INTERTANKO GUIDE TO BLENDING/COMMINGLING OF LPG CARGOES ON BOARD GAS CARRIERS

Transcription

1 INTERTANKO GUIDE TO BLENDING/COMMINGLING OF LPG CARGOES ON BOARD GAS CARRIERS

2 Blending/Commingling of LPG Cargoes On Board Gas Carriers By INTERTANKO s Gas Tanker Committee All rights reserved. No part of this publication may be reproduced in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this publication) without the written permission of INTERTANKO. Applications for INTERTANKO s written permission to reproduce any part of this publication should be addressed to the publisher. INTERTANKO 2016 While every effort has been made to ensure that the information contained in this publication is correct, neither the authors nor INTERTANKO can accept any responsibility for any errors or omissions or any consequences resulting therefrom. No reliance should be placed on the information or advice contained in this publication without independent verification.

3 Foreword Foreword The aim of the INTERTANKO Gas Tanker Committee (GTC) is to uphold the mission of the Association by being thought leaders, innovators and a key resource for the industry. The mission will be our beacon, as we strive to safeguard the sustainability of the LNG and LPG industries by being committed to continuous improvement and constructively influencing their future. This document is among the first of the GTC s outputs and, as Chairman of the Committee, it gives me great pride to commend the good work of all those involved, in particular members of the working group, the GTC and the INTERTANKO Secretariat. We also like to thank Capt. Sanjiv Sethi (Anglo Eastern Chair of the working group), Capt. Ravindra P Singh (Synergy Group), Capt. Ioannis Besis (Eletson), Capt. Bakolias Tasos (Consolidated Marine Management) and Stefanos Karakelles (Eletson). As you can imagine, the behind the scenes research and work that went into producing this document has been significant. It is hoped that this publication, which incorporates leading best practice and procedures, will serve Members and the wider industry. Rajalingam Subramaniam Chairman, GTC INTERTANKO President & CEO, AET Tankers ii Blending/Commingling of LPG Cargoes On Board Gas Carriers

4 Introduction Introduction At its meetings in 2015, INTERTANKO s Council decided to widen the services of INTERTANKO to address the needs of the growing proportion of Members with LNG/LPG interests. To assist with this, INTERTANKO formed a specialised INTERTANKO Gas Tanker Committee, which met for the first time in February During this initial meeting, Members who participated expressed their concerns at the process of blending/commingling of LPG cargoes on board their ships and the lack of industry guidance on this issue. The Society of International Gas Tankers and Terminal Operators (SIGTTO) issued guidelines on the commingling of LPG in August 2005, but in July 2013 they withdrew these guidelines to avoid any possibility of conflict with the new SOLAS Regulation VI/5-2, which prohibits the blending of bulk liquid cargoes during a sea voyage. A working group was formed to: Examine the legality of performing LPG blending on board, in conjunction with SOLAS regulation VI/5-2. Examine reasons why LPG blending is required. Identify the various ways LPG blending is currently being performed. Identify the hazards associated with LPG blending of propane and butane on board all types of gas carriers. Provide simple guidelines on the matter. Examine commercial implications related to the matter. The purpose of these guidelines is to assist Members in the process of blending LPG cargoes in compliance with SOLAS Regulation VI/5-2. Blending/Commingling of LPG Cargoes On Board Gas Carriers iii

5 Contents Contents Foreword ii Introduction iii 1. LPG Blending and SOLAS Regulation VI/ Reasons for Blending 3 3. Ways of Blending and the Associated Hazards Blending During Loading Blending During Discharge Blending While at Safe Anchorage or at Layby Berth 9 4. Propane to Butane or Butane to Propane? Propane to Butane Butane to Propane Assessing the Risk Guidelines on Blending Blending During Loading Blending During Discharge Blending While at a Safe Anchorage or at Layby Berth Practical Considerations Commercial Implications 17 Annex 1 19 Annex 2 29 Annex 3 35 Annex 4 39

6 Section 1. LPG Blending and SOLAS Regulation VI/5-2

7 Section 1. LPG Blending and SOLAS Regulation VI/ LPG Blending and SOLAS Regulation VI/5-2 At its 90 th session, in 2012, the IMO Maritime Safety Committee adopted SOLAS Regulation VI/5-2. SOLAS Regulation VI/5-2 consists of four paragraphs and is the result of lengthy deliberations at the IMO, which began in 2005 and finally concluded in 2011, when MSC 89 approved the draft of SOLAS Regulation VI/5-2 and authorised its circulation for subsequent approval at MSC 90. The paragraph that is of importance with regards to LPG blending is para 1:.1 The physical blending of bulk liquid cargoes during sea voyages is prohibited. Physical blending refers to the process whereby the ship s cargo pumps and pipelines are used to internally circulate two or more different cargoes with the intent to achieve a cargo with a new product designation. This prohibition does not preclude the master from undertaking cargo transfers for the safety of the ship or protection of the marine environment. This paragraph makes it clear that LPG blending during sea voyages is prohibited. Although the IMO decided that LPG blending cannot be performed during sea voyages, it felt that it was beyond its remit to specify whether or not LPG blending should be allowed within port limits. It has, therefore, been left to each port State/ port authority to define the port location, limits and circumstances under which blending may be undertaken. A full research into the history and evolution of SOLAS Regulation VI/5-2 can be found in Annex 1. 2 Blending/Commingling of LPG Cargoes On Board Gas Carriers

8 Section 2. Reasons for Blending

9 Section 2. Reasons for Blending 2. Reasons for Blending Propane, n-butane and iso-butane are used in a number of domestic and industrial applications: Feedstock in the production of petrochemicals. Refrigerant gas. Propellant gas. Auto gas. Fuel gas. The table below shows the physical properties of propane, n-butane and iso-butane. Product Chemical Symbol Atmospheric Boiling Point ( C) Vapour Pressure at 37.8 C (Bars Absolute) Liquid Relative Density 15 C/15 C Vapour Relative Density (Air=1) Propane C 3 H n-butane C 4 H iso-butane C 4 H For a cargo to be characterised as commercial grade propane, it must contain at least 95% propane. The balance is made up of ethane, butanes and/or propene. For a cargo to be characterised as commercial grade butane it must contain at least 95% butane. The balance is made of propane, pentane, etc. These definitions are generic and vary according to national regulations. Burners can use butane, propane or any mixture of the two as fuel gas. In cold climates, where the ambient temperatures fall below zero, butane is rendered useless since vapour cannot be generated. Therefore, some propane must be added to the butane to maintain vapour generation. Although propane s high vapour pressure might seem advantageous, it becomes a disadvantage when the construction of containment tanks is considered. High vapour pressure means the containment system needs to withstand higher pressures. Also, for fully refrigerated installations, the costs of maintaining the pressure increases because the compressors controlling it need to run for longer periods. The price/availability of both products, the geographical range of the reception facilities and their physical characteristics are factors that may lead to the need for their blending. 4 Blending/Commingling of LPG Cargoes On Board Gas Carriers

10 Section 2. Reasons for Blending LPG blending is performed on board gas carriers for one of the following reasons: The reception facility might not have the tank space required for blending. The reception facility might not have the equipment/expertise needed for LPG blending. The avoidance or reduction of tax (either import or manufacturing tax). Quicker turnaround of the cargo being imported, as the LPG mix would be directly fed to bottling plants, without delay. Blending might be interfering with shore facility loading/discharging schedule. Blending/Commingling of LPG Cargoes On Board Gas Carriers 5

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12 Section 3. Ways of Blending and the Associated Hazards

13 Section 3. Ways of Blending and the Associated Hazards 3. Ways of Blending and the Associated Hazards There are three ways of blending. Each method has its own particular hazard, but it should be noted that limited crew experience is a hazard that is common to each way of blending. The most important safety buffer when conducting blending is the experience of the crew performing blending operations, but unfortunately it has become common for instructions on LPG blending to be issued without taking into account whether those on board have any previous experience of such operations. 3.1 Blending During Loading When blending during loading, the vessel is loaded with one grade with the next grade loaded on top of the first. Hazards associated with blending while loading are: Generation of flash gas When fully refrigerated propane is mixed with fully refrigerated butane, flash gas is generated due to heat absorption. The flash gas increases the pressure inside the tank and, if the loading rate is not monitored and regulated with the appropriate attention, the increase in pressure might result in lifting of the pressure relief valves (PRVs) and subsequent uncontrolled release of flammable hydrocarbons while alongside. Loss of power During blending, pressure is controlled by the loading rate and use of the refrigeration plant of the vessel. If, for any reason, the vessel experiences a loss of power and the loading is not immediately halted, and if the pressure in the tanks is close to the point of lifting the PRVs and a vapour return line (VRL) is not supplied, or the capacity of the VRL is not large enough, the increase in pressure would result in the lifting of the PRVs and, subsequently, in the uncontrolled release of flammable hydrocarbons while alongside. Miscommunication with shore As the loading rate and the VRL are controlled from the shore, miscommunication between the shore and the vessel could result in a dangerous situation. This is particularly the case if critical information, such as the time needed to reduce the loading rate, stop the loading, the cubic capacity of the VRL and the time needed for operation of the VRL, are either not clearly understood by the crew or are not clearly communicated to the crew. Cargo roll-over due to density inversion When liquids of different densities are mixed in the same tank, layers of different density can be created, known as stratification. Unstable stratification may occur when the liquid in the lower layer becomes less dense than the layer above it. This would occur when liquid in the lower layer becomes less dense due to heat input, while the surface becomes heavier due to evaporation. This unstable condition can relieve itself by sudden mixing, which releases significant energy that may inflict damage and/or a rapid rise in cargo tank pressures. Thermal stress As the temperature difference between the two grades is significant, care must be taken to ensure that the thermal stresses imposed on the steel tank surface is kept to a minimum. 8 Blending/Commingling of LPG Cargoes On Board Gas Carriers

14 Section 3. Ways of Blending and the Associated Hazards 3.2 Blending During Discharge Blending during discharge is performed by mixing the two products at the manifolds. The construction of the piping is such that it allows for the increase in pressure. Hazards associated with blending during discharge are: Miscommunication with shore The mixing of the products will result in increased pressure in the shore tanks, so the crew must maintain the agreed rate at all times and be ready to reduce the rate. The crew must communicate clearly how much time the vessel needs to stop the discharge. 3.3 Blending While at Safe Anchorage or at Layby Berth Blending during loading or discharge is often not possible due to schedule/time restrictions of the terminal, or for other factors. The vessel may then be instructed, by the charterers, to load propane and butane separately in such a way that sufficient empty tank space remains on board the vessel for the mixing to be performed. Hazards associated with blending while at a safe anchorage or at a layby berth are: Generation of flash gas When fully refrigerated propane is mixed with fully refrigerated butane, flash gas is generated due to heat absorption. The flash gas increases the pressure inside the tank and, if the blending rate is not monitored and regulated with the appropriate attention, the increase in pressure might result in the lifting of the PRVs and a subsequent uncontrolled release of flammable hydrocarbons. It should be noted that as there is no VRL, there is no contingency in place. Loss of power During blending, pressure is controlled by the blending rate and use of the refrigeration plant of the vessel. If for any reason the vessel experiences a loss of power, and the pressure in the tanks is close to the point of lifting the PRVs, the increase in pressure would result in the lifting of the PRVs and, subsequently, in the uncontrolled release of flammable hydrocarbons. Stability and stress issues When blending at anchor the vessel will at all times have at least two tanks slack. This can result in reduced stability of the vessel due to free surface effects. Accuracy and sloshing issues If the vessel experiences bad weather while at anchor, the crew will not be able to calculate the quantities exactly. This means there is a danger of overfilling the tanks or of not achieving the mixing ratio requested by the charterers. Bad weather could result in violent movement of the cargo inside the tanks, with the risk of damaging internal structures and tank fittings. Cargo roll-over due to density inversion When liquids of different densities are mixed in the same tank, layers of different density can be created, known as stratification. Unstable stratification may occur when the liquid in the lower layer becomes less dense than the layer above it. Blending/Commingling of LPG Cargoes On Board Gas Carriers 9

15 Section 3. Ways of Blending and the Associated Hazards This would occur when liquid in the lower layer becomes less dense due to heat input, while the surface becomes heavier due to evaporation. This unstable condition can relieve itself by sudden mixing, which releases significant energy that may inflict damage and/or a rapid rise in cargo tank pressures. Thermal stress As the temperature difference between the two grades is significant, care must be taken to ensure that the thermal stresses imposed on the steel surface of the tank is kept to a minimum. 10 Blending/Commingling of LPG Cargoes On Board Gas Carriers

16 Section 4. Propane to Butane or Butane to Propane?

17 Section 4. Propane to Butane or Butane to Propane? 4. Propane to Butane or Butane to Propane? The processes of introducing propane into a tank containing butane, or butane into a tank containing propane, have their own inherent risks. 4.1 Propane to Butane When propane is introduced in to a butane tank, there will be rapid rise in tank pressure as the cooler propane tends to produce a large quantity of flash gas. If the propane is not introduced in a controlled manner, the vessel s cargo compressors may not be able to cope up with the rise in tank pressures. In addition, the temperature gradient needs to be monitored, as temperature will tend to fall with the introduction of propane. The risk of thermal stresses/shock should be considered during the blending process. 4.2 Butane to Propane When butane is introduced in to a propane tank, the rise in tank pressure may not be immediate as there is generally a time lag. This means that the introduction of butane into a propane tank has higher associated risks, as the rise in tank pressure may not be apparent. When it does rise it will tend to rise suddenly, leading to excess vapour generation beyond the control of vessel s reliquefaction plant. This could lead to uncontrolled venting. In addition, the heavier butane will tend to stay in the bottom, so the need for circulating the cargo arises. 4.3 Assessing the Risk While both options are technically possible, adding butane to propane adds some uncertainty to the blending operation as the rise in pressure may be sudden after the completion of the blending. When adding butane to propane, owners should, therefore, keep the rate of blending to a pace where the Harbour setting of the PRVs would never exceed 65% of their limit to ensure that a safety buffer is available. All owners should conduct a risk assessment and, based on that assessment, should state their company specific PRV limits when blending propane and butane. 12 Blending/Commingling of LPG Cargoes On Board Gas Carriers

18 Section 5. Guidelines on Blending

19 Section 5. Guidelines on Blending 5. Guidelines on Blending Regardless of the method used to blend propane and butane, the same effect/result will apply to all types of gas carriers. However, the type of gas carrier (fully pressurised, semi-pressurised, fully refrigerated) will determine the severity of the potential hazards involved with each way of blending. Fully pressurised gas carriers Fully pressurised gas carriers are designed to withstand the pressure of all cargoes they are carrying, even if the cargo reaches an ambient temperature of 45 degrees. Therefore, the most severe hazard faced during blending being the increase of pressure to such a level where the PRVs lift is not an issue for this type of vessel. Semi-pressurised gas carriers Semi-pressurised gas carriers are designed, depending on the vessel, to withstand pressure from 4.5 up to 8 Barg. Due to this design, the risk of lifting a PRV when blending LPG on board a semi-pressurised gas carrier still exists, although it is considerably lower than with a fully refrigerated gas carrier. The mixture may well generate pressures in excess of the vessel s maximum allowable relief valve (MARV) setting if it is not conditioned appropriately. Fully refrigerated gas carrier Blending on board fully refrigerated gas carriers involves the greatest risks as their tanks, and subsequently their PRV limits, are designed to withstand pressures of only up to 0.48 Barg while at port and 0.28 Barg while at sea. 5.1 Blending During Loading The following precautions should be observed when a request is made to mix propane and butane during loading: Carry out a thorough risk assessment for the operation. Plan the operation and brief all personnel involved. Prior to arrival, notify the terminal of the intention to conduct blending operations during loading. Conduct a pre-loading meeting to address: a. Loading rates b. Whether propane will be added to butane, or vice versa Specify the tank pressure at which the operation must be halted. Consider the mechanical and technical limitations of the vessel s equipment. Carry out the blending in ONLY ONE tank at a time. Include the details of the blending operation in the loading plan. Calculate stability and stresses at all stages. 14 Blending/Commingling of LPG Cargoes On Board Gas Carriers

20 Section 5. Guidelines on Blending Ensure that a VRL is connected for use in an emergency situation and that the crew is aware of the time needed to activate it and the hourly rate of vapour it can accommodate. Closely monitor trends in tank pressures and tank temperatures to ensure that the blending is proceeding as planned. No other operations are to be carried out during LPG blending. 5.2 Blending During Discharge The following precautions should be observed when required to mix propane and butane during discharge: Carry out a thorough risk assessment for the operation. Plan the operation and brief all personnel involved. Prior to arrival, notify the terminal of the intention to conduct blending operations during discharge. Clearly identify, during the ship/shore safety meeting, the requirements of the terminal, including the communication and the emergency procedures. Closely monitor pressure and temperature at the manifolds and adjust the rate to meet terminal requirements. 5.3 Blending While at a Safe Anchorage or at Layby Berth The following precautions should be observed when required to mix propane and butane while at anchor or at a layby berth: Carry out risk assessment of the operation. Plan the operation and brief all personnel involved. Make sure the person in charge (PIC) of the layby berth is aware of the operation the vessel is going to perform (if applicable). Specify the tank pressure at which the operation must be halted. Consider the mechanical and technical limitations of the vessel s equipment. Evaluate and monitor stability and stress conditions affecting the vessel during every stage of the blending operation. Continuously monitor and make allowance for the sea conditions. Ensure sufficient ullage is available in the tanks. Monitor the hourly trend of change in tank pressure and tank temperature. In the case of an upward trend, reduce the rate of blending to stabilise pressure. No other operations are to be carried out during LPG blending. Blending/Commingling of LPG Cargoes On Board Gas Carriers 15

21 Section 5. Guidelines on Blending 5.4 Practical Considerations Below are some practical considerations to be observed, as required, during LPG blending: Ensure that line up of the blending operation is clearly drawn on a process flow diagram (PFD) of the vessel. Ensure the blending plan and risk assessment is clearly understood by all personnel involved. Line-up is always to be checked separately, by two responsible officers, to ensure it is correct. If blending at anchor or during loading, make sure that tank pressures have stabilised before commencing the operation. The tank pressure at which the operation must be halted is to be clearly communicated to all personnel involved in the operation and posted in the cargo control room (CCR). Crew and terminal experience is to be taken into account when assigning the resources for the operation. When deciding the pressure limit (PRV%) at which the blending operation needs to be halted, take into account whether propane is to be added to a tank containing butane or if butane is to be added to a tank containing propane. Change the cargo tank MARV setting and corresponding alarms to Harbour mode. Compressors to be in no insterstage cooling (NIC) mode as this will allow for a bigger suction capacity. Transfer to commence at a very slow rate and to be increased slowly, always taking into account trend/ rate of change of tank pressure. Transfer to be ceased if any sudden, rapid increase in cargo tank pressure is experienced. CCR to be continuously manned during the operation and the OOW is to be given clear instructions. Proper deck rounds are to be carried out to ensure there are no leakages. Ensure sufficient electrical power is available. Check that there are no active cargo alarms on the alarm panel. Ensure that cargo pumps are free and ready for operation. When mixing butane to propane, stratification might become apparent as the heavier butane will remain at the bottom of the tank. Cargo circulation within the same tank might not prove helpful as cargo is pumped from the bottom back to the bottom. Transfer from one tank to another and then back will help resolve the problem. 16 Blending/Commingling of LPG Cargoes On Board Gas Carriers

22 Section 6. Commercial Implications

23 Section 6. Commercial Implications 6. Commercial Implications Cargo calculations After the blending operation, the density of the mixture will not be a mathematical average of the two cargoes because the molecular composition will have changed. Because the cargo will not have been homogeneously mixed, there may be problems in correction for float immersion, temperature readout and shrinkage. The density of the final mixture is often calculated using weighted averages. However, this is an incorrect method as X litres of one liquid, when added to Y litres of another, will not produce a solution of (X+Y) litres. At the discharge port, receivers may carry out cargo sampling, sending the sample to the lab to determine the correct density. When these samples are taken, care is necessary to ensure that the sample is representative of the cargo as a whole. The difference in density could lead to shortage of cargo at the discharge port. In addition, the cargo description will change after mixing, and a new bill of lading (B/L) will be required to reflect the correct product designation before the cargo is discharged. Therefore, members are recommended to contact their P&I club to obtain an LOI wording that they can agree with their charterers. The charter party should also contain a clause that addresses the rights and obligations of both owners and charterers where blending is required. (See Annex 2). The quantity the vessel would have been able to load if mixing was not required must be taken into account by the chartering department when calculating the freight. A corresponding dead-freight protest and statement should be issued by the Master upon completion of loading. Time and bunkers used: Time charters When an LPG carrier under time charter is requested to perform blending while at anchor or at the berth, the time needed and the daily bunkers consumption for the operation must be clearly communicated to the charterers. While time and bunkers consumed should be for the time charterer s account, to avoid any future disputes owners may consider obtaining written confirmation of this from the charterer, or prepare an addendum to the time charter clearly confirming that time and bunkers will be for their account. Spot charters If a spot chartered vessel is requested to perform blending operations, and there is no blending clause in the fixture, an addendum to the charter should be agreed, identifying clearly that the owner will be compensated for time lost (at the demurrage rate) and for additional bunkers consumed. Tank condition at the end of discharge: Due consideration should be given to the condition of the tanks upon completion of discharge as LPG mix heel might not be suitable for the vessel s next employment. For example, if the next cargo is a full propane cargo, certain terminals require the vessel to arrive fully cooled to load. This would mean that tank should be prepared at a cost to the owner. 18 Blending/Commingling of LPG Cargoes On Board Gas Carriers

24 Annex 1

25 Annex 1 Annex 1 History and Evolution of SOLAS Regulation VI/5-2, Adopted by MSC 90 with Resolution MSC.325 (90) There are two parts of the regulation that were initiated by two different issues. Paragraph 1 + (par 2) Paragraph 1 of the regulation resulted from a paper being submitted by the United Kingdom to IMO Evaluation of Safety and Pollution Hazards (ESPH) 11 in Paper ESPH 11/INF.3 raised the issue of bio-fuel carriage and proposed it as a point of discussion for the next IMO Bulk Liquids and Gases Committee (BLG). BLG 10 In BLG 10, in 2006, the issue was further clarified and a problem was identified. This was the question about which annex of MARPOL should apply for the carriage of bio-fuel when it was carried as a blend with ordinary fuel rather than in the pure form. UK, Sweden and the International Parcel Tankers Association (IPTA) submitted a paper (BLG 10/3/9) explaining the guidelines they had issued on the matter for ships flying their flag. The committee, in its report to the IMO Maritime Safety Committee (MSC), recognised the importance of the issued and decided to ask the IMO Marine Environmental Protection Committee (MEPC) to add a new item to the work programme of BLG 11. MEPC 55 MEPC , having considered the proposal of BLG 10, decided to include a new high priority item on the application of requirements for the carriage of bio-fuels and bio-fuel blends in the work programme of the BLG subcommittee and in the agenda of BLG 11, with a target completion date of BLG 11 BLG 11, in 2007, agreed to conduct an in depth discussion on the matter in ESPH working group 13 and BLG 12. ESPH 13 The ESPH 13 working group, in 2007, proposed that bio-fuels blends could be carried as a MARPOL ANNEX I cargo. BLG 12 (BLG 12/3) was the first time the blending issue was raised. Four blending scenarios were recognised and two of them were not covered by any IMO convention (loading on top and blending during sea voyage). The ESPH working group asked BLG 12 to change their terms of reference so they could look into the matter during ESPH 14. BLG 12 BLG 12, in 2008, agreed with the proposal of ESPH 13 and asked for MEPC 58 to consider the proposal to expand the terms of reference of the ESPH Working Group to include blending on board, and decide as appropriate. 20 Blending/Commingling of LPG Cargoes On Board Gas Carriers

26 Annex 1 MEPC 58 MEPC 58, in 2008, in turn advised that they could not judge the matter of expansion of the terms of reference of the ESPH to include blending, and that the decision had to be taken by BLG 13 as the information provided to the committee was insufficient. BLG 13 During BLG 13, in 2009, the matter of blending of bio-fuels was seriously considered for the first time and three papers were submitted on the matter. Paper 13/4, by Netherlands and UK, where more information on current practices was presented to the subcommittee. BLG was asked to expand the TOR on this agenda item and to review the two alternatives proposed in the paper. These were 1, to allow blending on board and 2, to ban blending on board. Paper 13/4/1, by IPTA, where some of the information provided in 13/4 was questioned. IPTA proposed there should be a clear distinction between blending operations carried out in port and those carried out at sea, making it clear that blending at sea during a voyage is an unacceptable practice. Paper 13/4/2, by INTERTANKO, recognised that there was need for a set of regulations covering blending of bio-fuels. INTERTANKO proposed a two stage process for the development of these regulations and, at no point, proposed a ban on blending while at sea. Instead, INTERTANKO advised that this was a matter that should be further investigated. BLG 13, in its report to MSC and MEPC after considering the papers, agreed the following: 1. The practice of blending at sea should be prohibited and mandatory provisions should be developed under the auspices of the MSC and the MEPC. 2. With respect to blending on board in port, the subcommittee decided to expand the terms of reference of the current agenda item for this topic and, accordingly, requested the ESPH Working Group to include the issue of blending on board in port in their further consideration of the carriage of bio-fuel blends. 3. That operational aspects of blending on board should not be addressed by the ESPH Working Group, but guidance should be developed in respect of the following items (paragraph ):.1 documentation and administration, shipping document(s), Procedure and Arrangements Manual, Oil Record Book and Cargo Record Book;.2 name of the final product at unloading;.3 classification of the final product (pollution category, ship type and carriage requirements); and.4 possible wash requirements and residue discharge after unloading, if carried under Annex I requirements. Blending/Commingling of LPG Cargoes On Board Gas Carriers 21

27 Annex 1 MSC 86 MSC 86, in 2009, acted on the recommendation of BLG and prepared a circular: PROHIBITION OF BLENDING MARPOL CARGOES ON BOARD [DURING THE SEA VOYAGE] [AT SEA] (ANNEX 10 OF THE REPORT). The draft circular was prepared by an informal group that included INTERTANKO as a participant. The draft circular was approved subject to an MEPC 59 concurrent decision. This was the first time that the subject was expanded to include all MARPOL cargoes. The justification for this was that, if bio-fuels alone were to be specifically referenced, a definition of bio-fuel materials would be required. Currently, no such categorization is defined and bio-fuel materials are specified only in so far as they are MARPOL cargoes. If bio-fuels were to be specifically identified, it was recognised that a flexible mechanism to update the list would be needed in view of the continuous development of new materials for bio-fuel usage. Accordingly, it was proposed that the circular should relate to blending during the sea voyage of MARPOL cargoes and the draft text was developed to reflect this approach. MEPC 59 MEPC 59, in 2009, agreed to the draft Circular proposed by MSC 86 and clarified that the title During the Sea Voyage would be retained as final. The committee went on and approved the BLG 14 subcommittee plan, which included the matter of blending. Finally, the circular was issued on the 3 rd August 2009 as MSC-MEPC.2/ Circ.8. ESPH 15 ESPH 15 noted that although no new papers were submitted, there was still a need for clarification of what in port meant and the following definitions were submitted to BLG 14. In port might be defined as an area within which vessels load or discharge cargo whilst at a safe berth where:.1 both component products come from the shore facility at the safe berth and are blended on board; or.2 one product comes from the shore facility and the other product is already on board; or.3 one product comes from the shore facility and the other product is delivered from a Barge/coaster moored alongside the vessel while at the safe berth; or.4 one product is delivered from a barge/coaster moored alongside the vessel while at the safe berth and the other product is already on board. The above definitions where suggested in previous discussions of the working group. In this working group we also saw, for the first time, the opinion that the ban should not apply to offshore support vessels. This opinion was brought forward by the US. 22 Blending/Commingling of LPG Cargoes On Board Gas Carriers

28 Annex 1 BLG 14 BLG 14 in 2010, after considering the report of ESPH 15, asked MEPC 61 to note the following: The definitions for in port and blending in port, as proposed by the Group, and a request for any additional views or information on this issue to be made available for the next ESPH meeting. The discussions on the development of mandatory provisions to prohibit the blending of MARPOL cargoes on board during the sea voyage and the proposed draft text developed by the Chairman for further discussion at ESPH 16. Proposed draft below: Draft text for the proposed regulation to prohibit the blending of MARPOL cargoes on board during the sea voyage: The physical blending on board of MARPOL cargoes during the sea voyage to create new products is prohibited. Physical blending refers to the process whereby the ship s cargo pumps and pipelines are used to internally circulate two or more different cargoes with the intent to achieve a cargo with a different product designation. This prohibition does not preclude the Master from undertaking cargo transfers for the safety of the ship or protection of the marine environment. MSC 87 AND MEPC 61 In 2010, both committees agreed that the issue of blending should remain on the agendas of the upcoming BLG and ESPH meetings. ESPH 16 ESPH 16 met in 2010 and, in its report to the subcommittee, it noted the following: As physical blending is mainly a safety related issue, the appropriate convention for the new regulation is SOLAS and a cross reference could be introduced into MARPOL Annex 1 and Annex II in order to consolidate the prohibition control. They further recognised, after considering papers by the International Marine Contractors Association (IMCA) and the International Association of Drilling Contractors (IADC), that the view US had expressed, during ESPH 15, that the ban was never intended for offshore support vessels, must be reflected in the proposed draft. The working group also proposed that the item on bio-fuels and blending should be removed from their agenda as they had concluded the work. It is also important to note that after extensive debate, which took into account all of the issues raised and recalled an earlier direction from the BLG subcommittee, the Group concluded that operational procedures for blending operations in port should not be addressed within the Guidelines. Blending/Commingling of LPG Cargoes On Board Gas Carriers 23

29 Annex 1 Draft regulation, as per ESPH 16, which the working Group asked BLG 15 to endorse. Draft Text for the Proposed Regulation to Prohibit the Blending of [Cargoes Subject to Annex I and Annex II of MARPOL] [Bulk Liquid Cargoes] On Board During the Sea Voyage. The physical blending on board of MARPOL regulated cargoes during the sea voyage to create new products is prohibited. Physical blending refers to the process whereby the ship s cargo pumps and pipelines are used to internally circulate two or more different cargoes with the intent to achieve a cargo with a new product designation. This prohibition does not preclude the Master from undertaking cargo transfers for the safety of the ship or protection of the marine environment. The prohibition does not apply to the blending of products for use in the search and exploitation of sea-bed mineral resources on board vessels used to facilitate such operations. BLG 15 BLG 15, in 2011, clarified the whole issue and proposed the draft that was actually included in the regulation. With regard to the need to incorporate guidance for blending operations carried out in a port, the subcommittee was advised that, after carefully reviewing a number of practical considerations which had been raised, the group had concluded that detailed operational procedures for blending operations in port should not be addressed within the proposed Guidelines as these need to be controlled and monitored by the port authorities concerned. With respect to the prohibition of blending activity during the sea voyage, the subcommittee noted that a new draft had been developed addressing recent input in relation to the needs of the offshore support service industry. It was requested that this draft should now be finalised by the Working Group, addressing particularly the issue of how best to describe the cargoes involved. The delegation of France proposed that the regulation should apply to all bulk liquid cargoes and that it was not appropriate to refer to MARPOL cargoes within SOLAS. This proposal was also approved, as can be seen in the final draft. MSC 89 was invited to: Approve the draft amendments to SOLAS chapter VI, regarding the prohibition of the blending of bulk liquid cargoes during the sea voyage, with a view to subsequent adoption by the next MSC. This is the draft amendment that was proposed for approval. SOLAS CHAPTER VI CARRIAGE OF CARGOES Regulation The following new regulation 5-2 is added after regulation 5-1: Regulation 5-2 Prohibition of the blending of bulk liquid cargoes during the sea voyage 1 The physical blending of bulk liquid cargoes during the sea voyage is prohibited. Physical blending refers to the process whereby the ship s cargo pumps and pipelines are used to internally circulate two or more different cargoes with the intent to achieve a cargo with a new product designation. This prohibition does not preclude the master from undertaking cargo transfers for the safety of the ship or protection of the marine environment. 24 Blending/Commingling of LPG Cargoes On Board Gas Carriers

30 Annex 1 2 The above prohibition does not apply to the blending of products for use in the search and exploitation of sea-bed mineral resources on board ships used to facilitate such operations. MSC 89 MSC 89, in 2011, approved the draft and requested its circulation, as appropriate, in order to be approved by the next session of the MSC (90). MSC 90 MSC 90 (2012) finally approved the regulation in its current form by resolution MSC (325)90. Paragraph 3 + (par 4) Paragraph 3 resulted from the environmental accident in Abidjan involving the vessel PROBO KOALA. The Netherlands submitted paper 56/22/2, which described the accident, to MEPC in The possibility was presented that the cargo residues, which caused the accident, were in fact a byproduct of the industrial production process that took place on board the vessel. The Netherlands came back with another paper, to MSC 89/11/1, where it was confirmed that according to the criminal investigation, an industrial process had taken place on board PROBO KOALA and that this, in turn, resulted in the accident. The Netherlands therefore proposed the insertion of another regulation, after 5-2, which would prohibit production processes on board during a sea voyage. MSC 89 MSC 89 decided to ask BLG 16 to consider the proposal to prohibit industrial production processes on board a vessel and revert with its proposal to MSC 90. BLG 16 BLG 16 considered the proposal of the Netherlands and agreed with it, proposing the draft shown below to MSC 90 and noting the need for additional information to be supplied to MSC 90 regarding the activity of ships engaged in oil related activities. Regulation 5-3 Prohibition of the production process during the sea voyage 1 Any production process on board a ship during the sea voyage is prohibited. Production processes refer to any deliberate operation whereby a chemical reaction between a ship s cargo and any other substance or cargo takes place. MSC 90, in 2012, accepted the proposal and agreed that the drafted option 2 included in paper MSC 90/14/2 should be the one that the drafting committee must use to prepare the regulation. Blending/Commingling of LPG Cargoes On Board Gas Carriers 25

31 Annex 1 MSC 90 (2012) finally approved the regulation, in its current form, with resolution MSC (325)90. Regulation 5-2 Prohibition of the blending of bulk liquid cargoes and production processes during sea voyages 1 The physical blending of bulk liquid cargoes during sea voyages is prohibited. Physical blending refers to the process whereby the ship s cargo pumps and pipelines are used to internally circulate two or more different cargoes with the intent to achieve a cargo with a new product designation. This prohibition does not preclude the master from undertaking cargo transfers for the safety of the ship or protection of the marine environment. 2 The prohibition in paragraph 1 does not apply to the blending of products for use in the search and exploitation of seabed mineral resources on board ships used to facilitate such operations. 3 Any production process on board a ship during sea voyages is prohibited. Production processes refer to any deliberate operation whereby a chemical reaction between a ship s cargo and any other substance or cargo takes place. 4 The prohibition in paragraph 3 does not apply to the production processes of cargoes for use in the search and exploitation of seabed mineral resources on board ships used to facilitate such operations. Further Developments PPR 1 Pollution Prevention and Response (PPR) 1, in 2014, noted the discussions of the group regarding the need for further clarification, based on the significant numbers of questions received by Member Governments, international organisations and the IMO Secretariat, as a consequence of the new SOLAS regulation VI/5-2. This was related to the prohibition of the blending of bulk liquid cargoes and production processes during sea voyages that entered into force on 1 January The subcommittee invited interested Member Governments and international organisations to submit relevant proposals to MSC 93. MSC 93 MSC 93, in 2014, under agenda item 20, received a paper submitted by Liberia, the Marshall Islands, Norway, Panama, ICS, BIMCO and INTERTANKO. The paper sought clarification on the following areas: 1. The definition of sea voyage? 2. The meaning of two or more different cargoes ; 3. What does a new product designation mean? 4. What is meant by chemical reaction in the context of a production process? 5. The application to the carriage of gases. 6. The correct interpretation of the words process whereby the ship s cargo pumps and pipelines are used to internally circulate two or more different cargoes with the intent to achieve a new product designation 26 Blending/Commingling of LPG Cargoes On Board Gas Carriers

32 Annex 1 7. The application of this regulation to accepted practices, such as the mixing of additives. It was proposed that the committee should instruct PPR 2 to develop guidance. The committee agreed with the proposal and instructed PPR to consider the questions arising out of MSC 93 and to subsequently revert to MSC 95. PPR 2 PPR 2, in 2015, noted that in the interim period, the co-sponsors had further considered the issue, had reached a better understanding of the new SOLAS regulation VI/5-2 and were of the view that there was no need to seek further guidance on the regulation. Consequently, the subcommittee invited MSC 95 to note this above view. MSC 95 MSC 95, in 2015, noted that a better understanding of SOLAS regulation VI/5-2 Prohibition of the Blending of Bulk Liquid Cargoes and Production Processes During Sea Voyages, had been reached and, therefore, there was no need to develop further guidance on the application of this regulation. In this context, the delegation of the Netherlands expressed the view that this better understanding of SOLAS regulation VI/5-2 ought to ensure the correct interpretation and the full and proper implementation of this regulation. Blending/Commingling of LPG Cargoes On Board Gas Carriers 27

33

34 Annex 2

35 Annex 2 Annex 2 The model INTERTANKO Blending Clause has been adapted specifically for the blending on board of propane and butane. The INTERTANKO Blending Clause deals, in turn, with: The Charterer s option to blend. The safety of the operation. Bill of lading (B/L) issues. Indemnity provisions. First, the Clause gives charterers the option to instruct owners to blend propane and butane cargoes, provided that the process the owner is asked to conduct is one he can perform both legally and safely. Note that the blending must be carried out at anchorage or berth within port limits, i.e. not at sea. Second, the charterer needs to comply with the documentary aspects of the blending by providing new paperwork for the new product. When cargoes are blended the nature of the cargo is changed. Owners will, therefore, need to retrieve the original B/Ls and issue new ones that properly reflect the process that has occurred i.e. describe the cargo as a blend and state the two places of shipment. It would not be possible to use the place of origin of the original shipment alone as this would be a mis-description. In addition, it must be possible to tell from the new B/L what the commingled products were and what the new, resultant product is. The Clause includes indemnities against the consequences of compliance with charterers requests to blend propane and butane, such as if the resultant cargo becomes contaminated or defective in any way. If used, therefore, there would be no need for a separate letter of indemnity (LOI) as this is built into the charter party clause itself. It would be possible for owners to instead use their P&I Clubs recommended forms of LOI, suitably adapted to the circumstances of the charterer s request. Below the Clause, is an example of a more comprehensive LOI that incorporates some additional provisions. Please note that an LOI is only as good as the entity providing it. INTERTANKO Blending Clause for Propane and Butane Cargoes INTERTANKO BLENDING CLAUSE FOR PROPANE AND BUTANE CARGOES 1. Subject to the technical characteristics of the Vessel, Charterers shall have the option of instructing the Vessel to blend propane and butane cargoes on board the Vessel provided that such blending/ commingling operations: (a) (b) (c) can be performed in accordance with all applicable laws, rules and regulations; are not contrary to the recommendations of the Vessel s flag State or any other relevant authority; are not determined by the Master or Owners to be unsafe; 30 Blending/Commingling of LPG Cargoes On Board Gas Carriers

36 Annex 2 (d) are carried out only at a safe anchorage or berth and within port limits. All expenses and costs incurred in connection with such blending, including the cost of bunkers consumed, shall be for the Charterers account. 2. (a) Charterers shall, before the commencement of loading of any propane or butane and after any blending/commingling of cargoes, provide the master with a Material Safety Data Sheet (MSDS) which shall contain safety, handling and environmental information. (b) (c) (d) Charterers warrant that the propane and butane cargoes to be blended on board are stable and compatible and that there will be no precipitation of ice/hydrates deposits in cargo tanks, pipes, valves and cargo machinery. Charterers shall produce and deliver to Owners all original bills of lading issued in respect of the propane and butane cargoes loaded by the Vessel prior to blending. Owners shall on completion of blending sign new bills of lading for the blended cargo containing a full and accurate description of the cargo, together with the dates and places of shipment and description and quantities of the propane and butane cargoes which have been blended. 3. Charterers hereby undertake: (a) (b) (c) to indemnify Owners and to hold Owners harmless in respect of any liability, loss, damage or expense of whatever nature, including but not limited to, any liability in connection with change of quantity, quality and pumpability, and/or any damage to the Vessel including tanks, pumps and lines, which Owners may sustain by reason of blending/commingling of cargoes on board the Vessel and/or by issuing new bills of lading in connection therewith. in the event of any proceedings being commenced against Owners in connection with the blending of propane and butane cargoes as aforesaid and/or issuing of new bills of lading in connection therewith, to provide Owners from time to time on demand, with sufficient funds to defend the same. if, in connection with the blending of propane and butane cargoes as aforesaid and/or issuing of new bills of lading in connection therewith, the Vessel or any other Vessel or property belonging to the Owner should be arrested or detained or, if the arrest or detention thereof should be threatened, promptly to provide Owners on demand with such bail or other security as may be required to prevent such arrest or detention, or to secure the release of such Vessel or property and to indemnify Owners in respect of any loss, damage or expenses caused by such arrest or detention, whether or not the same be justified. 4. In addition to the foregoing undertakings by the Charterers, Owners shall in any event have the option to require a Letter of Indemnity from an entity acceptable to Owners in wording including the provisions of Sub-clause 3 before complying with Charterers orders to blend propane and butane cargoes on board. 5. [Voyage charterers only: Charterers shall pay compensation at the demurrage rate for all additional time spent as a result of the exercise of the option under Sub-clause 1 without any deduction whatsoever.] Blending/Commingling of LPG Cargoes On Board Gas Carriers 31