Is Prelude FLNG a Ship or an Upstream Production Facility? Or Both? And how such a definition may affect people and the environment.
Insider information from an anonymous expert who sees Shell International Trading and Shipping Co Ltd as an organisation run by managers who like to portray themselves as ‘simple sailors’, but who actually operate like a cult with scant respect for the health and safety of employees and their own policies.
In May 2015 Mr I.C. Blayney, MLA (a Western Australia lawmaker) laid his Report No. 5 on the Table of the Parliament of Western Australia Legislative Assembly relating to ‘FLNG Safety Matters’ 1. For those who do not know FLNG stands for ‘Floating Liquified Natural Gas’ which is normally defined as an ‘upstream production facility’ and/or a ‘ship’. Mr Blayney issued his report as part of the enquiry by the Economics and Industry Standing Committee ‘into the economic impact of projects such as Prelude’ during which ‘considerable concern was raised in relation to the safety of FLNG facilities’ 1. These concerns have been taken very seriously by the Australian Government as the oil and gas industry is inherently dangerous, and accidents do happen at the non-reimbursable expense to life and/or damage to the environment.
Numerous key points emerged during this enquiry. ‘First and foremost, it is the responsibility of the FLNG facility operator to ensure that risks relating to human safety and environmental protection are reduced to as low as reasonably practicable’ 1 shortly ALARP. For that reason, the FLNG facility operator must develop a fit for purpose safety case as an integral part of the engineering activities. As per the Australia’s offshore energy regulator (NOPSEMA) ‘a safety case has to show how an operator meets or will meet the requirement of the regulatory provisions relevant to the control of major accident event risks and the risks to health and safety of people at the operator’s facilities’ and ‘the operator has to show through reasoned and supported arguments that there are no other practical measures that could reasonably be taken to reduce risks further’ or otherwise ‘to reduce the risks to a level that is ALARP’. 2
2N-04300-GN0166 – ALARP (A138249).pdf (nopsema.gov.au)
Sadly, the changes to the regulatory regime in the offshore petroleum industry typically emerge at the expense of people’s lives and/or the environment. E.g., the Piper Alpha oil platform exploded and collapsed on 6 July 1988 killing 165 of the men on board which fundamentally transformed the offshore regulations from a prescriptive to a risk-based design approach, the core of any safety case. In the Report No 5 the safety case regime has been described as ‘the world’s best practice’ 1. When designing upstream production facilities or ships numerous discipline engineers in their safety integrated design are expected to rely on technical standards which have been established in the industry based on the experience and exist for a reason; those are mostly prescribed by the company standards, class societies and regulatory authorities.
The Prelude FLNG facility is not only complex in design in terms of managing risks and hazards but is extremely complex from regulatory perspective as ‘when a ship becomes tethered to a petroleum facility, regulatory jurisdiction over that vessel passes from the Australian Marine Safety Authority to the National Offshore Petroleum Safety and Environmental Management Authority’ 1. Therefore, there are at least two of the above authorities are involved and both apply different sets of standards.
Similarly at Shell under the HSSE & SP Control Framework there are numerous sets of standards applied to upstream production facilities and ships creating significant challenges as those standards are not compatible: they are owned by different management teams with different skills, knowledge, and experience and who are driven by different objectives. At Shell the Asset Integrity Process Safety Management Manual (the AIPSM) and Transport Manual Maritime Safety (the TMMS) under the HSSE & SP Control Framework apply to company and contracted third party assets with major accident hazard risks (e.g., upstream production facilities and/or ships) but with different sets of standards. It has been observed over time that ‘multiple standards within Shell to achieve the same objective is confusing where both worlds meet’, such is in the case of the Prelude FLNG, but is also inefficient leading to extra costs to maintain duplicates and this can be potentially dangerous. The AIPSM contains 22 requirements including the requirement 7 under which the Asset Manager, Project Manager or Wells Manager are accountable for developing and maintaining a ‘Statement of Fitness’ (shortly the SoF) to demonstrate the technical integrity of the asset prior to energising and introducing hazardous substances. For those who are not familiar with the commissioning and operational procedures, the ‘SoF’ for the applicable systems needs to be signed immediately prior to the introduction of hazardous substances or energy with major accident risks. The SoF must be signed to confirm that process safety risks have been identified, documented, and are managed to ALARP, and that the people in HSSE critical positions are fit for work, and that HSSE critical equipment meets its technical integrity requirements (i.e., performance standards).
Easy to write but challenging to achieve as the TMMS has been largely the authority of the Global Maritime Technical Function which does not fully recognise the Global Technical Safety Engineering Function. The accountable managers under the Global Maritime Technical Function describes themselves as ‘simple sailors’ who admit that they ‘don’t like too much process’, but rather prefer to ‘copy and paste from project to project to manage standard shipping / ship construction projects’ and therefore believing that they do not need to look ‘at the risks in every project from scratch’ undermining effective risk management. This is in contradiction with Finding 32 of Report No.5 that ‘the design of any safety feature of an FLNG facility must consider both the facility’s function and its particular operating environment’ 1.
In the writers’ opinion when ‘simple sailors’ as such start driving engineering activities by prescribing engineering standards (in parallel with technical safety engineering technical function) incidents happen. NOPSEMA in their Direction – section 574 (direction number: 1860)3 described the power failures commencing on 2 December 2021 on the Prelude FLNG directly impacted:
3 A820988.pdf (nopsema.gov.au)
- ‘Emergency response capability, operations of safety critical equipment (e.g., communications, access to safety critical documentation and information, permit to work system) and evacuation of personal by helicopter or boat.
- Habitability of the facility for the personnel on board. Essential services such as lighting, safety systems, communication systems, portable water systems, sewage treatment and HVAC were affected (seven people were treated for heat related conditions).
- Functionality of process equipment required to effectively manage the LNG inventory’.
Safety Critical Element Management is a mandated process which is anticipated to apply during an Asset’s Operate phase as to ‘provide assurance that the physical hardware barriers are in place and working to prevent initiation or escalation of major incidents or if they are not that risks are appropriately assessed, and mitigating actions taken’. It appears this did not happen for the Prelude FLNG providing its operations interrupted by numerous past incidents.
The author doubts whether it is possible to implement effectively such the process (which is defined as technical integrity verification) whilst those who are in charge at Shell at Shipping and Maritime fundamentally do not agree with the Asset Integrity Process Safety Management Manual applying to ships and therefore to the facilities like Prelude FLNG, despite the prescriptive regulatory framework requiring to do so. It seems that the SoF process has been treated at Shell Shipping & Maritime as a paper exercise whilst the mandatory requirements have been modified by those who are not qualified in HSSE critical position in a way it is convenient to preserve the margins potentially at the expense of other people and the environment. Those who dare to ‘speak up’ by raising concerns to Compliance and/or Legal have been subjected to lengthy smear campaign orchestrated by Human Resources (or their equivalent) prior getting disposed as an object possession.
Subject to continue …
This is the first in a planned series of articles providing examples of Shell management behaviour at odds with the pledges to Shell employees in Shell’s General Business Principles.
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