Leading the way; Making a difference INTERTANKO International
Association of Independent Tanker Owners Hellenic Mediterranean
Panel Athens 29 th March 2012 Overview: Association Finance
Priorities + Strategic Plan Air + GHG Emissions Katharina Stanzel
Deputy Managing Director INTERTANKO
Slide 2
Leading the way; Making a difference MEMBERSHIP 230+ Members
3,200+ Tankers 280+ Million DWT Members in 40+ countries > 75%
of Global Independent Tanker Fleet 320 Associate Members
Slide 3
Leading the way; Making a difference MEMBERSHIP Million dwt /
number of members Number of ships
Slide 4
Fleet Composition and Fee Structure -10%-5%
20022003200420052006200720082009201020112012 USD/ship 1,415 1,486
1,635 1,800 2,000 1,800 1,710 USD/dwt0.0080 0.00840.00920.0101
0.0090 0.0086 Min US 5,000 5,250 6,350 7,000 6,300 6,500 6,175 Max
US 52,000 54,600 65,000 80,000 85,000 76,500 72,675 Typedwt# crude
205,248,439 1,317 product 36,607,690 664 chem/oil 24,147,166 729
chemical 10,013,343 418 gas 4,947,552 143 special 4,916,022 77
285,880,212 3,348
Slide 5
Leading the way; Making a difference Average Age Membership
Fleet
Slide 6
Leading the way; Making a difference BUDGET 2010 membership
fees reduced by 10% No change in 2011 membership fees 2012
membership fees reduced by 5%
Slide 7
Leading the way; Making a difference BUDGET (US$) 2011 2011
2012 (Actual) (Budget)(Budget) Operating Income7,753,228
7,572,6507,401,925 Operating Expenses-6,886,593-7,217,450-7,373,997
Operating Result 866,635 355,200 27,928 Non-operating
Income/expenses 87,303 -25,000 -25,000 Result for Year 953,938
330,200 2,928
Slide 8
Leading the way; Making a difference Key Focus Areas
Safety/TechnicalSeafarersEnvironment Marine Operations Regulatory /
Legal Information Top priorities for 2012 Damage stability Inert
gas Shipyard standards Class standards Fuel quality Mercury in
crude Criminalization Crew competence Shore access Fair treatment
of Seafarers GHG emissions Ballast water Reception facilities Air
emissions Piracy Vetting Port State Control Chemical operations
Sanctions Limits of liability insurance Oil spill compensation
Tanker market Panel meetings IO web page Other work plan issues
Tanker design Structural Integrity Machinery/equipm ent Fuel
switching Safe tank entry Gas detection Biofuels Cargo properties
Crew visas Seafarer ID docs Accommodation sp. Cadet berthing Ship
recycling Anti-Fouling Waste management Noise pollution Response
mgmt. Hull biofouling Ship striking mammals Loadlines off SA
Lifesaving app Pilotage Port & Terminals Navigation issues
Offshore operations Ship/Ship transfer ISPS Code Security Officers
Ship sec alert sys Accident investigations Conflict in law UNCLOS
Legislation Charter parties FDIP Demurrage Intellectual property
Worldscale Anti-corruption Weekly News Annual review/ report
Publications Presentations Tanker statistics Incident analysis
Workshops Seminars Bulletins Global political/ economic
environment
Slide 9
Macro-environment Political Global Economic Shift of Powers
-China/ India/ Brazil - Europe failing Free market distortions -
Regional Protectionism Regulatory Environment politicised -
Regional regulation - Sanctions etc. Security Issues (Piracy)
Economic Market Dynamics (Fleets, Cargos, Finance) Tonne mile
demand Fuel availability/ cost Growing national protectionism
Growth of national fleets/ interests Environ mental Globalised
Concerns, e.g. Ballast Water Nox, Sox, PM, GHG Techn ologica l
Compliance options through technology Availability of abatement/
treatment tec. Availability of Fuels LNG Distillates Socio-
cultural Human Resources: - Availability/ Recruitment - Competency
- Training Expectations from Legislators Politicians Public
Overregulation Political decision making Need for Cooperation with
other associations/ orgs
Slide 10
ANNUAL TANKER EVENT Venue: Conrad Hotel Singapore May 9 Council
dinner May 10 Council meeting May 11 Tanker Seminar - Tanker market
- Piracy - Technical session
Slide 11
Leading the way; Making a difference Emissions to Air Air
Emissions SO x NO x Particulate Matter Greenhouse Gas Emissions
Carbon Dioxide Methane etc. Marpol Annex VI Compliance through S
content Equivalent Measures accepted Addresses Marine Fuel Oil
Quality
Slide 12
Leading the way; Making a difference MARPOL Annex VI Reg. 18.3
Fuel Oil Availability and Quality Fuel oil.. shall meet the
following requirements: blend of HC derived from petroleum refining
free from inorganic acid should not include any substance or
chemical waste which: jeopardize ship safety and adversely affects
machinery is harmful to personnel contributes to overall addition
to air emissions Quality and Safety standards
Slide 13
Leading the way; Making a difference HFO Quality Recent
developments Blending to meet required sulphur limits can result
in: Increased average density Increased average catfines levels
(Al+Si) Increase in sludging problems Reduced ignition and
combustion quality Increased problems with chemical contamination
of fuel 13
Slide 14
Leading the way; Making a difference Fuel Quality Issues
Slide 15
Leading the way; Making a difference
Slide 16
Quality Control of Bunkers Need to clarify responsibility for
ensuring bunkers delivered to ships meet relevant criteria set in
ISO 8217:2010 and MARPOL Annex VI & ensure stricter enforcement
of Reg. 18 and involve local authorities in quality control of
fuels Require bunker suppliers to have quality control system for
fuels they sell & take corrective actions when off spec bunkers
are delivered BUT currently No official authority involved in
control and monitoring prior to fuel delivery Control by commercial
fuel tests/owners only Responsibility for quality compliance and
control should not be left with ships Quality/type of fuel has
become very relevant
Slide 17
Leading the way; Making a difference
Slide 18
Leading the way; making a difference Proliferation of
Regulations complicated application requirements safety challenges
(e.g. fuel switching) lack of predictability of available
alternatives global availability of different bunker types ?
abatement technologies still adapting to ship use Danger of
increasingly regionalised not harmonized regimes causing:
Slide 19
Leading the way; Making a difference
Slide 20
Emission Control Areas - ECAs NORTH SEA & BALTIC SEA NORTH
AMERICA
Slide 21
Leading the way; Making a difference 2015 Compliance Options:
Fuel Liquid Natural Gas (LNG) as main fuel High costs for retrofit
& new building Supply network to be built Methane slip Low
Sulphur fuel (0.10% MGO) Rel. easy but expensive
Additional/converted storage capacity for MGO ? total segregation
between MGO and HFO fuel systems High price premium (currently ~US$
350/t) potential availability issues
Slide 22
Leading the way; Making a difference Compliance Options:
Scrubbers Exhaust Gas Cleaning Systems Maturity Availability
Performance reliability One scrubber for each main engine or up to
3 auxiliary engines Time needed for retrofit: 2-3 weeks planning
installation 7-10 days off hire 2 weeks testing for
certification
Leading the way; Making a difference Scrubbers: Issues to
Consider Test resultsIs technology proven for application at sea ?
Does it work with SCRs Dimensions / physical footprint / weight
CAPEX OPEX energy consumption sludge treatment / disposal Prove
compliance usage + water wash discharge monitoring Performance
monitoring & documentation Redundancy Manufacturer capacity
Crew issues: training and qualification
Slide 26
Leading the way; Making a difference ECA 2015 Strategy Cost
efficiency is related to time spent in ECAs ALTERNATIVECAPEXOPEX
LNG> US$20 m/shipup to 20% fuel saving MGOlow premium US$ 350/t
but up to 4% fuel saving SCRUBBERS US$5 m or more/ ship 2-3% fuel
penalty in use increased CO 2 emissions
Slide 27
Leading the way; Making a difference Greenhouse Gas Emission
Reductions Technical & Operational Measures Ship Energy
Efficiency Management Plans (SEEMP) Energy Efficiency Design Index
(EEDI) Market Based Measures (MBMs)
Slide 28
Leading the way; Making a difference GREENHOUSE GASES Policy on
implementation of IMO Energy Efficiency Design Index (EEDI)
requirements - 4 year waiver - method of compliance Policy on
Market Based Measures (MBM) Better acceptance of Virtual Arrival
project with charterers
Slide 29
Leading the way; Making a difference Ship Energy Efficiency
Management Plans Best practice guidance TEEMP In co-operation
between members and other stakeholders Company & Shipmanagement
Plans Voyage optimisation Propulsion resistance management
Machinery optimisation Cargo handling optimisation Energy
Conservation Awareness Plan
Slide 30
Leading the way; Making a difference INTERTANKO POSITION
1.Welcome adoption of amendments to MARPOL Annex IV, mandating
energy efficiency measures (EEDI/SEEMP regs) 2.Advocate: a)level
playing field: implementation of EEDI to all new build ships from
the same date b)Compliance with EEDI focussed on improved hull
design, propulsion efficiency & energy optimisation, not
predominantly reduced speed designs c)Measures taken to comply with
EEDI not to jeopardise or have adverse effect on safety of the ship
3.Emphasise that EEDI measure for new ships only
Slide 31
Leading the way; Making a difference MARKET BEASED MEASURES -
MBMs Governments do not believe that ships can meet GHG reduction
targets without MBMs EEDI & SEEMPs unlikely to be sufficient
but: no reduction targets have been set! Number of proposals
discussed at IMO: Mandatory CO 2 reduction targets, Efficiency
Incentive Schemes, Emissions Trading Schemes, GHG Funds Impact
Study to assess suggested proposals
Slide 32
Leading the way; Making a difference INTERTANKO POSITION Market
Based Measures not justified at this time (Industry is already
incentivised by high fuel prices) Should MBMs be required, they
should: be implemented through an international regime be simple to
enforce and to monitor drive the right behaviour Provide
transparency to maintain current level playing field not place
disproportionate financial and operational burden on the
industry
Slide 33
Leading the way; Making a difference
Slide 34
SUSTAINABILITY Deep concern that the current tanker market
rates are consistently below ship owners operating costs.
INTERTANKOs Chairman, Capt Graham Westgarth If these rate levels
continue for a long period, this could lead to a situation where
sustainability of the oil transportation industry is threatened.
Our Members operate tankers to the highest standards and will
continue to do so. Operating for a prolonged period in an
environment where tanker owners are not even covering their
operating costs is obviously not a situation that can be
maintained.
Slide 35
Leading the way; Making a difference Thank You
www.INTERTANKO.com [email protected]
