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

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

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

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

5. 5 Substances Reclassification

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

7. 7 Ethanol classification – IBC Code

8. 8 Ethanol Transportation Requirements Oil Carrier requirements plus NLS requirements of MARPOL Annex II for Category Z: 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

9. 9 Ethanol Transportation - ABS Requirements Applicable Rules: Steel Vessels – requirements of Oil Carrier (Part 5C 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

10. 10 Carriage of Ethanol - Operational Concerns No Rule or mandatory requirements for specific painting scheme Operators indicating that pure epoxy is not recommended. Suitable coatings would be Isocyanate Epoxy, Novalac Expoxy and Phenolic Epoxy Piping systems materials and components should be suitable for Ethanol Foam concentrate of the fixed deck foam system shall be compatible with Ethanol Tankers of 20K DWT and above require IGS. The acidity of Ethanol is affected during transportation by the presence of the CO2 from the inert gas generator

11. 11 Transportation of Vegetable Oils Now classified under IBC Code and requires a double hull tanker for carriage. Certain vegetable oils can be carried in Type 2 ships and others can be carried in Type 3. 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).

12. 12 Ship Type Arrangements

13. 13 Ship Type Arrangements CL Ship Type B/5 or 11.5 m (the lesser) ≥760 mm SWL Type 3Type 1 Type 2 CL Max. Amount of Cargo per Tank 1,250 m 3 3000 m 3 B/15 or 6 m, the lesser but ≥ 760 mm No Limit

14. 14 Transportation of Vegetable Oils (cont.) 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. 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.

15. 15 Tank stripping limits RequirementCurrent MARPOL Annex IIRevised MARPOL Annex II (1/1/2007) Pollution Category A Major Hazard B Hazard C Minor Hazard D Recognizable Hazard X Major Hazard Y Hazard Z Minor Hazard Maximum Residue After Stripping Ship Details IBC/BCHOther X [1] < 1/7/86 (BCH Ships) Not Applicable 300 +50* liters # 900 +50* liters # No minimum 300 +50* liters # 900 +50* liters # If “Z” and in IBC Ch.18, empty to maximum extent. If “OS” and in IBC Ch.18, not applicable 75 liters # 1/7/86  X [1] < 1/1/2007 (IBC Ships) 100 +50* liters # 300 +50* liters # No minimum 100 +50* liters # 300 +50* liters # X [1]  1/1/2007 (IBC Ships) Not Applicable75 liters # * performance test tolerance # performance test required

16. 16 Stripping performance test Clean the tank and piping prior to testing 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 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. provide 100kPa (1 atmosphere) back pressure (usually a constant pressure valve) at the unloading manifold – see figure

17. 17 Back-pressure arrangements

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

19. 19 Discharge Current MARPOL Annex IIRevised MARPOL Annex II (1/1/2007) Pollution Category ABCDXY Z Major HazardHazardMinor HazardRecognizable Hazard Major HazardHazard Minor Hazard ConcentrationAny 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 En route  7 Knots Piping Outlet Location UnderwaterNot ApplicableUnderwater (not mandatory for ships with X [1] <1/1/2007 carrying Cat. Z) Nearest land  12 nautical miles and water depth > 25m X [1] - keel laying date or commencement date of conversion to a chemical carrier.

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

21. 21 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 The main purpose of the Manual is to make operational procedures and physical arrangements available to the ship’s officers 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 To assist Owners in compiling the P&A Manual, a template is available at ABS website www.eagle.org/regulatory

22. 22 Thank you for your attention !