Working of LNG Gas Supply System

Issue Date: 12 Apr 2016
LNG
LNG‐Gas Supply System for ME‐GI gas‐injec on system Manifold (3 page brochure)………………………………………… 3‐5
Maritime Propulsion 3/31/16: LNG engine set in Crowley’s new ConRo ship ………………………………………………………….. 7
HHP Insight 3/30/16: LNG‐Diesel dual fuel powerplant placed in ﬁrst of two ships……………………………………………….. 8‐9
Maritime Propulsion 3-11-16: MAN Diesel & Turbo inks deal with Japan’s JFE…………………………………………………………
FT 03/09/16: Time called on era of ever‐bigger container ships……………………………………………………………………………...
WSJ 03/09/16: Chevron LNG bet meets big chill……………………………………………………………………………………………….……..
FT 2/11/16: Maersk’s stumble highlights sluggish state of global trade …………………………………………………………………..
01/10/16:US will be a gas supplier to the world by tomorrow ………………………………………………………………………..……..
WSJ 12/02/15: Out‐of‐Bounds CO2 elutes talks………...……………………………………………………………………………………….…….
 Gas Marine Fuel 12/03/15: The Majority of shipping vessels are set to run on LNG within 10 years…………………………
 SMi 12/03/15 Presents its masterclass on...Gas as a Marine Fuel.…………………………………………………………………………...
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 Marine Link 11/03/15: First LNG Containership Transits the Panama Canal……………………………..…………………………...… 19

LNG‐Gas Supply System for ME‐GI gas‐injec on system Manifold product sheet……………………………………………... 6
CONTENTS: Page:
Within 10 years the majority of shipping vessels will run on LNG...a cleaner, alternative fuel
source. The newest innovation in LNG carrier engine design, M-type, electronically controlled,
gas injection (ME-GI) engines, optimize the capability of slow speed engines by running directly
off BOG (removing the need to reliquefy the gas) or utilizing fuel oil, and ME-GI propulsion
results in less fuel consumption.
Environmental legislation is currently impacting the marine market segment. Ships were
traditionally powered by Heavy Fuel Oil (HFO), which produces high levels of harmful
pollutants. LNG is one of the only fuel source able to comply with the environmental legislation.
Dynamic Controls designs and manufacture the gas supply system for ME-GI gas-injection
system manifolds.
The following pages 3 thru 36 , represent various publications/news articles regarding LNG
applications, markets, and developments.
Page 1 of 36

LNG
 Marine Link 11/03/15: ABS deems Crowley Product Tanker “LNG‐Ready’…………………………...……………………………….. 20
 WSJ 07/22/15: Economic Anchor. July 22, 2015……………………………………………………………………………………………………….. 21
IGU World LNG Report 2015 edi on—sec on 5 …………………….………………...………………………………………………………….. 22‐34
Marine Link 06/10/15: DSME launches LNG carrier for Turkey………………………………………………………………………………….. 35
Motorship 11/27/13: MAN hosts phase of EU LNG ini a ve. November 27, 2013.…………………………………………………. 35‐36

CONTENTS—CONTINUED
The following pages 3 thru 35, represent various publications/news articles regarding LNG
applications, markets, and developments.
Page 2 of 36

Page 3 of 36

Page 4 of 36

Page 5 of 36

Gas Supply System for ME-GI gas-injection system Manifold
LNG
Market(s) for Dynamic Controls’ LNG, gas supply system for ME-GI gas-injection system manifolds
are,Container ships, and other cargo ships—Please refer to, Shipping Industry Fleet -page 21 of 36.
19 Apr 2016
Piellisch, Rich. Crowley is building
two LNG-fueled Commitment-
class ConRo ships for the Puerto
Rico trade. March 30, 2016 .
http://hhpinsight.com/
marine/2016/03/crowley-maritime-
sets-first-man-engine/. 4/21/16.
Application
Product Code Sizes Type of Manifold Design Pressure
Non-
Vented Ventilated Methane Ethane
GVT-C4-A-1-D-1-A-4 1" Single line 400 Bar/5801 psi X X
GTV-C4-A-1-D-2-A-4 1” Dual line 400 Bar/5801 psi X X
GVT01-C4-A-1-D-1-A-4 1” Single line 400 Bar/5801 psi X X X
GVT01-D5-B-1-D-1-A-4 1 ½” Single line 420 Bar/6207 psi X X X
GVT01-E6-B-1-D-1-A-4 2” Single line 420 Bar/6207 psi X X X
GVT-A2-3-A-1-A-1-A-4 ¼” Small block
No. of DCL
cartridge valves
in each manifold
16
16
16
16
16
4
* Small block with A2 valves installed, used on Nitrogen only and is supplied as an additional unit with all the above
•ME-GI Gas-Injection System Manifolds for New Build and Retrofit market(s) Worldwide
Methane Manifold Block Exploded View Nitrogen Manifold Block Exploded ViewGas Supply System
*
DCL Cartridge Valves, refer to: 1 of 27
Page 6 of 36

The main engine has been set onto Crowley Mari me Corpora on’s
new vessel, El Coquí, the first of two new Commitment Class ConRo
(combina on container and Roll/On‐Roll/Off) ships that will be pow‐
ered by liquefied natural gas (LNG) for use in the ocean cargo trade
between Jacksonville and Puerto Rico.
“This state‐of‐the‐art engine technology will add efficiency while con‐
nuing to reduce impacts on the environment, one of Crowley’s top
priori es,” said John Hourihan, senior vice president and general man‐
ager, Puerto
Rico services.
“U lizing this
green technolo‐
gy is just anoth‐
er way we are
demonstra ng
our commit‐
ment to the
people of Puer‐
to Rico, our
customers and
the environ‐
ment. It also
bears men oning that neither of these ships, which have been design
specifically for the Puerto Rico trade, gets built without the Jones Act –
a federal statute that provides for the promo on and maintenance of a
strong American merchant marine.”
A video showing the progress of se ng the engine may be viewed
online here.
The engine was placed using a series of heavy li s by 500‐ton cranes in
the shipyard of VT Halter Marine, a subsidiary of VT Systems, Inc.,
where El Coquí (ko‐kee) and sister ship, Taíno (tahy‐noh), are under
construc on.  The engine has a total weight of 759 metric tons and
measures 41 feet high, 41 feet in length, and 14.7 feet wide.
“Customers will not only be able to experience the same reliable and
dedicated service they have with Crowley today, but also will have the
added benefit of lower emissions once these two ships join the Crowley
fleet,” said Jose “Pache” Ayala, Crowley vice president, Puerto Rico.
“Crowley is making a significant investment in the Puerto Rico trade to
provide faster transit mes while con nuing with the ability to carry
and deliver the containers, rolling cargo and refrigerated equipment
our customers count on.”
Designing, building and opera ng LNG‐powered vessels is very much in
LNG Engine set in Crowley’s new ConRo ship—March 31, 2016
http://hhpinsight.com/marine/2016/03/crowley-maritime-sets-first-man-engine/
line with Crowley’s overall EcoStewardship posi oning
and growth strategy. The company formed an LNG
services group in 2015 to bring together the compa‐
ny’s extensive resources to provide LNG vessel design
and construc on management; transporta on; prod‐
uct sales and distribu on, and full‐scale, project man‐
agement solu ons.
  These Commitment Class, Jones Act ships are de‐
signed to travel at speeds up to 22 knots while maxim‐
izing the carriage of 53‐foot, 102‐inch‐wide contain‐
ers. Cargo capacity will be approximately 2,400 TEUs
(20‐foot‐equivalent‐units), with addi onal space for
nearly 400 vehicles in an enclosed Ro/Ro garage.
LNG-Diesel Dual Fuel Powerplant Placed in
First of Two Ships –March 30, 2016
CrowleyMari meSets1stMANEngine. in Dual
Fuel, LNG, Marine, Milestones by Rich Piellisch
Crowley Mari me is trumpe ng the se ng of the main engine
onto its new El Coquí container ship as ‘a cri cal milestone.’ El
Coquí is the first of two Commitment‐class LNG‐diesel dual fuel
ships being built for the Puerto Rico trade. Photo from Crowley’s
excellent video shows the MAN Diesel & Turbine 8S70ME‐C8.2‐GI
engine ‘A‐frame’ being lowered into place.
Crowley Mari me reported “another cri cal mile‐
stone” as the main engine has been installed in its El
Coquí newbuild, the first of two Commitment‐class
ConRo (combina on container and Roll/On‐Roll/Off)
ships that will be powered by liquefied natural gas to
connect Jacksonville and San Juan.
The engine is a MAN Diesel & Turbo‐design 8S70ME‐
C8.2‐GI built at the Tamano Works of Mitsui Engineer‐
ing & Shipbuilding in Japan. It was installed in El
Page 7 of 36

The engine is a MAN Diesel & Turbo‐design 8S70ME‐C8.2‐GI built at the
Tamano Works of Mitsui Engineering & Shipbuilding in Japan. It was
installed in El Coquí by VT Halter Marine in Mississippi, where a second
Commitment‐class ship, the Taíno, is also under construc on.
“This state‐of‐the‐art engine technology will add efficiency while con‐
nuing to reduce impacts on the environment, one of Crowley’s top
priori es,” Crowley Puerto Rico services senior VP John Hourihan said
in a release.
Placed in Stages
The engine was placed in stages via a series of heavy li s by 500‐ton
cranes at the VT Halter yard.
“This ship is basically being built around the engine,” Jensen Mari me
construc on manager Patrick Sperry says in a video on the El Coquíin‐
stalla on. (Jensen is Crowley’s Sea le‐based naval architecture subsidi‐
ary. Also quoted in the video are Crowley new construc on engineering
manager Raymond Bland and construc on management VP Ray
Martus.)
Faster
“Crowley is making a significant investment in the Puerto Rico trade to
provide faster transit mes while con nuing with the ability to carry
and deliver the containers, rolling cargo and refrigerated equipment
our customers count on,” said Crowley Puerto Rico VP Jose “Pache”
Ayala.
The Jones Act‐compliant, Commitment‐class, Jones Act ships are de‐
signed to travel at speeds up to 22 knots while maximizing the carriage
of 53‐foot, 102‐inch‐wide containers. Cargo capacity will be approxi‐
mately 2,400 TEUs (20‐foot‐equivalent‐units), with addi onal space for
nearly 400 vehicles in an enclosed Ro/Ro garage.
Deep Experience in Puerto Rico
In addi on to their main ME‐GI engines (the first to be built in Ja‐
pan; HHP Insight, July 30, 2014), each of the new Crowley ships will
have three MAN Diesel & Turbo 9L28/32DF auxiliary engines.
Crowley notes that it has served the Puerto Rico market since 1954,
“longer than any other carrier in the trade.” The firm has more than
250 Puerto Rico employees, and is “the No. 1 ocean carrier between
the island commonwealth and the U.S. mainland with more weekly
sailings and more cargo carried annually than any other shipping line.”
Continued: LNG- Diesel dual fuel powerplant placed in First of Two ships.-March 30, 2016
http://hhpinsight.com/marine/2016/03/crowley-maritime-sets-first



The 8S70ME‐C8.2‐GI engine weighs 759 metric tons.
Coquí by VT Halter Marine in Mississippi, where a second Commitment‐
class ship, the Taíno, is also under construc on.
There are two MAN diesel engines
installed on/in each ConRo container
ships, each engine has the

Dynamic Controls,  LTD.
ME‐GI gas‐injec on
system manifold
(Refer to page 3‐5 of 35)

The DCL ME‐GI gas‐injec on system
manifold.
Page 8 of 36

G50ME‐C9 Engine Successfully Passes TAT
MAN Diesel & Turbo’s G50 engine has successfully passed its
Type Approval Test at Mitsui in Japan. Upon entering service,
the engine will power the world’s first ethane‐fuelled eco‐
friendly LEG (Liquefied Ethane Gas) carrier – the first of three
such vessels to be built in China by SinoPacific Shipyard for
the German shipowner, Hartmann Reederei. Besides oper‐
a ng on ethane,
Finland Breaks the Ice on LNG

Polaris undergoing ou i ng at Arctech Helsinki Shipyard
in January (Photo: Eric Haun)Due for delivery in Q2 2016,
Finland’s new icebreaker Polaris is the world’s first to fea‐
ture dual fuel liquified natural gas (LNG) and diesel propul‐
sion, earning the icebreaking vessel designa ons as the
Finland’s most powerful and the world’s greenest.
Big Power for the Prince of Wales

MT30 gas turbine li ed into the U.K. Royal Navy’s latest
aircra carrier HMS Prince of Wales (Photo: John Linton)
The U.K. Royal Navy’s Queen Elizabeth Class aircra carri‐
ers presently under construc on are due to become the
centerpiece of the na on’s defense force. Upon entering
opera on, each ship will essen ally serve as floa ng four‐
acre military base capable of travelling up to 500
MAN Diesel & Turbo Inks Deal with Japan’s JFE
Posted by Michelle Howard
Supply of German manufacturer’s energy‐efficient marine en‐
gines to Japanese market complies with stringent environmen‐
tal regula ons
Japanese engine manufacturer JFE has entered a new coopera‐
on agreement with MAN Diesel & Turbo for MAN's 32/44CR,
35/44DF, 48/60CR and 51/60DF modern four‐stroke engine
types. The agreement applies to marine newbuild projects for
ships to be deployed on Japanese domes c trade routes, and
where the shipyards and shipowners involved are located in
Japan. JFE has produced and supplied medium‐speed diesel
engines since 1964 under the SEMT Piels ck license, which was
acquired by the MAN Group back
in 2006.
The aforemen oned MAN Diesel &
Turbo common‐rail engines cover a
power range of 3,600 to 21,600 kW
and their well‐proven, state‐of‐the‐
art, fully electronically‐controlled,
common‐rail injec on system is
suitable for both heavy fuel oil and
dis llate fuels. This technology,
developed in‐house by MAN Diesel & Turbo and fully op mized
for its engines, provides superior performance in terms of fuel
consump on and smoke emissions, especially at part load, com‐
pared to the same engines’ IMO Tier II versions that feature
conven onal injec on system.
Upon customer request, the common‐rail engines can be pro‐
vided with ECOMAP capability, an innova ve feature for the
MAN 32/44CR and 48/60CR engines: the flexibility of the CR‐
system permits the engine to be programmed to follow differ‐
ent SFOC/power characteris cs, with each having an op mal
efficiency at different load points. Hence, the customer is pro‐
vided with the poten al to realize a be er fuel economy
through changing the engine’s opera ng profiles. Especially
aboard vessels with mul ‐engine installa ons, the combina on
of such CR engines with an intelligent power management sys‐
tem enables the maximal exploita on of the engines’ flexibility
poten al.
The dual‐fuel engines covering the power range of 3,180 to
18,000 kW can be operated in the O o (gas mode) or Diesel
(diesel mode) cycles from LNG in the former to more tradi‐
onal HFO, MDO or MGO in the la er mode. Significantly,
the dual‐fuel engines can switch between these fuels at any
engine load between 15 to 100 percent maximum con nu‐
ous ra ng (MCR) without disrup on to the power supply.
Extremely environmentally friendly opera on is achieved in
gas mode when using LNG as fuel with negligible sulphur
(SOx) and par cle emissions, while carbon dioxide (CO2) and
nitrogen oxide (NOx) emissions are respec vely reduced by
20 and 85 percent compared to diesel mode. Accordingly,
running the engines in gas mode complies even with the
stringent IMO Tier III levels without the need for any exhaust
‐gas a er‐treatment.
Issue Date: 21 Mar 2016
Page 9 of 36

Time called on era of ever-bigger container ships –March 9, 2016
The race to operate ever‐bigger container ships could be sail‐
ing towards the finishing flag a er a consultancy said that pur‐
suing yet another big increase in size would not be cost‐
efficient.
Up to now, shipping lines have found that the larger the ship
is, the cheaper it is to carry each container. The capacity of the
biggest container ships afloat has risen sharply in the last five
years and more than doubled since 2000.
High quality global journalism requires investment.
But Drewry Shipping Consultants said the next step‐up in size
would impose such significant costs on ports that they would
outweigh the advantages of moving cargo in ever‐larger ves‐
sels.
The research by Drewry comes a er lines have poured billions
of dollars since the financial crisis into new, bigger ships, which
has contributed to the industry’s financial woes. Lines have
not only had to find hundreds of millions of dollars per vessel
to buy the ships but have suffered sharp earning declines as
the new ships have created excess capacity, driving down fees
per container shipped.
Denmark’s AP Møller‐Maersk, whose Maersk Line operates
the world’s biggest container ship fleet, warned in Febru‐
ary that the combina on of factors was producing market con‐
di ons “significantly worse” than during the 2008‐09 financial
crisis.
The highest‐capacity ships currently afloat — Mediterranean
Shipping Company’s Oscar class, introduced last year — are
395m long, 59m wide and can carry 19,224, 20 equivalent
units (TEUs) of containers. A 40 container — the most com‐
monly‐used size — is around two TEUs. Fi een years ago, the
biggest vessels carried only around 8,000 TEUs.
Tim Power, Drewry’s managing director, said the consultancy
had modelled the overall costs of moving containers on a se‐
ries of ship sizes and had found efficiency savings on the big‐
gest ships currently afloat.
But the company then ran a simula on on a s ll‐larger behe‐
moth that carried 24,000 TEUs and might exceed the 400m
length and 60m breadth that is the current maximum for to‐
day’s ships.
Page 10 of 36

MELBOURNE, Australia—Six years ago, Big Oil was so confident in the outlook for global energy demand that it bet tens
of billions of dollars to turn part of a remote Australian island known for its breeding grounds of rare sea turtles into a
vast gas‐export hub.
Now, the Chevron Corp.‐led Gorgon plant has become emblema c of how quickly the assump ons that underpinned
giant energy bets world‐wide have been shaken by falling energy prices.
On Tuesday, Chevron said it had started producing liquefied natural gas—natural gas cooled to a liquid form so it can
be transported by ship—from the Gorgon project and the company expects to send its first cargo to customers in Asia
next week. However, the plant is becoming opera onal at a me when investors are more ski sh about the health of
China’s economy, amid an oversupply of major commodi es.
Last month, Chevron, which owns nearly 50% of Gorgon, was among 10 U.S. oil companies whose credit ra ngs were
cut by Standard & Poor’s due to the oil‐price rout. Another of Gorgon’s big investors— Exxon Mobil Corp.—had its
triple‐A corporate ra ng placed on watch by S&P for a possible downgrade.
Many experts say Gorgon, now es mated to cost $54 billion to build versus an original budget of $37 billion as site
construc on progresses, offers a scant return on the huge investment with energy prices at current levels. Oil prices
were at around $60 a barrel—and rising—in September 2009, when Chevron, Exxon and Royal Dutch Shell PLC signed
off on the project’s construc on. That is roughly 60% above where oil prices sit now.
Gas sales from LNG projects in the Asia‐Pacific region
such as Gorgon are linked to swings in oil prices,
meaning returns on investment are more vulnerable
to vola lity in commodity markets than export‐
oriented facili es in the U.S. In 2015, LNG prices in
Asia roughly halved.
Energy companies say shareholders will benefit from
a guaranteed revenue stream from Australia, backed
up by a stable regulatory regime. Chevron es mates
gas output from Gorgon will last at least 40 years.
Also, Chevron and its partners have locked Asian
customers including China into deals linked to oil
prices that last up to 20 years, meaning they must
pay for natural gas supply whether they need it or
not.“We expect legacy assets such as Gorgon will
drive long‐term growth and create shareholder value
for decades to come,” John Watson,Chevron’s chief
execu ve, said. Spokespeople for Exxon and Shell,
which own about 25% of Gorgon each, declined to
comment.
Last year, China’s LNG imports fell 1% as the econo‐
my cooled. At the same me, rapid growth in North
American shale‐gas produc on sparked fears of a
global energy glut that is likely to take years to clear.
“We’re looking at a world of significantly lower
returns compared to the old days of the LNG indus‐
try,” said Michelle Neo, a Singapore‐based analyst at
energy consultancy FGE.
Gorgon is Chevron’s biggest global bet on LNG and it will produce up to 15.6 million metric tons of LNG a year, plus
enough gas to generate electricity for 2.5 million Australian homes.
Gorgon, along with seven other gas‐export facili es in Australia and neighboring Papua New Guinea, promised to help
redraw the energy map by moving the epicenter of the global gas trade away from the poli cally vola le Middle East.
About $180 billion was commi ed by companies including Chevron,ConocoPhillips and France’s Total SA to Australia’s
gas‐export industry between 2009 and 2012.
As well as concerns raised by the impact of falling prices on margins, onshore LNG projects are costly because they
require refrigera on tanks and a network of transporta on pipelines, while in many cases sea channels need to be
created for LNG tankers to arrive at ports and load up.
In addi on, Gorgon’s checkered record since star ng construc on has undermined confidence in its returns.
The project “is the poster child of rampant cost infla on gone wrong in the Australian LNG industry,” said Neil Beve‐
ridge, a Hong Kong‐based senior analyst at Sanford C. Bernstein. He es mated that the project’s overall cost could
come in at close to $60 billion, or roughly $4,000 a ton of capacity—about twice the current break‐even es mate based
Chevron plans more capital spending cuts– March 9, 2016
on current prices.
Gorgon’s construc on on isolated scrubland off Australia’s northwestern coastline coincid‐
ed with a parallel investment boom in other resources such as iron
ore and gold.
The result was that Chevron had to pay more to hire people—from
pipe fi ers to welders—while the construc on frenzy helped to
drive up the cost of raw material imports such as steel. A strength‐
ening Australian currency inflicted more pain for Chevron, which
had calculated its costs in U.S. dollars.
Barrow Island’s status as a government‐protected nature reserve
since 1910 also brought complica ons. Chevron and its partners
had to comply with strict environmental condi ons, ranging from
shrouded lights to avoid disturbing the nigh me ma ng of marine turtles to some of the
world’s toughest quaran ne procedures to cut the risk of invasive species being brought in
by workers.
Chevron expects the project to add a little more than 200,000 barrels a day to its
produc on when fully opera onal. That compares with the company’s output of 2.67
million barrels a day in the final three months of 2015. Gorgon and another Australian LNG
project, known as Wheatstone, together accounted for nearly half the US$15.4 billion that
Chevron invested in oil and gas in 2014.
However, such LNG projects will welcome long‐term cargo revenue and analysts recognize
their future poten al, despite current price concerns.
“If you look from the point when the investment decisions were taken, back between 2009
and 2011, then the project economics are pre y marginal and have suffered,” Giles Farrer,
a research director at consultancy Wood Mackenzie Ltd. in London, said. “[But] if you look
at the point where we are now, the projects are going to deliver fantas c revenue.”

Page 11 of 36

Maersk’s stumble highlights sluggish state of global trade –February 11, 2016

For moving containers during 2015 than 2014, and the
group reporter a $2.5bn net loss for the fourth quarter of
last year.
US railroads including Union Pacific, the largest, have
also recorded big falls in profits for the fourth quarter.
Companies that ship dry bulk commodi es are
in precarious financial posi ons a er rates to charter
vessels fell to the lowest levels since the Bal c Dry Index
was set up in 1985 to track such data.
One key ques on now is how far the sharp falls in prices
for moving goods are a leading indicator of further de‐
mand problems in a global economy shaken by China’s
deepening slowdown.
The general picture of gloom is countered by condi ons
in oil tanker markets. Here, despite some recent falls in
rates, owners can s ll generate profits by charging
$50,000 a day for a very large crude carrier.
It is also noteworthy that Maersk forecasts growth in
world container trade of 1 to 3 per cent in 2016, not a
downturn in traffic. The air freight market — o en quick
to slow down in a downturn — is experiencing modest
growth. US railroads, while losing traffic in many areas,
are benefi ng from the booming domes c car market.
Erik Stavseth, analyst at Oslo‐
based Arc c Securi es, says de‐
mand to move freight in many
markets appears to be slackening.
But he says that in most shipping
markets the problem is that own‐
ers were too op mis c about
future growth levels and over‐
invested in new vessels.
Mr Stavseth points to the oil
tanker market as one of several
cases in the global economy that
illustrate the delicate balance
between supply and demand.
While the low oil price has s mu‐
lated demand for crude and
hence the need to move it, the
biggest factor in the tanker sec‐
tor’s posi ve performance is that
the market is short of ships.
“That tanker rates are strong
doesn’t really underline that the
economy is great,” says Mr
Stavseth. “It just underlines that
the supply‐demand balance is
posi ve.” There is li le doubt
that condi ons in the market to
move dry bulk commodi es are
catastrophic. Average short‐term
rates to charter
Capesize carri‐
ers — the larg‐
est kind —
were at $2,756
per day on
Thursday, well
below their
roughly $8,000
opera ng cost.
Paul Slater, a
shipping fi‐
nance expert
based in Florida, says China’s de‐
mand for commodi es has
waned not only because of its
economic slowdown but also
because of changes in the coun‐
try’s buying prac ces. The Chi‐
nese government under Xi Jinping
has brought order to once chao c
commodity‐buying prac ces,
greatly reducing China’s stock‐
pile.
But overall demand is flat rather
than declining and few industry
observers believe a surge could
revive the dry bulk ship market,
which has been swamped by ves‐
sel deliveries that expected to
increase the world fleet by 4 per
cent this year.
“There’s really an extreme over‐
supply of vessels, built on the
premise that China doesn’t slow
down,” says Mr Stavseth.
Most industry observers believe
container shipping lines’ prob‐
lems reflect world economic con‐
di ons more closely than trends
in other transport segments. Con‐
tainer shipping lines such as
Maersk and Hong Kong’s Orient
Overseas Interna onal, parent
of Orient Overseas Container
Line, carry manufactured and
semi‐finished goods. They are
consequently far more exposed
to worldwide consumer demand.

http://www.ft.com/intl/cms/s/0/1d744f1e-d044-11e5-831d-09f7778e7377.html#axzz45ehsMWg8
Robert Wright in New York
Page 12 of 36

Container throughout at the Port of
Singapore, the world’s second busiest
container port a er Shanghai, was
down 8.7 per cent in 2015 on the rec‐
ord 33.9m 20‐foot equivilant units han‐
dles in 2014. Maersk said container de‐
mand grew by 0 to 1 per cent in 2015.
But even in this market, the problem
has been least as much shipping lines’
over‐op mism in forecas ng future
demand and buying big new ships as it
is underlying weakness in demand. N
Drewry, the London‐based shipping
consultants, calculate that shipping
lines earned and average $2,063 per 40‐
foot container in 2014, but that the
figure fell to $1,570 in 2015, and is
down to $1,548 so far this year.
No sector illustrates the complexi es of
the demand swings currently sweeping
freight markets as well as the US’s rail‐
road industry.
According to the Associa on of Ameri‐
can Railroads, the number of carloads
moved in the first five weeks of 2016
fell 15.7 per cent on the same period
last year. Movements of containers and
truck trailers — together known as in‐
termodal traffic, which is counted sepa‐
rately — were 4.8 per cent up.

The carload figures were domi‐
nated by a 30 per cent decline in
coal traffic. This is a reflec on of
falling worldwide demand for the
US’s high‐quality metallurgical
coal and power companies’ grow‐
ing preference
for gas for
genera ng
electricity.

The low oil
price, mean‐
while, helped
to depress
once‐buoyant
movements of
oil and refined
products.

The increase
in intermodal shipments looks
posi ve. But that trend reflects
mainly the end of last year’s go‐
slow at US west coast ports,
which held up many container
movements.
While global economic weakness
has sent earnings tumbling at
operators of dry bulk vessels, and
also put container shipping com‐
panies’ profits
under pressure,
a very different
set of factors has
played out in the
market for mov‐
ing crude oil.
The crude price
collapse since
mid‐2014 has
increased de‐
mand to move
oil, while ship‐
owners, who
suffered a pro‐
longed period of weakness in
2012 and 2013, did not place the
excess orders that dry bulk ship‐
owners and container shipping
lines did.
Tanker owners have also benefit‐
ed from changes in the oil market
following the crude price rout.
More of the world’s oil supplies
are now coming from low‐cost
producing areas led by the Gulf,
and this makes tanker voyages
longer, and therefore soaks up
more capacity.
But there are some signs of weak‐
ness in the tanker market. For
example, shipowners face a sud‐
den surge of compe on with
the return to the market of Iran’s
oil tankers, following the li ing of
interna onal sanc ons.
Air freight is par cularly vulnera‐
ble in economic downturns.
When demand so ens, shippers
tend to move freight from expen‐
sive aircra to far cheaper con‐
tainer ships.
Data from the Interna onal Air
Transport Associa on, the air‐
lines’ representa ve body, sug‐
gest such a process might be un‐
Continued—Maersk’s stumble highlights sluggish state of global trade –February 11, 2016
Page 13 of 36

der way. They show a gap open‐
ing up between world trade
growth and the more sluggish
expansion of the air cargo sec‐
tor.
Trade nevertheless con nues to
grow, albeit very modestly.
Traﬃc in December 2015 was
0.8 per cent up on the same
month in 2014.
Condi ons for air cargo opera‐
tors, however, have deteriorat‐
ed sharply. Record deliveries of
large passenger jets with sub‐
stan al cargo holds meant that
capacity to move air freight was
6.5 per cent up year‐on‐year in
December. Only 43.9 per cent of
available capacity was used.

Continued—Maersk’s stumble highlights sluggish state of global trade –February 11, 2016
These diﬃcult condi ons were
the backdrop to Boeing’s decision
last month to slow produc on of
its 747 jumbo jet, which sells
mainly to cargo operators.
Page 14 of 36

The Energy Atlantic, a 290-metre tanker
steaming slowly through the Gulf of
Mexico, is about to make history. It is
scheduled to arrive on Tuesday
at Cheniere Energy’s Sabine
Pass liquefied natural gas plant on the
coast of Louisiana, to be loaded with the
first cargo of LNG to be exported from
the “lower 48” contiguous states of the
US.
The shipment is a momentous event for
energy markets, marking the arrival of
the US as a gas supplier to the world.
The plunge in oil prices since the sum-
mer of 2014 has dragged down the value
of LNG, which is often sold on crude-
linked contracts, and damped the excite-
ment over US exports. The economics of
shipping gas from the US were compel-
ling two years ago, but are now margin-
al. Deteriorating market conditions have
put the brake on any new investments in
US LNG.
Even so, US LNG exports are likely to
have a significant impact, holding down
energy costs for consumers in Europe,
Latin America and Asia. They will also
provide tough competition for anyone
hoping to build rival LNG plants, such as
the proposed projects in east Africa, the
west of Canada, or Russia. By the end of
the decade, the US is likely to be the
world’s third-largest exporter of LNG,
after Qatar and Australia.
Combined with the new supplies
from Chevron’s huge Gorgon and Wheat-
stone projects in Australia, which are
scheduled to come on stream this year,
exports from the US are making it a
buyers’ market for LNG.
“There is an awful lot of LNG sloshing
around the world at the moment, with
even more to come,” says Frank Harris
of Wood Mackenzie, a consultancy. “And
that is putting downward pressure on
prices.”
A decade ago, this prospect seemed
wildly unlikely. US gas production was
in decline and by the 2010s the country
was expected to be a large importer of
LNG, not an exporter.
The shale revolution, the result of
advances in production techniques that
made it possible to extract gas at
commercially viable rates from previ-
ously unyielding rocks, meant that US
production started rising again in
2006, and since 2011 it has been break-
ing new records every year.
Charif Souki, Cheniere’s visionary
founder who
was ejected from the
company at the end
of last year, was one
of the first to see the
potential for LNG
exports from the US.
In 2010, he submitted
the first application
to regulators to
convert the LNG import terminal that
Cheniere had built at Sabine Pass,
which was being barely used because
US domestic gas production was so
strong, into a liquefaction plant.
Many in the industry were skeptical
that the project could be made to work
but the plan took a decisive step for-
ward in October 2011 when Britain’s BG
Group signed a 20-year contract to buy
most of the production from Sabine
Pass’s first “train”, as LNG production
units are known. After that contract
was signed, the trickle of proposals for
similar projects turned into a flood.
The US Department of Energy has
received applications to export LNG
for 54 projects. If they all went ahead,
they would have the capacity to liquefy
about 60 per cent of the entire gas
production of the US.
So far, however, just five plants have
started construction: Cheniere’s
Sabine Pass and
its Corpus Christi
project in Texas;
Freeport LNG,
also in Texas;
Cameron LNG in
Louisiana; and
Cove Point LNG,
on the east coast
in Maryland.
Those projects have been able to make
progress because they were fast
enough at signing up customers on
long-term contracts that guarantee
their revenues. Since the end of 2014
those customers, mostly utilities in
Europe and Asia, have been reluctant
to make any further commitments.
The price of LNG delivered in north-
east Asia, including Japan and South
Korea, the world’s two largest mar-
kets, has fallen along with oil. It has
dropped to about $6.65 per million
US will be a gas supplier to the world by tomorrow– January 10, 2016
British thermal units, just a third of its
price of almost $19 per mBTU two years
ago, according to Argus, the information
service.
At that price, with benchmark US gas at
about $2.40 per mBTU, plus liquefaction
costs of $3 to $3.50 per mBTU, plus
transport at about $2 per mBTU, LNG from
Louisiana or Texas does not look commer-
cially attractive.
Similar calculations apply in Europe. Bench-
mark UK National Balancing Point gas has
dropped by almost a half since 2013 to
about $5.20 per mBTU, meaning that LNG
exports from the US to Britain are unlikely
to cover all of their costs.
Since 2013, most of the new LNG projects
launched worldwide have been in the US.
However, the deteriorating economics
make it unlikely that any new plants will be
approved for a while.
The plants that have already started con-
struction, though, are highly unlikely to be
stopped. This is because the companies
buying LNG from one of these plants have
typically made firm commitments for 20
years under which they have to pay the
charges they have promised, even if they
do not use the capacity.
The US LNG projects will add to global over-
supply. Bernstein Research has estimated
that the world’s liquefaction capacity will in
Page 15 of 36

Continued—US will be a gas supplier to the world by tomorrow-January 10, 2016
h p://hhpinsight.com/marine/2016/03/crowley‐mari me‐sets‐ﬁrst‐man‐engine/
the next three years rise by 90m tonnes
per annum, which is about 35 per cent of
present demand.
Nikos Tsafos of Enalytica, a research com-
pany, says US LNG should help hold gas
prices down for a few years at least.
When the global oversupply is finally ab-
sorbed by rising demand, the next wave of
plants in the US, including projects backed
by ExxonMobil and Kinder Morgan, will be
poised to benefit.
There are other promising potential new
sources of LNG in the world, including the
projects to develop large gas discoveries
Page 16 of 36

World leaders are hammering out
ways to cut their countries’ carbon
emissions in Paris. But what about all
the carbon dioxide—from planes and
ships—emitted outside any one coun-
try’s borders?
Airlines and the global maritime indus-
try count among the world’s biggest
CO2-emitting industries. Unlike emis-
sions from power plants or passenger
cars, CO2 from planes and ships ply-
ing international routes aren’t tabulat-
ed as part of any one country’s total
emissions. Those totals are the main
subject of haggling in Paris this week
and next, aimed at coming up with a
concrete plan to limit man-made
climate change.
That omission is ratcheting up pres-
sure on negotiators in Paris to figure
out how to handle that uncounted CO2,
and whether to force the industries’
global watchdogs to come up with a
credible, separate plan to rein in air
and sea emissions.
One big challenge: It’s hard to peg just
how much CO2 the two industries are
emitting in the first place.
A recent European Parliament report
estimated between 3% and 4% of
global, man-made CO2 emissions
came
from
inter-
national commercial flights and ship-
ping. Left unchecked amid efforts to
reduce emissions elsewhere, that
share could grow to as much as 40%
of global emissions by 2040, the re-
port warned.
The International Civil Aviation Organi-
zation, a United Nations body, puts the
current contribution from internation-
al aviation to global C02 emissions at
1.3%. Its shipping counterpart, the
International Maritime Organization,
said in a report last year that from
2007 to 2012 such emissions reached
an average 3.1% of the global output.
The issue hasn’t been at the top of the
climate-change agenda among negoti-
ators in the yearlong run up to the
Paris talks. But the threat of a more
forceful approach to reining in air and
sea emission has long shadowed those
industries. It is also flaring anew as an
irritant for environmental groups,
which say executives haven’t done
enough to come up with a plan on their
own.
“Progress has been insufficient,”
said Andrew Murphy, a representative
for Transport & Environment, an envi-
ronmental advocacy group.
A preliminary paragraph in the draft
of the Paris accord—a document
global leaders hope will spell out a
final, concrete plan—could require
that countries work through the U.N.
agencies to slice up emissions from
such international trips by air and sea
and apportion them to individual coun-
tries.
The ICAO and IMO have taken leading
roles in trying to broker the details of
any agreement, and representatives
of both are in Paris now.
Countries with rapidly growing air-
lines, or those heavily dependent on
tourism, argue any moves to limit
flight emissions will favor more ma-
ture markets, such as those in the U.S.
and Europe. The airline industry,
meanwhile, has fought against what it
worries would be a patchwork of
national regulations and taxes that
would govern its emissions.
The European Union has, for instance,
threatened that the lack of a global
agreement on international flight
emissions could spur it to revive
efforts to include them in its carbon
cap-and-trade mechanism, something
carriers so far successfully have
fought.
“We are supportive of
ICAO putting together a
framework that gov-
erns the entire planet,”
said Mark Dunkerley,
chief executive of Ha-
waiian Airlines par-
Out-of-Bounds CO2 Elutes Talks—by Robert Wall and Costas Paris– December 2, 2015
For the shipping
industry, the IMO
has imposed an
efficiency
standard for
ships built since
2013.
Carbon‐dioxide emission from ships don’t count toward na onal totals.
h p://www.wsj.com/ar cles/out‐of‐bounds‐co2‐clouds‐emissions‐tallying‐1449107855
Page 17 of 36


Environmental legisla on is
the key factor currently im‐
pac ng the marine segment.
While ships were tradi onally
powered by Heavy Fuel Oil
(HFO), which produces high
levels of harmful pollutants,
including sulphur dioxide
(SOx), interna onal law now
states that shipping fuel can
contain no more than 3.5%
sulphur. Further, the limit in
Emission Control Areas (ECAs)
or Sulphur Emission Control
Areas (SECAs), which current‐
ly include coastal areas such
as the Bal c Sea, North Sea
and the waters surrounding
North America and the Carib‐
bean, is 0.1%.
LNG is one of the only fuel
sources able to comply with
these strict limits and, with
the majority of vessels oper‐
a ng in coastal areas, the
need for LNG‐compliant solu‐
ons is set to become a must
for operators in the very near
future. Ten years from now,
the majority of vessels will
run on LNG and conven onal
vessels will have very limited
trading op ons. This supports
the CapEx argument – while
you may have to pay more
for your LNG‐compliant solu‐
ons in the short term, there
will be signiﬁcantly more val‐
ue to be gained from it down
the line.
Against this backdrop, SMi’s
Gas as a Marine Fuel master‐
class will examine the grow‐
ing demand for LNG as a ma‐
rine fuel as a result of an in‐
creasing emphasis on envi‐
ronmental performance and
how to best prepare for it by
examining how this is be‐
ing implemented world‐
wide, with focus on recent
developments in Europe and
the US. The full‐day pro‐
gramme will also explore the
recent technical and regula‐
tory developments and how
you can best adapt to these
changes.
Source: E-mail from energy@semiconference.co.uk
“LNG is one of the
only fuel sources
able to comply
with these strict
limits…”
The Majority of Shipping Vessels are Set to Run on LNG within 10 years, with Conventional
Vessels having very Limited Trading Options | Gas as a Marine Fuel . Dec. 2015
Gas as a Marine Fuel | 3rd
December 2015, Central
London, UK
Register online to network
with latest attendees in-
cluding ExxonMobil:
www.smi-
online.co.uk/2015gasmari
nefuel.asp
Alterna vely, con‐
tact Mar n Hughes on tel
+44 (0) 20 7827 6078 or
email mhughes@smi‐
online.co.uk
The Bal c Sea / North Sea / English Channel Environmental
Control Area came into force on January 1st 2015. All vessels
travelling in these areas must now use low sulphur fuels. This
master class will examine the issues around one of these
“clean” fuels – LNG. Europe is not alone in requiring these
improved environmental regimes and the master class will
also touch on other areas, par cularly North America who
also received their ﬁrst gas fuelled vessel late in 2014.
This master class will examine the growing demand for gas as
a marine fuel resul ng from increasing emphasis on environ‐
mental performance and how this is being implemented
worldwide.
SMi’s presents its masterclass on...Gas as a Marine Fuel 3rd Dec 2015
www.smi‐online.co.uk/2015gasmarinefuel.asp
Page 18 of 36

The 3,100 TEU capacity, 764‐foot‐long American‐
flagged Isla Bella is the first of two Marlin Class
containerships contracted by TOTE Mari me and
built by General Dynamics NASSCO.Delivered last
month the LNG‐powered vessel features increased
fuel efficiency and reduces nitrogen oxide emissions
by 98 percent, sulfur oxide emissions by 97 percent
and carbon dioxide emissions by 76 percent.

“The Isla Bella is a true engineering feat,” said
Panama Canal Administrator/CEO Jorge L. Quijano.
“We are honored that this vessel, with its unique
technology, transited the Canal.”

Isla Bella is scheduled to begin providing freight
service in the fourth quarter of 2015 between
Jacksonville, Fla. and San Juan, Puerto Rico.

Upon comple on of the second Marlin Class
containership, Perla del Caribe, launched in August
2015 and scheduled to enter service in the first
quarter of 2016, the vessels will be the largest and
most environmentally friendly LNG‐powered dry
cargo ships in the world.
The world’s first LNG‐powered container vessel, TOTE Mari me’s Isla
Bella, transited the Panama Canal October 30, marking a milestone not
only for the mari me industry, but also for the Canal as it nears the
comple on of its expansion scheduled to open in 2016, the Panama Canal
Authority (ACP) announced
First LNG Containership Transits the Panama Canal-November 3,2015
h p://www.marinelink.com/news/containership‐transits400347.aspx
Isla Bella transi ng the locks at Mira Flores
(Photo courtesy of the Panama Canal Authority)
Page 19 of 36

“ABS has played a fundamental role
in supporting the ambitions of the
maritime industry as it moves to
embrace the opportunity of LNG as
fuel,” said ABS Chairman, President
and CEO Christopher J. Wiernicki.
“This milestone builds upon our work
to provide owners with the guidance
and support they need to move ahead
with shipbuilding projects that allow
them the flexibility to respond to
changes over the lifetime of their
vessels.”
According to ABS, who published
the Guide for LNG Fuel Ready Ves-
sels in 2014, its LNG-Ready endorse-
ments allow shipowners and yards the
flexibility to limit initial investment
while planning for the future conver-
sion to dual fuel or gas-powered
combustion engines.
Rob Grune, senior vice president and
general manager petroleum services
Posted by Eric Haun
Four-ship series built to ABS class is
first to take advantage of LNG-Ready
approval for potential conversion to
LNG fuel in the future
ABS has issued the first LNG-Ready
approval in accordance with its Guide
for LNG Fuel Ready Vessels to a
product tanker, granting LNG-Ready
Level 1 approval and approval in
principle for Crowley Maritime Cor-
poration’s new Jones Act tank-
er Ohio, the first in a series of four
ships built by Aker Philadelphia
Shipyard
By achieving compliance with the
ABS Guide for LNG Fuel Ready
Vessels, Crowley has the option to
convert the product tankers to LNG
propulsion at a later date having
already been granted a conceptual
review.
for Crowley, said, “As our business
continues to shape itself to better
meet the requirements of our custom-
ers, these vessels that stand ready and
able to operate on a cleaner, alterna-
tive fuel source are our way of antici-
pating future demands.”
Crowley will christen Ohio today at
the Tampa Cruise Terminal. The
50,000 dwt, 330,000-barrel-capacity
ship has already made two voyages to
date carrying clean petroleum prod-
ucts to Florida.
The three remaining product tankers
are expected to be delivered through
2016.
ABS Deems Crowley Product Tanker ‘LNG-Ready’- November 3, 2015
Source: (http://www.marinelink.com/news/lngready-crowley-product400340.aspx)
Page 20 of 36

Fleet Size
Source: The Wall Street Journal | Wed. July 22, 2015 |
Rows of shipping containers at the freight terminal at Piraeus port in Greece last week. PHOTO: SIMON
DAWSON/BLOOMBERG NEWS
Total Fleet Value
$497 Billion
Total Fleet
20,134 Ships
Fleet value, in billions
Shipping Industry Fleet
Page 21 of 36

Page 26 of 36

Page 27 of 36

Page 28 of 36

Page 30 of 36

Page 31 of 36

Page 32 of 36

and the introduc on of a pas‐
sive par al reliquefac on
system add to these LNG ves‐
sels’ efficiency and further
help to reduce the unit
freight cost.
Over the next 8 months DSME
will install the cargo contain‐
ment system capable of
transpor ng 174,000 m3 of
LNG and put the ship and its
equipment through the re‐
quired tests and trials.
Posted by Eric Haun
Teekay’s first M‐type, Elec‐
tronically Controlled, Gas
Injec on (MEGI)‐powered
LNG vessel, Creole Spirit, was
floated out at the Daewoo
Shipbuilding & Marine Engi‐
neering (DSME) shipyard in
South Korea on May 29. The
vessel is on charter contract
with Cheniere and is expected
to enter service early 2016,
making it the most efficient
LNG ship on the water with
the lowest unit freight cost in
the world fleet.
The two‐stroke engine tech‐
nology provided by MAN Die‐
sel, the MEGI propulsion sys‐
tem, is driving a step change
in global LNG vessel efficien‐
cy. While the most efficient
Dual Fuel Diesel Electric
(DFDE) propulsion systems
have daily consump ons in
the region of 125‐130 metric
tons including sea margin, the
MEGI vessels have a con‐
sump on of 100 metric tons.
That being said, it is not just
the fuel consump on that
makes the two‐stroke story
so compelling. The reduc‐
on in the number of cylin‐
ders requiring overhaul, the
reduc on in the size of the
complex electrical systems
Special points of interest:
 The two-stroke engine
technology provided by
MAN Diesel, the MEGI pro-
pulsion system, is driving a
step change in global LNG
vessel efficiency.
DSME Launches LNG Carrier for Turkey—June 10, 2015
Creole Spirit (Photo: Teekay)
Source: http://www.marinelink.com/news/launches-carrier-teekay392752.aspx)
MAN Diesel & Turbo has marked the final phase of the EU-
funded Helios project by hosting an industry conference at its
PrimeServ Academy in Copenhagen.
The Motorship attended the event, at which the results of the Heli-
os project, aiming to develop a research platform for an LNG-
fuelled two-stroke marine Diesel engine. Helios is part of the EU
7th framework programme, and MAN as lead organisation was
partnered by Germanischer Lloyd, Kistler Instruments, Sandvik
Powdermet, TGE Marine Gas Engineering and four universities -
Uppsala, Erlangen, Jonkoping and Lund. (continued on 3 of 17)
MAN Hosts Final Phase of EU LNG Initiative– November 27, 2013
MAN Diesel & Turbo ME‐GI engine
The MAN Diesel MEGI
propulsion system, is
equipped with Dynamic
Control’s:
Gas Supply System
for ME‐GI
gas‐injec on
system Manifold.
Refer to pages 3,4,5 of 30.
Page 35 of 36

The project centred around
MAN's ME-GI research engine
and it was enlightening to see the
two different approaches to gas-
fuelled two-stroke developments
following our visit to Wartsila in
Trieste two weeks ago. MAN's
high pressure gas system is un-
doubtedly more complex than the
competing low-pressure technolo-
gy, burns a higher percentage of
pilot fuel, and will need EGR or
SCR in order to meet IMO Tier
III emissions limits. However, it
appears to be engineered with an
even more highly fail-safe ap-
proach to problems with the gas
system and a simpler retrofit pos-
sibility. In addition, the company
says that it offers shipowners the
most flexible choice of fuel possi-
ble, and although NOx emissions
are currently above Tier III limits,
methane slip is very low, so car-
bon emissions - and hence EEDI -
implications are highly positive,
the engine is tolerant to variations
in gas quality, and it can run on
gas at loads of 10% or lower.
MAN is confident that with fur-
ther development the pilot fuel
percentage can reduce further, and
NOx emissions can be cut.
The Helios project has explored
wider aspects of LNG as fuel in
Europe, including availability,
pricing and infrastructure, as well
as lubrication and wear issues
resulting from using ultra-low
sulphur fuels.
The ME-GI engine has already
attracted orders, the first being for
TOTE container ships, which was
not expected by MAN, as
well as Teekay LNG tank-
ers and for two larger con-
tainer ships for US compa-
ny Matson. No doubt the
low price of LNG in North
America has influenced
these orders. MAN ex-
pects the market for dual
-fuel two-stroke engines
to grow rapidly as the
lower ECA sulphur lim-
its come into force.
Continued—MAN Hosts Final Phase of EU LNG Initiative– November 27, 2013
http://www.motorship.com/news101/lng/man-hosts-final-phase-of-eu-lng-initiative
!
Page 36 of 36

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