Dual-fuel vessels in our fleet: • 4 Aframaxes • 2 DPSTs • 5 VLCCs including 3 newbuilds to be delivered in 2023 Exploring opportunities to develop ZEVs in 2022: • 2 zero-emission VLCCs with Lloyd’s Register and SHI • 2 zero-emission Aframaxes with PTT PETROLEUM & PRODUCT SHIPPING KEY DEVELOPMENTS CONTRIBUTING TO THE DEVELOPMENT OF A SUSTAINABLE AND DECARBONISED GLOBAL MARITIME SECTOR ADVANCED ON OUR COMMITMENT TO DEVELOP ZEVs TOOK DELIVERY OF HIGHLY SPECIALISED ECO-EFFICIENT DPSTs AET continues to be a leader in driving initiatives to make global shipping more sustainable. As one of the first movers in ordering low emissions LNG dual-fuel vessels, we have grown our fleet to eight such vessels currently in operation, with three more to be delivered in 2023. In addition to LNG dual-fuel capability, we have also been investing in other features to increase efficiency and reduce emissions such as advanced hull designs, propeller ducts and boss cap fins, and energy efficient electric pumps. With regards to new vessels we are adding to our portfolio, AET’s strategy is to explore and invest in modern, environmentally friendly tonnage and operations which has ensured that our vessels meet the International Maritime Organization’s (IMO) Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII) regulations which came into force on 1 January 2023. In relation to our existing fleet, we are retiring assets that are carbon intensive as well as working with our ship managers to ensure that our fleet is compliant through strategies such as slow steaming, derating engines and retro-fitting our assets with Energy Saving Technologies (ESTs). AET’s fleet rejuvenation strategy has resulted in us adding more eco-efficient dual-fuel vessels to our fleet. Our efforts to grow our eco-efficient fleet demonstrate our commitment to meeting the IMO’s 2030 Greenhouse Gas (GHG) intensity reduction ambition and our commitment across the MISC Group to net-zero GHG emissions by 2050. AET signed a MOU with Lloyd’s Register and Samsung Heavy Industries (SHI) in April 2022 for the development and construction of the first two zero-emission VLCCs. Founding members of the Castor Initiative, MISC, Lloyd’s Register and SHI are taking the active lead to demonstrate both the commercial feasibility of ammonia as a clean fuel for the shipping industry and the need for more such collaboration within and across industries. In September 2022, PTT and AET signed a MOU for the development and construction of two zero-emission Aframaxes to be powered by green ammonia. Jointly PTT and AET are taking the lead to encourage the use of green ammonia as a main propulsion fuel. AET will select a suitable shipyard and the two zero-emission dual-fuel tankers are planned to be delivered to PTT for long-term charters in Q4 2025 and Q1 2026 respectively. This MOU sets a clear signal of PTT’s and AET’s commitment to reduce GHG emissions from international shipping as energy efficiency improvements alone will not be sufficient. In 2022, AET took delivery of six newbuild Dynamic Positioning Shuttle Tankers (DPSTs) which has further grown our DPST operations in Latin America. The six eco-efficient DPSTs are all on long-term charter contracts in Brazil - three with Shell and another three with Petrobras. These newbuild DPSTs are fully compliant with IMO NOx Tier 3 and SOx emission requirements. In addition, they are equipped with electrical-driven Variable Frequency Drive (VFD) cargo pumps and efficient thrusters for enhanced fuel efficiency and are fully capable of operating in weather conditions expected for their class. Three sister vessels - Eagle Campos, Eagle Canoas, and Eagle Colombo - are also fitted with energy-saving devices such as the Hi Pre-Swirl Duct and Rudder Bulb for improved propulsion efficiency and are already EEDI Phase 2 compliant. Three sister vessels - Eagle Cambe, Eagle Crato, and Eagle Colatina - are fitted with energy-saving devices such as Saver Fins and Savor Stator for improved propulsion efficiency and are approximately 6% more efficient than the EEDI Phase 2 requirements. At the end of 2022, AET is an established DPST owner with a fleet of 17 shuttle tankers with four of these vessels operating in the Barents and North Seas and 13 in the Brazilian Basin. All vessels are chartered on long-term contracts which have significantly contributed to AET's earnings for the year. Took delivery of 6 DPSTs for Shell and Petrobras, expanding our Latin American footprint TOOK DELIVERY OF NEWBUILD DUAL-FUEL VLCCs In 2022, AET also took delivery of two LNG dual-fuel VLCCs, which are amongst the world’s first built for long-term charter to TotalEnergies based on the agreement signed in April 2020. Both vessels represent a game changer in conventional energy shipping with a carbon footprint reduction that is contributing to AET’s aspiration to meet or exceed IMO’s 2030 Greenhouse Gas goals. The carbon reduction is achieved through a combination of LNG dual-fuel technology, energy saving devices and innovative features. These assets reinforce our financial and ESG focus of continual improvements of our greenhouse gas emissions and our stakeholders’ carbon footprint while responsibly transporting much-needed energy commodities across the world. Took delivery of 2 LNG dual-fuel VLCCs for TotalEnergies ROBUST MID-SIZE TANKER SEGMENT AS A KEY CASH GENERATOR • More than 15,000 STS operations completed in the US Gulf • More than 570 STS operations in offshore Brazil and Uruguay Our Aframax and Suezmax mid-size tanker segment which performs specialised lightering services in key regional trades is one of the main contributors to our income stream. AET’s integrated lightering (ship-to-ship) and conventional voyage operations allow us to offer a one-stop service to meet all our customers’ needs. We have performed more than 15,000 ship-to-ship (STS) transfers and are a market leader in the US Gulf region. Along with a base dedicated to lightering operations in Galveston, Texas, our fleet of purpose-built lightering support vessels, and full employment of our own Mooring Masters and their Assistants ensure consistently safe and high-quality operations. Lightering operations in offshore Uruguay and the Brazilian Basin provide our Latin American customers with additional flexibility. We continue to expand our presence in Latin America, having serviced more than 570 lightering operations in offshore Uruguay and Brazil. AET also operates the world’s only two Modular Capture Vessels. These specialised Aframax sized vessels are designed to assist in hydrocarbon capture in the event of a well incident in the US Gulf of Mexico. Since 2011, these vessels have been on long-term charter to the Marine Well Containment Company (MWCC). Business Review Business Review 115 114 MISC Berhad Integrated Annual Report 2022
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