CURRENT AND FUTURE

LNG TECHNOLOGIES
SHELL: STUART MACDONALD
WESTPORT: BRUCE HODGINS
KENWORTH: PHIL WEBB

Copyright The Shell Company of Australia Limited October 2012

October 2012 1
 DISCLAIMER STATEMENT

This presentation may contain information, data, opinions or predictions from Shell or
sourced from third parties. While reasonable care has been taken in relation to the
preparation of this presentation, any person using or relying on the information, data,
opinions or predictions (whether for commercial purposes or otherwise) does so at their
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information, data, opinions or predictions, and to the extent permitted by law excludes all
liability for any loss or damage (whether caused by negligence or otherwise) resulting
from reliance thereon. You should speak with your Shell Account Manager before using
any Shell product discussed at the Shell Technology Forum to ensure the product is
appropriate for your specific requirements.

Copyright The Shell Company of Australia Limited October 2012

October 2012 2
 WHAT IS LIQUEFIED NATURAL GAS (LNG)?
LNG Properties
 LNG consists mainly of methane
 LNG is a colourless and odourless cryogenic liquid
 LNG has an atmospheric boiling point of –163 ºC to –160 ºC
 Depending on composition, LNG has a density of 458 – 463 kg/m3

Characteristics leading to…

 High energy content per mass unit: 1 litre diesel = approx. 0.72kg LNG*
 LNG has to be maintained in cryogenic insulated tanks to minimise losses from vaporisation
 LNG is very cold → if spilt on unprotected skin, it will cause frostbite
 LNG in ambient conditions vaporises quickly (lighter than air)
LNG SUPPLY CHAIN

CH4
Natural Liquefaction Transportation Onsite storage LNG fuelled
Gas to LNG of LNG fuel and refueling Trucks

* Natural Gas properties vary by region and the LNG conversion to diesel litre equivalents will have slight variations according to the source
Copyright The Shell Company of Australia Limited October 2012
October 2012 3
 WHY NATURAL GAS FOR TRANSPORTATION?
Energy Pricing Energy Security Climate Change
Normalised GHG Emissions Measured In Engine Test Cell
Ratio of average natural gas and coal import prices Australia’s resources to production ratio a
CO2 CH4*21
to crude oil in the New Policies Scenario 100%

-29% -25%
90%

80%

70%

60%
Diesel FTP Diesel ESC HPDI FTP HPDI ESC

SOURCE: “Energy in Australia 2012” Bureau of SOURCE: Westport HD 15L ADR 80/02 engine
SOURCE: “World Energy Outlook 2010”, IEA Resources and Energy Economics (BREE) certification test results

 Abundant supply globally and
in Australia
 International Energy Agency
(IEA) predicts lower energy
equivalent natural gas prices
versus crude oil out to 2035
Over the past 20 years, the
reserves to production ratio for oil
has fluctuated between six and 11
years
Natural Gas is the third largest
energy resource in Australia (after
coal and uranium)
Direct injection LNG engines
have achieved tank to wheel
GHGe reductions of 25-29%
versus diesel
Copyright 2010 Westport Power Inc.

Natural Gas offers significant commercial, energy security and environmental benefits
Copyright The Shell Company of Australia Limited October 2012
October 2012 4
 LNG HEAVY DUTY TRUCK – WELL-TO-WHEEL GHGe
Fueling,
Grams of GHGe transportation Emissions at Total
Extraction Processing
per km travelled and storage end use life cycle

1088
LNG
g/km
HPDI
78 g/km 36 g/km 150 g/km 824 g/km

1483
Diesel g/km

227 g/km 130 g/km 12 g/km 1114 g/km

Source: Natural Resources Canada GH Genius Model and Terasen (March 2008) data for SW British Columbia Copyright 2012 Westport Power Inc.

27% reduction Well to Wheel

Copyright The Shell Company of Australia Limited October 2012
October 2012 5
 SHELL’S CONTRIBUTION TO THE LNG
INNOVATION JOURNEY

Shell has been a leader in LNG innovation and production since 1964
Copyright The Shell Company of Australia Limited October 2012
October 2012 6
 SMALL SCALE LNG – MORE MARKET OPPORTUNITES

Marine
Stranded Gas

Road
Coal Bed Transport
Methane
Small Scale Liquefaction

Mining

Pipeline Gas

Rail

Extended
Well Test
Gas Existing LNG Infrastructure Stationary
Power

Extraction Markets

Economical small scale liquefaction creates more market opportunities for LNG
Copyright The Shell Company of Australia Limited CONFIDENTIAL October 2012
October 2012 7
 SHELL MMLS ANIMATION VIDEO

Copyright The Shell Company of Australia Limited October 2012

October 2012 8
 ENGINE TECHNOLOGIES
-SUMMARY OF NATURAL GAS ENGINE TYPES

NG Engine
Technologies

Spark Compression
Ignition (SI) Ignition (CI)

High Pressure
Stoichiometric Lean Burn Fumigated Direct Injection
(HPDI)
Copyright The Shell Company of Australia Limited October 2012
October 2012 9
 LNG QUALITY - OPTIMISING PERFORMANCE
Depends on:
Global LNG Production (mtpa) vs. MN
 Composition 60
 Methane Number (MN)
 Heating Value 40
 Wobbe Number (WN)
20
Fuel quality variation can cause knocking in
certain engines: 0
 Leads to loss of engine efficiency and power 69 70 72 73 74 76 80 81 84 88 90

 Can cause damage to the engine and component parts

Variation in minimum MN across a selection of
Engine specifications for MN currently vary significantly: engine types (excl. HPDI)
 Optimal MN >70 (AVL method) in LNG
 Engine sensitivity – low MN can effect reliability, 90 Min MN (AVL)
maintenance costs and emissions 80
 MN does not impact HPDI engine performance 70
 Australia has an abundance of High MN natural 60
gas sources Engine1 Engine 2 Engine 3 Engine 4 Engine 5

Natural Gas properties vary by region. Australian LNG is suitable for most engines types
Copyright The Shell Company of Australia Limited October 2012
October 2012 10
 VEHICLE BACKGROUND – LNG TANK SCHEMATIC
2
1
3
7

4 9
6
5
-160°C 8

1) Liquid dispenser 3) Relief valve (PRD) 5) Vapour space – small

2) Top fill – Spray of 4) Fuel gauge – can
unit – Fuel stored as – allows escape of boil hole near top of tank
liquid allows faster be mounted in cab or
cryogenic liquid at off gas to prevent absorbs excess pressure,
filling by fuel receptacle
fuelling depot pressure build up extends tank hold time

6) Tank - Insulated by double 7) Economizer regulator

8) Vaporiser – heated 9) Fuel – enters engine as a
walled stainless steel tank, – determines and controls
with engine coolant to gas (pressure depends on
vacuum space between layers tank operating pressure to
evaporate fuel engine type)
to act as thermal barrier minimise boil off

Copyright The Shell Company of Australia Limited October 2012

October 2012 11
 LNG TRANSPORTATION TANK SAFETY

 Risks with storing fuel at such low

Spill from
road
temperatures, but extensive safety
collisions procedures to ensure that these risks
are mitigated
 Thick double walled tank – makes
Heating of
Failure of penetration unlikely
pressure
tanker Risks release  Stringent regulations on grade of
contents
device (PRD) tank steel – cryogenic temperature
 Two pressure release devices (PRD)
in case of single failure
Failure to
detect small
gas leak

Copyright The Shell Company of Australia Limited October 2012

October 2012 12
 NATURAL GAS TECHNOLOGY AND
FUEL CHOICE BY APPLICATION
Gas Current
Application Power Payload Fuel / Year Fuel Choice
Technology Uptake

 Direct Injection
Large Marine >5,000 HP >300T Up to 30M L ~100
 Dual Fuel

Off-Highway
1,000-5,000  Direct Injection
 Rail/Marine
 Mine Truck
HP
>200T ~1,000,000 L
 Dual Fuel LNG ~0

Heavy Duty  Direct Injection

 On-highway 400-600 HP 30-140T ~100,000 L  Dual Fuel ~10,000
trucks  Spark Ignited

Medium Duty  Spark Ignited

 Buses 200-350 HP 5-30T ~40,000 L  Lean ~ 300,000
 Refuse  Stoich + EGR

Light Duty
 Pass. Cars <300 HP 0.5-2T ~4,000 L  Spark Ignited CNG ~ 14,000,000
 LD Trucks
Values are coarse estimates and information is based on Westport’s best knowledge

LNG is more suitable than CNG for heavy duty and off-highway applications
Copyright The Shell Company of Australia Limited Copyright 2012 Westport Power Inc. October 2012
October 2012 13
 ONBOARD STORAGE: CNG VS. LNG

CNG Onboard Storage LNG Onboard Storage

SOURCE: “Energy in Australia 2012” BREE

Lower energy density storage  Higher energy density storage

Fumigation systems retain most of diesel capacity  Replaces most of diesel capacity

Spark ignition systems can replace all diesel capacity

Copyright The Shell Company of Australia Limited October 2012

October 2012 14
 WESTPORT HPDI TECHNOLOGY

~95% gas substitution (5% diesel)

Diesel engine performance remains
 Same high power and torque
 Same efficiency

No pre-mixing of air and fuel:

 Fuel injected at beginning of
power stroke
 Robust combustion over wide range
of fuel composition (no chance
of detonation)
 Low methane emissions due to Copyright 2000 Westport Power Inc.

air-only in crevices
 Fast transient response
 No methane-number limitation

Copyright The Shell Company of Australia Limited October 2012

October 2012 15
 WESTPORT HPDI SYSTEM

LNG tank and pump

Natural gas engines (chassis mounted)
with diesel-equivalent Fuel injectors
(under valve cover)
performance and efficiency
warm,
Complete LNG fuel solution high-pressure
including LNG tanks/fuel natural gas
pumps integrated with engine
ADR 80/03 Certified (also Accumulator
EPA 2010 and Euro 6
variants) Common-rail
Fuel conditioning
diesel
module
Factory installed by leading fuel pump
OEMs
Hydraulic Control units
pump
(drives LNG Pump
and PS) Copyright 2012 Westport Power Inc.

Copyright The Shell Company of Australia Limited October 2012

October 2012 16
 GLOBAL TRENDS IN LNG ENGINE TECHNOLOGY
US and Canada energy policies shifting toward support for natural gas for heavy-duty on-road
trucks, locomotive, and marine use
Every HD truck OEM in North America has LNG vehicles available or has announced plans to
build LNG trucks
Shell has technical partnerships with a number of OEMs
Engine Co. Technology Model HP Availability

Cummins Westport
SESI ISLG (8.9L) 320 Now
(CWI)

Cummins Westport
SESI ISX 12G 400 2013
(CWI)

Westport HPDI HD 15L 475 Now

Volvo HPDI Volvo 13L Not announced 2014

Navistar DF Max Force 13L Not announced Not announced

CWI = Cummins Westport Inc. HP DI = High Pressure Direct Injection SESI = Stoichiometric EGR Spark-Ignited DF = Fumigated Dual-Fuel

Copyright The Shell Company of Australia Limited October 2012

October 2012 17
 OEM HEAVY DUTY LNG TRUCK AVAILABILITY (AUS.& N.AMERICA)
Brand Models LNG Engine Options
T409SAR, T659 Westport HD15L
K200
Cummins ISL-G
320, 365, 367, 382, Westport HD15L
384, 386, 388
Cummins ISX12G (2013)
Cummins ISL-G
T440, T470, W9100S, Westport HD15L
T660, T800
Cummins ISX12G (2013)
M2-112, 114SD, Cummins ISL-G
Cascadia Cummins ISX12G (2013)

Navistar 7.6L DT Conversion

TranStar, Cummins ISL-G
WorkStar
Dual Fuel (MFG13 – 2014)
Cummins ISL-G
VNM Volvo/Westport (HPDI)(2014)
Cummins ISX12G (2013)
Cummins ISL-G
TerraPro Volvo/Westport (HPDI)(2014)
Granite
Cummins ISX12G (2013)
Copyright The Shell Company of Australia Limited October 2012
October 2012 18
 HD LNG VEHICLES IN AUSTRALIA

Factory-built LNG trucks from Kenworth Australia available today

Australian Ratings: 95% gas substitution
 500 - 578HP @ 1800 RPM Lower operating costs
 1,650 - 1,850 lb-ft @ 1200 RPM ~25% reduction in GHG vs. diesel
Dual - and Triple - Tank LNG configurations Lower noise

Full OEM support (ordering, delivery, parts, service, and warranty)

Helps meet corporate goals for energy security and carbon reductions

T409 SAR T659 K200 K200

Copyright The Shell Company of Australia Limited October 2012

October 2012 19
 IMPLICATIONS OF LNG ON TRUCK SPECIFICATIONS
Parameter Current Status Typical HD Truck Operating Costs
Range 500-1,000 km
0-1,300 kg payload
Weight/Payload
penalty
Performance Matches diesel
Fuel Cost Significant savings

Maintenance Cost Slight incremental

Capital Cost Higher

Resale Market Not Established

LNG Network Limited

TtW GHGe 25% lower

Noise/Odour Lower

Fuel is the largest contributor to operating costs. LNG can reduce fuel costs
Copyright The Shell Company of Australia Limited October 2012
October 2012 20
 LNG FOR TRANSPORT: AREAS FOR ACTION
Issue Responsibility Action

Mass and dimension Allow LNG truck up to 1.0m extra overall length and/or up to 1.0t
Federal government
allowance gross mass as compensation for LNG package

System Costs System suppliers Develop cost reductions for components

Truck Costs Truck OEMs Implement cost reduction programs

Truck Specifications Truck OEMs Develop packages to better match market demand

LNG Fuel Interface LNG suppliers Implement industry standardised refueling facilities

LNG Network LNG suppliers Implement “growth corridor” LNG refueling station networks

Accept some compromise of flexibility to gain access to low cost fuel

Limited Variants Operator
and reduced greenhouse gas emissions

Energy suppliers, OEMs, regulators and customers need to take a collaborative approach
Copyright The Shell Company of Australia Limited October 2012
October 2012 21
 SIGNIFICANT HIGH-HORSEPOWER OPPORTUNITIES
Target Vehicles Engine OEMs

MINING
(RESOURCE EXTRACTION)
Mine Haul Trucks Caterpillar
Drill Rigs and
Electro
Frac Pumps
Motive
agreement
with
RAIL Mainline Freight Westport for
off-highway
Mining Locomotives equipment,
Passenger Locomotives including
mine haul
trucks and
locomotives.
MARINE
Ferries
Tugboats Announced
Crew boats June 5,
2012
Container Vessels

Copyright 2012 Westport Power Inc.

Copyright The Shell Company of Australia Limited October 2012

October 2012 22
 SHELL LEADERSHIP: LNG ANNOUCEMENTS

Shell and Travel Centers of America (TA) MOU to provide LNG fuel option to US truck fleet
operators. 200 LNG fuel lanes at about 100 TA sites.

In July 2012, Shell signed an agreement for the

acquisition of Norwegian natural gas company Gasnor

Copyright The Shell Company of Australia Limited October 2012

October 2012 23
Copyright The Shell Company of Australia Limited October 2012