. .. 2229ISSN 1107-3179

Bimohthly Review for the Shipping Industry - MARCH 2015 - issue 103

www.nafsgreen.grnafs

Dionissis Christodoulopoulos

Special Edition

LNG vs Scrubbers

MAN Diesel & Turbo Hellas ahead with latest technology

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Index

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. : LNG versus Scrubbers!!!The answers are folowing...

TED PETROPOULOS: Is the glut of global newbuilding orders in general, and Chinese orders in particular, expected to lead to a sustained dry bulk slump for the foreseeable future?

: 1 FORUM

APOSTOLOS SIGOURAS: SCRUBBERS vs. LNG: WHATS THE CHOICE

YARA MARINE: GREEN TECH MARINE SOx SCRUBBER

COVER STORY: MAN DIESEL & TURBO HELLAS AHEAD WITH LATEST TECHNOLOGY

OVE MARTENSSON: MORE TO SCRUBBER PUMPS THAN MEETS THE EYE

:

ABB TURBOCHARGING: A TURBO BOOST FOR LNG

SPYRIDON ZOLOTAS: WE SEE LNG THE SOLUTION FOR THE FUTURE

KATHIE CLARK: NINE YEARS OF OPERATING AN ECOCHLOR BALLAST WATER TREATMENT SYSTEM

KAMINCO PRESENTS CROE & GALILEO

PANOS YANNOULISLNG OR SCRUBBERS?

PATRICK JANSSENSOWNERS STILL READY FOR LNG

PANOS ZACHARIADISLNG vs SCRUBBERS

STAVROS HATZIGRIGORISLNG WILL TAKE THE LEAD SOON

28. 54.44. 32.

ISSUE 103 - MARCH 2015

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06 NAFS MARCH 2015

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brochure.pdf 12/12/2014 9:49:48

ByNikos K. Doukas

EditorMember of Journalits Union of Athens Daily

Newspapers

08 NAFS MARCH 2015

Liquefied natural gas (LNG) is natural gas (predominantly methane, CH4) that has been converted to liquid form for ease of storage or transport. It takes up about 1/600th the volume of natural gas in the gaseous state. It is odorless, colorless, non-toxic and non-corrosive. Scrubber systems are a diverse group of air pollution control devices that can be used to remove some particulates and/or gases from industrial exhaust streams. The first air scrubber was designed to remove carbon dioxide from the air of an early submarine, the Ictineo I, a role which they continue to be used for to this day. Traditionally, the term scrubber has referred to pollu-tion control devices that use liquid to wash unwanted pollutants from a gas stream. Recently, the term is also used to describe systems that inject a dry reagent or slurry into a dirty exhaust stream to wash out acid gases. Scrub-bers are one of the primary devices that control gaseous emissions, especially acid gases. Scrubbers can also be used for heat recovery from hot gases by flue-gas condensation.Using liquefied natural gas (LNG) as ship fuel has recently gained more atten-tion not only in Europe, but also in Asia and the USA. There are three notice-able drivers which, taken together, make LNG as ship fuel one of the most promising new technologies for shipping.Shipowners interested in LNG as ship fuel are currently facing a number of questions regarding the costs and the possible benefits of using such tech-nology. And they wish to learn whether exhaust gas treatment systems could be the preferred technical solution. At the same time, increasing ship effi-ciency with advanced waste heat recovery systems becomes feasible. Scrubbers are assumed to be used only when needed to meet the emission values responding to the low sulphur fuel limits, i.e. inside ECA, in EU ports and globally by 2020. Their operating costs depend on operation time and engine loads. In the following pages there is a series of articles and presentations by mar-ket experts who kindly involved in our special edition for LNG as fuel versus Scrubbers. Major Class Societies, huge multinational corporations, shipping experts, ship suppliers, analysts, give their point of view on the subject.

Sources: Wikipedia, Costs and benefits of LNG as ship fuelfor container vessels (Gl group).

LNG versus Scrubbers!!!The answers are folowing...

Using LNG as ship fuel promises less emissions and, given theright circumstances, less fuel costs. The attractiveness of LNGas ship fuel compared to scrubber systems is dominated bythree parameters:

Share of operation inside ECA

Price difference between LNG and HFO

Investment costs for LNG tank system

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The last 7 years have not been easy for the dry bulk sector. Freights have been erratic and generally in a downward direc-tion. So have vessel values. Other than a spike in 2013 (created by a false hope of an early recovery in dry bulk fortunes), as I currently write this article, the BDI is at its lowest level since 1986 and still falling with all dry bulk vessels spot earnings below operating expense level.

It is not surprising that this monumental slump has taken place as bulk trade (wet and dry) since 2008 has grown by 21% whereas tonnage supply has surged by 54%, thus creating a large tonnage surplus to requirements. Even last year, by which newbuilding orders started to ebb, dry cargo trade grew by 3.7%, whilst the fleet grew by 4.4% and yet, the order flow did not stop until very late in 2014.

Is this investor madness? What did they think when ordering? Can a whole industry be so wrong?

There is another example of such enor-mous miscalculation which occurred with VLCC over-ordering in the early 1970s, which caught the larger tanker industry by the 1973 and 1979 oil prices rises. However, there was an excuse then, as the oil price rise had not been anticipated. Nevertheless, it lead to a huge VLCC tanker slump, that lasted for 15 years and which saw the loss of fortunes and fall of the mighty names into dust.

Are we about to face the same scale of catastrophe? Is this market different?

For many ordering owners, the eco ship design was heralded to be the vessel of the future and one that would outclass the non-eco vessels and create a dual market. This prompted them to invest hugely into these vessels whose price appeared reasonable in the light of the precious high vessel prices during the last dry cargo boom. Many, now, of course, lament their

decision, as neither the dry bulk recovery has occurred, nor have these eco vessels enjoyed the promised bounty in terms of higher charter rates from charterers. The collapse in the price of oil, down to about $45 per barrel, has reduced the eco pre-mium substantially.

So, is the dry bulk industry and its invest-ments a giant albatross and will the industry face continuous cash burning conditions for many years to come?

The short answer, in my opinion, is that dry bulk is not necessarily doomed to a prolonged bad market. To put it another way, there is no doubt a huge problem of overcapacity facing the industry but a recovery may well be achieved in the next few years rather than a decade provided further orders shall be contained.

Before addressing the problem in greater detail, let us look into the current dry bulk order book.

As of the end of January 2015, the total dry bulk order book stood at 1,954 vessels of 162.7m DWT (Clarksons World Fleet Register). This represents a massive 21.4% of the existing and quite sizeable

fleet. Moreover, 48% of the total is due to be delivered in the next 11 months, i.e. a staggering 78m DWT or 10.25% of the existing fleet. Out of this total, 46m DWT is accounted by Chinese ship yards, involving 632 vessels.The position does not improve much in 2016, as there is still a massive 66.9m DWT global order book, of which Chinese yards account for 45.6m DWT. (Clarksons Shipping Intelligence Weekly and Clark-sons World Fleet Register).

In Table 1 you will see how the Chinese order book is spread out. Increasingly, the average bulker DWT is growing from 73,685 DWT in 2015, to a massive 104,389 DWT in 2017, implying that most of the forward orders have been for capes. Greek and Chinese owners are competing for top position in this race. There is some evidence of an order slowdown in Chinese yards, as Chinas Ministry of Industry and Information Technology reported a 14.2% fall to 59.95m DWT for the whole of 2014 with the latest months showing a steeper slowdown. There was some evidence toot that the completed tonnage by Chinese yards in 2014 fell by 13.9% compared to 2013. However, this did not prevent the Chinese order book to still grow by 13.7% y/y to 148.9m DWT at the end of 2014.

So, is China leading the race to oblivion in dry bulk shipping, as well as in global shipping?

What we can anticipate, though, is a significant delay, as owners will not be in a rush to accept delivery of their vessels. We would assume that the delaying factor will result in a reduction of at least 10% of the fleet and as high as 15% per annum over the next two years. Based on total, 2015-2016 orders of 145m DWT, this would reduce the total deliveries over the period by about 14.5m DWT to 21.75m DWT.

Then we need to consider how many cancellations will take place for deliveries

Is the glut of global newbuilding orders in general, and Chinese orders in particular, expected to lead to a sustained dry bulk slump for the foreseeable future?

ByTed Petropoulos

Head, Petrofin Research

FINANCIAL FOCUS12 nafs POSIDONIA 2014

Banks witnessed, after a long and arduous road since 2009, a useful shipping recovery in 2013 in both vessel values and cash flows via higher freights. Al-though the recovery was erratic and not evenly spread among the vari-ous shipping sectors, it had a pronounced beneficial effect on the quality of the banks loan portfolios and in banks borrowers ability to meet their (often restruc-tured) loan obligations. Confidence grew among

banks that shipping was on the way to recovery and this was felt even more by borrowers and private equity funds.

Dry bulk lead the way with a 12-month (March 2013 to March 2014) recovery of 41.4% in vessel values and 52.3% in freights (from Shipping Intelligence Inc. 1st April 2014, below). With overall shipping confidence rising to record heights (Moore Stephens) and with the sectors progress picking up, one would have expected banks to be rushing headlong into new shipping loans and for competition to among banks grow.

With rare exceptions though ,this is not, however, what happened and the question is: why?

The answer lies with the banks themselves. Commencing with their shipping exposures, many banks had nurtured weaker clients in the hope of such a recovery. The process of recovery, though, could not work mira-cles overnight. It simply takes time to work out difficult loans and improve the health of a banks loan portfolio. The recovery needs to be sustained and the recent fall in dry bulk freights demonstrated the still volatile nature of the recovery. In addition, from a common shipping approach by the boards of major banks to be cautious to achange, involving a willingness to expand, one needs time.

A second factor is that many shipping banks had what they believed to be a higher than desired overall shipping exposure and needed time to reduce it to acceptable levels via client loan repayments.A third factor is that banks had set up very strict criteria for lending result-ing in too few potential loan transactions meeting such requirements

However, there were other more significant reasons for the banks lack of ship lending appetite. It relates to the fundamental weakness in the liquidity and capital ratios of European banks in the light of Basel III and the new ECB regulatory overview of all E.U. banks. Banks simply lacked the financial resources and the risk appetite to step on the gas pedal. European banks especially found themselves bracing for the ECB loan review and proving their financial robustness. In a world of doubt, to banks, profitability came second to financial strength. As the majority of shipping banks were European (72% of global ship finance in December 2013), Petrofin Bank Research (c) the difficulty of European banks had a pronounced and adverse effect on Greek ship lending.

To add insult to injury, three of shipping champions of previous years i.e. RBS, HSH and Commerzbank were under immense pressure to downsize their shipping portfolios and/or leave ship lending altogether.During this time, some banks stood out for either lending counter-cyclical-ly or standing their ground as ship finance providers. These were mainly DVB, ABN AMRO, Credit Suisse and ING among European banks and China Exim, CDB, and Korean Exim, from the Far Eastern banks.

A classic West-East divide took place with shipping credit being more readily available in the Far East, where a large number of small to me-dium banks supported local clients. The same was not true in the West for any but the biggest and often publicly quoted companies.

For Greek ship finance, in particular, it had been most hit as the biggest lenders exited the market at precisely the time when Greek newbuilding orders and second-hand purchases accelerated. With the Greek banks unable to provide new ship finance and caught by the difficulties of Euro-pean banks as a whole, Greek owners turned to the remaining few active lenders, to Far Eastern lenders (linked only to shipbuilding orders) and, increasingly, to US private equity funds (PEFs).

As the finance gap widened, PEFs were for many Greek owners often the only way to take advantage of what promised to be a healthy shipping recovery. PEFs were not only active but often scoured Greece for oppor-tunities to co-invest and lend to Greek owners believing that the antici-pated shipping recovery would provide them with the high returns they have been seeking. The result was an explosion of Joint Ventures most of which investing in eco-friendly vessels of new designs that is hoped will be the vessels of the future.

Characteristically, according to Tufton Oceanic data, on a global basis between January 2002 and January 2014, the share of global mortgage lending of the world fleet and orderbook fell from 43% to 36%. The above was even more pronounced in Greece. There are no hard data for the Greek shipping exposure by PEF, but we believe that there are over 40 Joint Ventures in place today. With interests primarily in drybulk and then

By Ted Petropoulos, Head Petrofin Research

Shipping finance lagging behind the recovery of Shipping

10 NAFS MARCH 2015

Financial Focus

in 2016, whereby, the down payment may not have been sufficient to ensure that the vessels would be built. We can only offer a guestimate here and assume that about 10m DWT will be affected in 2016, as it is too late to cancel 2015 deliveries. Then, we have possible conversions into tank-ers, which are showing signs of vigour at present. An analysis by Clarksons Capital Markets has revealed that only 49m DWT of the order book has been placed at yards with the ability to convert dry orders into wet ones. The estimate suggests that a maxi-mum of between 10m and 15m DWT could be converted. As these conversions cannot take place for 2015 deliveries, I assume that there will be a 5m DWT conversion in 2016.For the critical 2015-2016 years, therefore, we have an adjusted increase in capacity down from 145m DWT to 108.25m DWT to 115.5m DWT or equivalent to 14.22-15.17% increase over the period, based on a total dry bulk fleet of 761.3m DWT at the end of 2015.

We now turn to the scrapping market. Here, the scrap price has recently tumbled from 420 $/LTD to 365 $/LTD. However, due

to the new regulations coming into effect on 1/1/2016, as well as the poor market, many vessels will head for scrapping. The total scrapping per annum has fallen from 33.4m DWT in 2012 to 23.3m DWT in 2013 and only 16.1m in 2014, but is showing a resurgence in January 2015 with 4.2m DWT scrapped in one month alone.

It is safe to assume that on the back of the poor markets and high drydocking and special survey costs, the scrapping of dry bulk vessels shall grow to the 2012 levels of approximately 30m DWT per annum. Should this occur, then this would reduce the total fleet increase by a further 60m DWT, down to 48.5m25m DWT to 55.5m DWT. These tonnage estimated increases represent a 6.33-7.3% increase over the 2-year period, which is encouraging. Now, these numbers are much more manageable. The tonnage rise in 2015 is expected to be slightly higher than in 2016, as the cancellation/conver-sion impact would affect more 2016 orders but against that we must consider that 2015 scrapping may be higher than 2016, due to the new regulations.The above predictions are guestimates and

may be affected by a number of factors, such as the state of the dry bulk market, the ability to delay and/or cancel orders, and scrap prices. If correct, though, a 2-year tonnage increase of 6.3-7.3% seems high but manageable and far smaller than the increase implied by viewing the order book alone.

Turning to the demand side, current dry bulk growth estimates for 2015 and 2016 are for 4-5% in 2015 and 5-6% in 2016, i.e. a total of 9-11% over the 2-year pe-riod. This is based on continuous benefits from quantitative easing and a rela-tively low price of oil, as well as a growth recovery in China as a result of a credit expansion programme. Should the above dry cargo demand scenarios materialise, then it is possible that in 2015 and more so, in 2016, we shall witness the first years of demand marginally outstripping

supply.

Such a development would undoubtedly re-sult in a partial recovery of dry bulk freights to levels that would exceed operating expenses resulting in the dry bulk industry having a marginal but positive cash flow with which to address loan and interest obliga-tions. Conditions, though, are not expected to encourage or justify new orders which would delay further such recovery or make it a false dawn.

Just before we all rejoice that a recovery is nigh, we should mention that the low price of bunkers may encourage less slow steaming, which alone may negate/delay the markets recovery. In addition, there will still be those that with itchy fingers dying to place forward orders in a quest for glory and the elusive Eldorado of shipping last seen in 2007.

To conclude, the industry has the poten-tial to achieve the beginnings of a partial recovery, provided it does not once again shoot itself on the foot by further orders. Did someone say deja vue?

MARCH 2015 NAFS 11

TABLE 1 - Chinese Yards Bulker OrderbookBuilt year No of Bulkers DWT Avg Bulker

DWT2015 632 45,936,731 72,6852016 479 45,575,356 95,1472017 86 8,977,422 104,3892018 5 746,000 149,200Totals 1202 101,235,509 Feb-15 Clakrsons World Fleet Register

World Yards Bulker OrderbookBuilt year No of Bulkers DWT Avg Bulker

DWT2015 1019 78,038,777 76,5842016 734 66,893,178 91,1352017 188 16,452,987 87,5162018 13 1,342,600 103,277Totals 1954 162,727,542 Feb-15 Clakrsons World Fleet Register

Financial Focus

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Piraeus Office - INTRA MARE HELLAS, 4 Skouze Str. - 185 36 Piraeus - Greece tel: +30-210-4293843 - fax: +30-210-4293845 e-mail: info@intramare.gr

ByVicky Liouta

MD,Vilmar International S.A

The P&I renewal period is over and another year full of discussions, changes and move-ment of tonnage has passed with the reason-able and known hurdle.Owners are still facing problems because of the low market rates in all sectors and general financial conditions worldwide still do not favor them at all. Vessels oversupply is haunting small or big owners who are concerned on future income and the right basis they should carry on their business. What may the future tell them? Will they keep their old ships still un-der their operation or ultimately have to decide to idle or sell them for scrap sooner or later. The whole industry is being focused on P&I Clubs this time of the year particularly, more than the rest of it, and it is remarkable that great efforts are spent by P&I insurers to main-tain their members, reputation, premium levels, tonnage, relationships and, more important, increase their income. Brokers, obviously, worldwide, play a key role during negotiations and are in the centre of the cyclone trying to please everyone and this is proved to be finally undeniable.We have seen though movements also this year, such as big names in shipping changing Clubs irrespective of issues of release calls, long relationship and premium level. Little dif-ferences in amount of tonnage for each of the IG Clubs comparing with last years renewals, however, is it absolutely certain that Clubs are

happy after this years renewals? Does the alleged merger, rejected by Clubs Managers, of two big P&I Clubs mean something which will change the regime of IG as we know for the last years? Are general increases, over the time, bringing enough income to the Clubs to continue under present scheme?Discussing with insurers I sense there is an undecided feeling about this years results in P&I world. Tough negotiations until last minute, some Clubs decision to deny renewal of burdened fleets and certain owners final extreme decisions to change P&I insurer after many years, do give the impression that not only are the owners considering alternatives for P&I cover of their companys fleet as the market levels, the profit earned, the future plans for their company dictate, but also, as owners are more and more keen to find a com-petitive, organized, beneficial solution for their vessels insurances, equally the Clubs look for healthy, organized, well respected owners with new tonnage which will have to pay, ultimately, enough to support the vitality of IG Clubs. Someone has to note that various P&I Clubs lately started operating in many countries across the globe, except Greece, and many members from that country, smaller or bigger shipping companies support their local Club. In addition, many fixed premium facilities offer almost equal service, competitive premium, increased limit of liability and no release calls

to their members. China has a serious role on insurances and not only P&I Club exists for long but also other insurances started already their services, in relation to various covers in insurance field. Is therefore logical to wonder if IG Clubs and their Managers continue to get enough income from owners worldwide who are spread to many and different insurance choices? I personally have my concerns if it is to the benefit of the IG Clubs to impose and insist on the general increases each year, irrespective of the changes worldwide, the release calls as a binding rule among the IG Clubs and, of much importance, the rate of the premium as far as the old comparing to new tonnage is concerned. It seems that there is no way out for IG Clubs if members loyalty and relationships are not carefully observed by the Clubs and undoubtedly preserved, and P&I insurance cover is not deemed as mutual benefit for the future. I do not wish to believe that Clubs prefer to cover only the big fleets and the stronger owners worldwide and refuse cover to smaller but healthy owning companies worldwide. I feel hence that IG Clubs must seriously judge all circumstances this year and before the end of the cover period or announcements of general increases the fall of 2015, reflect on their true and realistic requests after taking into consideration the global changes and owners mind in shipping.

Is there real future in P&I world?

Article

14 NAFS MARCH 2015

Euploia represents exclusively Cicek Shipyard in Greece

CICEK SHIPYARD / DENZ ENDSTRS A.S., one of the most well-established shipyards in Turkey, occupy more than 100 highly qualified personnel as regular staff, providing Full Technical Management, Operat-ing, Maintaining and Consulting. CICEK SHIPYARD is certified with high-est quality standards of ISM, ISO, ISPS, etc.Cicek Shipyards mission is to build and repair ships in a safe and efficient manner that ensures adherence to contracted delivery dates whilst not prejudicing its respect for the environment, to supply high quality products to ship-owners at competitive prices and to ensure sustainability in production through proactive initiatives and ongoing investment in human resources and technology. The vision of the shipyard is to be one of the worlds top 50 shipyards. Cicek family and Celal Ciceks shipbuilding his-tory starts from 1960s under the name of GAYE Ltd. But Naval architect and MSC marine engineer Celal Cicek established Deniz Industry Co/Cicek Shipyard, in July 1st 1977. The shipyard was located in Halic - Balat, stanbul. The first ship constructed in this shipyard was a coaster of 3.250dwt named Cokun Yac. Two sister ships having the same tonnage were also built in this yard in Hali.In 1979, company applied for land in Tuzla following the announcement of the Tuzla Private Sector Shipyard Area and commenced ship construc-tion at this site in 1981. By the end of 1982, company had started on the construction of product tanker of 3.250dwt named Doan Kaman and of a chemical tanker of 3.250dwt named Orse. Naval architect and marine engineer Celal iek undertook the design work. At that time, Orse was the first chemical tanker to be built in Turkey.In 1982, company started construction of a 5.700dwt bulk carrier, named Kazm Kolotolu, which was the biggest ship company had constructed at that time. Again, she was completely companys own design and was delivered in 1984. Towards the governments decision of subsidizing the purchase of second hand vessels from abroad hence 1985, all the Turkish shipyards as well as Cicek were left without domestic demand and proceeded constructing vessels in smaller sizes and different types and left to perform conver-

sions and repairs.In those difficult days, banks did not provide any Letters of Guarantee for shipbuilding due to lack of knowledge of the shipbuilding industry.Cicek maintained its activities for several years by carrying out ship repair work and by building smaller vessels including tugs - tankers - chemical tankers and bulk carriers. This continued until 2003.Today, Cicek has been in the shipbuilding and ship repair industry for over 40 years and employs 300 people directly plus 600 subcontractors. The companys president manages all, the naval architect and marine engineer Celal Cicek Msc who celebrated his 50th year in engineering this year.The company recently completed several important projects for Turkish ship-owners. Most of these ships have subsequently been resold to impor-tant European ship-owners.Investing in new shipbuilding machinery and equipment enabled Cicek to compete with the most modern yards all around the world. Cicek has the first and so far the only new building graving dock in the Turkish private shipbuilding area. Measuring 225m in length, 37.5m. in breadth and 11m in depth, it is capable of accommodating panamax sized vessels. In ad-dition, the shipyard has a slipway that can build ships of up to 26.000dwt and another small slipway on which Cicek build vessels up to 5.000dwt. Recently, these have included niche vessels like sophisticated chemical tankers and bunker tankers.Cicek has successfully completed many modern vessels in recent years. Many of these were IMO II chemical tankers of up to 30.000 dwt.At the moment, Turkeys biggest vessel a 58.000dwt bulk carrier has been floated out from Ciceks dry dock.At the moment iek Shipyard is very much actively the handy size bulk carrier market. By introducing Bulk Flower 25K and Bulk Flower 35K designs which will change the handy size bulk carrier market for fuel consumption efficient, larger handling capabilities by heavy lifting cranes clean environment by double hull structure and uses CO2 emissions by shaft generator and water ballast management systems for clean ballast water.

16 NAFS MARCH 2015

Market News

Euploia Drydocks & Services Ltd broadens professional horizons with a new addition to their world-wide net of represented shipyards. Euploia is now representing Exclusively in Greece CICEK SHIPYARD.

Mr. Charis Valentakis (right)Director of Euploia Drydocks and Services Ltd & Mr. Ayhan Yapicier(left)Technical Manager of Cicek Shipyard/Deniz Endstrisi A..

, . 1 , 22/01/2015 Divani Apollon Palace & Thalasso,

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18 NAFS MARCH 2015

Market News

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7% . ., Nasdaq, Meyer Sandy Frucher Nasdaq . . Ted Petrofin Research , , . 40 , 436 . 2009 391 2014. , , , . Euro-bank, ,

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. , .., Space Hellas , , Microsoft Space ellas . ,

, SCB Hellas he American Club, P&I 14 P&I clubs G 10 75% . P&I clubs , . , CEO, Hellenic Hull Manage-ment (HMA) Limited, . , , HE-MEXPO, , . . , & SRH Marine Greece, Director, Co-mit International Radio-Maritime (CIRM)

. , , , , . Martin Stopford, President, Clarkson Research , 1941 23 . ( ) . smart shipping . , , Seaborne Capital Adviors Ltd., , . . , .. , FreeSeas Inc., 24 , . , Chief Executive Officer, Goldenport Group, , , , . , , Intermodal Shipbrokers, , , BRICS , , . , & CEO, Paragon Shipping Inc. & Box Ships Inc., , , .

To 1 . European Community Shipowners Associa-tion (ECSA) , Eurobank. Hellenic Hull Management Ltd., Olympic Shipping & Management S.A., Space Hellas, The American Club, Manifest , .., OTESAT-MARITEL, LEXUS. , Chiotellis & Co / Advocates Con-sultants , IRI Hellas, Perimenis Electrical Services, Bureau Veritas, Face to Face Consultants, Elnavi, , , , Safety-4Sea Theseanation.gr .

1 Forum

MARCH 2015 NAFS 19

Market News

SURVITEC GROUPGLOBAL EXCHANGE HIRE OF

EXTENDED SERVICE LIFERAFTS

Exchange------------------------------------------------------------

At 2.5 years (30 month) intervals, exchange liferafts will be waiting for your vessel to

arrive at port...

Reduced Administration

------------------------------------------------------------

Our dedicated Global Hire team will take care ofservicing schedules - you only need to tell us

where your ship will be...

Flexibility------------------------------------------------------------

Begin with only with one vessel and add more as and when existing liferafts are due

for a service...

Reduced Total Cost of Ownership

------------------------------------------------------------

No capital investment, no depreciation of assets, just the guarantee of a fully serviced,

high quality product on board...

For further information please contact your local expert, Malcolm Barratt.Tel: +30 698 004 2468 / Email: Malcolm.Barratt@survitecgroup.comWeb: www.survitecgroup.com

NAF Survitec Advert_V4.indd 1 11/11/2014 14:04

Survitec: Liferaft exchange hire programme delivers tomorrows technology today

The concept of the intelligent liferaft is gaining traction in the ship-ping industry as vessel owners and operators continue to explore new ways to reduce annual servicing costs, control budgets and increase operational efficiency. The extended service liferafts offered by Survitec Group, as part of its Global Hire exchange programme, offer a glimpse into what the future holds.Survitecs latest RFD Extended Service Liferaft (ESR) takes liferaft design to a new level. The product features intelligent sensors that can feed information to an external monitoring device. This allows the rafts condition to be checked while in service by a ships crew. This requires minimal skills and takes less than five minutes per liferaft.Malcolm Barratt, Survitecs Global Hire Sales Manager, believes that one day all liferafts will be manufactured in this way. There is grow-ing interest in how we can monitor the condition of all different types of equipment on board a ship, not just liferafts. This makes sense. Why not be able to carry out important condition checks as often as you like? In tomorrows world the idea that you need to wait for a liferaft to be serviced, before you find out there is a potential problem, will seem ridiculous. What is exciting is that these liferafts are actually available right now as part of our Global Hire offering. The challenge for any manufacturer of life sav-ing appliances is to slow down the ageing process of a product by preventing the degradation caused by moisture, salt, aggressive marine exhaust gases and oxygen. The first logical step in this process is to handle the product less dur-ing its life cycle and manufacture something with an extended service interval. But to do this, two issues are critical. Firstly, the product has to be pro-tected better while it is in service. Secondly, one must be able to check up on the condition of the liferaft between these longer service intervals without compromising this in-built protection.The International Maritime Organisation (IMO) guidelines (IMO MSC.1/Circ.1328) clearly state that for a liferaft to be given extended service status, it must be possible to evaluate the humidity around the liferaft behind its sealed protective barrier. One must also be able to detect possible leakages of inflation gas from the gas cylinder. A qualified person, who has been trained and certified by the liferaft manufacturer, must carry out these checks using accurate tools and measuring equip-ment.To provide the necessary protection, a Survitec ESR is placed in a hermetically sealed environment that positively reduces the ageing ef-fect of the atmosphere on a liferafts structure and materials. The sealed packaging inside a Survitec ESR features a three-layer foil barrier.

A top layer of polyester film provides the packaging with mechanical strength across a range of temperatures. A middle layer of aluminium foil performs the crucial function of providing a barrier against water vapour transmission and aggressive gases. Finally a third layer of polythene helps to heat seal the foil barrier. The result is a barrier that has a water vapour transmission rate of under 0.05g/m2/24hr and is resistant to physical handling, sulphates and chlorides, UV light, grease, oil, acids and alkalis. The whole packaging system complies with British Standard BS1133, which specifies the materials to be used for hermetic sealing, the quan-tity and type of desiccant to use and the Relative Humidity (RH) to be achieved. For an extended service liferaft the requirement is to keep RH inside the sealed package below 65%. To satisfy the IMO regulations on the inspection of extended service lif-erafts, electronic sensors are used inside the liferaft canister. Survitecs ESR features an integrated CO2 and RH sensor to evaluate the humidity behind its sealed protective barrier and detect possible leakages of

inflation gas from the gas cylinder. An external USB port mounted into the canister feeds this information to a monitoring device via a standard USB cable. Survitec supplies a very easy-to-use handheld device free of charge that features an integral cable and single on/off button. It signals a clear pass (green light) or fail (red light) result for each

sensor. For a small additional charge the company can supply an APEX approved device. As part of its service package, Survitec also provides training and certification for the ships crew that covers all aspects of how to perform a complete on-board liferaft check. Extended service liferafts must be inspected at least annually while the liferaft remains in its stowage posi-tion.Concluded Malcolm: The manufacture of intelligent liferafts that comply with the current IMO regulations is only possible thanks to advances in sensor technology and liferaft design. One day we expect all liferafts will be equipped with some sort of integrat-ed condition monitoring facility, even those that are required to be serviced annually. In the meantime, our Global Hire custom-ers are benefiting from this technology because they are using liferafts that only require servicing once every 30 months. Combining exchange hire with extended liferaft servicing allows all types of vessels, from container ships and tankers through to bulk carriers, to benefit from reduced costs, increased flexibility and improved operation-al efficiencies. Now in its tenth year of operation, Survitecs Global Hire programme currently has 7000 hire liferafts in operation of which over 3,500 are extended service liferafts on exchange hire contracts.

Market News

20 NAFS MARCH 2015

SURVITEC GROUPGLOBAL EXCHANGE HIRE OF

EXTENDED SERVICE LIFERAFTS

Exchange------------------------------------------------------------

At 2.5 years (30 month) intervals, exchange liferafts will be waiting for your vessel to

arrive at port...

Reduced Administration

------------------------------------------------------------

Our dedicated Global Hire team will take care ofservicing schedules - you only need to tell us

where your ship will be...

Flexibility------------------------------------------------------------

Begin with only with one vessel and add more as and when existing liferafts are due

for a service...

Reduced Total Cost of Ownership

------------------------------------------------------------

No capital investment, no depreciation of assets, just the guarantee of a fully serviced,

high quality product on board...

For further information please contact your local expert, Malcolm Barratt.Tel: +30 698 004 2468 / Email: Malcolm.Barratt@survitecgroup.comWeb: www.survitecgroup.com

NAF Survitec Advert_V4.indd 1 11/11/2014 14:04

22 NAFS MARCH 2015

A turbo boost for LNG

ABB Turbocharging

Demand for liquefied natural gas (LNG) is on the increase in the power generation industry as well as, more recently, the marine sector. ABB Turbocharging is strongly committed to continuously developing technologies and maintenance solutions that support this market.

Marco Burgwal graduated in 1995 inNaval Architecture and Marine Engineeringin Haarlem, The Netherlands. He worked as a technical superintendent at a Dutch shipping company before joining ABB Turbocharging in2002. After a 6 year spell in Japan, which included heading the West Japan turbocharger service business, he returned in 2008 to join the global medium-speed sales and applicationengineering department, which he has headed since 2011.

Text Marco Burgwal, Photography Michael Reinhard, Viking Line

Natural gas, cooled to 162C and, liquefied, is arguably the most discussed fossil fuel today, and it is likely to remain so in the coming years. Industry in general continues to favor it as an environmen-tally attractive alternative to other hydrocarbon fuels. In fact, ABB Turbocharging has delivered over 1,700 TPL and TPS turbo chargers on over 1,100 engines powered with LNG so far.

Natural gas is the preferred choice for electric power generation and industrial sectors because of its low greenhouse emissions a result of its lower carbon intensity in comparison with coal and oil. And for new power generation plants it is especially attractive because of the relatively low capital invest-ment needed. Also, abundant natural gas resources and stable production contribute to the strong competitive position of natural gas among all the available energy sources.

This trend is clearly visible in the medium and large bore power generation market, where the volume of newly produced diesel fueled engines has dropped significantly since the introduction of the new spark ignited lean burn gas engines and multi-fuel engines.

Another clear trend in the global energy market, and especially in electricity generation, is the need for high flexibility, reliability and fuel efficiency to be available over a wide load range. These require-ments can no longer be met by traditional inflexible gas turbines, and it is here that the highly efficient gas engines have a key advantage.

A multiple engine setup easily outperforms the traditional gas turbines by enabling an existing power system to operate at maximum efficiency. It does this by effectively absorbing system load variations, allowing a significant saving at the system level, and therefore for consumers. A 2012 study of the California power system by the energy consultancy DNV KEMA showed that adding highly efficient gas engines, instead of traditional, high-start-cost, inflexible gas turbines, enables up to twelve per-cent of the annual system costs to be saved.

Environmentally relevantThis increasing importance of natural gas is not only evident in the power generation industry; the marine sector, too, has taken note of its environmentally and commercially attractive benefits compared with other fossil fuel solutions. With natural gas as fuel, NOx emissions are reduced by 85% and SOx and particulates are practically non-existent compared with traditional diesel engines. The key commercial benefit is that no additional expensive aftertreatment systems are required to meet the new regulations coming into force. Looking at the total cost of ownership, natural gas is potentially a more attractive solution for meeting new emission regulations than any kind of diesel configuration.

ABB Turbocharging

actively supports the

gas and dual-fuel engine

development trends

through the introduction

of high pressure, high

efficiency two-stage

turbo charging Power2

and Valve Control

Management (VCM).

ABB Turbocharging

While dual-fuel engines are already widely used in the LNG carrier market, pure spark ignited gas engines still tend to be rare in the marine sector. Although operators of ferries, cruise vessels, offshore support vessels and others are showing a growing interest in this technology, the LNG boom in the marine sector for non-LNG carriers is progressing more slowly than was anticipated. This is mainly due to the IMO Marine Environment Protection Committees decision to enforce new regulations for ships NOx emissions in 2016 for already designated NOx Emission Control Areas (NECA) only. Another reason is the lack of a global LNG infrastructure, which is currently limited to specific regions.

Increased engine outputABB Turbocharging actively supports the gas and dual-fuel engine development trends through the introduction of technologies that include high pressure, high efficiency two-stage turbocharging (Power2) as well as Valve Control Management (VCM). These technologies offer the possibility of in creasing engine output and operational flexibility, enable fixed pitch propeller (FPP) operation and allow an increase in engine efficiency.

ABB turbochargers are used right across the medium-speed gas and dual-fuel engine market, and cover a broad range of marine and power plant appli-cations. ABB Turbocharging also has well-established maintenance management agreement packages, such as the Operation Performance Pack-age (OPAC), that fully support these markets. OPAC enables customers to maintain highest plant efficiency, flexibility and uptime, through monitoring, planning and completion of turbocharger maintenance at a fixed price per running hour a key factor in todays market environment.

1,700 TPL and TPS turbochargers run on over 1,100 engines powered with LNG

MARCH 2015 NAFS 23

24 NAFS MARCH 2015

Slow steaming a proven strategy

ABB Turbocharging - Tips for the operator

With bunker costs increasing, slow steaming has become a universally accepted means of significantly reducing fuel consumption and is used by major shipping companies around the world.

Holger Markow is an environmental and process engineer with a postgraduate degree in economy engineering. He joined ABB Turbocharging in 1996. Today Markow is Senior Manager Technical Service, respon-sible for claims management, breakdown investigation and technical support for end users, operators and Service Stations.

Text Holger Markow, Photography Michael Reinhard

All major international container lines are nowadays operating their vessels in so-called slow steaming or even super slow steaming mode at engine loads down to 10% MCR (Maximum Continuous Rating). Slow steaming reduces specific fuel consumption, lowers carbon emissions and considerably improves companies environmental balance sheets into the bargain.The one big advantage of slow steaming is that it provides shipowners with a flexible solution to the problem of how best to save on fuel oil. Many of ABB Turbochargings customers need and wish to have the possibility to run on full load, yet also be able to save on fuel oil when the possibility of slowing down arises.

Part-load and low-load operationsTo meet this growing demand for running large vessels on varying loads, all major two-stroke engine builders have developed customized slow steaming solutions that improve the main engine perfor-mance during part-load or low-load operation. A popular technical solution is turbocharger cut out. This practice has widely recognized benefits and is in use on large container vessels operating across the globe. When one turbocharger is cut out, the remaining turbochargers benefit from the higher exhaust gas energy they receive. This causes the scavenge air pressure to increase and provide higher cylinder compression and maximum combustion pressure. The outcome is lower fuel oil consumption and a good overall engine condition.

Cleaning regime and slow steamingOver the past five years ABB has been successfully involved in hundreds of slow steaming projects, either with a fix or flexible cut out solution. When operating vessels in slow steaming mode, customers generally need to take a special look at their cleaning regime. Typical negative results of continuous low load operation are ineffective, incom-plete combustion and chemically altered combustion products. Increased fouling of the exhaust system and turbocharger components can occur. Normally, dry and wet cleaning performed on the turbine side removes soot and other accumulated deposits me chanically through the use of marine grit or water droplets, which impact on the hot surface. However, at lower loads this mechanical impact is reduced, making the cleaning measure less effective. Where slow steaming is used continuously over longer periods of time, cleaning regimes may need to be adjusted as follows to achieve adequate cleaning results:1. During cleaning, make sure that the engine load is at 25% or higher.2. Dry clean more frequently (e.g. every 24 hours).3. Regularly check the effectiveness of the cleaning by carrying out intermediate inspections on the relevant gas ducts.Please consult ABB Turbocharging for any individual support you may require regarding slow steaming.

Over the past five years ABB has been successfully involved in hundreds of slow steaming projects, either with a fix or flexible cut out solution.

Cut out information reminder

Turbocharger cut out is a popular choice for slow steaming solutions.

Two ways to achieve a turbocharger cut out:1. In the so-called fix or permanent cut out, the rotating and bearing parts are completely removed and stored, and the gas, air and oil ports are closed with blanking plates.2. With the flexible cut out, no parts are removed from the turbocharger but controlled cut out valves are installed in the exhaust gas inlet and air outlet. The turbocharger can be engaged whenever needed. As oil is still supplied to the turbocharger, the provision of external sealing air to the turbocharger is mandatory for an oil- and gastight sealing, plus modifications to the turbocharger are required.

CM

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CM

MY

CY

CMY

K

26 NAFS MARCH 2015

Scrubber vs. LNG: Whats the choice?

Article

Make me prophet to make you a profit my grandma used to say. In Greek of course ( ). And she was right. Especially in cases like ours.Lots have been said lately about which is the right age (and type and condition and ECA zone sail-ing time and etc.) for a ship to (partially) switch to LNG, or continue with MGO, or install a Scrubber system. Also, what about the oil prices. Are they going to continue to drop? How much? Are they go-ing to recover? When? What about the global crisis? Is it really over? Are there any other alternative sailing routes? Or transportation routes? Are there any new regulations coming? When? What about the environment? Etc. Etc. Etc.You see, this is really a headache. Too many freedom variables. Chaos theory in its full implemen-tation. OK may someone say And what shall I do? The answer unfortunately relies in the first phrase of this article.To my point of view though, we must focus in the global picture. Diversification and variety of choices create a healthy market and healthy competition. It is a rule of nature; many species must survive and adjust to the new environment. Meaning that we need all alternative solutions on the table. Some will make the wrong choices and extinct; some will make the right choices and move forward. But the choices have to be there and be many and different. After all, oligopolistic competition is one of the most successful economic models of the past. Being more practical and proactive, despite the issues we face here in Greece in general, we have tried to interpret the signs of the time in a more realistic way, by creating ECOMASYN. As said before, the idea is simple. Based on the IMO regulations, a lot of changes are about to happen in the shipping business, all related to a cleaner environment. Ships have to adjust in the new era requirements, that is, lower COx, SOx, NOx emissions, cleaner Ballast Water, more energy efficient transportations. Also, the oil prices fluctuation create an unstable energy/economic environment. ECOMASYN (Hellenic Eco Marine Synergy) is a Non-Governmental Organization, aims to deal with all these issues that are going to be hot in the years to come. Our members, more than 20 for the time, are Design Offices, Contractors, Suppliers, Classification Societies (as supportive members), Consultants, etc. covering a wide range of activities related to the fields described above, all well-known companies in the Marine business. We plan to expand really soon in other areas of interest, focusing always in LNG and Alternative Fuels, Energy efficiency, Scrubbers/Emission abatement and Ballast Water Treatment, from the Ship Repairing point of view.In order to materialize this objective, the Cooperation hopes not only to the interconnection of its network members (professionals, companies and institutions), but also to provide advisory and orga-nizational assistance, education and training for their development, improve the business value and upgrade the quality of their services.Focus is given in the following areas: Provide integrated solutions to Shipping Companies based in Greece Provide integrated solutions to Shipping Companies abroad and attract them to the Greek Market Participation in international, European Union or National Development programs and projects in partnership with other stakeholders ECOMASYN also aims not only to get together companies, suppliers, service providers, institutional organizations, universities, professional associations, etc. but also to help improve the extroversion of Greek Shiprepair and the Greek Shipbuilding Industry in general.In Greece we have been always good in finding alternatives. Thats what we are also trying to do now. Our vision is to actively contribute in the next 3-5 years to the creation of a world known Green Marine Center in Greece, which will provide the green added value to its clients. The strategy to be followed is the one stop shop concept, where the customer will have the opportunity to find all services (research, development, advisory, education, certification, etc.) provided together in one place, selecting from a variety of service providers and products, which will meet the required quality/cost/time criteria. And we need our future clients to see our efforts in a positive way.

Text Apostolos Sigouras, CEO NAFSOLP

To my point of view though, we must focus in the global picture. Diver-sification and variety of choices create a healthy market and healthy competition. It is a rule of nature; many species must survive and adjust to the new environment. Meaning that we need all alternative solutions on the table. Some will make the wrong choices and extinct; some will make the right choices and move forward. But the choices have to be there and be many and differ-ent. After all, oligopolistic competition is one of the most successful economic models of the past.

IS YOUR CREW REALLY TRAINED TO TAKE THIS JUMP IF NECESSARY?

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Norsafe Academy ad 03-15.indd 1 04.03.2015 16:55:11

Annex VI of IMO MARPOL Convention on sul-phur content (0.1%max.) in marine fuels entered into force on 1st January 2015, as far as Sulphur Emission Control Areas (SECAs) are concerned. Furthermore, on 1st January 2020, there will be a further limit (0.5%) outside SECAs (global cap). The latter is going to be further investigated (as far as compliant fuel availability is concerned) before 2018 but, although initially it seemed that most probably it would be postponed for 2025, recently, many important stakeholders in the shipping industry (i.e. the International Chamber of Shipping- ICS) think the global sulphur cap is very likely to be implemented in 2020, almost regardless of the effect that any lack of avail-ability of compliant fuel may have on the cost of moving world trade by sea. In this connection, it is worth to be mentioned that the EU has already decided that the global sulphur cap will apply to international shipping within 2020 off the coasts of EU Member States, regardless of any decision by IMO to postpone it eventually.The same IMO Convention allows for alternative technologies to be adopted on board ships in order to meet the maximum allowable sulphur emissions in ships exhaust gasses.The simple implementation itself, by using compliant (low sulphur) fuels, presents the advantage of low(er) CAPEX (capital expenses) but many important drawbacks as well, both technical: low viscosity, lubricity, instability etc. and operational: fuel change over complication/problems (loss of power-LOP), availability in the market, cost (250300 US Dollars/mt. premium on residual HFO), operating cost (excessive wear on existing marine engines), need for certified quality/composition at delivery (bunker delivery notes-BDN), etc.

The most mature alternative technologies are:a. Use of desulphurizing systems (scrubbers), continuing to burn traditional residual HFO.b. Use of LNG as fuel, installing a suitable LNG fuel system on board.Ship owners and operators face very difficult challenges but also potential opportunities for

making the right choice among available op-tions:- How much do I have to pay?- What are the risks for long term decisions on technologies which are not 100% mature yet?- Have I chosen the right technology?- Can I create a competitive advantage?- How can I compromise conflicting issues, i.e. meting environmental regulations and, at the same time, maintaining profitability of my opera-tions?LNG as a marine fuel made significant progress in the last few years, in both Europe and North America and next years look set to bring further acceptance by the shipping industry.The main drivers, which represent also opportu-nities for the ship operators, are:- Environmental compliance- Economic benefits- Diversification of energy sourcingHowever, challenges remain in the form of infra-structure, supply, regulations and risk manage-ment.Analysts say further progress in the short term is therefore likely to focus on niche markets within SECAs, including ferries and short sea trade. The prospect of deep sea global LNG powered trade, by contrast, is some way off.Main barriers for the adoption of LNG as marine fuel, are:- Inadequate standards and regulations, i.e.: Fragmented EU/ global regulations Lack of harmonized equipment standards (i.e. standard connectors) Lack of harmonized safety and security stan-dards, including training, simultaneous bunkering operations, etc.- Uncertain financial framework for LNG fuel,i.e.: Unclear pricing scheme LNG price volatile and hardly predictable Risk of higher than expected costs/commercial risks Taxation not fully defined yet - Absence of a realistic business model, i.e.: CAPEX LNG fuel pricing-spot market-contract duration LNG standard quality- Bunkering availability, chicken and egg issue, which can be solved only through point-to-point initiatives between shipping lines, gas suppliers and other stakeholders.I believe that scrubbers and MGO (low sulphur fuel) will prevail at short term.When it comes to the choice between scrubber and LNG fuel, the following should be consid-ered:1. Fuel costs Residual HFO price until recently was in the range of 600 $/mt. (15.5 $ mBTU). Presently, it

is approximately reduced by 50%, but it will go slightly up again. Premium for distillate (low sulphur) fuel cost is in the range of 250300 $/mt (5.76.8 mBTU) LNG fuel price (landed) can vary from 4 $/mBTU (USA-Gulf) to 10 $ /mBTU (Japan).2. CAPEX Cost for a scrubber system cleaning both main engine(s) and auxiliaries exhaust gas-ses, including installation, may vary from 2 m$ for a 4-stroke 6MW machinery and open loop scrubber to 6 m$ for a 2-stroke 20 MW hybrid scrubber system. Cost for an LNG fuel system is almost double than a scrubber installation of the same capacity.3. Stability/Loss of cargo capacityBoth systems have to be evaluated from the stability point of view. Furthermore, loss of deadweight capacity should be accounted for, considering additional weights.As far as loss of cargo volume is concerned, it is pointed out that, while scrubber technology has dramatically reduced footprint, the volume required for LNG fuel tanks, especially in volume critical ships (containerships, Ro-Ros, etc.), still represents a big challenge, Even more so, considering that LNG fuelled ships, in most of the cases, maintain their ability to burn fuel oil, hence the corresponding fuel tanks remain onboard (dual fuel capability).4. Operating ProfileAs already stated, meeting 0.1%sulphur content limit in ships fuel is required while vessels are operating within SECAs. Therefore, it is of the utmost importance to take into consideration the estimated percentage of vessels operating time in SECAs.In general, if time in SECAs is less than 25% of the operating time of a vessel, then it does not make sense to go for technologies requiring high CAPEX (scrubbers or LNG fuel).Therefore, a careful study has to be carried out in order to reach the right choice.For example, from case studies conducted re-cently, it is estimated that, for an MR tanker oper-ating 30-35% in SECAs, with present HFO prices (300 $/mt) and LNG fuel price at an average 8$/mBTU, the payback period will be approximately 7 years with scrubbers (3.3 m $) and 14 years with LNG fuel system on board (5.8 m $), while with LNG average fuel price at 12$/mBTU (2nd half 2014) there will be no ROI ever!In a few words, although LNG fuel price is expected to decrease in the near future, present HFO prices make the scrubber option even more attractive.In conclusion, in case a vessel has a remaining operating life of at least 10 years, then scrubbers represent the solution that makes most sense.

28 NAFS MARCH 2015

LNG or Scrubbers?ArticleText Panos Yannoulis, President Oceanking

MARITIME

PUT THE FUTURE OF YOUR FLEET IN SAFE HANDSAs your classification partner, our extensive maritime expertise, technical knowledge and regulatory foresight will help to ensure that your fleet meets the demands of the future. Our aim is safety, compliance and optimal operational performance throughout the lifetime of your

vessels, benefitting your business and the maritime industry as a whole. With DNV GL your fleet is in safe hands. Can you afford anything else?

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30 NAFS MARCH 2015

Article

Alfa Laval:PureNOxWater Treatment System for cleaning scrubber water in EGR process

ApplicationHigh focus on emissions from ships is driving the more stringent regulations for reducing NOx emissions beyond current Tier II levels. Vessels with a keel-laid date on or after January 1, 2016 that travel in NOx Emission Control Areas (ECA) will require IMO Tier III certified engines. However, there are ongoing discussions to con-sider more stringent NOx emission rules also for existing ships.Alfa Laval is collaborating with MAN Diesel, the worlds largest manufacturer of diesel engines for large cargo vessels, to develop a scrubber Water Treatment System (WTS) for large two-stroke diesel engines. The solution is integrated in the Exhaust Gas Recirculation (EGR), a system which has the potential to be the NOx abatement frontrunner in terms of both technology and economic viability.

PureNOx Water Treatment System (WTS)The PureNOx water treatment system is com-pact with a small footprint, it is simple to install and can be operated at very low engine loads. PureNOx reduces maintenance costs for the EGR scrubber system and results in smaller waste vol- umes for onshore disposal.The PureNOx WTS effectively secures: Cleaning of the EGR scrubber water to pro-tect the engine Cleaning of the discharge water in compliance with IMO directives (MEPC 57/21 Annex 4) Controlling required pH level in the process Monitoring and logging of wash water in com-pliance with IMO directives

BenefitsCompared to other NOx emissions reduc-tion systems, the EGR system offers these advantages:Compact footprint and simple installationThe EGR system including Alfa Lavals PureNOx WTS is designed as an integral part of the MAN two-stroke marine diesel engine.Easy to operate and possible to operate at very low engine loadsA fully automated EGR control system ensures quick and correct response to engine load variations. Only a small amount of additives in form of NaOH is required, depending on the sulphur content in the fuel.Lower maintenance costs of EGR scrubber system Using the EGR with its integrated Alfa Laval

PureNOx system is a reliable technique that effectively removes soot and thereby protects the engine.

Significantly reduced waste volumes for onshore disposal PureNOx collects and discharges wash water solids as concentrated sludge into the sludge tank, while cleaning the scrubber water in compliance with IMO criteria for overboard discharge.The Alfa Laval PureNOx water treatment system is an important part of our EGR system to be able to meet the IMO criteria for Tier III NOx emission limits, says Johan Kaltoft, Senior project manager for research and de-velop- ment at MAN Diesel & Turbo. The close cooperation and solid development support we received from Alfa Laval contributed to optimis-ing the design of our EGR system.

PureNOx WTS installationsSeveral PureNOx installations are today in op-eration. A test version of the solution has been tested on a cargo vessel for two years and a more developed model has been tested on an engine at MAN test facility in Copenhagen with positive results, followed by a prototype installation installed in a Maersk Line C-class container vessel.The 9th of October 2012 MAN Diesel & Turbo,

together with HHI-EMD, presented the Maersk Line C-class container vessel as a milestone in Tier III development the first IMO Tier III-compliant diesel engine utilizing EGR equipped with Alfa Laval PureNOx WTS.

EGR How it worksThe EGR system includes a wet scrubber that is integrated into the engine, cooler and water mist catcher, blower, con- trol system and the Alfa Laval PureNOx WTS.

The system re-circulates up to 40% of the ex-haust gas into the charge air chamber, lowering the oxygen content in the cylinder and increas-ing the specific heat capacity. This reduces the com- bustion temperatures and suppresses the formation of NOx emissions. To prolong the ser-vice life of engine components, a wet scrubber circulates water to remove soot and sulphur ox-ides (SOx) from the re-circulated exhaust gas. The Alfa Laval PureNOx high-speed separator system effectively cleans scrubber wash water, removing impurities that may interfere with the process yet fulfilling IMO water purity require-ments to enable discharge into the sea.

LaunchPureNOx will be available on the market in due time prior the more stringent Tier III legislation comes into force.

The Alfa Laval PureNOx Water Treatment System (WTS) effectively cleans the EGR scrubber water, protecting the engine and cleaning the discharge water in compliance with IMO direc-tives (MEPC 57/21 Annex 4).

2015 has arrived. How will you cope

with ECA legislation?As of 1 January, MARPOL Annex VI demands that you change your operations in SOx Emission Control Areas

(ECAs). But where other legislation dictates your onboard equipment, the new SOx regulations let you decide how

to comply and compete. Whatever your choice,Alfa Laval is there to

support you.

The MGO routeIf youve decided to work with distillate, you face potentially engine-stopping hazards when it comes to fuel viscosity and lubricity during fuel changeover. As your natural partner in fuel handling, we offer the Alfa Laval Automated Fuel Changeover System (ACS) a safe and optimized changeover solution. Fully automatic and built with its own cooler, the ACS upgrades your existing booster system to provide the cooling needed when using low-viscosity MGO/MDO with diesel engines.

Contact us today for more information, or learn more at www.alfalaval.com/marine

The HFO routeIf youve decided to continue using HFO by

installing a scrubber aboard your vessel, we have the proven solution in Alfa Laval PureSOx. Now in its second generation and even more fl exible, PureSOx has been operating at sea for years, combining full reliability in meeting ECA limits with the competitive advantage of more economical fuel. Whether you choose an open-loop, closed-loop or hybrid confi guration, your fuel cost savings with PureSOx will be measurable and substantial.

Contact us today for more information, or learn more at www.alfalaval.com/puresox

Should a shipowner choose LNG fuel , or is it better to keep operating using conventional fuels?

Think that if we exclude ships operating in the Baltic or trading in ECAS for more than 40% to 50 % of the time, this is a question that we will have to reply in the next five to seven years and not today. LNG is cheaper to produce, at this mo-ment more expensive to distribute but overall has an economic advantage over the use of marine gas oil (MGO) or over the use of ultra low sulfur heavy fuel oil (ULSHFO). MGO and ULSHFO are the fuels that LNG is called to replace. A lot will depend on what will be the marketing policy of the LNG fuel suppliers who today sell it at prices marginally lower than MGO in Scandinavia. Pric-ing of course depends also on the price at which they buy LNG. As we all know Europe is not one of the cheap LNG market places.We have seen projects associated with ships trading in the USA ECA to develop very fast and offer huge advantages to the ship opera-tors. The price of LNG in the US is pretty low and USA projects offer an investment pay back time of three to four years. Most probably we wil see more projects in the US sooner rather than later. At the end of the day, it is not all about cost as we calculate it today. The use of LNG as fuel results in 20 % less carbon emissions, zero SOX emissions, zero PM emissions; Diesel engines operating in the Otto cycle can meet the NOx Tier III limits without any modifications or additions to the exhaust system and at zero cost. The possible implementation of new ECAS or a carbon tax or a fuel levy may bring things forward a bit. The difficult question is how fast the LNG fuel supply and distribution chain will develop. To come back to the question that you have asked, conventional ships cannot operate

using LNG today unless they are engaged in special trades. Shipowners should consider LNG and prepare for it since most probably the situation will change faster than what we expect . For ships trading worldwide, the use of liquid fuel should always remain a possibility at least as a back up or as an emergency use fuel.

Are there any Commercial risks involved in choosing LNG as a ship fuel ?

To build an LNG fuelled ship requires careful consideration. As explained above, today the LNG bunkering infrastructure is not available and therefore there is no question about taking the risk to build a conventional ship using exclu-sively LNG as fuel. Shipowners thinking forward are discussing with Yards and make some preparations so that the propulsion and electric power generation systems of their ships can be converted to utilize LNG as fuel in minimum time. However the investment required to make a ship fully ready to use LNG as fuel is most of the times (unless the LNG tanks are installed ) only a small fraction of the total investment required to do the full LNG fuel conversion.

How can a decision of a shipowner to use LNG as fuel affects the commercial perfor-mance of a ship ?

A more or less theoretical question for the vast majority of conventional ships trading worldwide. As discussed above for ships trading in special areas for which full scale LNG bunkering facilities area available there are commercial advantages in using LNG as fuel. The time for large contain-erships and tankers and large bulk carriers will also come. Who is telling us that the 0,5 % sulfur limit that will come into force in 2020 will not be further reduced ? Who is telling us that more ECAS requiring a 0.1 % sulfur limit will not be here in a few years time ? My personal view is that after 7-10 years and for the next 30 years or so LNG will be the dominant marine fuel. More forward in the future we may see other forms of energy that will displace LNG. Taking into ac-count that ships last for 20 to 25 years we should start thinking about LNG as fuel today.

Do you believe that barriers (such as lack of

bunkering facilities and supply chains) could affect the choice of a shipowner to chose LNG as a new fuel for his vessels ?

Yes, this has been discussed in an extensive way above. My firm belief is that the LNG producing countries have a vested interest to develop an LNG bunkering infrastructure. This could help them to enter, develop and dominate downstream markets in which they are pretty weak today.

What is your aspect in the dilemma LNG vs Scrubber.

Think that scrubbers have been a quick fix in order to comply with the requirement to lower SOx emissions. They are big gas washing machines, manufactured from corrosion resistant material thirsty to consume power. They may have an application for smaller vessels but the larger the size of the ship and her propulsion and power generating system the more difficult it will be to install and operate a scrubber. Scrubbers increase the CO2 emissions. Pumping sulfur into port and coastal waters may result in problems that are difficult to predict today. As discussed above and always depending on the time that a vessel will spend within an ECA the most obvi-ous solution will be to use MGO or ULSHFO. Scrubbers may be used for ships engaged in lo-cal trades involving a lot of trading within ECAS. To my opinion they are not a long term solution. LNG will take the lead soon.

Please illustrate in few words the experience of Maran Gas using LNG in its fleet.

As you know, MGM is an LNG carriers opera-tor. We have the LNG vapors onboard and if we do not use them as fuel we will have to waste them in the gas combustion unit (GCU) or for producing steam that is subsequently condensed without producing any energy. The use of gas as fuel improves the emissions of the ship, Gas is also more user friendly for both boilers and diesel engines since the combustion is much cleaner. Sometimes and depending on the com-position of gas that we have onboard, we face difficulties to optimize the combustion but this is a problem that we can manage. Overall we feel that gas is a much better fuel than HFO or MGO.

32 NAFS MARCH 2015

LNG will take the lead soon

InterviewInterview Stavros Hatzigrigoris , Managing Director MARAN GAS MARITIME

We support innovative solutions to improve energy efficiency

and reduce emissions

Move Forward with Confidence

For more information, please contact: Bureau Veritas Hellas A.E. 23, Etolikou Str. - 185 45 PIRAEUS Tel: +30 (210) 40 63 000 Fax: +30 (210) 40 63 063 Email: grc_lpr@gr.bureauveritas.com Visit us on: www.bureauveritas.com - www.veristar.com - www.bureauveritas.gr

AP_Marine_210x280-2014:AP_Marine_210x280-2014 05/05/14 10:07 Page1

Yara Marine Technologies (YMT), former Green Tech Marine is a world leading marine scrub-ber supplier based in Oslo, Norway. YMT was acquired by Yara International ASA in April 2014 and is today part of Yara`s emission to air plat-form together with numerous companies within the clean air technology.

YMT was the first company to introduce and patent the in-line scrubber solution and is today the largest supplier of marine in-line exhaust gas cleaning systems. YMT has a class-approved system from both DNV and Bureau Veritas. The scrubber system leaves a very small footprint which is crucial to save passenger and/or cargo space. The scrubber also has a simple design and is easy to operate and maintain which again makes it less time consuming to run for the crew onboard. The scrubber system can run in open or closed loop. In closed loop, the system uses MGO as alkaline, which is harmless and more efficient than the hazardous NAoH used in multi-inlet scrubbers. As the in-line scrubber uses one tower per engine it is programed to always use the minimum amount of energy based on the MW used on each engine at all times which makes it extremely energy efficient.

YMT is also known for its good reputation and strong references in all shipping sectors. Today YMT has sold more than 70 scrubber systems, YMT has installed scrubbers on the majority of Norwegian Cruise Lines retrofit fleet and for Royal Caribbean Cruise Lines, in addition to new builds for Norwegian Cruise Lines at Meyer Werft yard in Papenburg, Germany. YMT has through 2014 supplied North European ferries with more than 20 scrubber systems to comply with the North European ECA zone. In 2014 YMT also entered the tanker market winning a contract to supply 6 scrubber systems to Hyundai Heavy In-dustries for LPG carriers being delivered in 2015.

This is what Norwegian Cruise Lines Vice President of Operations Mr. Brian W. Swensen said about Yara Marine Technolgies Scrubber systems;

Norwegian Cruise Line selected Green Tech Marine scrubbers for our fleet for several rea-

sons; most importantly, because they have the best scrubber technology available for cruise vessels and provide the best ROI compared to all other existing technologies. Other benefits that are important to us include the installa-tion area needed, which does not affect existing guest stateroom or outer deck areas and the ability for the scrubbers to be installed while subject vessel is underway.

Brian W. Swensen, Senior Vice President, Tech-nical Operations & Refurbishment at Norwegian Cruise Line

34 NAFS MARCH 2015

Yara Marine Technologies present the Green Tech Marine SOx Scrubber

Article

SOx removal to comply with IMO 0,1% emissions regulations Hybrid functionality both open and closed loop operation An extremely small footprint Low weight resulting in minimal change to stability conditions Energy-ef ciency less than 1.5 % of engine power is required Plastic/ GRP pipes for extended lifetime Harmless Magnesium Oxide used as alkali in closed loop no dangerous

caustic soda Simple and low cost maintenance

With the Green Tech Marine scrubbers from Yara Marine Technologies you benefi t from:

Based on breakthrough new technology, Yara Marine Technologies cost-effective exhaust gas cleaning solutions meets escalating emissions regulations. It simpli es the transition to cleaner exhaust by replacing your ships exhaust silencer few, if any, structural modi cations required.

A small solution to a big challenge

Knowledge grows

The small size and low weight of the scrubber got our attention. When we saw the initial performance results, we were convinced to launch a full scale trial. Now that weve seen it in action, were convinced.

Anders AasenAssociate Vice President, Global Marine Technical Services at Royal Caribbean Cruises Ltd.

Yara Marine TechnologiesPhone: +47 47 88 85 44Email: info@yaramarine.comwww.yaramarinetechnologies.com

CROE: The money-saving alternative to low sulfur fuel

36 NAFS MARCH 2015

Article

The constant struggle amongst legislation, compliance and rate of adoption is nowhere more real than within the international shipping community. Fluctuating global economies have, until recently, hindered the rapid development of dependable technolo-gies while misaligning the fiscal targets of the operators and owners. Having that said, it is apparent that environmental impact is at the forefront of the struggle and emission regula-tions is arguably its largest front. Adaptation and change are rarely elements any operation will gladly embrace. We understand that ulti-mately our customers are the ones baring the costs and the ones utilizing assets in order to meet and exceed regulatory expectations. Our job here at Kaminco is to ensure the profitable and streamlined operations of our customers. With unmatched experience in emissions abatement technologies, we are proud to be able to offer to our customers, the without question best, most dependable two options currently available on the mar-ket. We offer the industrys leading custom designed exhaust scrubbing package as well as the worlds most advanced on-site LNG production solution, two very different means in solving one very similar problem.Emissions abatement compliance requires a customized approach. We work with our clients targets and expectations, and assist in compiling a custom tailored solution which may very well encompass a combination of different technologies in order to achieve the desired environmental responsibility of a fleet. In conjunction with our trusted partners we have prepared a brief insight of our two featured technologies. I encourage the read-ers to go through the product overviews and contact us for any questions they may have.

George Kaminis

Text: Nicholas Confuorto, President and Chief Operations, CR Ocean Engineering LLC

On January 1st 2015, the IMO Annex VI, ECA zone requirements came into effect. Shipowners and operators are now faced with having to decide between switching to a lower sulfur fuel or embracing alternate solutions such as LNG or exhaust gas cleaning systems (Scrubbers). As of this writing, more than 300 scrubbing systems have been sold to shipowners and operators worldwide. The cruise and ferry industries account for the majority of the reported installations and they seem to have embraced scrubbing technology as a solution to the ECA require-ment. Other shipping segments have also installed scrubbers but not to the same extent. Many seem to be taking a wait and see attitude. However, with each day costing millions of dollars in additional fuel costs to the industry due to differential between the low sulfur fuel and the high sulfur fuel, is waiting a wise decision? In an industry where small incremental savings could mean the difference between being competitive or not, millions of dollars in fuel savings could make a big difference. The recent reduction in fuel costs has given the industry a financial break. Unfortunately, the net price dif-ferential between low sulfur and high sulfur fuels has not decreased. Therefore the potential percent saving gained by using the high sulfur fuel is actually even higher. This is consistent with the generally accepted feeling that the cost differential between low and high sulfur fuels will not be reduced but could actually increase once the low sulfur fuel demand increases. Having forecasted the shipping industry need for scrubbing systems, CR Ocean Engineering LLC (also known as CROE) converted their most successful shoreside scrubber design to a marine design. When using a CROE scrubbing systems, ship owners will be able to continue using the lower cost high sulfur fuel oil even in the Environmental Controlled Areas (ECA). The CROE scrubbing system is designed to be light weight, relatively small in both diameter and height, highly efficient and very cost effective. It is designed to have low backpressure, has an all metal construc-tion, requires no bypass, replaces the silencer and can run dry without concerns. Washwater treatment equipment is also provided by CROE as part of the scrubbing system package. The CROE Scrubbing System is available in Open Loop (a once trough design using seawater to neutralize the collected sulfur emissions), Closed Loop (using a freshwater solution with an alkaline solution to neutralize the collected sulfur compounds) or Hybrid configurations (deigned to be both Open Loop and Closed loop and able to switch from one configuration to the other on demand). Presently 2 (two) CROE scrubbing systems are being installed on a bulk carrier traveling the Great Lakes in North America (confidential client). 2 (two) other scrubbers are being installed on a RoRo in Sweden (the STENA Forerunner) and 1 on a RoPax in Finland (the BORE Seagard). Addit