LNG

SHIPPING & BUNKERING

Fuelling a promising future
May 2017

2017 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG
International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG 1
International have any such authority to obligate or bind any member firm. All rights reserved.

Document Classification: KPMG Confidential

AGENDA

CONVENTIONAL BUNKER FUELS

EMISSION CONTROL AREAS
ADVANTAGE LNG
INDIAS UNIQUE POSITIONING
ENABLERS FOR GROWTH IN LNG SHIPPING
AND BUNKERING

2016 KPMG Advisory Services Private Limited, an Indian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights
reserved 2
 CONVENTIONAL BUNKER FUELS
Conventional Marine Fuels are mainly traded in the ARA (Amsterdam, Rotterdam, Antwerp)
region of Northern Europe and Asia Pacific (Singapore). These traditional markets for Marine fuels
is set to change with the onset of ECA zones and push towards cleaner marine fuels.

1 Intermediate Fuel Oil (Residual) 2 Heavy Fuel Oil (Residual)

A mix between Heavy and Light Fuel Most common and dirtiest fuel used
Oil. as bunker.

3 Marine Diesel Oil 4 Light Fuel Oil

5 Marine Gas Oil GLOBAL RESIDUAL SHARE 75%

Least polluting among conventional REST 25%

marine fuels.

2016 KPMG Advisory Services Private Limited, an Indian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights
reserved 3
 ECAs (EMISSION CONTROL AREAS)

ECA FUEL NORMS

Prevention of green house gas emissions

Reducing Ozone damaging gases

MARPOL 73/78 Annex VI Regulations for the prevention of Air Pollution

from ships entered into force on 19 May 2005,

Regulation 12 - Emissions from Ozone depleting substances from

refrigerating plants and fire fighting equipment.
Regulation 13 - Nitrogen Oxide (NOx) emissions from diesel engines
Regulation 14 - Sulphur Oxide (SOx) emissions from ships
Regulation 15 - Volatile Organic compounds emissions from cargo oil
tanks of oil tankers
Regulation 16 - Emissions from shipboard incinerators.
Regulation 18 - Fuel Oil quality.

CURRENT ECAs FUTURE ECAs

Mexico and Panama
North America Mediterranean
Europe Scandinavia
Baltics South East Asia
Japan

2016 KPMG Advisory Services Private Limited, an Indian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights
reserved 4
 ADVANTAGE LNG
Clean Fuel Regulations Alternative

OTHER CLEAN
ENVIRONMENT Global increase in ECAs
ALTERNATIVES

High investment
LNG reduces air-polluting Selective Catalytic cost and
emissions to best-in-class IMO Regulations Reduction (SCR) and uncertainty
levels Exhaust Gas Recirculation regarding supply,
(EGR), MGO and Gas demand and fuel
Scrubber prices are
As an alternative to LNG, hampering
GHG emissions can be EU Regulations use of methanol as a ship development of a
ultimately 20% lower fuel has also attracted market for
attention liquefied natural
gas bunkers.
Converting vessels to run
Bio-LNG is no different US Regulations on methanol would be
from fossil LNG, but has considerably less expensive
the potential to drastically and complicated than
reduce GHG emissions converting to LNG.
On the one hand, LNG shipping requires advance investments from ship owners, which need to be balanced by lower fuel costs at sea. On the other
hand, a sufficiently detailed LNG bunkering infrastructure needs to be in place, requiring significant advance investments from the LNG supply
industry. Still LNG Bunkering Market is predicted to grow at a CAGR of 63.5% until 2025. *
*Source: Marine Insight
2016 KPMG Advisory Services Private Limited, an Indian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights
reserved 5
 INDIAS UNIQUE POSITIONING
Global Trade Route Europe, Middle East & Africa (EMA)

Indian Ocean is the worlds Netherlands UK South Africa

busiest sea trade routes. Russia France Germany

Spain Italy India

Long coastline on both east and
west side.

Lakshadweep and Andaman in

the vicinity.

Americas
Canada Brazil

USA Mexico
India Future Center
of Global Trade
India has the Domestic Demand:
Increasing Trade Share
Challenge:
following
Work is on to India is a net
advantages: One of the highest consumption
develop Inland importer of Gas,
-Geography ASPAC - Asia Pacific
Water Transport in hence maintaining growth rates.
-Economy India. competitive edge is Australia Singapore
-Demand India has already really dependent on Increasing trade means more
China / Hong Kong Japan
-Consumption started work on LNG state of the art
South Korea Malaysia
vessels will come to Indian ports,
-Human Capital Barges on the infrastructure and
-Political Stability Ganges. speed of delivery. higher refueling opportunity.

2016 KPMG Advisory Services Private Limited, an Indian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved 6
ENABLERS FOR GROWTH IN LNG SHIPPING AND BUNKERING

GOVERNMENT

INDUSTRY

2016 KPMG Advisory Services Private Limited, an Indian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved 7
Thank you
Nikhil Moghe
Director IGH S&O- Oil & Gas
nikhilmoghe@kpmg.com
Mobile: 9717700504

kpmg.com/socialmedia kpmg.com/app

2017 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no services
to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm
vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member
firm. All rights reserved.

The information contained herein is of a general nature and is not intended to address the circumstances of
any particular individual or entity. Although we endeavor to provide accurate and timely information, there can
be no guarantee that such information is accurate as of the date it is received or that it will continue to be
accurate in the future. No one should act on such information without appropriate professional advice after a
thorough examination of the particular situation.