7
Major Companies Control
Most of Shipping Capacity
Major 50
Shipping
Firms
(94%)
World Shipping Capacity
Others
IMO
CONCERNS OVER REPUTATIONAL RISK & LOSS OF INSURANCE COVERAGE
TO SULFUR CAP (2/2)
No. of Ships Bunker Demand
85%
25%
Large Ships Dominate
Bunker Oil Consumption
Large
SmallShips
IMOSHIPPING INDUSTRY
OIL REFINING INDUSTRY
01 02 03
Shipping Industry
OPTIONS
9
LOW-S FUEL OIL (LSFO)/ MARINE GASOIL (MGO)
I
SCRUBBER
II
TECHNOLOGY
10
Exhaust GasWashwater
Scrubbed Exhaust Gas
Sea Water
from Engine
SCRUBBER PROCESS53% of Global Fleet
Aged +20 years
Washwater Disposal
Limited Scrubber AvailabilityUp-Front Cost (VLCC ~ $3-$6 MM)
KEY CHALLENGES
Shipping Industry
TO COMPLY WITH IMO’s REGULATIONS
11
0.5%S
Shipping Industry
LOW-S FUEL OIL (LSFO)/ MARINE GASOIL (MGO)
I
SCRUBBER
II
LNG
III
BUNKERING TECHNOLOGY
Large LNG Bunker Tank
Up-Front Cost
Limited Bunkering Ports Complex Operation
LNG BUNKERING
12
Shipping Industry
OPTIONS
13
SCRUBBERLOW-S FUEL OIL (LSFO)/ MARINE GASOIL (MGO)
RISING LSFO & MGO DEMAND
LNG
0.5%S
SCRUBBER LNG
02 Shipping Industry
I II III
GLOBAL BY FUEL TYPE
14
2017
64%High-S
Fuel Oil
2% LNG
2020
11%High-S
Fuel Oil
3%LNG
AFTER 2020
High-S
Fuel OilLNG
Shipping Industry
5.7 MMBDTotal
Demand6.1 MMBD
IMOOIL REFINING
INDUSTRY
01 03
SHIPPING INDUSTRY
02
OPTIONS
16
III REFINERYINVESTMENTI CRUDE OIL GRADE
SWITCHING
II FUEL BLENDING
Oil Refining Industry
Higher Sweet Crude Demand
SOUR CRUDE SWEET CRUDE
Oil Refining Industry
GRADE SWITCHING
17
SULFURSULFUR
HIGHLOW
FUEL
18
Oil Refining Industry
DIESEL HIGH SULFURFUEL OIL
REFINERY
19
Oil Refining Industry
SIMPLE REFINERY
HIGH-SFUEL OIL
DIESEL
JET
GASOLINE
Long Construction Period & High Investment
TREATING UNIT
UPGRADING UNIT
DIESEL
JET
GASOLINE
LOW-SFUEL OIL
OPTIONS
20
III REFINERYINVESTMENTI CRUDE OIL GRADE
SWITCHING
II FUEL BLENDING
Oil Refining Industry
INVESTMENTIII REFINERY
DEMAND GROWTH OUTPACING SUPPLY GROWTH
Additional
LSFO/MGO Demand
Additional
LSFO/MGO Supply
21
LSFO/MGO Price
Year
Price
20202018
22
THE GREEN PLANETSAILING