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LNG for marine market development

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  • 1. Liquefied Natural Gas for marine transportation When will LNG be adopted by the marine market in the United States?The US shipping industry is facing an inevitable periodof upheaval. The next 3-10 years will see great change, INTRODUCTION GROWTH MATURITYalthough opinion is divided regarding the speed of changedriven by the possible use of LNG as a marinetransportation fuel.In preparation for their upcoming market development LNG EXPORTS ENVIRONMENTAL PTION DISRUreport, FC Business Intelligence has released a snapshot MIC ONOof the CHALLENGES and market DRIVERS that the United EC N URN OStates LNG marine market is facing. R RET STMENT? VE ND INVE RI G A TICE YD IN C Rate of adoption OR IN RA AT RA T P UL T S EG BELNG marine market: IAL R OF ENT TY Swhere are we now? PRICE DIF FER ILI IVE AB AT AIL ERN AV LT A E RED TE STAGG N RANatural Gas has the potential to play a significant O ADOPTIrole in a number of transportation markets in theUnited States and globally. Currently, the marine TimeLNG market is being built by pioneering companiesmaking substantial investments and formingstrategic partnerships. 80% Sulphur Oxides 90-95% Carbon Dioxide up to 25% Nitrogen Oxides 90% Particulate Matter 100% North American Emissions Control Area Entry in to force: 1 August 2012 Enforced by: Environmental Protection Agency (EPA) and the US Coast GuardMarket (USCG)drivers 1 2 3 4 5Why is there so much interest Regulatory driver Environmental Price differential Economic disruption LNG exportsin LNG as a marine fuel? The catalyst for change Studies of converted 8 trillion cubic Fuel cost is 80% of The U.S. DOE’s in the marine fuel diesel engines meters of natural total costs for ship desire to establish market is environmental have shown a gas reserves in the operators, therefore the US as a regulation, enacted by reduction of: United States has a cheaper, regulatory significant LNG the International led to a 10 year low compliant fuel exporter will take • Sulphur Oxides Maritime Organization in gas prices. The source may have a number of years by 90-95% (IMO). These regulations, marine market is a major impact on to be realised. While • Carbon Dioxide which will become more expected to see a competitiveness. the export market by up to 25% stringent in 2020, 20% or better price fully develops, there regulate the level of • Nitrogen Oxides advantage for will be increasing Sulphur Oxides, Nitrogen by 90% LNG over Ultra Low availability for the Oxides and Particulate • Particulate Matter Sulfur Diesel for the domestic LNG matter emitted. by 100% foreseeable future. market.Hierarchy ofchallenges 1 2 3 4What are the challenges to Staggered Training and best Return on Availability ofthe LNG marine market adoption rate practice investment? alternativesreaching a critical mass? First adoption will occur Demand for experienced Absence of a clear ROI LNG is not the only option from ship owners who operations professionals for marine vessels to available to ship owners have access to significant will increase, but there is prove categorically prove seeking to comply with CAPEX. Adoption will limited supply and best economic model. The the EPA regulations. occur in an ad hoc, practice for smaller, likely adoption rate will These alternatives are vessel-by-vessel coastal vessels. The be heavily influenced by not without their own approach whereby primary source of best the success of LNG challenges. Ship owners retrofitting and new practice on LNG haulage on shore. could also: builds will have to fit maintenance & refueling Similarly, given the 25+ a) Burn low sulfur fuels with the existing is for tankers. The year life cycle of vessels such as Marine Diesel operations plans. regulatory regime is still the ROI for retrofitting Oil (MDO); or in a nascent stage, with will vary significantly. b) Fit abatement further guidelines and technologies regulations on both new (i.e. exhaust gas builds and operations. scrubbers)Join the conversationThank you for your interest in LNG as a marine transportation fuel market in the United States.FC Business Intelligence Ltd hopes you found the information interesting.Please get in touch if there is more information, data, interviews with executives or networkingopportunities that you need. For more information please visit www.lngmarineevent.comand/or contact Piers French at pfrench@fc-bi.com.LNG market development presentation © 2013 FC Business Intelligence Ltd®The information of this document was prepared by FC Business Intelligence Ltd and its partners. FC Business Intelligence Ltd has no obligation to tell you wheninformation in this document changes. FC Business Intelligence Ltd makes every effort to use reliable, comprehensible information, but we make no representationthat it is accurate or complete. In no event shall Nuclear Energy Insider and its partners be liable for any damages, losses, expenses, loss of data or profit caused bythe use of the material or contents of this document.FC Business Intelligence Ltd grants you a licence to make one free copy of the information contained herein for personal or non-commercial use only. Accordingly,no part of this document may be copied, performed in public, broadcast or adapted without FC Business Intelligence Ltd’s prior written permission. Piers French atpfrench@fc-bi.com to request permission.

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