LNG Academy Episode 8: LNG Codes & Standard

Alex Taimuri

Welcome back to another exciting episode of “The LNG Academy.” Our mission is to spread LNG education to the world. In today’s episode, we’re diving into the world of LNG standards and codes. Joining me today  is my co-host and LNG operations specialist, Mehdy Touil, who has recently attended his first conference, LNG2023 in Vancouver.

Hi Mehdy.

Mehdy Touil

Hi Alex 

 

Alex Taimuri

Let’s start by clarifying the distinction between codes and standards. It’s a commonly confused topic. Can you explain the difference between the two? 

 

Mehdy Touil

Absolutely Alex. Codes and standards are related but distinct concepts. A code is a set of rules or regulations that are legally enforceable. These rules are typically developed by government agencies or industry organizations and are designed to ensure public safety, protect the environment, or promote other important public policy goals. Building codes, fire codes, and electrical codes are some good examples. 

 

On the other hand, a standard is a set of guidelines or requirements that are typically voluntary but widely accepted and followed by a particular industry or profession. Standards are often developed by standards organizations or industry groups to promote consistency, interoperability, and quality across different products or services. ISO 9001 for quality management and ASTM standards for material testing are common examples of standards. 

 

Alex Taimuri

That’s a clear distinction between codes and standards. Thank you for explaining that. You also mentioned specifications. How do specifications differ from codes and standards? 

 

Mehdy Touil

Specifications provide detailed descriptions of the requirements that a product or service must meet. They are typically created by customers or purchasers to ensure that the product or service they receive meets their specific needs or requirements. Unlike codes or standards, specifications are more specific to individual companies or products. 

 

Alex Taimuri

I see. So, codes provide the rules, standards offer the guidelines, and specifications outline the specific requirements. That makes sense. Now, let’s explore the main codes and standards that govern the LNG industry globally. Can you shed some light on this? 

 

Mehdy Touil

Certainly. There are several codes and standards related to LNG on a global scale. For example, for shipping we have the International Maritime Organization (IMO) code known as the IGC code. This code defines the design, construction, and equipment standards for ships carrying liquefied gases in bulk, including LNG. Another international code developed by the IMO is the International Gas Carrier IGF Code, which provides safety requirements for gas carriers, including LNG vessels. 

 

On a national or state level, there are codes like the National Fire Protection Association (NFPA) 59A, which is a US standard outlining minimum fire protection requirements for the design, construction, and operation of LNG facilities. In Europe, the standard EN 1473 provides safety requirements for LNG installations, including LNG storage and transportation. Japan has the Japanese Industrial Standard (JIS) with several standards related to LNG, such as those for LNG tanks and vessels, regasification systems, and fueling stations. Australia has the AS 4735, an Australian standard that defines the minimum safety requirements for LNG facilities, including storage, transportation, and regasification. Additionally, the globally recognized American Society of Mechanical Engineers (ASME) B31.3 standard outlines the requirements for the design, construction, and operation of LNG piping systems. 

Alex Taimuri

Thank you for highlighting these important codes and standards. It’s crucial for our listeners to be aware of these guidelines when working in the LNG industry. Now, let’s focus on the United States, where significant activity is expected in the next decade. Who are the regulating bodies for the LNG industry in the US? 

Mehdy Touil

In the United States, safety standards for LNG facilities are enforced by various regulatory agencies at the federal, state, and local levels. Some key regulatory bodies involved in enforcing safety standards for LNG facilities in the US include the Pipeline and Hazardous Materials Safety Administration (PHMSA), which is a federal agency under the Department of Transportation (the DOT) responsible for regulating the safety of pipelines and the transportation of hazardous materials, including LNG. The Occupational Safety and Health Administration (OSHA) is another federal agency under the Department of Labor that ensures safe and healthy working conditions for employees in the US, including the enforcement of safety standards for LNG facilities in the workplace. The Federal Energy Regulatory Commission (FERC), an independent agency, regulates the interstate transmission of natural gas and electricity, including LNG facilities involved in import and export activities. Additionally, state and local regulatory agencies may also be involved in enforcing safety standards for LNG facilities, depending on the jurisdiction. 

 

Alex Taimuri

Thank you for providing an overview of these bodies in the US. It’s crucial for our listeners to understand the entities responsible for enforcing safety standards. Now, let’s touch upon the similarity between Canada and the US regarding LNG. Are there any notable similarities in the codes and standards between the two countries? 

Mehdy Touil

Yes, Canada and the US share similarities in their approach to LNG codes and standards. Both countries prioritize safety, environmental protection, and the efficient operation of LNG facilities. While there are some differences due to specific jurisdictional requirements, many standards and codes used in the US do serve as a reference for LNG projects in Canada under different titles. Additionally, collaboration and information sharing between regulatory bodies in both countries help ensure alignment and consistency in codes and standards. 

 

Alex Taimuri

Thank you for highlighting the similarities between Canada and the US regarding LNG codes and standards. It’s interesting to see the collaboration and alignment between these two countries. Now, let’s delve into a specific regulation in the US. Could you tell us more about 49 CFR Part 193? 

 

Mehdy Touil

Certainly! 49 CFR Part 193 is a regulation issued by PHMSA. This regulation specifically addresses the safety standards for LNG facilities, including the design, construction, and operation of LNG storage, liquefaction, and vaporization facilities. It outlines comprehensive requirements for the safe handling and transportation of LNG, including measures to prevent accidents, mitigate risks, and ensure the protection of public safety and the environment. 

 

Alex Taimuri

That’s an important regulation in the US LNG industry. It plays a vital role in ensuring the safety and security of LNG facilities and operations.  

Now, let’s discuss how LNG project developers and operators can ensure compliance with these regulations. What steps can they take to adhere to the required standards? 

 

Mehdy Touil

Ensuring compliance with regulations is crucial for LNG project developers and operators to maintain safety and operational integrity. Here are some key steps they can take: 

 

Stay Informed: It’s essential to stay up to date with the latest regulations and standards related to LNG operations. Regularly monitoring updates from regulatory bodies, industry associations, and standards organizations will help maintain compliance. 

 

Engage with Regulatory Agencies: Building a collaborative relationship with regulatory agencies is beneficial. Seek guidance and clarification when needed, and proactively engage in discussions and consultations related to regulatory changes or proposed standards. 

 

Conduct Regulatory Assessments: Perform comprehensive assessments of the project or facility against applicable regulations and standards. Identify any gaps or areas of non-compliance and develop action plans to address them promptly. 

 

Implement Robust Safety Management Systems: Establishing a robust safety management system (SMS) is crucial. It should include policies, procedures, and processes that align with regulatory requirements. Regular audits and inspections should be conducted to ensure ongoing compliance. 

 

Training and Competency Development: Provide appropriate training and competency development programs to personnel involved in LNG operations. This ensures they are knowledgeable about safety protocols, regulatory requirements, and industry best practices. 

 

Documentation and Record-Keeping: Maintain accurate and detailed documentation of compliance efforts, safety records, and regulatory inspections. This includes keeping records of maintenance activities, safety training, and emergency response plans. 

 

And the last one, engage Third-Party Experts: Seek the assistance of qualified third-party experts, such as consultants or engineering firms specializing in LNG regulations. Their expertise can provide valuable insights and support in maintaining compliance. 

Alex Taimuri

What is the cost associated with non-compliance? 

Mehdy Touil

Failure to comply with regulations in the LNG industry can have serious consequences for companies. Non-compliance may result in safety hazards, environmental damage, legal liabilities, and reputational damage. Regulatory bodies have the authority to impose penalties, fines, and even shut down operations that do not meet the required standards. Moreover, incidents or accidents caused by non-compliance can result in injuries, loss of life, and significant financial losses. Therefore, it is crucial for LNG companies to prioritize compliance and stay ahead of regulatory changes. By proactively monitoring and implementing the latest regulations, companies can mitigate risks, maintain a strong safety culture, protect the environment, and ensure the long-term sustainability of their operations. 

Alex Taimuri 

That’s true, and we have some glaring examples. 

Mehdy Touil

Several well-documented incidents serve as reminders of the consequences that can arise from non-compliance with regulations in the LNG industry. For instance, the lengthy shutdown of Shell’s Prelude Floating facility is as a notable example. The facility experienced technical issues and delays in its start-up due to non-compliance with safety and technical standards, resulting in significant financial losses and reputational damage. Similarly, the Hammerfest LNG plant in Norway faced operational challenges and shutdowns due to technical issues, leading to costly repairs and delayed production. More recently, the Freeport LNG in the US experienced a major incident that we covered in depth in Episode 1, with a costly suspension of operations. These incidents highlight the importance of adhering to regulations to avoid disruptions, protect investments, and ensure the safe and reliable operation of LNG facilities. 

Alex Taimuri 

How do you see the regulatory roadmap evolving? 

Mehdy Touil

Environmental concerns have become increasingly important in the LNG industry. With growing recognition of the need to reduce greenhouse gas and methane emissions and mitigate environmental impacts, there is a heightened focus on incorporating sustainability principles into LNG operations. Standards and codes play a vital role in addressing these concerns. They define requirements for environmental impact assessments, emissions monitoring, and mitigation measures throughout the LNG value chain. Additionally, standards are being developed to encourage the use of cleaner technologies, such as electrification, carbon capture, engine technologies in shipping or the use of LNG as marine fuel. By adhering to these standards, LNG projects can demonstrate their commitment to environmental responsibility and contribute to a more sustainable energy future. For example, in December last year, the US Environmental Protection Agency, or EPA, issued a regulatory roadmap specific to the LNG industry. The roadmap lists the numerous points at which EPA’s statutory and regulatory duties require the agency to participate in the LNG projects approval and permitting process, which may vary depending on the design and equipment selection. And this is something project developers should follow closely if they want to avoid costly delays in approval. 

Alex Taimuri

Thank you for outlining the essential steps for LNG project developers and operators to ensure compliance with regulations. By following these measures, they can prioritize safety, meet regulatory requirements, and operate with confidence.

Thank you Mehdy! 

Mehdy Touil

You’re welcome Alex.

Alex Taimuri

With that, we conclude another informative episode of “The LNG Academy.” Stay tuned for more engaging discussions as we continue to explore the dynamic world of liquefied natural gas. Until next time!