Liquid cargo storage – an insurer’s perspective

Feb 04 2021

Low oil prices have encouraged many owners to use vessels for medium- to long-term floating storage – but a number of issues arise from an insurance / risk management perspective. By Rod MacLennan, master mariner and loss prevention executive, North of England P&I.

In general, a more refined product has a shorter shelf life than crude oil.


However, due to a vast range of characteristics, compositions and potential additives, it is difficult to exactly determine the shelf life of a particular cargo.


How can a vessel owner and crew help protect themselves against a potential claim?


Good vapour management

From a basic operational perspective, careful vapour management is key.


Excessive venting through PV valves can result not only in cargo losses but also a change in the quality or specification of the cargo.


If venting is required, it is important to check that local regulations permit this.


Some areas, such as California, do not permit tank vapour venting even as a means of controlling tank pressures arising from an increase in pressure due to diurnal (during the day) variation.


Risk of decomposition

From a more complex perspective, the rate of decomposition of a refined cargo depends on many factors.


These include the nature of the original crude, the distilling process, water content, additives used (anti-stat, antioxidant, etc) and vessel-related factors such as tank coating condition.


A certificate of analysis and quality should be provided on loading and used as a reference for composition, additives and water content.


Monitoring the cargo

Monitoring by analysis may be the only way to truly know how well a cargo is surviving storage.


Where liquids are concerned, before the vessel goes into storage mode, take samples of the cargo and have them tested in the presence of an independent surveyor.


When in storage mode, take regular samples and analyse them to determine the quality of the cargo.


However, this level of analysis may be reliant on laboratories being located close by and is not always an option.


If this is the case, the vessel’s crew should continue to regularly take samples and check them visually for colour, viscosity and sediments as well as noting the odour.


In addition, take regular ullages [head space measurements] and record them along with cargo temperatures, bottom soundings (such as free water and sediments), inert gas readings and external temperatures.


It is also important to record any controlled or uncontrolled venting and, if required, operation of the inert gas plant.


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