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