Transportation of Ethanol and Vegetable Oils Understanding the

Transportation of Ethanol and Vegetable Oils Understanding the revisions to MARPOL Annex II and the IBC Code November 1, 2007 BG LNG Services LLC 24 th October 2006 1

AGENDA l INTRODUCTION l SUBSTANCES RECLASSIFICATION l TRANSPORTATION OF ETHANOL l TRANSPORTATION OF VEGETABLE OILS l PROCEDURES & ARRANGEMENTS MANUAL 2

Introduction l MARPOL Annex II & IBC Code Revision n n Assignment of hazard profile to each substance Vessels affected - oil products tankers, chemical carriers and other tankers carrying noxious liquid substances n Date of entering in force – 1 January 2007 n Impact of reclassification of certain substances n Handling of residues (stripping and discharge requirements) n Procedures and Arrangements Manual 3

Substances Reclassification l Five-tier system changed to four-tier system l Each substance in IBC Chapters 17 and 18 has been recategorized. l Evaluation includes aspects such as bioaccumulation, acute toxicity, chronic toxicity, biodegradation, long-term human health effects and possible effect on marine wildlife/habitats. l Procedures to categorize substances not listed in Chapters 17 or 18 and/or in MEPC 2/Circulars were defined. l Biofuels are currenty under consideration by IMO 4

Substances Reclassification 5

Transportation of Ethanol (Ethyl Alcohol) l Listed in Charter 18 of IBC Code 2007 Edition as Category Z, therefore IBC Code requirements do not apply. l Can be carried under a Noxious Liquid Substance (NLS) Certificate. l NLS requirements of MARPOL Annex II indicate lower limits of residue within the tanks and has revised limitations on the discharge of such residues 6

Ethanol classification – IBC Code 7

Ethanol Transportation Requirements l Oil Carrier requirements plus NLS requirements of MARPOL Annex II for Category Z: n n n Tank Stripping Requirements “empty to the maximum extent for existing vessels, 75 liters for vessel constructed or converted after 1 January 2007” Underwater Discharge (not mandatory for vessels built before 1 January 2007) Procedures and Arrangements Manual 8

Ethanol Transportation - ABS Requirements l Applicable Rules: n n n Steel Vessels – requirements of Oil Carrier (Part 5 C Chapters 1 or 2 of the Rules) + MARPOL Annex II (Category Z) + Administration Steel Vesels under 90 m – requirements of Oil Carrier (Part 5) + Resolution A. 673(16) + Administration Steel Barges – requirements of Oil Tank Barge (5 -2 -3 of the Steel Barges Rules) + MARPOL Annex II (Category Z) + Administration 9

Carriage of Ethanol - Operational Concerns l No Rule or mandatory requirements for specific painting scheme l Operators indicating that pure epoxy is not recommended. Suitable coatings would be Isocyanate Epoxy, Novalac Expoxy and Phenolic Epoxy l Piping systems materials and components should be suitable for Ethanol l Foam concentrate of the fixed deck foam system shall be compatible with Ethanol l Tankers of 20 K DWT and above require IGS. The acidity of Ethanol is affected during transportation by the presence of the CO 2 from the inert gas generator 10

Transportation of Vegetable Oils l Now classified under IBC Code and requires a double hull tanker for carriage. l Certain vegetable oils can be carried in Type 2 ships and others can be carried in Type 3. l Vegetable oil carried in deep tanks in existing dry cargo ships has been legislated separately in MEPC 48 (54) (tanks are to be no closer than 760 mm from the shell plating). 11

Ship Type Arrangements 12

Ship Type Arrangements Ship Type B/5 or 11. 5 m (the lesser) ≥ 760 mm CL CL CL SWL B/15 or 6 m, the lesser but ≥ 760 mm Type 1 Type 2 Type 3 Max. Amount of Cargo per Tank 1, 250 m 3 3000 m 3 No Limit 13

Transportation of Vegetable Oils (cont. ) l MARPOL Annex II permits an exemption of the Administration for vegetable oils identified with footnote “k” in Chapter 17 of IBC Code. Exemption allows the carriage of such oils in NLS tanker meeting the requirements for ships Type 3 (instead of 2), except for cargo tank location. n n n Wing tanks or spaces shall be arranged such that cargo tanks are located inboard of the moulded line of side shell plating nowhere less than 760 mm. Double bottom tanks or spaces shall be arranged such that the distance between the bottom of cargo tanks and moulded line of bottom plating measured at right angles to the bottom shell plating is not less than B/15 (m) or 2. 0 m at centerline, whichever is the lesser. Minimum distance shall be 1. 0 m The relevant certificate shall indicate exemption granted. 14

Tank stripping limits Requirement Pollution Category Current MARPOL Annex II A Major Hazard B Hazard C Minor Hazard Revised MARPOL Annex II (1/1/2007) D Recognizable Hazard X Major Hazard IBC/BCH 300 +50* liters# X [1] < 1/7/86 (BCH Ships) X [1] 1/1/2007 (IBC Ships) Z Minor Hazard Ship Details Maximum Residue After Stripping 1/7/86 X [1] < 1/1/2007 (IBC Ships) Y Hazard Not Applicable 900 +50* liters# 100 +50* liters# 300 +50* liters# Other No minimum 300 +50* liters# 900 +50* liters# No minimum 100 +50* liters# 300 +50* liters# 75 liters# Not Applicable * performance test tolerance # performance If “Z” and in IBC Ch. 18, empty to maximum extent. If “OS” and in IBC Ch. 18, not applicable 75 liters# test required 15

Stripping performance test l Clean the tank and piping prior to testing l ensure the ship trim (max. 3 deg. by the stern) and heel (max 1 deg. ) give favorable drainage to the suction point in the tank l fill the tank with water to the depth representing the normal end of unloading condition i. e. the point at which stripping is usually commenced. l provide 100 k. Pa (1 atmosphere) back pressure (usually a constant pressure valve) at the unloading manifold – see figure 16

Back-pressure arrangements 17

Stripping performance l discharge and strip the tank according to the designated procedure l the time taken for the stripping procedure is to be recorded l close the manifold valve and open all valves and remove drain plugs l the residue is then collected and measured l the stripping performance details are to be entered in the P&A manual (including time taken) 18

Discharge Pollution Category Concentration Current MARPOL Annex II Revised MARPOL Annex II (1/1/2007) A B C D X Y Z Major Hazard Minor Hazard Recognizable Hazard Major Hazard Minor Hazard Any residue to reception facility, except 0. 1% by weight or below. 1 ppm 10 ppm 1 part NLS to 10 parts water. Any residue to reception facility, except 0. 1% by weight or below. Any residue to sea 7 Knots En route Piping Outlet Location Underwater 7 Knots Not Applicable Underwater (not mandatory for ships with X [1] <1/1/2007 carrying Cat. Z) Nearest land 12 nautical miles and water depth > 25 m X [1] - keel laying date or commencement date of conversion to a chemical carrier. 19

List of Reclassified Vegetable Oils Comparison of pollution categories and ship types of some vegetable oils before and after 1 January 2007 revision 20

Procedures and Arrangements Manual Every ship certified to carry substances of category X, Y or Z shall have on board a Manual approved by the Administration l The main purpose of the Manual is to make operational procedures and physical arrangements available to the ship’s officers l It is necessary to review the current Manual against the revised MARPOL Annex II to determine those sections that will require amendment, in particular with respect to the stripping requirements by the corresponding Administration l To assist Owners in compiling the P&A Manual, a template is available at ABS website l www. eagle. org/regulatory 21

Thank you for your attention ! 22