Part IV: Lake Charles Cameron LNG Terminal: Model for Success or Recipe for Disaster?

When a Fortune 500 Company steps up to the plate and recognizes real issues surrounding safety and security, and then actually does something about it, the ripple effect caused by these actions can sometimes change the culture of an industry. After recognizing safety issues with its exposed and wide open LNG berth, situated in close proximity to passing traffic, the owner of one southern LNG marine terminal recently made the decision to completely redesign its berthing arrangement by dredging out a two-berth dock, at right angles to the ship channel. There's more to it than that, of course, but the bottom line is that the terminal’s older, exposed berth will no longer be used to berth LNG tankers or transfer cargo. The move has drawn wide praise from local channel users, the United States Coast Guard and a host of local safety and professional maritime organizations. And, why not?

We’re talking about El Paso Energy’s Southern LNG Terminal at the port of Savannah, GA, in case you were wondering. Six years ago, in September 2000, a tanker struck the Georgia terminal’s exposed, now defunct, riverside berth. Fortunately, the terminal was not in operation at the time and the exposed berth is no longer used by the terminal. Click here to view an image of the Southern LNG Terminal and its new berthing facilities. Note the old, obsolete dock sitting parallel and exposed to the ship channel, as well as the dredged cut, situated well off the channel and perpendicular to it. (Photo Courtesy: El Paso Corp)

Despite the new, safer berthing arrangement, back in March of this year, a 940-foot LNG carrier broke away from its moorings while discharging its cargo of LNG at the same terminal. Quick response and safety measures prevented a spill or worse and the Federal Energy Regulatory Commission (FERC) is still investigating the incident, which shut down the dock for 36 hours at a terminal on the Savannah River. The city of Savannah, GA rests just five miles away.

The tanker was pulled some 15 feet from the pier by a surge from a passing ship but was then corralled and brought back to the berth. The story is relevant to the current debate in Lake Charles in more than one way. The vessel which “pulled” the LNG carrier from its moorings was a smaller product carrier, of no more than 30,000 tons, far smaller in tonnage and dimensions than the 100,000 DWT ton vessels which are expected to pass Sempra’s facility every day; and in closer proximity to the berths. More importantly, the berth at which the LNG vessel was moored at was built especially to ensure that a ship-to-ship allision could not occur.

The Savannah terminal’s present berth is a dredged slip, situated well off the channel, at right angles to it. Despite these precautions, the vessel was sucked off the dock anyway. But, the story well illustrates the dangers of an exposed berth to the possibility of allisions, as well as the sad truth that even a recessed, well designed one will not guarantee safety from passing deep-draft traffic, no matter how small. Nevertheless, LT Andy Meyers of the US Coast Guard in Savannah told MarEx on Tuesday that the new berth was “a marked improvement over the old, exposed berth.”

There’s far more to the story. El Paso’s actions, while laudable and in keeping with their corporate slogan of being the “neighbor to have,” were also rooted, like most business decisions, in their long-term financial requirements. In the midst of ramping up for a major expansion of their facilities, the complete revamping of their berthing facilities made a lot of sense, both in terms of economics, but also for the purposes of local goodwill and ensuring that there would be limited local and / or FERC opposition to their plans to grow the terminal. Beyond this, the safety issues associated with maintaining a dock which was in close proximity and exposed to ship channel passing traffic, necessitated the use of “tethered tractor tugs, fore and aft on every passing deep draft vessel.” MarEx readers may recognize some common threads between this story and the issues facing Sempra’s Cameron Terminal in Lake Charles, LA. But it is here where the similarities end.

Local sources in Savannah have said that changes to docking arrangement at the Southern LNG Terminal have cost El Paso at least $35 million. Along the way, however, and because of the safer, recessed berthing facilities, the need for the tractor escort tugs has gone away, as well as the millions of dollars in expenditures associated with them. From El Paso’s standpoint, the elimination of the escort tug requirements is important, because they were paying for every bit of it - and not because they wanted to. Captain "Laks" Lakshman, Vice President of Commercial Operations for Colonial Marine in Savannah tells MarEx that "local industry simply refused to pay for mandated escort tugs."

While not even a penny has yet been spent on tractor tug escorts in the port of Lake Charles, that’s only because the Coast Guard and the local pilots have not yet set up the parameters to require it, Sempra’s terminal hasn’t been completed, and more importantly, Sempra hasn’t had to step up to say that they will also pay for such a requirement.

According to local Savannah river pilots, as many as 5,000 deep-draft ship movements occur on the Savannah River each year. El Paso’s savvy removal of the annual cost of escort tugs from their bottom line will eventually allow them to pay the entire tab for the new docks. With no such incentive for Sempra to do the same in Lake Charles, it is no wonder that the concept of a more recessed, conventional dock arrangement is strictly off-the-table for discussion. In both locations, it can be argued that safety arrangements are inextricably tied to finances. To be fair, El Paso’s willingness to pay for the tug escorts in the first place does play well to their “neighbor to have” corporate culture. With or without the new docks, it can also be said that they’ve done the right thing, no matter how you look at it.

In both Lake Charles and Savannah, local channel users have similar complaints when they talk about their hometown LNG terminals. Southern LNG is looking to double the number of LNG tankers that call on the terminal, but other local Savannah River users are worried that the increased traffic will delay their commerce. With a two-mile buffer zone now in force, behind and in front of any LNG tanker, the ship channel is already feeling the effects of LNG traffic. It could get worse.

Captain Lakshman also told MarEx on Tuesday that a scheduled 1500 hours sailing time for one of his vessels was delayed until 2000 hours recently; all because of LNG traffic in the channel. Lakshmann worries that commercial shippers will eventually look for other ports where turnaround time isn’t threatened by long delays associated with the LNG facility. In Lake Charles, the Sempra Facility has the potential to create the same delays, once up and running, depending, of course, on the safety precautions decided on by the powers-that-be.

Lake Charles’ existing LNG facility, Trunkline, in contrast, is secluded in its own dredged cut, out of the ship channel and away from virtually all other ship traffic.
Click here to view an image of the Trunkline Terminal located in Lake Charles on the Industrial Canal. Well recessed from the ship channel, away from passing traffic, the terminal is easily defendable against waterborne security threats and poses little in the way of safety hazards to others. Beyond this, the locations and berthing arrangements of the Trunkline and Southern LNG terminals both eliminate the need for escort tug protection from passing traffic. (Photo: courtesy of Trunkline LNG)

In Lake Charles, concerns over safety at the rapidly expanding Sempra Terminal spurred major channel users to commission a “Calcasieu Channel Passing Study” for the facility. A unanimous vote by the Calcasieu River Waterway Safety Committee (CRWHSC) authorized additional “analysis of passing vessel effects on docked LNG tankers” with Oceanic Consulting, a Canadian-based marine consulting group. The $200,000 consulting project, which finished just this week will, hopefully once and for all, determine whether passing traffic can navigate safely in proximity of the new terminal’s angular and open berthing arrangement and under what conditions.

The series of simulations were run at the Oceanic / CMS facilities in St. Johns, Newfoundland for the Calcasieu River Waterway Harbor Safety Committee (CRWHSC). Also, following the CRWHSC work, another set of simulations were independently run with basically the same equipment and alignments. These additional runs were conducted to complete the simulation matrix as had originally been agreed upon within the CRWHSC and to provide additional data for further review.

While the official results and report on the simulations are still perhaps weeks away, MarEx did receive preliminary - and we stress unofficial - information on Wednesday from CITGO Petroleum, one of the parties with a representative in attendance. According to our source, early data shows that 29 CRWHSC “runs,” each mimicking a different situation, emergency or set of variables, were completed. Of these, 5 simulations resulted in allisions with the docked LNG tankers and 5 more resulted in passing vessel groundings; equating to a 34% failure rate. But others tell a different story.

Mike Miller of the Lake Charles Pilots, when contacted by MarEx for comment, was reluctant to speak out. He cited agreements between the attending parties where they had decided not to speak in generalities until the full consulting report was issued. But faced with CITGO's account of the simulations and modeling, he interviewed Captain George Mobray, who attended the simulations for the pilots. Only then did Miller pass along the following data:

•Vessel transits using conventional tug boats were adequate until meteorological conditions were ramped up to equal or exceed 30 KT of wind and 2 KT of current; or combinations thereof.

•Only one of the ten incidents (a grounding, actually) described by CITGO personnel occurred when using the tractor tugs.

Miller went on to say that only when wind conditions were increased to 30 KT with an ebb tide of 2 KT for an outbound loaded tanker did the tractor tugs fail to prevent a casualty. In this case, he says, the passing vessel grounded south of the terminal.

According to Miller, nothing unusual was noted during the modeling and / or simulations. In fact, he said, "We never move LNG ships with winds exceeding twenty KT in any event." He did concede that it was likely that tractor tugs would be part of the safety equation for passing traffic once the Sempra facility was up and running. But, he stressed once again, "Even conventional tugs were adequate until high meteorological conditions were simulated."

The official results, when released by the Oceanic Consultants, will tell the full story. Until then, there are only conflicting accounts of what transpired. In Savannah, an exposed LNG berth required a minimum of two tethered tractor tugs, fore and aft, for all passing deep draft traffic. It’s now hard to imagine how the port of Lake Charles could allow passing traffic to proceed without tractor tug escorts, once Sempra begins trading here.

It is also hard to understand how the primary government agency responsible for marine safety in America today could ignore the results, whatever they may show, of some of the most sophisticated marine simulation and modeling studies available in the world today. Nevertheless, the Lake Charles Coast Guard is on record as saying that “Coast Guard decisions regarding safety precautions at the Cameron terminal will not necessarily be linked to the results of the CRWHSC study.”

There is good news. On October 12 of this year, an inbound, loaded LNG tanker on the Savannah River lost partial power during its transit to the berth and, according to Coast Guard sources in Savannah, “was unable to maintain steerageway.” Because the port requires escort tractor tugs with all LNG ship traffic, as well as mandating a two mile buffer zone in either direction, the escorting tugs were able to inch the vessel safely to the berth over a 4-1/2 hour time span, without further casualty.

While the full capabilities of the tractor tugs became fully evident during the towing operation, it is unknown as to whether they would have been sufficient in the event of a complete loss of power. In the end, the safety precautions which served this particular incident well, are also part of the reason other vessels can experience delays of five hours or more, every time there is an LNG movement in Savannah. The culture of safety touted by Sempra LNG’s CEO clearly does not come without a price, nor will all the precautions in the world guarantee safety on the Calcasieu River once their LNG terminal begins trading. But the same can be said for any marine cargo facility, at any port in the world.

The only question left to be answered now is whether Sempra, FERC, the port of Lake Charles and the Coast Guard have done everything necessary to ensure that the newest addition to the Lake Charles industrial complex is as safe as is possible. Weighing everything that we know so far, it’s still not entirely clear that they have. What is crystal clear is that the final price tag of those efforts, if in fact they are “enough,” could be higher than anyone might imagine, and more than any of Sempra’s supporters are willing to admit.