VERIFICATION OF ONSHORE LNG AND GAS FACILITIES

Transcription

1 SERVICE SPECIFICATION DNV-DSS-315 VERIFICATION OF ONSHORE LNG AND GAS FACILITIES OCTOBER 2010

2 FOREWORD (DNV) is an autonomous and independent foundation with the objectives of safeguarding life, property and the environment, at sea and onshore. DNV undertakes classification, certification, and other verification and consultancy services relating to quality of ships, offshore units and installations, and onshore industries worldwide, and carries out research in relation to these functions. DNV service documents consist of amongst other the following types of documents: Service s. Procedual requirements. Standards. Technical requirements. Recommended Practices. Guidance. The Standards and Recommended Practices are offered within the following areas: A) Qualification, Quality and Safety Methodology B) Materials Technology C) Structures D) Systems E) Special Facilities F) Pipelines and Risers G) Asset Operation H) Marine Operations J) Cleaner Energy O) Subsea Systems The electronic pdf version of this document found through is the officially binding version Det Norske Veritas Any comments may be sent by to For subscription orders or information about subscription terms, please use Computer Typesetting (Adobe Frame Maker) by Det Norske Veritas If any person suffers loss or damage which is proved to have been caused by any negligent act or omission of Det Norske Veritas, then Det Norske Veritas shall pay compensation to such person for his proved direct loss or damage. However, the compensation shall not exceed an amount equal to ten times the fee charged for the service in question, provided that the maximum compensation shall never exceed USD 2 million. In this provision "Det Norske Veritas" shall mean the Foundation Det Norske Veritas as well as all its subsidiaries, directors, officers, employees, agents and any other acting on behalf of Det Norske Veritas.

3 Changes Page 3 Background The experience gained from past projects specific to onshore LNG and Gas installations is incorporated in this Service. Introduction The suit of inter-related DNV-OSS documents consist of a general description of the verification systematics (DNV-OSS-300) and object specific documents. This DNV-OSS-315 offers the reader the application of the common framework and overview of processes in risk verification, to process facilities. This Service : Introduces a levelled description of verification involvement during all phases of an asset's life. Facilitates a categorisation into risk levels High, Medium and Low, assisting in an evaluation of the risk level. Assists in planning the verification through the making of a Verification Plan, and describes the DNV documentation of the process throughout. Provides an international standard allowing transparent and predictable verification scope, as well as defining terminology for verification involvement. Changes Two new DNV service document types have been introduced as from October 2010 to be used for services that are not limited to offshore and/or not to be considered as DNV Rules for classification of Ships or HSLC/NSC. The documents have been named; DNV Service s (DSS) and DNV Standards (DS). This service specification; DSS-315: Verification of Onshore LNG and Gas Facilities replaces the previous version of the document with short name; DNV-OSS-315. There are no changes in content, only how the document is referred to, as OSS now will be used for Service s intended for Offshore use.

4 Page 4 Contents CONTENTS Sec. 1 General... 6 A. General... 6 A 100 Introduction... 6 A 200 Objectives... 6 A 300 Scope of application for verification... 6 A 400 Structure of this document... 7 B. Risk Based Verification... 7 B 100 General... 7 B 200 Verification s Role in Hazard Management... 7 B 300 Risk-based Verification Planning... 7 B 400 Certificate of Conformity... 8 C. Definitions and Abbreviations... 9 C 100 General... 9 C 200 Abbreviations... 9 C 300 Verbal forms... 9 C 400 Definitions... 9 D. References D 100 List of Internal References D 200 List of External References D 300 List of Technical s Sec. 2 Principles of Risk Based Verification A. Purpose of Section A 100 Objectives B. Verification Principles B 100 Purpose of Verification B 200 Verification as a Complementary Activity B 300 Risk-based Levels of Verification C. Selection of Level of Verification C 100 Selection Factors C 200 Overall Verification Objective C 300 Assessment of Risk C 400 Technical Innovation and Contractor Experience C 500 Quality Management Systems D. Communications D 100 Notification of Verification Level D 200 Obligations Sec. 3 Service Overview A. General A 100 Objectives B. Service Process B 100 General Principles B 200 Simplified verification planning B 300 Selection of level of verification B 400 Codes, standards and reference documents C. Project Initiation C 100 Verification during conceptual design D. Project Execution D 100 General D 200 Verification of overall project management D 300 Verification during design D 400 Verification during construction E. Verification Documents E 100 General App. A Selection of Verification Level... 24

5 Contents Page 5 A. General A 100 General principles B. Trigger Questions B 100 Overall project objective and goals B 200 Assessment of risk B 300 Technical innovation B 400 Contractors experience B 500 Quality management systems App. B Generic Detailed Verification Scopes of Work Tables A. Purpose A 100 Introduction B. Critical Elements B 100 Critical Elements and Components App. C Examples of Verification Documents A. Verification Documents A 100 Validity of verification documents A 200 Statement of Compliance A 300 Verification Reports A 400 Verification Comments A 500 Audit report A 600 Survey Reports B. Use of quality management systems B 100 General B 200 Quality plans B 300 Inspection and test plans B 400 Review of quality management programme C. Document forms C 100 Introduction C 200 Statement of Compliance C 300 Verification comments sheet C 400 Survey report... 75

6 Page 6 Sec.1 SECTION 1 GENERAL A. General A 100 Introduction 101 This Service (DNV-DSS-315) gives the criteria for and guidance on verification of the integrity (safety, environmental and reliability) of parts of onshore LNG (both import and export) and gas receiving facilities during various phases of new developments and modifications. 102 This document is an object-specific Service conforming to the philosophy defined in the top level document DNV-OSS-300 Risk Based Verification. A 200 Objectives 201 The objectives of this specification are to: describe DNV s verification services for onshore LNG and gas receiving facilities during design, construction, and commissioning, provide guidance for the Client and other parties for the selection of the level of involvement of those carrying out verification activities, whether quantitatively as a result of a quantitative risk assessment or qualitatively by simple trigger questions. provide a common platform for defining and manage the scope and extent of verification activities. A 300 Scope of application for verification 301 This specification may be adopted for the verification of parts of onshore liquefied natural gas and gas receiving facilities during the project development phase starting from detailed design up to and including commissioning and start-up. 302 The LNG and gas facilities covered in this specification comprise the following critical systems: support structures and foundations non-cryogenic critical vessels, piping and equipment cryogenic critical vessels, piping and equipment (including transfer piping) LNG storage tanks open hazardous drains pressure relief systems ignition prevention and control systems emergency shutdown system blowdown system fire and gas detection system fire and blast protection emergency power supply escape and evacuation means emergency communication systems environmental control. which are applied in various configurations and tailored to each particular project s specific requirements. The specification does not cover the following: Jetty, Mooring and Marine related facilities (with the exception of the shore based transfer systems and associated safety equipment. Jetty structures are covered by DNV-OSS-304). the import and export pipelines within plant battery limits (this is covered under DNV-OSS-301) 303 Compliance to CE Marking Directives such as Pressure Equipment Directive (PED/97/23/EC), Machinery Equipment Directive 98/37/EC and Explosion Proof Devices ATEX 94/9/EC which are applicable in the European Community are not covered in this specification. 304 This DSS describes the principle of a levelled verification involvement, where the extent of verification involvement is linked to the risks associated with part or all of the facility. 305 The primary scope of DNV s verification work is the verification of the integrity of gas facilities and the safety of its personnel and those in close proximity to it. Other aspects, such as the verification of the environmental safety of the facility, or its ability to meet the Client s business objectives, may be included in DNV s scope of work if desired by the Client. 306 Statutory verification (or certification) of onshore gas facilities to the requirements of National Authorities is not included specifically in the scope of application of this DSS. Such verification (or

7 Sec.1 Page 7 certification) shall be governed by the regulations of the relevant Authority. However, if detailed procedures are not given by these Authorities, this DSS shall be used by DNV as a guideline for its work. A 400 Structure of this document This document consists of three sections and 3 appendices: Section 1 explains the relationship between this document and DNV s overall risk-based verification process. Section 2 explains the principles of DNV s verification process with its risk-based levels of involvement, and how the level of involvement for a particular project is defined. Section 3 describes the verification process and the activities for each of the project phases. Appendix A gives guidance on the selection of verification level, preferably as the result from a quantitative risk assessment or alternatively, qualitatively as a result of the posing of trigger questions. Appendix B gives a generic detailed scope of work tables for all phases and all levels of involvement. These tables are the basis for the development of project-specific scopes of work tables. Appendix C gives example verification documents and describes the documents issued during and as a result of the verification process. The use of quality management systems is addressed here also. B. Risk Based Verification B 100 General 101 This DSS describes the principles of verification of the safety and integrity of natural gas facilities for all phases. The risk based verification concept is described in DNV-OSS-300 and visualized in Figure 1 overleaf. 102 The Verification Plan is the pivot element, with the Asset, Risk Assessment and Definition of Involvement Level as input and the Verification Execution being the implementation. B 200 Verification s Role in Hazard Management 201 Major Accident Hazards are identified in a safety assessment by an analysis of the risks to the facility s personnel using suitable definitions of such accidents. 202 Critical Elements are those parts of the facilities and such parts of the facilities (both hardware and software), or any part thereof: the failure of which could cause or contribute substantially to; or a purpose of which is to prevent; or limit the effect of a major accident and/or impact on project specific objectives. 203 Performance requirements are statements which can be expressed in qualitative or quantitative terms, of the performance required of a system, item of equipment, person or procedure, and which is used as the basis for managing the risk e.g. planning, measuring, control or audit through the lifecycle of the facilities. It can be: a criterion or a standard of performance with which assessed performance may be compared an availability/reliability standard; a probability that an HSE or Business Critical system will be available for its required function under a defined load an endurance period: a period of time over which an HSE or Business Critical function is stated to remain functional under a defined load an impairment criterion/threshold: a specified condition, which defines impairment of an HSE or Business Critical function. 204 Verification Plan is a document describing the process and activities required for verifying that all Critical Elements meet project objectives. This will form the scope of work for the Verifier. 205 Verification is the process whereby DNV as an independent and competent party assesses that a Critical Element will be, has been, and will continue to be suitable to meet project performance requirements. A graphical representation of this process is shown in Figure 1. B 300 Risk-based Verification Planning 301 The selection of the level of verification shall depend on the level of risk a particular item adds to the overall risk to the facility. The planning can be simplified or detailed. This is further described in DNV-OSS This Service addresses both approaches as input into the preparation of a verification plan.

8 Page 8 Sec.1 Guidance note: Risk can be evaluated based on safety, environmental impact, business, schedule, public relations, reputation or other criteria set by the Client. The generic scopes of work tables are generated based on safety and integrity risks. Where other risks, such as environment or business, are required by the Client to be considered during the verification process, the principles set out in this document may be used to modify the generic scopes of work tables given in Appendix C. ---e-n-d---of---g-u-i-d-a-n-c-e---n-o-t-e In view of the complexity of many gas facilities, DNV recommends strongly that the verification level be derived from the results of risk assessments of the facility. Guidance note: Only for simple natural gas facilities, with consequently lower levels of risk would DNV consider that simplified verification planning using the trigger questions and generic Verification scope set out in Appendices A and B to be justifiable. For novel technology for which there are no applicable standards to verify against, Technology Qualification according to procedures as defined in "DNV-RP-A203 Qualification Procedures for new Technology" can be used as input for Verification. ---e-n-d---of---g-u-i-d-a-n-c-e---n-o-t-e--- Asset Planned Asset including overall company acceptance criteria, performance requirements and verification objectives Risk Assessment including identification of hazards and ranking of hazards based on risk evaluation Definition of Verification Involvement including detailing of acceptance criteria, and performance requirements Verification Plan including list of verification activities Verification Execution including reporting of compliance or non-compliance A sset Completed Figure 1 DNV risk based verification Flow-Chart B 400 Certificate of Conformity 401 A Certificate of Conformity may be issued by DNV to confirm compliance according to the scope of work. An example is given in Appendix C. 402 The DNV Certificate of Conformity confirms that, after performing verification according to a DNV defined scope of work, DNV has found the natural gas facility to conform to a given DNV Standard or acceptable international standards. 403 Usually DNV performs the complete scope of work for all phases. However, in some circumstances, DNV may accept external Independent Review Certificates, for example for pressure vessels. This shall be reflected in the text of the Certificate.

9 Sec.1 Page A Statement of Compliance is issued in all other instances where Certificate of Conformity is not applicable. See Appendix C for further details. C. Definitions and Abbreviations C 100 General 101 Relevant definitions in EN 1473:2007 also apply to this DSS. C 200 Abbreviations ALARP = As Low as Reasonably Practicable C&E = Cause and Effect CFD = Computational Fluid Dynamics D&ID = Ducting and Instrumentation Diagram EC = European Community ESD = Emergency Shutdown System ESDV = Emergency Shutdown Valve ESSA = Emergency Systems Survivability Analysis FERA = Fire and Explosion Risk Analysis FGS = Fire and Gas System HAZID = Hazard Identification (Assessment) HAZOP = Hazard Operability (Study) HVAC = Heating, Ventilation and Air Conditioning HIPPS = High Integrity Pressure Protection System ICS = Integrated Control System LNG = Liquefied Natural Gas MPQT = Manufacturing Procedure Qualification Testing MPS = Manufacturing Procedure NDT = Non-Destructive Testing OSS = (Offshore) Service PCS = Process Control System PFD = Process Flow Diagram PFP = Passive Fire Protection PSD = Process Shutdown System QRA = Quantitative Risk Analysis RAM = Reliability Availability Maintainability SIL = Safety Integrity Level UPS = Uninterruptible Power Supply VAR = Verification Activity Report WPS = Welding Procedure WPQR = Welding Procedure Qualification Record C 300 Verbal forms 301 Shall : Indicates requirements strictly to be followed in order to conform to this DSS and from which no deviation is permitted. 302 Should : Indicates that among several possibilities, one is recommended as particularly suitable, without mentioning or excluding others, or that a certain course of action is preferred but not necessarily required. Other possibilities may be applied subject to agreement. 303 "May": Verbal form used to indicate a course of action permissible within the limits of the DSS. C 400 Definitions 401 Client: DNV s contractual partner. It may be the purchaser, the owner or the contractor. 402 phase: All phases during construction, including fabrication, installation, testing and precommissioning, up until the installation or system is mechanically complete and safe to receive and/or export gas or LNG. In relation to onshore facilities, this include both onsite and offsite fabrication, site assembly and integration, tie-in, pressure testing, pre-commissioning and repair. 403 Commissioning phase: Activities after pre-commissioning when gas or LNG are introduced into the installation up until the complete installation is rendered safe and operable for intended operations. 404 Critical Element: Parts of an installation which prevent, control or mitigate identified major hazards and the failure of which could cause or contribute substantially to impairment of the defined safety objectives. Safety Critical Elements represent the barriers which prevent, control or mitigate the major accident scenarios. 405 Critical Equipment: Item of equipment or component or assembly the failure of which could cause or

10 Page 10 Sec.1 contribute substantially to impairment of the defined safety objectives. 406 : All related engineering to design of the onshore facilities, including structural supports, pressure containment, safety systems, as well as material and corrosion aspects. 407 phase: An initial phase that takes a systematic approach to the production of specifications, drawings and other documents to ensure that the onshore installation meets specified requirements (including design reviews to ensure that design output is verified against design input requirements). 408 Fabrication: Activities related to the assembly of objects with a defined purpose. In relation to the onshore facilities, fabrication typically refers to the process of assembly or transformation of e.g. plates, profiles and pipes etc into production equipment and facilities. These may be built fully on-site or built offsite in parts and transferred to site for assembly or integration. 409 Hazard: A deviation (departure from the design and operating intention) which could cause damage, injury or other form of loss (Chemical Industries Association HAZOP Guide). 410 HAZID (HAZard Identification): A technique for the identification of all significant hazards associated with the particular activity under consideration. (ISO Risk Management - Risk Assessment Techniques). 411 HAZOP (HAZard OPerability study): The application of a formal systematic critical examination to the process and engineering intentions of new or existing facilities to assess the hazard potential of mal-operation or mal-function of individual items of equipment and their consequential effects on the facility as a whole (Chemical Industries Association HAZOP Guide). 412 Manufacture: Making of articles or materials, often in bulk. In relation to onshore facilities, this typically refers to activities for the production of various components under contracts from one or more contractor or supplier. 413 Major Hazard: A deviation (departure from the design and operating intention) which could cause unacceptable damage, injury or other form of loss. 414 Onshore Gas facilities: Onshore process plants for regasification of LNG or receiving, treatment and/or liquefaction of natural gas 415 Operations (phase): The phase when the gas facilities are being used for the purpose for which it was designed. 416 Performance Requirement: A description (qualitative or quantitative statement) of the essential requirements to be met, maintained or provide on demand by a system or item of equipment in order for it to satisfactorily fulfil its purpose. 417 Risk: The qualitative or quantitative likelihood of an accident or unplanned event occurring, considered in conjunction with the potential consequences of such a failure. In quantitative terms, risk is the quantified probability of a defined failure mode times its quantified consequence. Guidance note: Risk is not only related to physical failure modes, but also to operational errors, human errors and so on. For some risks the functional failures or physical failure modes contributes less than 20% while more than 80% of the risk relates to other devices. ---e-n-d---of---g-u-i-d-a-n-c-e---n-o-t-e Risk Reduction Measures: Those measures taken to reduce the risks to the operation of onshore facilities and to the health and safety of personnel associated with it or in its vicinity by: reduction in the probability of failure mitigation of the consequences of failure. Guidance note: The usual order of preference of risk reduction measures is: inherent safety prevention detection control mitigation emergency response. ---e-n-d---of---g-u-i-d-a-n-c-e---n-o-t-e Project Objectives: The safety, integrity and business goals for the design, construction, operation and decommissioning of the gas facilities including acceptance criteria for the level of risk acceptable to the Client. 420 Safety Objectives: The safety goals in terms of functionality, reliability/availability and survivability for the design, construction and operation of the natural gas facility including acceptance criteria for the level of risk acceptable to the Client.

11 Sec.1 Page Statement of Compliance: A statement or report signed by a qualified party affirming that, at the time of assessment, the defined onshore installation phase, or collection of activities, met the requirements stated by the Client. 422 Verification: An examination to confirm that an activity, a product or a service is in accordance with specified requirements. Guidance note: The examination shall be based on information, which can be proved true, based on facts obtained through observation, measurement, test or other means. It should be noted that there is a distinct difference between verification and certification. The scope of work for verification is ultimately decided by the customer, while the scope of work for certification is ultimately decided by DNV (or the national authorities when DNV issues certificates on their behalf). ISO 8402: 1994 definition: Verification: Confirmation by examination and provision of objective evidence that specified requirements have been fulfilled. ---e-n-d---of---g-u-i-d-a-n-c-e---n-o-t-e Verification Plan: A plan which defines the scope of the work (sow) for verification. It includes; verification objectives, elements to be verified, performance requirements, level of involvement by party and type of verification activity. (ref. DNV-OSS-300 Sec.2 C) D. References D 100 List of Internal References DNV-OSS-300 Risk Based Verification, 2004, Det Norske Veritas DNV-OSS-301 Certification and Verification of Pipelines, 2000, Det Norske Veritas DNV-OSS-304 Risk Based Verification of Offshore Structures, 2006, Det Norske Veritas DNV-OSS-307 Verification of Process Facilities, 2004, Det Norske Veritas DNV-OSS-309 Verification, Certification and Classification of gas export and receiving terminals, 2009, Det Norske Veritas DNV-RP-A203 Qualification Procedures for New Technology D 200 List of External References A Guide to Hazard and Operability Studies, 1979, Chemical Industries Association Limited, London ISO 8402 Quality Vocabulary, 1994, International Organization for Standardization, Geneva BS 4778 Quality Vocabulary, Part 2 Quality Concepts and Related Definitions, 1991, British Standards Institute, London EN General Criteria for Certification Bodies Operating Product Certification, 1998, European Committee for Standardization, Brussels D 300 List of Technical s Relevant technical specifications which can be used as references are given in Appendix B. The main standards for LNG facilities addressed in this document are: EN1473 Installation and equipment for liquefied natural gas - of Onshore Installations NFPA 59A Standard for Production, Storage and handling of Liquefied Natural Gas.

12 Page 12 Sec.2 SECTION 2 PRINCIPLES OF RISK BASED VERIFICATION A 100 Objectives 101 The objectives of this section are to provide: A. Purpose of Section an introduction to the principles of verification the safety and integrity of onshore LNG and gas receiving facilities an introduction to the principles of risk-based levels of verification activity and guidance on the selection of levels of verification. B. Verification Principles B 100 Purpose of Verification 101 Verification constitutes a systematic and independent examination of the various phases in the life of a natural gas facility to determine whether it has sufficient integrity to meet its safety objectives. 102 Verification activities are expected to identify errors or failures or non-compliance to agreed performance requirements in the safety and integrity-related work associated with the natural gas facility and to contribute to reducing the risks to its operation and to the health and safety of personnel associated with it or in its vicinity. 103 Verification is primarily focused on integrity and human safety, but business risk (cost and schedule) may be addressed also if required by the Client. B 200 Verification as a Complementary Activity 201 Verification shall be complementary to routine design, construction and operations activities and not a substitute for them. Therefore, although verification will take into account the work, and the assurance of that work, carried out by the Client and its contractors, it is possible that verification will duplicate some work that has been carried out previously by other parties involved in the natural gas facility. 202 The verification plan shall be developed and implemented in such a way as to minimise additional work, and cost, to maximise its effectiveness. The development of the verification plan shall depend on the findings from the examination of quality management systems, the examination of documents and the examination of project activities. B 300 Risk-based Levels of Verification 301 To achieve a DNV Certificate of Conformity for a natural gas facility a verification of the activities described by the scope of work defined within this DSS first shall take place. 302 The level of verification activity is differentiated according to the overall risk to the facility and to individual parts of it. If the risk to the facility (or a particular part) is higher, the level of verification involvement is higher. Conversely, if the risk to the facility (or a particular part) is lower, the level of verification activities can be reduced, without any reduction in their effectiveness. 303 The extent of verification of gas facilities is categorised into Low, Medium and High. A summary of the levels of involvement is given in Table It is the prerogative of the Client of the natural gas facility to decide the level of verification. The selection should consider the factors given in Sec.2 C. The selection of the most suitable verification level may be guided by using the information gained from a Quantitative Risk Assessment, or alternatively qualitatively by trigger questions, as described in Appendix A. Further guidance is provided in DNV-OSS-300 Risk Based Verification. 305 Where DNV is issuing the Certificate of Conformity for the facility, DNV will decide on the appropriate scope and use the same type of questions to evaluate the suitability of the selected level. 306 Different levels of verification can be chosen for different phases of the natural gas facility s design, construction or commissioning, or even within the same phase if necessary. For example, the design of a particular component or unit may be innovative and considered high risk whereas the construction and installation methods are well-known and considered low risk. The converse might be true also. 307 The level of verification can be reduced or increased during a phase if the originally chosen level is considered too rigorous or too lenient, as new information on the risks to the natural gas facility becomes available.

13 Sec.2 Page Verification should be planned in close co-operation with the Client and each of its contractors, to provide a scope of work that is tailor-made to the schedule of each production process or activity, i.e. to make the verification activities, surveillance and hold points, an integrated activity and not a delaying activity. Guidance note: Many contractors have adequate quality control systems and quality control departments, with competent personnel to perform, for example, inspection at pressure vessel manufacturers. In that case, not all verification work need be done by DNV personnel. Where applicable, the various inspections may be carried out by competent persons other than DNV personnel. In that situation DNV s verification activities may comprise: reviewing the competence of the contractor s personnel auditing their working methods and their performance of that work reviewing the documents produced by them. ---e-n-d---of---g-u-i-d-a-n-c-e---n-o-t-e Verification will direct greatest effort at those elements of the natural gas facility whose failure or reduced performance will have the most significant impact on safety and integrity. 310 The degree of confidence placed in a certificate by its users depends on their degree of confidence in the verification carried out. Therefore, the level of verification will be stated on the Certificate of Conformity for the facility. 311 If more than one verification level has been used for a phase, then the lowest level will be reported on the facility s certificate, and the additional verification activities will be identified and described in the verification report. C. Selection of Level of Verification C 100 Selection Factors 101 The selection of the level of verification shall depend on the criticality of each of the elements that have an impact on the management of hazards and associated risk levels of the facility. This is illustrated by Figure 1 below. 102 The contribution of each element shall be judged qualitatively and/or quantitatively and shall use, where possible, quantified risk assessment data to provide a justifiable basis for any decisions made. 103 Selection factors are the: overall safety objectives for the facility assessment of the risks associated with the facility and the measures taken to reduce these risks degree of technical innovation in the facility experience of the contractors in carrying out similar work quality management systems of the Client and its contractors.

14 Page 14 Sec.2 Table 2-1 Levels of Verification - Summary of Involvement Level Description of involvement Guidance for application on the level of involvement Low Review of general principles and production systems during design, construction and commissioning Review of principal design documents, construction and commissioning procedures and qualification reports Site attendance only during system testing Less comprehensive involvement than level Medium Proven facility designs with relatively harmless contents and/or installed in benign environmental conditions Established design; manufacturing and installation by experienced contractors Low consequences of failure from a safety point of view (or environmental or commercial, if required) Relaxed to normal completion schedule Mediu m High Review of general principles and production systems during design, construction and commissioning Detailed review of principal and other selected design documents with support of simplified independent analyses Detailed review of construction and commissioning procedures Full time attendance during (procedure) qualification and review of the resulting reports Audit-based or intermittent presence at site Review of general principles and production systems during design, construction and commissioning Detailed review of most design documents with support of simplified and advanced independent analyses Detailed review of construction and commissioning procedures Full-time attendance during (procedure) qualification and review of the resulting reports Full time presence at site for most activities More comprehensive involvement than level Medium Facilities in moderate or well-controlled environmental conditions Facilities with a moderate degree of novelty Medium consequences of failure from a safety point of view, (or environmental or commercial, if required Ordinary completion schedule Facilities with a high degree of novelty or large leaps in technology Extreme environmental conditions Inexperienced contractors or exceptionally tight completion schedule Very high consequences of failure from a safety point of view (or environmental or commercial, if required Note: High, Medium Low Verification Involvement refers to the degree or intensity of verification involvement. Completion schedules affect verification involvement in an indirect but important way. The effect of a tight completion schedule is pressure on the project team to take less time to carry out the various tasks. Tight completion schedules are more prone to run late, thus adding more pressure on the project team. Problems which have been encountered in this situation in the past have included: design reviews not carried out incomplete welding non-destructive testing incomplete missing structural members commissioning incomplete. High Increasing HIGH Risk Probability of Failure MEDIUM Low LOW Consequence of Failure High Figure 1 Selection of the Required Level of Verification

15 Sec.2 Page 15 C 200 Overall Verification Objective 201 An overall verification objective covering all phases of the natural gas facility from design to operation shall be defined by the Client. The objective should address the main integrity goals as well as establishing acceptance criteria for the level of risk acceptable to the Client. Depending on the facility and its location, the risk could be measured in terms of human injuries as well as environmental, political and economic consequences. C 300 Assessment of Risk 301 A systematic review should be carried out to identify and evaluate the probabilities and consequences of failures in the natural gas facility. The extent of the review shall reflect the criticality of the facility, the planned operation and previous experience with similar facilities. This review shall identify the risk to the operation of the facility and to the health and safety of personnel associated with it or in its vicinity. Once the risks have been identified, their extent can be reduced to a level as low as reasonably practicable by means of one or both of: reduction in the probability of failure, mitigation of the consequences of failure. 302 The result of the systematic review of these risks is measured against the safety objectives and used in the selection of the appropriate verification activity level. The result of the systematic review of these risks is measured against the safety objectives and used in the selection of the appropriate verification activity level. C 400 Technical Innovation and Contractor Experience 401 The degree of technical innovation in the natural gas facility system shall be considered. Risks to the facility are likely to be greater for a facility with a high degree of technical innovation than with a facility designed, manufactured and installed to well-known criteria in well-known locations. Similarly, the degree of risk to the facility should be considered where contractors are inexperienced or the work schedule is tight. 402 Factors to be considered in the selection of the appropriate verification level include: degree of difficulty in achieving technical requirements knowledge of similar facilities knowledge of contractors general experience knowledge of contractors experience in similar work. C 500 Quality Management Systems 501 Adequate quality management systems shall be implemented to ensure that gross errors in the work for facility design, construction and operations are limited. 502 Factors to be considered when evaluating the adequacy of the quality management system include: whether or not an ISO 9001 or equivalent certified system is in place results from external audits results from internal audits experience with contractors previous work project work-force familiarity with the quality management system, e.g. has there been a rapid expansion of the work force or are all parties of a joint venture familiar with the same system. D. Communications D 100 Notification of Verification Level 101 An assessment of the required level of verification for a project should be made by the Client before preparing tender documents for design and construction activities. The Client can then specify this level in Invitations to Tender. This will give contractors clear guidance and reference when estimating the extent and cost of efforts associated with verification activities. 102 The required level of verification can be assessed by the Client using this DSS. However, if the Client requires the Contractor to carry out this assessment as part of his response to an Invitation to Tender the Client should provide the necessary information to enable the Contractor to carry out this work. This information should include overall safety objectives for the natural gas facility as well as particulars, such as temperatures, pressures, contents and environmental criteria, commonly contained in a design brief.

16 Page 16 Sec.2 D 200 Obligations 201 To achieve the purpose and benefits of verification the involved parties shall be mutually obliged to share and act upon all relevant information pertaining to the verification scope. 202 The Client shall be obliged to: Inform DNV about the basis for selecting the level of verification and the investigations and assumptions made in this context. Give DNV full access to all information concerning the verification scope for the natural gas facility and ensure that clauses to this effect are included in contracts for parties acting on behalf of the Client and parties providing products, processes and services covered by the verification scope. If information is proprietary and not available, exclusion from verification shall be mutually agreed with DNV. Ensure that DNV is involved in the handling of deviations from specified requirements within the verification scope. Act upon information provided by DNV with respect to events or circumstances that may jeopardise the safety or integrity of the facility and/or the purpose and benefit of verification. Ensure that the Safety Objective established for the facility is known and pursued by parties acting on behalf of the Client and parties providing products, processes and services covered by the verification scope. 203 Second parties shall be obliged to: Perform their assigned tasks in accordance with the safety objectives established for the project. Provide the Client and DNV with all relevant information pertaining to the verification scope. 204 DNV will be obliged to: Inform the Client if, in the opinion of DNV, the basis for selecting the level of verification or the assumptions made in this respect are found to be in error or assessed incorrectly. Inform the Client of events or circumstances that, in the opinion of DNV, may jeopardise the safety or integrity of the facility and/or the purpose and benefit of verification. Effectively perform all verification work and adjust the level of involvement according to the actual performance of parties providing products, processes and services covered by the verification scope.

17 Sec.3 Page 17 SECTION 3 SERVICE OVERVIEW A. General A 100 Objectives 101 The objectives of this section are to provide: an overview of the verification activities details of DNV s verification services for onshore LNG and Gas facilities during design, construction and commissioning phases. B. Service Process B 100 General Principles 101 The description of the process of DNV s verification of LNG and gas receiving onshore facilities is based on distinct project phases and the recognition of key milestones. 102 Verification performed by DNV normally progresses through one or more of these project phases and may include all or selected aspects of the project. Prior to commencement of work, the scope shall be defined in terms of the facilities to be verified (battery limits to be specified), applicable codes and standards and performance requirements, the agreed verification levels and phases to be covered in the Verification Plan. 103 Credit may be given in the Verification Plan, in terms of reduction in the Verification scope, for compliance to National regulations for example EC Pressure Equipment, Machinery Directive and ATEX Directives certified by a Notified Body. This is relevant for projects in the European Union in which the EC Directives are applicable. 104 The risk based verification process is described in relation to the normal project phases: Project initiation: conceptual design. Project Execution: project Management detail design construction manufacturing of process facilities manufacturing and fabrication of process facilities components and assemblies site assembly and integration project completion (pre-commissioning) commissioning issue of as-built and as-installed documentation, issue of operation manuals. B 200 Simplified verification planning 201 The steps in the simplified verification planning are as follows: Use trigger questions to assess the overall risk level of the project (or manageable elements thereof). Evaluate the risk against the relevant project acceptance criteria (often this can be directly tied to the Client s core values, objectives or a sub-set of these) and decide whether the general verification involvement shall be Low, Medium or High. Use the example detailed scope of work tables in Appendix B to make a first draft of a Verification Plan. Generate the project specific Verification Plan by including a project specific engineering judgment or risk analysis to adjust the table to suit the project. Perform the verification execution according to the Verification Plan, making revision to the plan if and when necessary. Report the verification. 202 The trigger questions are included in Appendix A. 203 Generic scopes of work for verification are suggested at the three levels of verification: low (L) medium (M)

18 Page 18 Sec.3 high (H). These are given in the tables in this section. 204 Project specific detailed scope of work descriptions should be made identifying all relevant activities to be verified. Examples of the level of detail are given in Appendix B. 205 It is the tables in this Sec.3 that give the principle difference between the levels of verification involvement. The detailed example tables in Appendix B are to be treated as examples only. They shall not be used without a project specific confirmation of their completeness based on an assessment of the prioritised risks. 206 The project specific scope of work definition, derived from the tables in Appendix B (or similar), shall be part of the final DNV verification report. B 300 Selection of level of verification 301 The selection of the level of verification for the simplified verification planning is facilitated by the trigger questions included in Appendix A. B 400 Codes, standards and reference documents 401 The verification process described in this DNV-DSS is not tailored to a specific technical standard, code or reference document. 402 It is recommended to use internationally recognised codes or standards. Where combinations of standards and external criteria are used the exact terms of reference and documents to be issued shall be agreed at the beginning of the project and formally defined in the contract. 403 It is strongly recommended not to mix standards due to the possible differences in safety philosophies. The use of European standards (EN) is required for compliance to EC directives. Guidance note: Most standards are a coherent collection of requirements for all the relevant aspects of a process system. These aspects, e.g. load and resistance, are normally among themselves adjusted to give an overall acceptable safety level. To pick requirements from different standards can then easily result in unpredictable (low) levels of safety and nonuniform level of safety. ---e-n-d---of---g-u-i-d-a-n-c-e---n-o-t-e--- C. Project Initiation C 100 Verification during conceptual design 101 Verification during the conceptual and or feasibility studies of a project and in the early stages of a project can reduce the need for verification during the design and construction phases, and can reduce costs during the long term operation, inspection and maintenance phases. Table 3-1 Scope of work for initial verification plan Verification activity Level L M H Review of the project conceptual design Review of initial design x x x Review of environmental aspects x x Review of project schedule risks x x Review of business risk x x D. Project Execution D 100 General 101 All design, construction and commissioning aspects, relevant to an onshore LNG and Gas Facility, shall be covered by a verification process. 102 In this specification the split in the scope of work between design and construction is made between sets of performance requirements developed during design and a description of the steps necessary to satisfy the specification (procedures) showing how construction verification activities will be implemented.

19 Sec.3 Page 19 Guidance note: The split between design and construction phases may vary, but it is useful to spend some time on the definition to reduce interface problems later. ---e-n-d---of---g-u-i-d-a-n-c-e---n-o-t-e--- D 200 Verification of overall project management 201 Verification of the overall project management is the examination of the means of controlling the entire onshore LNG and Gas Facilities development project, or the phase for which verification is undertaken. 202 This verification should confirm that the necessary controls are in place to ensure adequate information flow across the various interfaces. It is especially important where separate contractors have been employed for different phases of the project such as design and installation. 203 Typically, the documentation produced is expected to be in line with ISO 9000 requirements. Table 3-2 Scope of work for verification of overall project management Verification activity Level L M H Review of the project management process by: Review of project quality management documentation. x x x Audit of project quality management system x x Review of sub-contractor control x x Review of interface controls x x Review of methods of information flow including document control x x 204 The verification of the overall project management quality system and documentation is optional. The reviews and audits should typically be performed if an extensive verification of a project is performed, while may be omitted for smaller sub-phase verifications. D 300 Verification during design 301 verification is the examination of the assumptions, methods and results of the design process and is performed at the specified level of verification to ensure that the specified requirements of the onshore facilities will be achieved. 302 verification should consist of one, or more, of the following: review of specifications for design (asset specifications) review of design reports and drawings review of technology qualification program and associated results (for new technology) performing independent calculations audit of project quality management system review of specifications for construction, installation and operations, resulting from design. 303 The documents that shall be produced in the project should as a minimum satisfy the requirements of the selected code applicable for the project. 304 Definition of scope of work for verification of design should follow Table 3-3. Table 3-3 Scope of work for verification of design Verification activity Level L M H Review of specifications for design by: Review of the design basis with emphasis on the design criteria x x x Review of design reports and drawings by: Review of the main documentation to ensure that the main load conditions have been accounted for in design, that the governing conditions are identified, and that the x x x chosen design philosophies are in accordance with specified codes and standards Evaluation of the main methods used and spot checks of the input data and the calculation results x x Detailed review of main design reports x Performing independent calculations by: Check of pressure containment or overall integrity x x x Simplified independent analysis and calculation(s) performed by spot checks x x Advanced independent analysis and calculation(s) performed by spot checks x