Risks arising from the use of a tanker as a floating storage facility

Skuld P&I Club highlights key issues to be addressed

The Skuld P&I Club highlights some of the key issues that will need to be addressed if the planned operation as a floating storage facility is to be performed safely and successfully.

How long will this period of low oil prices last? That is a question on which a lot of money will turn. Not least because buying and storing oil now is based on the goal of being able to sell it at a profit in the future, but that requires oil prices to rise by more than the cost of shore or ship storage and subsequent transport to the actual receiver.

The future development of oil prices is beyond the scope of this advisory, but events in the middle east will no doubt have a bearing on it.

For tanker owners, however, there are a number of issues that need to be considered before fixing a vessel out as a floating storage facility. Issues include:

1. the vessel may engage in multiple STS operations if cargo is sold off in parcels, this may lead to shortages given that sea conditions can make exact ullages difficult
2. if the cargo on board is bunker fuel, there may be requests for blending on board to achieve particular specifications (this may specifically be in breach of SOLAS)
3. the origin of the cargo needs to be carefully checked, as in some places in the world there have been issues with smuggling and sanctions breaches
4. cargo quality may be affected by long term storage at sea and therefore a full understanding of the cargo specifications and the cargo properties is important: cargo may become unstable, produce sediment, have significant microbial activity, there may be settling of contaminants and sludge, separation of water content or otherwise deteriorate over time
5. particularly with sludge / wax formation (made up of both organic and inorganic materials) may lead to very significant pumping and ROB issues
6. tank coatings, pumps, lines and valves may be affected if cargo becomes unstable, separates or on loading contains a significant amount of aggressive materials, including any prolonged contact with hydrogen sulphide (H2S)
7. tank cleaning: long term storage of crude is likely to mean that the tanks will need more than a usual COW wash and a full tank cleaning may be necessary
8. otherwise routine tank vapour management may become an issue, as venting may not be possible in all locations, and this is exasperated if the oil had a high (H2S) content, say greater than 15 ppm
9. temperature fluctuations can cause venting during afternoons which may be followed by a drop in pressure at night, thus necessitating the running of the TUG (Top Up Generator) to avoid air being sucked in to the tanks or risk the atmosphere reaching the explosive zone
10. if the vessel will be at anchorage, suitable preparation and maintenance of the main engine and auxiliaries will be necessary
11. the hull may become fouled if the vessel stays at any location for a significant amount of time, and that may occur during drifting as well as short voyages followed by lengthy stays at anchorage or drifting
12. the vessel’s class will need to be consulted, at least for the arrangement of periodic surveys and maintenance of certificates
13. manning will be important, including compliance with SOLAS, SCTW and the MLC, as well as arrangements for appropriate crew rotations and shore leave
14. vessels drifting or at outer anchorages need to maintain safe levels of fuel, water and provisions

Source: The Skuld P&I Club