i Copyright Statement This copy of the thesis has been supplied on condition that anyone who ...

415 Pages·2014·3.55 MB·English

by  Mohamed Brouig

Copyright Statement

This copy of the thesis has been supplied on condition that anyone who
consults it is understood to recognise that its copyright rests with its author and
that no quotation from the thesis and no information derived from it may be
published without the author’s prior consent.

i
RISK MANAGEMENT IN LIQUEFIED NATURAL GAS
PORTS AND MARINE TERMINALS SUPPLY CHAINS

By

Mohamed BRIOUIG
B.Sc., M.Sc.

A thesis submitted to Plymouth University
in partial fulfilment of the degree of

DOCTOR OF PHILOSOPHY

International Shipping and Logistics Group
Plymouth Graduate School of Management

2013

ii
Abstract

RISK MANAGEMENT IN LIQUEFIED NATURAL GAS
PORTS AND MARINE TERMINALS SUPPLY CHAINS

Mohamed BRIOUIG
B.Sc., M.Sc.

Due to its environmental attributes, Liquefied Natural Gas (LNG) as a clean
fossil fuel source of energy has witnessed a steady increase in demand
worldwide over the last decade. This increase is mainly attributed to higher
demand from the power generation sector as well as from domestic and
industrial usages .This growing role of LNG among competing energy sources
has raised concerns over the safety and security of the LNG chain of
production, transport and distribution and its related infrastructure. Within this
context, LNG ports and marine terminals, being strategically located at the
midstream of the LNG Supply Chain (SC), are further exposed to safety and
security risks and represent credible targets for international terrorism. Ensuring
uninterrupted, robust and resilient LNG SC requires first, adequate
management of safety and security risks in LNG ports and marine terminals.
While each discipline of risk, be it safety or security, has received significant
attention both in theory and practice, less attention was given to the
management of interfaces and shared impacts among LNG Ports safety and
security risks which led to the existence of gaps in the risk management (RM)
systems of LNG ports and may represent a major source of risk and disruption
to LNG ports. This research addresses such gaps which are poorly addressed
in the current literature and proposes a holistic and integrated approach to the
issues of LNG ports safety and security risks assessment and management. It
also aims to model safety and security RM from a SC perspective and
examines the relationships and shared impacts among LNG ports safety and
security risks in the present context of increased LNG demand worldwide in the
post 9/11 terrorism era.
iii
A unique combination of multiple methods within port and maritime SCs,
including a Delphi survey, quantitative survey, Soft Systems Methodology
(SSM) and a focus group expert consultation, is applied to reformulate the
prevailing RM approach marked by dichotomy and a disciplinary silo and to
propose a more enhanced and holistic approach to safety and security RM. The
results of the study confirm that an integrated and holistic approach to the issue
of RM in LNG ports and marine terminals is necessary to cost-effectively
address safety and security risks and ensure reliable and resilient LNG SCs.
Furthermore, a practical framework, in the form of a conceptual model, for LNG
ports risks and emergencies management is proposed which integrates all
facets of safety and security risks and emergencies management, including risk
prevention, mitigation, emergency planning and response and port business
continuity. The proposed conceptual model shows how the proposed RM
approach can be practically applied in the context of LNG ports in the Middle
East and North Africa (MENA) region, as well as in any LNG port worldwide
which lacks an integrated approach to risks and emergencies management.

Key Words Safety, Security, Risk Management, Emergency Planning & Response, LNG
Supply Chains, integrated approach, all-hazards approach, Port Business Continuity

iv
List of Contents

CHAPTER 1 INTRODUCTION AND BACKGROUND ......................................... 1
1.1 INTRODUCTION ...................................................................................... 1
1.2 WHY STUDY RM IN LNG PORTS? ......................................................... 3
1.3 RESEARCH AIM, SCOPE AND OBJECTIVES ........................................ 5
1.4 RESEARCH METHODOLOGY AND APPROACH .................................. 8
1.5 MAIN CONTRIBUTION OF THE STUDY ............................................... 14
1.6 ORIGINALITY ........................................................................................ 15
CHAPTER 2 THE LNG SUPPLY CHAIN ...................................................... 19
2.1. INTRODUCTION .................................................................................... 19
2.2. OVERVIEW OF THE LNG VALUE CHAIN (VC) ...................................... 21
2.3. LNG PORTS AND MARINE TERMINALS .............................................. 27
2.4 LNG SHIPPING ...................................................................................... 30
2.5 THE WORLD LNG MARKET ................................................................. 37
2.6 RISK MANAGEMENT, EMERGENCY AND PORT BUSINESS
CONTINUITY ........................................................................................... 41
2.7 CONCLUSION ....................................................................................... 61
CHAPTER 3 SAFETY AND SECURITY RISK MANAGEMENT
IN LNG PORTS .................................................................................................. 63
3.1 INTRODUCTION .................................................................................... 63
3.2 LNG PORT SAFETY RISKS .................................................................. 64
3.3 LNG PORT SECURITY RISKS .............................................................. 76
3.4 LNG PORT RISK MANAGEMENT AND QUALITY ................................ 87
3.5 CONCLUSION ....................................................................................... 92
CHAPTER 4 INTERNATIONAL SAFETY AND SECURITY
REGULATORY FRAMEWORKS ....................................................................... 94
4.1 INTRODUCTION .................................................................................... 94
v
4.2 INTERNATIONAL SAFETY AND SECURITY REGULATORY BODIES 97
4.3 SAFETY REGULATIONS ..................................................................... 100
4.4 SECURITY REGULATIONS ................................................................ 123
4.5 CONCLUSION ..................................................................................... 136
CHAPTER 5 RISK MANAGEMENT METHODS AND APPROACHES ...... 138
5.1 INTRODUCTION .................................................................................. 138
5.2 CONVENTIONAL RISK ASSESSMENT IN SHIPPING AND PORTS .. 138
5.3 SAFETY RISK ASSESSMENT APPROACHES ................................... 140
5.4 SECURITY RISK ASSESSMENT METHODS ..................................... 154
5.5 COMPARATIVE ANALYSIS ................................................................. 176
5.6 CONCLUSION ..................................................................................... 181
CHAPTER 6 METHODOLOGY ................................................................... 182
6.1 INTRODUCTION .................................................................................. 182
6.2 RESEARCH PHILOSOPHY ................................................................. 182
6.3 METHODOLOGICAL APPROACH ...................................................... 187
6.4 RESEARCH STRATEGY ..................................................................... 190
6.5 CONCLUSION ..................................................................................... 199
CHAPTER 7 QUALITATIVE AND QUANTITATIVE STUDIES
DATA COLLECTION AND DATA ANALYSIS ................................................. 200
7.1 THE EMPIRICAL STUDY- DELPHI STUDY ROUND ONE .................. 200
7.2 DELPHI STUDY SECOND ROUND ..................................................... 208
7.3 QUANTITATIVE STUDY- SURVEY ANALYSIS USING SPSS ............ 215
7.4 STATISTICAL TESTS .......................................................................... 232
7.5 CONCLUSION ..................................................................................... 246
CHAPTER 8 INTEGRATED LNG PORT SC RM
THE CONCEPTUAL MODEL ........................................................................... 248
8.1 INTRODUCTION .................................................................................. 248
vi
8.2 FORMULATION OF AN INTEGRTAED APPROACH TO RM .............. 264
8.3 VALIDATION OF THE CONCEPTUAL MODEL ................................... 283
8.4 CONCLUSION ..................................................................................... 291
CHAPTER 9 DISCUSSION ......................................................................... 295
9.1 INTRODUCTION .................................................................................. 296
9.2 THE RESEARCH PROBLEM ............................................................... 297
9.3 THE METHODOLOGY ADOPTED....................................................... 299
9.4 DISCUSSION OF THE MAIN RESEARCH FINDINGS ........................ 303
9.5 CRITIQUE OF THE RESEARCH ......................................................... 312
CHAPTER 10 CONCLUSION AND RECOMMENDATIONS ......................... 315
10.1 INTRODUCTION .................................................................................. 315
10.2 RESEARCH SUMMARY AND SPECIFIC RESULTS........................... 315
10.3 CHARACTERISATION OF THE RESEARCH APPROACH ................. 319
10.4 LIMITATIONS OF THE RESEARCH .................................................... 321
10.5 RECOMMENDATIONS FOR FURTHER RESEARCH ......................... 323
10.6 CONCLUSION ..................................................................................... 324
References ................................................................................................ 326
Appendices ................................................................................................ 347
Appendix1 Brief History of LNG tankers ........................................................... 347
Appendix2 Amendments to the STCW- 1978 ................................................... 354
Appendix3 Maximum Credible Accidental and non-accidental Releases .......... 357
Appendix4 Delphi survey round one questionnaire and results ........................ 359
Appendix5 Second round Delphi survey questionnaire and results .................. 375
Appendix6 Quantitative Survey questionnaire and results ................................ 388
Appendix7 Focus group prompt sheet .............................................................. 400

vii
List of Tables
Table 1.1 Summary of Research Design and methods.............................. 13
Table 2.1 World LNG major consumers..................................................... 25
Table 2.2 Emerging LNG carrier size and capacity.................................... 34
Table 2.3 List of some major LNG port accidents....................................... 44
Table 3.1 Physical parameters of tanker spills........................................... 80
Table 3.2 Safety and security interfaces in LNG ports............................... 93
Table 4.1 Diagram showing the organisation and flow of the chapter........ 96
Table 5.1 Major hazard analysis tools........................................................ 140
Table 5.2 FSA main steps and activities..................................................... 144
Table 5.3 GBS tier system.......................................................................... 146
Table 5.4 HSE criteria for individual risk..................................................... 147
Table 5.5 DHS RA stages of development................................................. 157
Table 5.6 NIPP core criteria for RA............................................................ 164
Table 5.7 SVA risk definition....................................................................... 169
Table 5.8 SVA risk variables....................................................................... 170
Table 5.9 SVA team members.................................................................... 175
Table 5.10 Sample Statement of Objectives................................................ 175
Table 5.11 Main characteristics of safety and security events..................... 177
Table 5.12 Prevention and mitigation strategies in LNG ports..................... 179
Table 5.13 Example of the TMC Model........................................................ 180
Table 7.1 Structure of the Delphi panel in Round One............................... 206
Table 7.2 Structure of the Delphi panel in the two rounds.......................... 210
Table 7.3 Second round consensus achieved............................................ 211
Table 7.4 Structure of the panel respondents............................................. 219
Table 7.5 Frequency Results...................................................................... 222
Table 7.6 Summary of Reliability and Validity............................................ 229
Table 7.7 Means by group.......................................................................... 230
Table 7.8 Likert Scale................................................................................. 231
Table 7.9 List of variables according to Likert scale................................... 231
Table 7.10 List of groups according to Likert scale...................................... 232
Table 8.1 Checkland’s definition of hard and soft systems methodologies 251
Table 8.2 Summary of SSM used to construct the RM Conceptual Model 266
Table 8.3 Composition of Focus Group Participants.................................. 285

viii
List of Figures

Figure 1.1 Port RM and emergency gaps bridged by current research....... 16
Figure 1.2 Comparison between previous studies and current study.......... 17
Figure 2.1 Steps of a typical LNG value chain............................................. 21
Figure 2.2 Composition of physical infrastructure of typical LNG SC.......... 23
Figure 2.3 CAPEX Figures for typical integrated LNG VC........................... 24
Figure 2.4 World natural gas and LNG trade movements in 2007............... 27
Figure 2.5 The gate terminal in the Netherlands.......................................... 28
Figure 2.6 Photo illustrating a membrane LNG tanker................................. 32
Figure 2.7 Spherical moss tankers.............................................................. 33
Figure 2.8 Tank Section of a Spherical moss tanker................................... 33
Figure 2.9 Q-Max and Q-Flex tankers at their home port in Ras-Laffan...... 35
Figure 2.10 Typical composition of LNG........................................................ 47
Figure 2.11 LNG critical safety conditions...................................................... 50
Figure 3.1 Risk model for spill events during loading/ unloading................. 72
Figure 3.2 SC security and quality............................................................... 89
Figure 3.3 The six sigma cycle..................................................................... 91
Figure 4.1 Diagram showing the organisation and flow of the chapter........ 96
Figure 5.1 QRA Steps.................................................................................. 143
Figure 5.2 State Geographic risk analysis attributes.................................... 159
Figure 5.3 Asset-based risk analysis attributes............................................ 160
Figure 5.4 NIPP risk management framework............................................. 164
Figure 5.5 Overall asset screening approach.............................................. 171
Figure 5.6 SVA methodology steps.............................................................. 172
Figure 5.7 Typical timeline for conducting SVA........................................... 173
Figure 6.1 Philosophical stance of the present research............................. 187
Figure 7.1 Formulation of questionnaire for first round Delphi..................... 203
Figure 7.2 Formulation of questionnaire for the second round Delphi......... 209
Figure 7.3 Type of samples.......................................................................... 218
Figure 8.1 Systems Thinking synergistic activities....................................... 253
Figure 8.2 Systems Thinking Applied........................................................... 254
Figure 8.3 Checkland’s Soft Systems Methodology.................................... 256
ix
Figure 8.4 Rich Picture of a typical LNG value chain................................... 258
Figure 8.5 SSM seven steps based on Checkland (1981)........................... 261
Figure 8.6 LNG port safety and security- Rich picture 1.............................. 270
Figure 8.7 LNG Port safety and security- Rich picture 2.............................. 271
Figure 8.8 Conceptual model for integrated LNG port SC RM..................... 278
Figure 8.9 Work flow diagram as per the conceptual model (Fig. 8.8)......... 279
Figure 8.10 LNG port community................................................................... 281
Figure 9.1 Sequence of the multi-methods approach adopted.................... 302
Figure 9.2 Integrated Pre-incident/ Post-incident RM and response........... 310

x