Risk Assessment & Loss Prevention of LNG Carriers in Operation, Under Construction and ConversionK.S. WangThe Principal Surveyor for JapanBMT Marine & Offshore Surveys Ltd.(Incorporating The Salvage Association)Kobe Office, JapanE-mail: kobe@bmtmarinerisk.comTel: +81 (0)78 331 7879Mobile: +81 (0)90 3086 1229www.bmtmarinerisk.com

• Founded in 1856 by London Insurers & others

• Royal Charter in 1867 – A Not for Profit Association

• Motto “Quaerite Vera” – meaning “Seek the Truth”

Founded 1856“The Association for the Protection of Commercial Interests as

respects Wrecked and Damaged Property”

• Known as The Salvage Association

• Expanded to 100 surveyors with 35 offices worldwide

• Our previous owner: Underwriters at Lloyds

• Affected by downturn in London Market in 1990’s

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• Renamed to BMT Marine & Offshore Surveys Ltd., in April 2007

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• Collision• Grounding• Machinery breakdown• Natural disasters• Fire• Explosions• War risks• Water ingress• Piracy• Terrorism

We Survey the Prevailing Risks in the Maritime industry

Most Common Risks

• Extensive ship wreckage • Hull damage (30 %)• Machinery damage(40 %)• Damage to cargo (30 %)• Loss of human life

Industries and Power Station

Domestic Gas

LNG FPSO

LNG FSRU

Processing, Liquefaction & Storage atLNG Production Terminal

LNG Receiving terminal

Distribution pipelines

LNG tankers

Gas production

Regasification

LNG Exporting Countries (LNG Loading Terminals)

• LNG export from countries with natural gas reserves.

• More natural gas reserves are found in production/construction in Russia, Iran, and other countries.

• LNG export is faster and more flexible than pipeline gas.

(Billion of m3)

QATAR

A very rough estimates

LNG Importing Countries CHINA AND INDIA • The major LNG importing

countries are in Asia.

• Europe and USA are increasing the import of LNG.

• The Air Quality of Japan has improved since use of LNG for Power Generator and Heavy Industries

• China will be one of the major importers of LNG

• Singapore is next on line(Billion of m3)A very rough estimates

Type of LNG Carriers

Membrane type of LNG Carrier (GTT Mark III, NO 96 and CSI)

Sizes:-

Standard: 125-150,000m3

Q-Flex: 210-217,000m3

Q-Max: 250,000m3

Spherical type of LNG Carrier

Sizes:- 125-145,000m3

• No. of Crew: About 30 per Ship

• Life Span: About 40 + years

• Construction period: About 2 ½

Spherical Type

Moss

Membrane Type

GTTTypeSPB

• Invar steel or stainless steel

• Types: NO 96, Mark III and CSI

• Aluminum Alloy• Aluminum Alloy

• Only two ships in operations

LNG FPSO - Floating Production Storage Offloading (Planning and Design Stages)

Raw Natural

Gas

LNG FSRU (In Operation and Under Conversion/Construction)

• No. of Crew on board: About 30• Life Span: About 40 years• Conversion from existing LNG Carriers (1 ship under conversion and 1 ship under planning) • New construction of LNG FSRU

Floating Storage and Re-gasification Unit (LNG FSRU)

Composite View of Offshore LNG Facilities

Spherical Type of LNG Carrier

• Almost 40% the LNG carriers in the world are of the Spherical type.

• 80% of LNG carriers coming to Japan are of the Spherical type.

Spherical Type of LNG Carriers

• Aluminum Alloy Spherical tank.

• 40m in diameter.

• “Self Supporting”

• 40% of the world’s LNG carriers are of this type.

Aluminum spherical tank of about 40m - 45m in diameterLong dry docking schedule

MEMBRANE Type of Carrier

MEMBRANE Type of LNG Carrier

• Primary membrane holds cargo.

• Secondary membrane prevents leakage.

• Primary & secondary insulation to maintain cargo temperature at –161 C

• Ship’s hull to support tank.

• 80% of the world’s LNG carriers under construction are of membrane type.

• Almost 60% of the LNG Carriers in the World are this Type.

NO.96 Membrane System

• Two membranes made of 36% nickel-steel (invar) 0.7 mm to 1.5 mm thick.

• Two layers of insulation boxes made of plywood filled with expanded perlite.

• Cargo tank is supported by inner hull of the ship.

MARK III Membrane System

Polyurethane Insulation Panel, this sections are to be prefabricated in the Workshop

Inner Hull Plate

Primary Barrier of Corrugated Stainless-steel of about 1.2-1.5 m/m thickness to be installed onboard

Secondary Barrier of “Triplex” Membrane

Secondary barrier of “Triplex” Membrane “Triplex” is made of glass cloth/aluminum foil/glass cloth bonded by glue.

These sections are to be installed onboard

CS1 Membrane System

• New Design (Two ships in operation)

• Combination of Mark III & No. 96.

– Nickel-steel (invar) (0.7 to 1.5 m/m) primary membrane.

– Glass cloth/Aluminum foil/Glass cloth Aluminum/glass“Triplex” secondary membrane.

– Polyurethane insulationpanel

Current Shipyards Building LNG Carriers• Korea

– Daewoo (GTT and Moss)

– Hyundai Heavy Industries (GTT and Moss)

– Samsung Heavy Industries (GTT and Moss)

– Hanjin Heavy Industries (GTT and Moss)

– STX Shipbuilding (GTT/Moss)

– 80% of world’s LNG carriers are under construction in Korea.

• France– Aker Shipyard (Chantier's de

L’Atlantique Shipyard)- GTT

• Spain– Puerto Real Shipyard - GTT

• China– Hudong Zhonghua Shipyard (GTT).

One ship delivered on 3/04/08 and Four ships under construction

• Japan– Kawasaki Shipbuilding (Moss)

– Koyo Shipyard, Imabari (GTT)

– Mitsubishi Heavy Industries (Moss/ GTT)

– Mitsui Engineering (Moss/GTT)

– Universal Shipbuilding (GTT)

– Ishikawajima-Harima Heavy Industries (SPB)- two ships were built

LNG Ship Repair Yards

– Malaysia• Malaysia Shipbuilding & Engineering

– European Yards.• Sobrena-France.• Izar Carenas-Spain.• Blohm & Voss-Hamburg.• CMR-Italy.• San Giorgio del Porto-Italy.• Lisnave-Portugal.

– Middle East.• Dubai Dry-docks.

– Japan• Mitsubishi Heavy Industries• Kawasaki Heavy Industries• Ishikawajima-Harima Heavy Industries• Universal Shipyards• Mitsui Engineering and Shipbuilding

– Singapore• Sembawang Group of Shipyards• Keppel Group of Shipyards

The current boom of shipbuilding has also brought forth an expansion of ship repair yards mainly under home port or home doctor concept.

• Special Trainings and licensing are required.

Risks of LNG CarrierAccidents during sea voyage:

– Grounding – Navigation error– Striking a fixed object or a wreck – Navigation error– Collision (with vessel or object) – Navigation error– Unloading/Loading

• Sudden pull-away and damage of loading/discharging arms and human injury

• Cracking of ship steel hull due to spill of LNG (super cold shock of -161℃)

– Terrorism – Missile attack, boat based explosive and hijacking.– Cargo machinery and cargo containment failures– Natural risks – Lightning, typhoon, hurricanes, and tsunami.– Other hull/machinery accidents, such as fire in engine room on bridge and in

accommodation, boilers, steam turbines, main reduction gears, diesel engine damages, and hull structural failures

Note: Apart from the above risk we must be aware of the high costs (millions of $) and long repair period (months) arising from ordinary damage on LNG Carrier.

Risks of LNG CarrierMajor and ・Minor Casualties on LNG Carriers experienced by the speaker over the last 30 years.

1979 LNG “X” (Moss) grounding in Japan – 2,000 tons of steel, 4 months of repair

– 1979 LNG “X” (Membrane) water ballast tank leak to insulation space of a cargo tank – ½ year of repair

– 1979 LNG “X” (Membrane) over pressure of insulation spaces causing building of membrane – 9 months of repair

– 1980 LNG “X” (Membrane) grounding in Gibraltar – 2,500 tons of steel and deformation of cargo tanks: 1 ½ years of repair and ship-ship transfer of LNG

– 1989 LNG “X” (Membrane) broke away from LNG Terminal due to very strong gale damaging to No. 1 cargo tank, deck deformation and loading arms – 10 months of repair

2004 LNG “X” (Membrane) grounding in Korea – 200 tons of steel, 8 months of repair

2005 LNG “X” (Membrane) sloshing damage in a LNG tank due to heavy weather, and with partially loaded LNG tank – 6 months of repair

– 2006 LNG ”X” (Membrane) sloshing damage during ballast voyage with minimum LNG, 4 months repair

- 2005/2006/2007 LNG (Membrane) “X”, “X”, “X”, “X”, and …… due to cargo containment failures (leak) in secondary barrier – 6 to 2 months of locating the leak and repairs

• Main Boiler damage• Main Reduction Gear damage• Main Turbine damage• Main Propeller shaft damage – Resulted in ship to ship transfer of LNG• Cargo Machinery damage (Cargo Pumps and etc.)• Cargo Pipe damages – movement of vessel at LNG terminal due to natural risks and machinery failures• Hull Structure Failures

A Minor Grounding Damage on LNG Ship

A minor crack (less than 1 meter) due to grounding on the steel bulkhead in a cofferdam next to a cargo tank caused sea water ingress to the cargo tank

Resuletd LNG Cargo Pumps Immersed in Seawater

Resulted rusts on the Primary Membrane of the Cargo Tank after Soaked in Seawater and moisture

Resulted insulation boxes soaked in seawater

Sloshing Phenomena of a Partially Filled Cargo Tank

• Latest allowable minimum level of LNG in a membrane type of cargo tank is 10% of the height of the cargo tank instead of 10 % of the length of the cargo tank

Another close-up view of sloshing damage in a LNG tank

Secondary barrier failure on the operating of GTT Mark III Cargo Tank (N2 leak detected during operations)

Separation due to failure of “Glue”applied on the onboard installed “Triplex”

“Triplex”Membrane-made of (glass cloth/ Aluminum foil/ glass cloth) as secondary barrier

Risks and Loss Prevention during Construction

• 1980 – Three LNG carriers in a shipyard – Total Constructive Loss. Due to cargo tank insulation failure.

• 2005 – One LNG Ship in a Shipyard – Insulation system failure. Long delays in delivery.

• 2005 – Fire in cargo tank. Due to welding of reinforcement on Pump column.

• Bulging of primary and secondary barriers during tests.

• 2005/2006/2007 – Failures of cargo containment system of LNG carriers in operations due to defects during construction.

• Our Recommendation: JH 143 Shipyard Risk Assessment and Loss Prevention Survey by BMT Surveys

Delivery delayed.

Major Construction Casualties

Major Casualties in LNG both at Loading and Receiving Terminals

Four Major accidents over 60 years of LNG usage

• Cleveland, Ohio-1944.

– Shortage of stainless steel leading to poor quality tanks after WWII.

– 128 fatalities, damage to facilities

• Staten Island, New York-1973.

– Construction accident.

– 37 fatalities, damage to facilities

• Cove point, Maryland-1979.

– LNG leakage ignited by faulty electrical circuit.

– 1 fatality, damage to facilities

• Algeria-2004.

– LNG liquefaction plant.

– Due to leaking gas drawn into a boiler fan.

– 27 fatalities, damage to facilities

There have been other accidents leading to injuries, delays in production and damages to facilities.

As Low as Reasonable Possible Risks of LNG Carriers

• Gas cloud

• Collision events

• Fire in engine room, accommodation and navigation bridge

• Release of bunker oil

• Collisions, groundings of any kind

• Man overboard, or piracy

• Contact with Quay/cargo tank releases of LNG

Measures to reduce risk and loss prevention on LNG Carriers

• Gas detection safety and firefighting equipments: Manual and automatic gas detections, foam, powder, water curtain, and sea water fire fighting systems

• Safety and Operation Internal Inspection/Audit by crew: Monthly• Safety and Operation Internal Inspection/Audit yearly by ship managers• Safety and Operational and Management Inspection/Audit and Security Screening

every 2 or 2 ½ years by External Surveyors (Class, Statutory, PSC, OCIMF, P & I Club)• Pre-employment crew screening, continuous training, up-grading of license and

selection of suitable crew• Terrorist risk prevention based on ISPS• Entry and Routine Condition Survey for P&I Clubs by BMT Surveys • JH115A general condition survey for Hull Insurers by BMT Surveys• JH2006/010 A, B,C, Engine room and office management and condition surveys for

Hull Insuers by BMT Surveys • JH143 Shipyard Risk Assessment and Loss Prevention Surveys during Construction /

Conversion of LNG Carrier by BMT Surveys• Preparation of Standard Maintenance Specification, Master Maintenance Plan and

Priced Standard Maintenance Plan by BMT Surveys• Use of Service Engineers for All the Vital Machinery and Equipments

New Risks on New Technologies

• LNG Carriers have proven experience of steam turbines propulsionsystem.

• New propulsion system is introducedDual Fuel Diesel Engine Propulsion SystemsDual Fuel Diesel Engines + Electric Motors propolusion systemReliqefication PlantRe-gasification plant

New Cargo Containment System (Mark III, CS I and so on....)

LNG FPSO

LNG FSRU

• We are going into new technologies accompanying with new risks.

Risks on Shipbuilders

• New Technologies

• More shipyards are building of LNG Carriers.

• High demand on trainned and experienced shipyard workers.

• Poching of Experienced Workers from One Shipyard to Another Shipyard

• Shortage of skill and trainned workers

• Major safety, quality and trainning issues

Risk Due To Shortage Of Experienced LNG Crew• In year 2000 the number of LNG were about 130.

• In year 2007 it increased to 250.

• In yerar 2010 the number of LNGC increse to about 300.

• 6 experieced senior officers per LNGC are required. (Master, Chief Officer, Chief Enginner, 1st Enginner, Cargo Engineer, Electrical Engineer)

2000: 1,000 Experienced senior officers

2007: 3,000 Experienced senior officers

2010: 3,600 Experienced senior officers

• In addition, due to increase in the construction of LNG Carriers, LNG FPSO, and LNG FSRU more experienced seafarers are employed as owner’s construction and operation superintendants.

• The Seaman’s Life is “Not as Fun as Before” due to 12 hours turn around at port at LNG Terminals

• There is a great shortage of experienced LNG senior officers in the marine industries.

• Trainning, licensing, security screening and better financial rewards and benefits are essential in order to attract seafarers to this industries .

LNG Receiving Terminals in the Pacific

ShanghaiChina

(1) + (?)

Singapore

Note: India (2) + (?)

LNG Receiving Terminals in Europe

More LNG Terminals are under construction and planning

LNG Receiving Terminals in the USA

More LNG Terminals and FSRU are under construction and planning in USA and the Americas

References“Trade Winds”“Fair Play”“Use of Risk Analysis for Emergency Planning of LNG Carriers” (Skramstad, E; Musaeus, S; Melbo, S-of DNV and Osprey) Nov23 2000 Gastech.“LNG Journals”“Hazardous Cargo Bulletin” March 2005.“LNG World Shipping” Dec. 2005“The Global Liquefied Natural Gas Market: Status and Outlook” -2003 Department of Energy Report, US GovernmentImages from:www.marinelog.com/ IMAGESMMIV/gaselys.jpg http://www.standards.org.sg/files/vol11no3art2.htmhttp://www.genesisenergy.co.nz/genesis/resources/news/LNG%20briefing%20to%20media.pdfhttp://www.dmhi.ct.ro/indexro.htmlhttp://www.helderline.nl/?p=/ship_details.php?id=373http://www.portcities.org.uk/london/server/show/conMediaFile.1853/The-LNG-(liquified-natural-gas)carrier-Libra.htmlEnergy Information Administrationhttp://www.eia.doe.govOil and Gas Journalhttp://www.ogj.pennnet.comGaztransport and Technigaz Naval engineering brochures

Mark III SystemNo. 96 SystemCS 1 System

Moss Systems engineering brochuresIHI-SPM Brochures

K.S. Wang -after the main engine damage survey wearing safety helmet, safety goggles, ear plug, mask, gloves, boiler suit, safety shoes and explosion proof torch lights

A Marine Engineer, a Registered professional engineer, a Member of Institute of Engineers. Ten years shipyard experience as project manager. Twenty years experience as marine superintendent and fleet manager of LNG carriers in Japan. Three year s as operations manager for an LPG terminal in China. Seven years as Principal Marine Surveyor, specialized in Condition Surveys of LNG Carriers in Japan, JH143 Shipyard Risk Assessment and Loss Prevention Surveys in Japan, China, Taiwan and Vietnam. Languages: English, Chinese, and Japanese.