1. 国际油轮船东协会简介 Single Hull Tanker Phase Out and its implications on Ship Conversion and Recycling in the Region Ship Care 2007 23-24 January 2007, Swissotel Beijing, China Tim Wilkins Regional Manager Asia Pacific tim.wilkins@intertanko.com

2. INTERTANKO 国际油轮船东协会简介 Single hull Tanker Phase out: Effects on Conversion and Recycling Introduction Trade Association for tanker owners 260 members, 40 countries, 2500 tankers, 300 Associate Members INTERTANKO office 25 persons Representation – IMO, Brussels Washington Information advisory service Meeting place Oslo – London - Washington - Singapore Lead the continuous improvement of the Tanker Industry’s performance in striving to achieve the goals of: Zero fatalities Zero pollution Zero detentions 领导油轮工业取得业绩上的不断改进和提 高，以努力实现以下目标： 零死亡事故 零海洋污染 零港口国控制滞留率

3. INTERTANKO 国际油轮船东协会简介 Single hull Tanker Phase out: Effects on Conversion and Recycling Introduction Phase Out Regulation - Stable Tanker Market - Dynamic 1. 1.Effect of Single Hull phase out on tanker conversion 2. 2.Effect of Single Hull phase out on ship recycling

4. INTERTANKO 国际油轮船东协会简介 Single hull Tanker Phase out: Effects on Conversion and Recycling Tanker Market 2006 was a profitable year for tanker owners, certainly better than expected With the exception of 2002, it has also been a good decade Prestige – Two tier market / Maritime Safety Package Venezuela strike – US oil from further a field Bosporus Problems – Congestion / Night transits Hurricanes in Gulf of Mexico – Oil Production Facility and Refinery closures Nigeria and Iraq – Hostilities forcing market disturbance Prudhoe Bay - Partial closure of North America’s largest oil field

5. INTERTANKO 国际油轮船东协会简介 Single hull Tanker Phase out: Effects on Conversion and Recycling Tanker Market Source: INTERTANKO

6. INTERTANKO 国际油轮船东协会简介 Assumed 4.5% increase in demandSource: INTERTANKO Single hull Tanker Phase out: Effects on Conversion and Recycling Tanker Market

7. INTERTANKO 国际油轮船东协会简介 Single hull Tanker Phase out: Effects on Conversion and Recycling Single hull phase out Source: INTERTANKO

8. INTERTANKO 国际油轮船东协会简介 Single hull Tanker Phase out: Effects on Conversion and Recycling Single hull phase out Source: INTERTANKO

9. INTERTANKO 国际油轮船东协会简介 Inserting an inner side and an inner bottom is the most common solution. Conversion trends Source: DNV Converting Single to Double Hull Single hull Tanker Phase out: Effects on Conversion and Recycling

10. INTERTANKO 国际油轮船东协会简介 Conversion trends 1.Single Hull to Double Hull conversion looking more inviting: –Conversion of single hull tankers to double hull is normally not regarded as a major conversion. The flag state is consulted from project to project. –Date of construction will not be changed after conversion –After conversion to double hull the phase out date of the vessel will no longer be relevant –Estimated cost for a VLCC conversion: USD26.6 to 31.6mill. –Costs based on; Scope of work Shipbuilding pricing statistics Location of potential yards Expected yard stay during conversion period Single hull Tanker Phase out: Effects on Conversion and Recycling

11. INTERTANKO 国际油轮船东协会简介 Conversion trends 2.Single Hull tankers converted to FPSOs and FSUs 3.Product Tankers converted to Chemical Tanker Type II or III: –MARPOL Annex II changes: all chemical products (in particular veg. oils) to be carried on chemical tankers Single hull Tanker Phase out: Effects on Conversion and Recycling

12. INTERTANKO 国际油轮船东协会简介 Single hull Tanker Phase out: Effects on Conversion and Recycling Source: INTERTANKO Effects on Recycling

13. INTERTANKO 国际油轮船东协会简介 Single hull Tanker Phase out: Effects on Conversion and Recycling Source: INTERTANKO Effects on Recycling

14. INTERTANKO 国际油轮船东协会简介 Single hull Tanker Phase out: Effects on Conversion and Recycling - 2010 and 2015 key phase out dates in terms of recycling - Potential smoothing of phase out curve Effects on Recycling

15. INTERTANKO 国际油轮船东协会简介 Single hull Tanker Phase out: Effects on Conversion and Recycling Effects on Recycling Source: INTERTANKO

16. INTERTANKO 国际油轮船东协会简介 Single hull Tanker Phase out: Effects on Conversion and Recycling - 2010 and 2015 key phase out dates in terms of recycling - -Potential smoothing of phase out curve: - - Smaller tankers continue to trade: Coastal trades Nigeria, China, Indonesia and Mexico - - Larger tankers trading to 25 years: LOOP lightering, Japan, Singapore, Middle East. - - Conversion options taken Effects on Recycling

17. INTERTANKO 国际油轮船东协会简介 Single hull Tanker Phase out: Effects on Conversion and Recycling Source: INTERTANKO Effects on Recycling

18. INTERTANKO 国际油轮船东协会简介 Single hull Tanker Phase out: Effects on Conversion and Recycling 1. Regulatory and Political Push 2007EC Strategy Industry Interim Strategy: IMO Guidelines 2009Adoption of IMO Ship Recycling Convention 2012Entry into Force on IMO Convention (optimistic projection, 2+1 yrs) 2. Market Force Pull Fragmentation in yard capability (Basel standards, environmental and safety management systems implemented) Choice of yard dictated by tanker owner – responsible recycling options Effects on Recycling

19. INTERTANKO 国际油轮船东协会简介 Single hull Tanker Phase out: Effects on Conversion and Recycling Phase out regime will effect recycling and conversion trends Tanker market fluctuations are and will continue to have major impact Tankers trading as long as possible due to strong tanker market – decreased recycling and increased conversion Inter-relation between market, conversion and recycling demonstrated Trend not limited to larger VLCCs but also smaller tankers – phase out regulation not the only regulation to consider (MARPOL Annex II) Recycling not limited to phase out, market trends and conversion options but also its own regulatory and political developments Geographical focus for recycling will rely heavily on implementation of national and international regulations Concluding Remarks

20. INTERTANKO 国际油轮船东协会简介 www.intertanko.com thank you for your time…