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Marine Log

January 22, 2007

Wartsila and HHI in dual fuel engine venture

Wartsila and Hyundai Heavy Industries Co. Ltd (HHI) are to set up a 50/50-owned joint venture in Korea to manufacture dual-fuel engines for LNG (Liquefied Natural Gas) carriers. The total investment in the company will be EUR 58 million, Wartsila's share being EUR 29 million.

The technology shift towards dual-fuel machinery in LNG carriers has significantly increased demand for Wartsila's dual-fuel engines. The main market is Korea. To date Wartsila has received orders for 206 Wartsila 50DF dual-fuel engines for 52 LNG carriers, most of which will be built in Korea. The global market share of Korea in the LNG shipbuilding market currently exceeds 70%.

"This joint venture will accentuate the strengths of two companies that are already partners; the vast know-how of the world's biggest shipbuilder with the expertise and experience of a global leader in engine design and ship machinery. The joint venture marks a major step in Wartsila's strategy to accelerate growth in the continuously expanding Asian market", says Ole Johansson, President and CEO of Wartsila when signing the contract today in Korea with Ph.D. Min, Keh-Sik, Vice Chairman and CEO of HHI.

The joint venture will manufacture Wartsila 50DF dual-fuel engines for the Korean, Japanese, Chinese and Taiwanese shipbuilding markets. Focusing on assembly and testing of the engines, the joint venture is scheduled to deliver its first engine in the second half of 2008. The total capacity of the factory will be some 100 engines a year.

Wartsila's sales organization will continue to serve the Japanese, Chinese and Taiwanese markets. The Korean market will be served by the joint venture company directly.

The joint venture will utilize the established global service networks of Wartsila and HHI to take complete care of customers' ship machinery needs at every stage in about 70 countries.

The Trieste factory in Italy will continue to manufacture Wartsila 50DF dual-fuel engines for marine markets outside East Asia and the growing worldwide power plant market.

Wartsila and Hyundai Heavy Industries have a long history of close co-operation. Wartsila and HHI have a license agreement to produce low-speed engines..

The deal is subject to the approvals of the relevant regulatory authorities.

The Wartsila 50DF engines

The Wartsila 50DF dual-fuel engine has pioneered an industry change from the traditionally-applied steam turbine machinery to a dual-fuel-electric concept with the benefits of much better operating economy and lower exhaust emissions.

The Wartsila 50DF is a lean-burn dual-fuel engine with a high power concentration of 950 kW/cylinder at synchronous speeds of 500 or 514 rpm.

Running on natural gas, the engine operates in a lean-burn Otto cycle. Natural gas is mixed with air in the inlet channels of the individual cylinders and ignited in the combustion chambers upon injection of a small quantity of diesel oil. The injection of this pilot fuel is regulated by an electronic control system which also adjusts the air-gas ratio to keep each cylinder at its correct operating point between knocking and misfiring limits.

In the diesel mode, the engines run on liquid fuel oil such as heavy fuel oil or marine diesel oil as a conventional diesel engine. The engines switch from gas to back-up liquid fuel instantly and automatically should the gas supply be interrupted or in the event of any other alarm, while maintaining power and speed. When the situation returns to normal it is then possible to switch back to gas mode.

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