0 Scorpio Tankers Inc. Scorpio Tankers Inc. Scorpio Tankers Inc. Company Presentation April 2016
Tankers Inc. Company Overview 1 • Scorpio Tankers Inc. (“STNG” or “Company") is the world’s largest ECO-spec product tanker company By Q4-17, the Company will own a fleet of 87 eco-design product tankers Currently 76 (1) product tankers on the water with an average age of 1.5 years, and 13 (2) product tankers time chartered-in (mainly on short term charters) • Vessels employed in well-established Scorpio pools • NYSE-compliant governance and transparency • The Company is headquartered in Monaco, incorporated in the Marshall Islands and is not subject to US income tax (1) Excludes three vessels currently held for sale (2) Includes three Handymax vessels to be delivered by end of March 2016
Tankers Inc. Operating Leverage Continues to Grow 2 To be Delivered Class Existing Total Owned TC-In Total 2016 2017 Handymax 14 - - 14 6 20 42 (1) MR - 8 50 4 54 LR1 - - - - 1 1 LR2 20 3 - 23 2 25 Total 76 3 8 87 13 100 (1) Excludes three vessels currently held for sale.
Tankers Inc. Product Tanker Owners & Operators 3 Top Pool Operators Top Five Handymax & MR Owners (1) Pool Operator Handymax MR LR2 Total # Owner Vessels Scorpio 32 80 21 133 1 Scorpio Tankers 56 Norient 37 53 - 90 2 TORM A/S 53 Handytankers 65 20 - 85 3 Sinokor Merchant 38 Navig8 7 13 13 33 4 Interorient Nav. Co. 37 5 China Merchants Grp 36 Teekay Taurus 0 0 18 18 Total Fleet 1762 Top Five LR2 Owners (1) Scorpio’s trading platform operates the # Owner Vessels 1 Scorpio Tankers 20 largest product tanker fleet in the 2 A.P. Moller 14 market with over 150 vessels under 3 Ocean Tankers 12 commercial management 4 K. G. Jebsen (KGJS) 10 5 China COSCO Shipping 9 Total Fleet 290 (1) Clarkson Research Services as of March 2016. Does not include newbuilds .
Tankers Inc. Scorpio Pools Have Consistently Outperformed The Market 4 Performance ($/day) Pool SHTP Handymax Benchmark $25,000 $20,000 Scorpio $15,000 Handymax Tanker Pool $10,000 (SHTP) $5,000 $0 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 $30,000 Scorpio MR Clarksons MR $25,000 $20,000 Scorpio MR Pool $15,000 (SMRP) $10,000 $5,000 $0 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 $45,000 $40,000 SLR2P LR2 Benchmark $35,000 $30,000 Scorpio LR2 $25,000 Tanker Pool $20,000 $15,000 (SLR2P) $10,000 $5,000 $0 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1 -15 Q2-15 Q3-15 Q4-15
Tankers Inc. Scorpio Well Positioned Now that Rates Have Recovered 5 LR2 MR Handymax $80,000 $70,000 $60,000 $50,000 $/Day $40,000 $30,000 $20,000 $10,000 $0 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Feb-16 Source: Clarksons Research Services, February 2016
Tankers Inc. Scorpio’s Newbuildings Ordered at Favorable Values 6 Historical Data 2005-2016 Scorpio Average Vessel Purchase Price ($ in millions) Current Avg Max Min Price ($ In Millions) Handymax $33 $35 $52 $28 MR $35 $40 $54 $34 Handymax $31 LR2 $53 $59 $83 $47 MR $36 LR2 $53 $90 $80 $70 $60 ($ Millions) $50 $40 $30 $20 $10 $0 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Feb-16 Handymax MR LR2 Source: Clarksons Research Services, February 2016
Tankers Inc. 7 Product Tankers in the Oil Supply Chain • When crude oil is extracted from the earth, it’s transported to a refinery and processed into different products • The demand for different products will depend on the demand and consumption of the individual region or economy • Structural demand drivers in the product tanker industry: • US has emerged as a refined products powerhouse, becoming the worlds largest product exporter • Changes in refinery locations, expansion of refining capacity in Asia and Middle East as well as a reduction in OECD refining capacity (Europe & Australia). • Changes in consumption demand growth in Latin America, Africa, and non-China/Japan Asia and lack of corresponding growth in refining capacity • Balance of trade: needs of each particular region- gasoline/diesel trade between U.S./Europe is a prime example of this given significantly different diesel penetration rates for light vehicles • For example, Europe imports surplus diesel from the United States, and exports surplus gasoline to the United States. • Product tankers provide the marine transportation for refined petroleum products. Exploration & Production Crude Transportation Refining Products Transportation Terminalling & Distribution Refined products are moved from Terminals are located closer to Oil production includes drilling, Crude oil is transported to the Refineries convert the crude oil the refinery to the end users via transportation hubs and are the extraction, and recovery of oil refinery for processing by crude into a wide range of consumable product tankers, railcars, final staging point for the refined from underground. tankers, rail cars, and pipelines. products. pipelines and trucks. fuel before the point of sale.
Tankers Inc. 8 Tanker Types Tankers “Clean” “Dirty” Crude Products Panamax LR2 MR/MR2 VLCC Suezmax Aframax Handysize LR1 Handysize (120,000 - (60,000 - (80,000- (25,000- (60,000- (<25,000 (200,000 + (80,000 - (< 60,000 80,00 DWT) 200,00 DWT ) 60,000 DWT ) 80,000 DWT) DWT) DWT) 120,00 DWT) DWT) 120,000 DWT ) Chemicals Naphtha Clean Clean Condensate Products Jet Fuels Kerosene - Gasoline - Vegoil - Gasoils Dirty Diesels Cycle Oils Products Fuel Oils Crude Oil
Tankers Inc. Product Tanker Specifications 9 • Product tankers have coated tanks, IMO Classes I, II, & III typically epoxy, making them easy to IMO Class I Chemical IMO Class I refers to the transportation of the clean and preventing cargo Tankers most hazardous, very acidic, chemicals. The tanks can be stainless steel, epoxy or marine- contamination and hull corrosion. line coated. • IMO II & III tankers have at least 6 IMO Class II Chemical & IMO Class II carries Veg & Palm Oils, Caustic segregations and 12 tanks, i.e. 2 tanks Product Soda. These tanks tend to be coated with Epoxy can have a common line for discharge. Tankers or Stainless steel. • Oil majors and traders have strict IMO Class III Product Typically carry refined either light, refined oil requirements for the transportation of Tankers “clean” products or “dirty” heavy crude or chemicals, FOSFA cargoes (vegetable refined oils. oils and chemicals), and refined products. Scorpio Average vs. Fleet • Tanks must be completely cleaned 14.0 Scorpio Tankers Active Fleet before a new product is loaded to 11.70 12.0 prevent contamination. • To ensure the products are as Average Age (Years) 10.0 8.97 7.83 8.0 uncontaminated as possible, oil companies and regulators often 6.0 stipulate which type of products the 4.0 tanker must recently have transported. 1.70 1.34 2.0 0.97 0.0 Handymax MR LR2 Source: Clarksons Research Services, February 2016.
Tankers Inc. Global Oil Demand Continues to Increase 10 • Global oil demand is expected to grow by 7.2 mb/d between 2015 and 2021, or a CAGR growth rate of 1.2%, reaching 101.6 mb/d in 2021. • The growth rate is lower than the 1.7% per annum seen in 2009- 2015 due to increasing vehicle fuel efficiency and China’s economi c transition from export-led growth to a consumption and services driven economy. • Global oil demand growth is primarily driven by non-OECD countries, specifically Asian countries. Non-OECD countries are expected to contribute 8.1 mb/d to the global growth between 2015 and 2021, versus a net-OECD decline of 0.9 mb/d. • Gasoline and gasoil are expected to account for roughly 75% of the non-OECD oil demand growth. Global Oil Demand: 2015-2021 (mb/d) Non-OECD Oil Demand: 2015-2021 (mb/d) 120 2015 2021 A CAGR Growth Rate of 1.2% 20 18.0 100 12.1 10.9 9.5 14.4 80 8.2 15 13.0 36.7 60 31.8 10.4 10 4.9 5.2 40 7.3 6.7 6.2 14.4 13.9 5.4 5.2 20 5 3.9 3.9 3.9 3.2 3.1 24.4 24.2 0 2015 2016 2017 2018 2019 2020 2021 0 Gasoline GasDies JetKero Naphtha LPG ResFuel Others North America Europe FSU Asia Middle East Others (1) Source: International Energy Agency (IEA) 2016
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