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Panel : Fuels of the future -What will come next after HFO?
Chair
Nikolaos Kyrtatos
NTUA
Introduction Trends in emissions regulations Conventional & alternative fuels production LSF/MGO: modifications needed, issues Alternative fuels & power options, LNG Engine issues with LSF, biofuels, gas Future fuels: Logistics, operation challenges
Engine Maker Oil Industry User / Operator Research Institute Engine Maker User / Operator
Kjeld Aabo Paul de Hoog Naoyuki Ohno Per Magne Einang Mikael Troberg Jorn Kahle
NYK LINE
MARINTEK
Kjeld Aabo
Marine Low Speed Copenhagen
<1>
Safety
Optimum engine layout High efficiency/low fuel consumption Low operation cost (MTBO) Reliability/availability Exhaust
<2>
- 15 %
- 20 %
Tier I: (global) Tier II: 2011 (global) Tier III: 2016 (ECAs)
- 80 %
Emission Trend
Emission Restricted Areas by IMO ECAs in 07/2009
CO2
SOx
Use of low-sulphur crude oil, but limited availability Blending of fuels is a possibility, and is done today Desulphurisation of HFO
According to the major fuel companies : Much better investment to build high-efficient refineries that can produce more valuable products such as gasoline, diesel and LPG than to build desulphurisation plants for HFO.
Development Clean Marine and test of MAN Diesel scrubber for after-treatment
SOX removal: 80% (salts add.) >67% SOX removal: 73% 95% (salts add.)
APM Development and test of MAN Diesel scrubber for after-treatment and EGR
Palm Oil
Rape Seed
< 11 >
12
< 13 >
IHI type B tanks low pressure tanks, BOR 0,2 %/day TGE type C tanks 4-9 barg pressure (up till 50 travelling days) BOR 0,210,23 %/day
14
Exhaust receiver
15
NO2
N O
NH3
N
H
H H
N N O
H
N NH
H
N N N
N O
H H
O
H
N N
16
EGR Integration
Future perspective of EGR integration in engine design: 7S50ME-B9
Safety Investigations
Engine room explosion study HAZID / HAZOP Double Wall Piping Engine Piping Vibrations Gas Pressure fluctuations Gas control simulation Gas / Fuel injectors reliability
Ventilation
Item Date
HAZID / HAZOP
Owners Class Ship Yard Engine Builder Engine Designer Other Subsuppliers
none none
HAZOP 2007 Nov. BG,APM,SHELL,YLNG,Q-GAS, Teekay,BP HAZOP 2009 Jan. EXXON MOBILE HAZOP 2009 Jan. BG
ABS ABS
DSME SHI
Doosan Doosan
fwd
< 20 >
Diesel or Alternatives?
Fuel cells Nuclear power Kite Power Solar cells
Will take long time to develop , if ever.
Our Diesel will Prevail for many years, with different fuels.
33366965.2010.05.04 (OG/LS) MAN Diesel & Turbo < 22
3336924.2010.04.28
(KEA/LSP)
< 23 >
Conventional & alternative liquid & gas fuel sources and production to 2030
CIMAC World Congress, Bergen 2010 Panel Session
Disclaimer statement
This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on managements current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing managements expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as anticipate, believe, could, estimate, expect, intend, may, plan, objectives, outlook, probably, project, will, seek, target, risks, goals, should and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this Report, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Groups products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory effects arising from recategorisation of reserves;(k) economic and financial market conditions in various countries and regions; (l) political risks, project delay or advancement, approvals and cost estimates; and (m) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this presentation. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this document. The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as oil in place" that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575 and disclosure in our Forms 6-K file No, 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1800-SEC-0330.
June 2010
Outline
Conventional & alternative liquid & gas fuel sources and production to 2030 - The Energy Challenge - Legislation will shape future marine fuels - How will the marine energy mix evolve?
Surge in energy demand Supply will struggle to keep pace Environmental stresses are increasing
June 2010
COMPLEX ECONOMIC SIGNALS WILL HELP DEFINE MARINE FUEL EVOLUTION Will new refinery projects and expansions be delayed to take advantage of an expectation of lower materials costs and to avoid periods where demand growth is low ? Will Fuel Oil be converted to maximise middle distillate production ? Will refinery capacity additions and current infrastructure capability outpace demand growth through to 2015 and beyond ?
Copyright of Shell Global Solution International BV. June 2010 5 5
Turnaround Feasibility& Engineering& cycle Scouting Construction (see Benchmarking) Project implementation
0 2 4 6 8
10
12
14
16
Time [years]
We could find that when 2020 arrives much of the refining infrastructure may look as it does today.
Copyright of Shell Global Solution International BV. June 2010 6
June 2010
7 7
ENERGY DEMAND BY THE SHIPPING INDUSTRY THE PATH TO THE FUTURE IS NOT STRAIGHTFORWARD
Energy Source:
Hi Sulphur Sulphur Lo RFO RFO Gen 1 Gen 2 Bio Bio LS Wind Gas oil Nuclear LNG/CNG Solar Hydrogen
Exhaust Cleaning
Scheduling Scrubbing Catalysis Routing Legislation and consensus Carbon Capture Emissions Trading
Hull design
June 2010
8 8
Legislation and incentives that encourages investment in technological solutions Understanding how world energy demand will develop and how refiners will respond. The shipping industry and stakeholders appetite to tackle environmental stress with a wide range of measures
June 2010
Naoyuki Ohno
Corporate Officer Technical Headquarters NYK Line CIMAC Congress 2010 Bergen, 17 June 2010
1
Assumptions
Vessels should have the following: Both residual fuel at global cap areas and distillate fuel at ECAs until 2020/2025. Only distillate fuel in all sea areas after 2020/2025. To establish proper operation procedures To modify machinery specifications
3
Low-sulfur-fuel Legislation
MARPOL
Global cap
Phase 1
Phase 2
Residual fuel
Global cap until 2020/25 ECA until 2015
Distillate fuel
Global cap after 2020/25 ECA after 2015
Low-sulfur-fuel Legislation
MARPOL
Global cap Modify spec.
Phase 1 Newbuildings
Residual + Distillate
Phase 2
Outlines of Modification
Existing vessels Replace, retrofit and add on: Pipelines, machinery, tanks, safety & protection devices and instruments, lubricating oils, etc. Newbuildings Modify and newly design: Specifications of machinery, pipelines, arrangement and capacity of tanks, etc.
Additional cost
6
Burning Equipment
Boiler
System oil
G/E
Pump
Capacity up
Pump
Additional MGO Stor.Tk
HTR M/E
Cylinder oil HFO Serv. TK
Return
Pump
Pump
HFO Stor. Tk
8
Boiler
MGO Serv. TK
MGO Stor. Tk
Pump
Additional MGO Stor.Tk
M/E
Return
MGO Serv. TK
Pump
Pump
MGO Stor. Tk
9
Impacts on Machinery
- Caused by properties of MGO Low lubricity - Sticking/wearing down of fuel-injection pump Low viscosity - Leakage from fuel-injection pump, oil-pump sealing Low flashpoint and high volatility - Risk of an outbreak of a fire High detergency - Clogging FO filter with sludge accumulated in pipelines
10
HFRRm
- OEM recommendation Less than 460m (HFRR) - New ISO 8217 Less than 520m (HFRR) - Engine manuf. recommended Vis More than 2 cSt @M/E inlet
12
Concern - Developing system - Criteria of discharge water - Extra space in the engine room Expecting development of scrubber which will be matched for our needs.
14
Summary
1, 2, 3, 4, 5, 6, 7, Proper operation procedures for changeover fuel should be established. MGO will be mainly used after 2020/25. Machinery specifications should be modified. Stable supply of MGO will be required. (300 mil tons/year?) Modification cost, namely environmental cost, is an essential investment for the company. MGO is partly an advantage for the engines. Development of a practicable scrubber as an alternative method is expected. Gas/dual fuel engines, and the infrastructure of LNG supply, as an alternative method, are also expected.
8,
15
Engines
Energy Efficiency
Energy Savings
Energy Savings
Energy Savings
5%
1%
8%
16%
Ship Design
Energy Savings
27%
Other
Energy Savings
1%
16
Fixed or mobile
The NYK Group pioneered the development and application of the 6.6 kV AMP system at the port of Los Angeles, ahead of other companies.
18
The NYK Group has decided to equip all large container vessels w/ AMP. This system and method can improve the harbor environment.
19
20
10
21
11
Fuels of the future what will come next after HFO Alternative fuels and power sours options Time span 2010 - 2030
Alternative fuels
Long list of alternative fuels: Bio fuel (fame) ( ) GTL (synthetic diesel oil) DME Hydrogen Gas (LNG, LPG) To make a difference the fuel have to be available world wide and be economical viable Based on that and the time frame in question, LNG is consider to be the only alternative fuel to MGO and HFO
MARINTEK 2
MARINTEK
LNG distribution
Source: Gasnor
Existing ships for distribution of LNG in Norway Capacity of 7500 and 1100 m3 LNG
MARINTEK
MARINTEK
MARINTEK
MARINTEK
Anchor handlers
Passenger ferries
Container carriers
Cruise ships
Oil Tankers
Ro-Ro vessels
MARINTEK
MARINTEK
10
MARINTEK
11
MARINTEK
12
Summing up
LNG is available world wide Small scale distribution by dedicated ships are available Storage technology for ships are available and under further development Gas engine technology is available for all types of piston engines, can meet the coming emissions li it and i t th i i i limits d contributes to a net reduction of GHG LNG has the potential to be economical competitive to HFO
MARINTEK
13
Wrtsil
Cimac June 2010 / Mikael Troberg / Fuel impact June 2010 Cimac sw.pptx
Agenda
LSF
In general Wrtsil engines are flexible for using of different fuel qualities Reported field problems related directly to low sulphur operation have not been recorded
Engine type Wrtsil 2 stroke engines Wrtsil 20 Wrtsil 26, 32, 38, 46CR, 46F Wrtsil 46*), 64 Wrtsil 32DF (main and pilot fuel) Wrtsil 34DF (main and pilot fuel) Wrtsil 50DF (main fuel / pilot fuel)
*) Conventional FIE
Limit [cSt] 2,0 1,8 2,0 2,8 1,5 2,0 2,8 / 2,0
Low viscosity:
Compatibility: Poor compatibility with heavy fuel can lead to: clogging of fuel filters, increased sludge amount sticking of fuel injection pumps, deposit formation on the engine components. Lubrication oil: 2 stroke engines with a high BN cylinder oil: Hard calcium carbonate deposits on the piston crown. The deposits can be minimised by reducing the cylinder oil feed rate to the lowest possible safe level.
Documented field experience (ULSD), example: W 12V32 17,500 service hours Sulphur content of ~ 10 50 mg/kg Standard stellite exhaust valves / valve seats designed for distillate fuel operation Findings: No marks of exhaust valve / valve seat brinelling No claims about excessive wear in the fuel injection equipment Lubricity additives can be added if the specified limit value is exceeded. Lubricating oil BN recommendation: 10 15 mg KOH/g
Agenda
Bio mass
Resources Conversion technology End Fuel
Oil Palm Jatropha seed Crops Rape seed Wheat Maize Potato Wood Willow/poplar Pine/Spruce Waste fats/oils Straw Municipal waste Hydro Wind Solar Marine
Crude Vegetable Oil Bio-oil Bio Diesel DME Ethanol Methanol Bio Methane Hydrogen Internal Combustion engine Fuel Cell Vehicle
Residues
Biodiesel
Disadvantages
- Slightly increased NOXs - Contains ~10% less energy than petroleum diesel - Variations in ash content - High acid number (with some types) - Water separate from bio diesel more difficult - Solvent characteristics may degrade rubber and attack certain metals - Can foster heightened microbial activity - Not suitable for long term storage (Acid number increases, oxidation takes place) - Cold flow properties can be a problem
11
Wrtsil 10 June 2010 2007 (updated 14 October 2009) Liquid Bio Fuels in Marine Applications - Kai Juoperi 19 November
Palm Oil 22 C
Palm Oil 60 C
Phosphorus content
Influence on the lifetime of DeNOx & OxiCat
Acid number
Influence on fuel oil system wear & tear
Palm Stearin 22 Palm Stearin 60 C C
Agenda
Gas
Reported field problems on Wrtsil gas engines have not been experienced as the engine is optimized by choise of component material and lubricating oil for : SG engines Exhaust valve Lubricating oil Stellit 4-7 TBN DF engines Stellit / Nimonic 4-7/10-20/30-55 TBN
Agenda
17
Wrtsil
Dimethylether (DME)
Manufacturing: Fischer-Tropsch process by utilizing methane, black lye, biomass or coal Synthetic fuel: Manufacturing decreases energy balance Emissions: Higher NOx than with fossil fuels No particulate emissions No SOx emissions
Bio diesel and fossil fuels: Bio diesel and fossil diesel fuels (MDO / MGO) are considered to be compatible If bio diesel is mixed with heavy fuel, precipitation of asphaltenes can take place in case heavy fuels stability reserve is low -> compatibility test needed
18
Wrtsil
Thank You!
"Fuels of the future - What will come next after HFO" Time span 2010-2030 Presented at CIMAC Congress 2010. Bergen.
Slide no. 2
PROs
No imidiate investments required LSFO not in 0,1% S version Extra requirements 2015-2020 (approx 20 mill tons per year) cannot be covered by LSFO. Will have to covered by MGO.
Slide no. 3
Fuel
No imidiate investments required Only minor operational issue expected With current split. The extra cost for the shipping industry would be in the order of 50.000.000.000 USD per year from 2020 onwards. (+200 USD/tons)
Logistics Limited logistic and operational challenge Operation challenges Can MGO be produced cheaper with new yet Opportunities undiscovered technology?
Slide no. 4
Fuel flexible engine tech. available. CH4 slip (GHG factor 20 higher than CO2) Space requirement (3X HFO) Efficiency. Well to funnel.
Logistics Need for infrastructure. Operation challenges Safety issues (high pressure gas injection) Opportunities Bunker process
Slide no. 5
PROs
Sustainability Availability, Price, Limited logistic challenge Storage stability Equipment impact NOx, Particulate matter ?
Slide no. 6
PROs
Logistics Limited logistic and operational challenges Operation challenges NOx, Particulate matter Opportunities
Slide no. 7
Slide no. 8
Slide no. 9
HFO
With NOx reduction. EGR, SCR or water injection With SOx scrubber. Wet or dry. Open or closed loop And an emerging patchwork of the other alternatives
Slide no. 10