Integrated Annual Report 2021

Invested in climate tech start-up to support the transition to net-zero The energy transition brings with it both opportunities and challenges ahead. To anchor these opportunities, we will actively explore and appraise new business areas, models and portfolios, and build new capabilities for a new era. In 2021, AET made an investment into Daphne Technology, a Swiss-based climate tech start-up, alongside Shell Ventures, Trafigura, and Saudi Aramco Energy Ventures. This move supports the development and deployment of technology to transition the maritime sector to net-zero. Daphne Technology works on technology platforms offering efficient solutions targeted at reducing emissions from all types of fuels, minimising air and sea pollution for the maritime industry. Its innovative technology is able to remove toxic and GHG emissions such as nitrogen oxides, methane and carbon dioxide from the post combustion gas of any types of fuel, including oil, LNG, biofuels, ammonia and hydrogen. As a longer-term solution towards net-zero, Daphne Technology will help reduce methane slip and improve the tank-to-wake decarbonisation. In addition to being an investor, we are targeting to deploy the solution across AET and also other MISC fleet vessels which utilise LNG as a fuel source. of Eagle Campos, the first of another three DPSTs purpose-built for long-term charter to Shell. AET had entered into an agreement with Shell in December 2019 to operate three DPSTs in the international and Brazilian Basin on long-term charters, with Eagle Campos being the first of this series. Eagle Campos’ two sister vessels are currently under construction at the Hyundai Heavy Industries (HHI) in Ulsan, South Korea and are due to be delivered in 2022. Further growing our DPST operations in Latin America, we will receive delivery of an additional three DPSTs in 2022 on time charter to Petrobras. AET currently operates six DPSTs under long-term charter to Petrobras. AET’s presence in Latin America positions itself in a sweet spot for West-East crude trades, which would still see growth, driven by Latin American exports to the Asia Pacific. PETROLEUM & PRODUCT SHIPPING BUSINESS REVIEW Invested in climate tech start-up Daphne Technology which offers state-of-the-art technology that reduces emissions from any fuel type, including oil, LNG, biofuels, ammonia and hydrogen Providing greener shipping solutions with LNG dual-fuel VLCCs Our fleet rejuvenation strategy in low-carbon dual-fuel propulsion strategy has helped us build our footprint as one of the world’s largest dual-fuel vessel owners and operators. In March 2021, we signed an agreement with Shell for the construction and time charter of three LNG dual-fuel VLCCs. Delivery of these vessels will commence in 2023, and they will grow our long-term secured-income portfolio as part of the greener and environmentally-friendly shipping solution. Following on from our 2020 construction and time charter agreement with TotalEnergies, we will deliver two LNG dual-fuel VLCCs in 2022. These two VLCCs when ready, will be amongst the world’s most environmentally-friendly VLCCs and will represent a significant step forward in our aspiration to align with IMO 2030 carbon-intensity goals while meeting our customers’ energy-transition needs. Agreement with Shell for the construction and time charter for 3 LNG dual-fuel VLCCs Delivery of two LNG dual-fuel VLCCs under construction to TotalEnergies in 2022 By end 2022, AET will have 17 DPSTs operating globally Expanded our Latin American market by adding to our environmentally-friendly DPST asset base In 2021, our fleet of 11 DPSTs chartered out to Equinor (Norway), Petrobras and Shell (Brazil), made notable contributions to AET’s earnings. In 2021, AET took delivery of one newbuild DPST from Samsung Heavy Industries, Eagle Pilar. Under long-term contract with Shell in Brazil, Eagle Pilar is operating to the highest operational and environmental standards. It is in full compliance with IMO NOx Tier III and SOx emission requirements and by design, approximately 25% to 30% more fuel efficient than the DPSTs built in the early part of the last decade. Eagle Pilar joins our fleet of six DPSTs that were built in 2020, all of which are building our secured income against long-term charters. These vessels drove our growth in 2021 and will continue to do so in the future. As well as that, in January 2022, we took delivery Continued to strengthen our mid-size tanker segment The mid-size tanker segment (i.e. Aframax and Suezmax) is a key cash-generating segment for AET. These tankers are crucial as they perform premiumpaying lightering services and key regional trades. Modular Capture Vessels (MCVs) are unique Aframax vessels that are built to provide hydrocarbon capture and containment services for containing a potential future underwater well control incident in the US Gulf. These vessels are part of an innovative marine system solution designed to respond to subsea incidents. AET was previously awarded a 20-year contract with Marine Well Containment Company (MWCC) which began in 2011. MWCC consists of 10 members – Anadarko, BHP, BP, Chevron, ConocoPhillips, Equinor, ExxonMobil, Hess, Shell and TotalEnergies. Delivering specialised marine solutions to our customers since 2011 MISC Berhad 130 Integrated Annual Report 2021 MISC Berhad Integrated Annual Report 2021 131