In half a century of operations, the LNG industry has built up an enviable safety record. A key contributor to this has been the Society of International Tanker and Terminal Operators (SIGTTO), which publishes best-practice guidelines and ensures that operational lessons are learnt and disseminated throughout the industry. It recently appointed Captain Andrew Clifton as General Manager. In this exclusive in-depth interview, he explains how SIGTTO is adapting to meet the needs of its members as the industry grows and expands into new activities – such as floating regasification and liquefaction, and the use of LNG as a shipping fuel.
Andrew, you took the helm of SIGTTO last November from Bill Wayne. What were you doing previously and how did that lead you into heading up SIGTTO?
I've been involved with liquefied gas shipping for over 30 years now. I was 19 years at sea, three years of those as master, almost all on large gas vessels, mainly LPG. I have been in SIGTTO’s secretariat before. I was technical advisor on secondment from Golar LNG in 2004 and 2005.
I then joined BP and went out to Jakarta in Indonesia for over five years, as the LNG shipping manager for the Tangguh LNG project, responsible for seven time charter ships plus any chartering in out, procurement of bunkers, agency, assurance, operations, you name it!
Not the easiest of environments in which to work, I would guess.
It was a very challenging environment but I don't regret anything. It was very good experience. But it is nice to come back to the UK.
During my time in Tangguh, for the last four years I was also chairman of the SIGTTO panel. So even before I took up this job I was very familiar with the society, its roles, its values, and the current issues and projects. It's a great honour and privilege to take on this role. It really is a dream appointment.
How would you describe the role of the society in today's LNG industry, given how large it has become? And how do you expect SIGTTO to evolve as the industry continues its rapid growth?
The society has retained its importance right through the evolution of the LNG industry. Consider that it took 34 years to get to 100 ships, another seven years to get to 200, and only another three years to get to 300. And we’ve got 80-plus vessels on order at the moment. That all presents challenges, not just in numbers of vessels, but in size, different propulsion systems, floating, storage and regasification units (FSRUs), floating liquefaction, ship-to-ship LNG transfer, and all the other activities that are going on.
We welcome the increase in activities but they all bring with them different types of operations for which best-practice guidelines are required. That's where SIGTTO comes in. The society can also share information about lessons learnt amongst the industry so that every operator isn't learning the lessons for themselves.
It's going to be 50 years of commercial operations in October next year and we believe we've spilt no more than 40 cubic metres of LNG during that time, with no loss of cargo tank containment and no fatalities directly attributable to the cargoes. Our key role at SIGTTO is ensuring that the industry maintains this impressive record.
What about specific proposals for coping with the future expansion of the industry – and presumably the future expansion of SIGTTO?
Our resources are very strained at the moment, especially by “LNG-as-fuel”. So we are looking at expanding the secretariat and our activities.
The general purposes committee (GPC), made up of around 40 key technical people from the industry, determines the work of the secretariat. What are the current issues? What working groups do we need to establish? Who's going to chair those working groups? Our board of 20 high-level executives from the industry determines the high-level strategy of the society.
What's the membership of SIGTTO? And how has it grown over time?
SIGTTO was formed in 1979, with about a dozen key companies, mainly oil majors, as members. Today we have 136 full members and 40 associate and non-contributory members. Full members are operators of liquefied gas vessels or terminals. Anybody developing a project is an associate member until such time as the capacity is commissioned. It’s not just LNG. It's LNG vessels and terminals and LPG vessels and terminals. We should never forget the LPG membership. Our associate members also include bodies like class societies, port authorities, tug operators and P & I (protection and indemnity insurance) clubs.
Two particularly interesting developments in the evolution of the LNG industry are floating regasification and liquefaction. What new issues do they introduce?
You're taking something that was normally done ashore onto a floating environment. Clearly that presents unique challenges and issues.
At SIGTTO we generally don't deal with the terminal infrastructure beyond the shore tank. Our activities stop at the inlet valve to the tank, whether it's regasification or liquefaction. So with either FSRUs or floating LNG (FLNG) we are concerned with the floater to the vessel interface, in particular looking at the means of cargo transfer, the means of mooring, how the vessel stays alongside, the links between the two parties, the emergency shutdown facilities, and all the other safety arrangements.
Safety is a crucial factor in the future growth of the LNG industry, as it would be in any industry. How does SIGTTO ensure the continuing safety of LNG shipping and terminal operation?
There are several functions that we play – and very successfully. It's important that we build on what we've done in the past. We should not get complacent about the carriage of any liquid hydrocarbons. That is a key message. LNG is safe as long as operations are performed under the same constraints, procedures and best practices as in the past.
So we continue to develop best practices and safe operating procedures, updating them when necessary and writing them from scratch for new operations. Then we share any lessons to be learnt through frank, open discussions in technical forums.
In any SIGTTO meeting, although the people in the room are competitors, once the door’s closed they’re quite happy to describe any issues or any concerns they have so that everybody can share them. A key part of the LNG industry and SIGTTO’s activities in the past has been the frank and open sharing of lessons to be learnt, including, of course, lessons of what's gone right. Often people talk about lessons to be learnt as only what’s gone wrong.
We have close liaison with other industry bodies, people like the International Chamber of Shipping (ICS), InterTanko, Intercargo, the Oil Companies International Marine Forum (OCIMF), the International Group of Liquefied Natural Gas Importers (GIIGNL), the Centre for LNG (CLNG), and the US Coast Guard.
And, of course, we’re heavily involved with the International Maritime Organisation (IMO). We’ve re-written the IGC code (The International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk) on behalf of the UK flag state, which submitted it to IMO. We’re also heavily involved with the IGF code (the International Code on Safety for Gas-Fuelled Ships), concerning LNG-as-fuel, which is also going through IMO at the moment.
It looks like we're clearing the final hurdles of the IGC code, which is great after almost 7 years. The IGF code is a year or so behind the IGC code.
The industry does have a very good safety record but from time to time things do go wrong. What kind of process is there for recording those kinds of incidents and learning from them?
This is about members speaking to us, either confidentially or transparently. This can be performed in many different ways. We also have an extensive database of particular issues. The safety record of the LNG industry is built upon the series of control measures we have developed. We often refer to the “cheese slice” in major incidents – so many cheese slices and if you take one away the incident doesn't occur. We've had situations in the LNG industry whereby the cheese-slice process has started but there’s been a particular control measure which has stopped it, so an incident has not occurred.
It's important also that these near misses are highlighted and sent out to the membership as soon as possible. We have an extensive library of past incidents. A lot of them aren't related to liquefied gas shipping. They may be shore process-related but can still be applied to our industry so that we can learn the particular lessons.
Can you give any examples?
You can look at some of the well-known process safety issues which have occurred at incidents like Texas City or Flixborough or Seveso. There are lessons which all industries can learn from incidents such as those.
One specific technology that some people regard as controversial is the ship-to-ship (STS) transfer of LNG. What conclusions have you come to about the risks involved?
Excelerate and Exmar first proposed STS transfer in about 2004. It had been done three times before, I believe, in the LNG industry but each time on a contingency basis not on a routine commercial basis.
SIGTTO welcomes new activities that expand the industry’s capabilities. However, we can't bring out guidance on best practice until an operation has been has been conducted for a period of time, during which we can learn from what's happened, speak to the operators and set up working groups. That’s exactly what we've done with STS transfer.
We produced the best-practice guidance about two years ago. And, as quite often happens, regulators and insurance bodies now say that any STS operation must be done in compliance with the SIGTTO guidelines. Excelerate and Exmar have been the trailblazers and have provided a large bulk of the best-practice guidance. We’re very grateful to them.
But that’s LNG ship coming alongside LNG ship. We now have the situation where we have ship coming alongside floater – and that may throw up different challenges and issues.
Obviously some of the basic principles in our STS transfer guidelines still apply – but there may well be different issues on different scales in different environmental conditions. It's fantastic that it’s Shell that’s doing the Prelude FLNG project, the first one. They will ensure that absolutely everything is looked at regarding all operations of Prelude, but especially so with the ship-to-floater interface.
Yet another trend keeping you busy is the use of LNG as a fuel. How is that affecting SIGTTO’s role?
It’s taking up a large part of our resources. Strictly speaking it’s outside of our core objectives, which are about liquefied gas vessels and terminals, not bunkers for conventional vessels.
Our board looked at it and we had three options. One was to ignore it and have nothing to do with it. The second was to take it on and absorb it into SIGTTO’s general activities and into our core objectives. The third was to form a new NGO to deal with it exclusively.
We didn't even consider the first option because we didn't think it was responsible to the industry. We thought the second option would just completely swamp our membership and maybe draw SIGTTO away from its core objectives. So we decided the third option was best.
Following a decision to proceed by our board of directors at its spring meeting in Houston in May, the Society for Gas as a Marine Fuel (SGMF) is to be established as a new NGO. This industry body is a major step forward in the enhancement of safety and best practices covering the use of LNG as marine fuel.
We clearly have a lot of concerns because this is introducing a low-flashpoint, cryogenic hydrocarbon onto ships which have never carried it before – even potentially ferries, where there’s not just the ship’s crew on board but also fare-paying passengers. This obviously throws up a lot of new issues: training, design, operation, LNG transfer, emergency response, gas detection, ventilation . . . The list goes on and on.
We have absolutely no doubts that LNG can be safely used as a fuel but with one caveat – that the same processes that have been successfully used in almost 50 years of vessel operation are followed for LNG-as-fuel.
We are hearing and reading some very worrying things. We recently heard LNG described as “cold diesel”. And we've seen some other comments from people who are not familiar with the processes used in the LNG shipping industry. There’s a lot more work to be done yet – so the new NGO will be key to ensuring the safe use of this fuel. I would ask anybody reading this who’s involved in LNG-as-fuel to support the SGMF.
Because of the rapid growth of the LNG industry, there have been concerns about the availability of trained seafarers. You mentioned the huge order book for more LNG carriers over the next couple of years. How much more of a challenge does that become as the industry takes yet another leap forward?
That's the correct description: a challenge. I wouldn't describe it as a problem. I think it's fantastic for the LNG industry that we're going to end up with a fleet of almost 500 vessels, when you consider that in 1997 we were only 100 vessels. We had a similar situation in about 2004 and 2005, when we went through the previous wave of new-builds. A lot of personnel transferred over from the tanker industry, especially the LPG industry.
SIGTTO at the time recognised there was a need for an industry standard for competence. Experience alone is not the best decider as to the standard required onboard a vessel. It should be a mixture of competence and experience.
At that time, there wasn't a single uniform industry-wide competence standard. So SIGTTO drew up suggested LNG competency standards, which are now the industry standard. Charterers commonly insist that all staff on the vessels they charter should be certified as complying with the SIGTTO competency standards.
So we’ve set the colleges, the ship managers, the ship operators, everybody, what we believe should be the minimum standard, and this is what people train to. That's gone a long way towards meeting the extra demand due to the new building. Companies do have to invest though. If operators are building new ships they have to spend money to train. There's no way around that.
Sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.