HAZOP Procedure

SUV Ore Sossego

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INDEX

INTRODUCTION 3

THE STUDY 4

THE TRANSSHIPMENT ASSETS 4

APPROACHING MANEUVER 5

ABBREVIATIONS 5

HAZOP SCOPE AND OBJECTIVE 5

HAZOP PROCEDURE 6

IDENTIFICATION OF SYSTEMS 7

IDENTIFICATION OF GUIDE WORDS 8

PROCEDURE 9

END OF THE MEETING 12

HAZOP WORKSHEET 13

HAZOP FACILITATORS 13

HAZOPTEAM 14

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INTRODUCTION

The freight component in the total delivering cost is significant for commodities
such as iron ore, particularly when it needs to be transported over long distances
from the producer to the consumer and especially in high freight markets, as it has
been experienced recently.

Vale, Rio Tinto and BHP Billiton which, at present, account for nearly 70 percent of
global iron ore shipments, are the main suppliers of China, the world biggest iron
ore consumer. Barring domestic iron ore production which is anyhow of low grade,
all the iron ore imported by the Chinese Steel Mills (CSM) is seaborne.

This massive demand for raw materials by China over the past few years has
prompted suppliers to seek improvements in their supply chain.

In order to reduce the freight disadvantage, Vale suffers from compared to

Australian dealers, due to their geographical proximity to China, Vale has built
400,000 plus DWT ships, Valemax ore carriers (among the worlds largest ore
carriers) to transport the iron ore in much larger parcels than the conventional
cape size (170,000 DWT) thus benefiting of economy of scale (the larger the
shipment size, thus lower the unit transportation cost).

Valemax vessels are employed on dedicated routes such as Brazil to Oman (captive
receiving port at Sohar), few European ports and to China.

Valemax vessels are unable to enter ports in China because of their deep-water
draft (about 23 meters) and their main dimensions (360 meters long and 65 meters
wide)

Floating hubs for various commodities and vessel sizes are widely used to realize
the economy of scale on long sea voyages. Therefore, as an alternative to the
construction (or supplement) of shore based deep-water terminals at the receiving
ends, Vale plans to engage one of their converted VLOC to SUV Ore Sossego to
carry out effective iron ore transshipment operations.

SUV Ore Sossego is equipped with cargo handling facilities such as Five heavy
duty cranes, hoppers, a conveyor system with two stationary ship-loaders with
shuttle booms capable to lighten / unload the Vale max and load VLOC / Cape and
Panamax size vessels. The Self Unloading Vessel (SUV) has the following main
features (about):

LOA 321.95M Breadth 58.0M

Depth 29.50M S. Draft 20.10M
SDWT 256147 T Displacement 301116T
GRT 149064T NRT 44719T

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Following vessel shall be involved in transshipment operations.

a. The SUV Self Unloading Vessel Ore Sossego,

b. Mother vessel - ore carrier of about 400.000 DWT, to be lightened or fully

discharged.

c. Feeder Vessel VLOC / Panamax or Cape size vessel to be loaded.

The operations shall be carried out by transferring the cargo from the mother
vessel to the feeder vessel via SUV which shall be shipped to various ports in
China / Japan / Taiwan etc.

Transshipment operations including berthing & Un berthing operations shall be

carried out in accordance with industry developed Ship to Ship Transfer Guide
(OCIMF).

SUV shall also be equipped with a set of primary & secondary fenders on either
side comprising of large Yokohama pneumatic floating fenders positioned along the
parallel body length of SUV. Secondary (smaller) fenders shall be fitted /
hanging on bow and stern flares on either sides.

THE STUDY

Owners Vale have requested a systematic examination of the SUV / transshipment

operations with the aim to identify safe methods of operation and control the risks
associated with the transfer of Iron Ore, based on the current design philosophy.

The requested examination shall be carried out in the form of a HAZOP study and
would be conducted in a formal workshop environment where discussions between
the key project stakeholders could take place under the direct control of the
HAZOP facilitator.

This document has been developed as a guide to the HAZOP study.

THE TRANSSHIPMENT ASSETS

The Transshipment Assets, object of this HAZOP, are described below:

Dedicated deep water transshipment site and vessels waiting anchorage

allocated in Subic Bay,

The SUV Self Unloading Vessel Ore Sossego, VLOC size vessel capable to
transship iron ore from vessels up to 400.000DWT onto feeder vessels.

04 nos tug with adequate BHP & BP to assist during berthing & un berthing
operations and during emergency manoeuvres.

SUV - cargo handling equipment.

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 Fendering and mooring equipment.

Experienced crew.

APPROACHING MANOEUVRE

The possible approaching and mooring manoeuvre shall be carried out by first
anchoring the Valemax at transshipment location & and then SUV / FV to come
alongside.

The preferred method will be selected by the team as a first task of the workshop,
before the HAZOP starts.

ABBREVIATIONS

The following abbreviation will be used in the present document:

GW Guide word
ALARP as Low As Reasonably Practicable
HAZOP Hazards and Operability
SUV Self Unloading Vessel Ore Sossego
FV Feeder Vessel could be VLOC / Cape size or Panamax.

HAZOP SCOPE AND OBJECTIVE

The HAZOP review will cover the risks related to the procedure of transshipment
on the basis of the risks associated to the single operation and the failure that
could occur during operation.

The HAZOP aims to:

Identify and assess the risks related to the single operations that will be
performed in order to ensure that all risks have been duly addressed in the
design or in the procedure;
Provide an input of practical experience and knowledge of similar
transshipment operation into the study;
Recommend improvements where the envisaged safeguards resulted, as a
result of this HAZOP, inadequate to control the hazards that have been
identified.

The objective of a HAZOP study is to recognize and identify the issues; HAZOP is
not a design review, as such, it is not carried out with the purpose of modify the
existing design but to evaluate the risks involved with it. However, if required,
addition or modifications to the design or procedures will be agreed.

Concerns related to compliance with Contractual documents or Client expectations

shall be discussed and solved prior and outside the HAZOP scope of work.

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HAZOP PROCEDURE

The HAZOP is a systematic procedure to assess all the potential deviation in

process parameters that could lead to consequences for safety of personnel or
operation.

The HAZOP Workshop is led by a HAZOP facilitator, who is technically skilled,

familiar with the process and objectives of study and able to guide the team
through the HAZOP process. The facilitator will explain the HAZOP process to be
followed before the HAZOP session starts.

This HAZOP study has been prepared by MSI Ship Management Pte Ltd, the
Technical & Operations Managers of SUV Ore Sossego and shall be undertaken
according to the methodology illustrated below.

In order to help the team to focus its attention, the Project is broken down
into several elements. Such elements, called systems, can be section of
the plant as well as activities.

Each element will then be individually brainstormed, using a series of

guide words (GW5) and reference to lessons learned from other projects.
The purpose is to identify possible internal and external hazards, identify
and quantify the level of risk and to propose appropriate mitigating
actions. As well as hazards related to single activities, hazards related to
possible effects of one activity on another should also be identified.
In general HAZOP procedure is applied to process plants where the
deviations are the process parameters such as pressure, temperature,
etc. In order to apply such procedure to the transshipment process, the
procedure followed is what-if like. This technique is a method of hazard
identification aimed to identify hazards (i.e. what might go wrong) by
considering unplanned deviations from normal operations.

The following flowchart describes the procedure that shall be followed:

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Figure 1- HAZOP Procedure Flow chart

IDENTIFICATION OF SYSTEMS

The System in the HAZOP is the basic system to be analyzed. There is not a fixed
rule to define the systems, too small systems provide a good assessment but lots of
repetitions and cause time consume, too large systems make analysis less
accurate.

In consideration that the aim of the HAZOP that will be performed is to assess the
risk related to the transshipment operation, for the specific case, MSI has defined
Systems as the basic operations to be performed in the transshipment.

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The following list of systems is proposed, based on experience in similar operation
and the final list of systems will be agreed at the beginning of the meeting.

No. System Description

1. SUV Waiting time
2. SUV Trip to/from the transshipment
site
3. SUV Vale max, Approaching, berthing
and unmooring maneuvering.
4. Feeder vessels Approaching, berthing
and unmooring maneuvering.
5. Ancillary services.
6. Transshipment operation/cargo
trimming.
7. Ancillary services.
8. Various.

Table 1 - System List

IDENTIFICATION OF GUIDE WORDS

GWs are, in general, failure, miss-operations, and human error, external events
that could happen during transshipment operations and help in assessing the likely
deviations from normal state of operations.

According to the What-If method, in the first stage of the workshop, the invited
team of qualified members will be encouraged to raise What if...? questions
around a pre-prepared checklist to jointly identify and evaluate what might go
wrong in the envisaged operation or process. This aimed to define a shared list of
what If whose associated hazards will be discussed in a later stage of the
workshop.

The following what If checklist has been prepared based on experience from
similar operations to stimulate the discussion for the hazards identification:

Guidewords/What If
Breakdown on mooring winches
Change in freeboard
Change in/adverse weather condition
Contact damage
Communication issues/failure (language,
misunderstanding etc., including failure to communicate
the start of operations, emergency plan, etc.)

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Guidewords/What If
Crane operator error
Darkness/Poor visibility
Emergency repair
External Traffic
Failure of deck mooring equipment/windlass
Failure of propulsion, steering or power
Fatigue of Crew
Fender failure/loss
Fire
Flooding
Fouling
General cargo handling facility failure
Human error
Inadequate emergency plan
Lack of availability of key spare parts
Lack of familiarity with transfer operation
Lack of knowledge for emergency response
Lack of maintenance
Lack of planning/documentation/Procedure
Lack of security
Low Feeder Vessel /Valemax standard
Maneuver error
Mooring lines failure/slack
Reduced thickness of plates
Ropes wrap around propeller
Spillage
Table 2 - What If List

PROCEDURE
The methodology requires exhaustive consideration of each activity to determine if
any potential problem regarding safety or operations may arise due to deviations in
the failure of some system during such operation.

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After the team has shared and agreed on a list of systems and GW/what If, the
HAZOP facilitator will define the GW to be considered and will ask the team if it
applies and if such deviation can lead to consequences.

Therefore the HAZOP facilitator will ask the team What if guideword happens
during system?

The team shall identify and evaluate each hazard in turn finding out the potential
consequences should the event occurs.

The consequences shall consider:

Impacts on personnel (safety issue)

Impacts on assets / operation
Impacts on environment

In general its important that the team defines if that event (GW) could lead to
personnel injury/fatalities, delays in operation, damage of equipment,
environmental damage.

It is important to stress that consequences shall be assessed NOT considering

safeguards provided.

When the main consequences have been found the HAZOP facilitator moves to the
assessment of the Safeguards which have been envisaged for each consequence to
prevent the event occurring or mitigate the consequences if it does.

Safeguards are defined as devices, procedure or other means that can prevent or
mitigate the consequences of a failure. A device or a procedure will be considered
as a Safeguards if it is capable to prevent a failure to happen or can avoid that a
failure leads to consequences or, anyway, is capable to mitigate such
consequences. Furthermore, safeguards shall be fully independent from the
failure.

At this point the team has all the elements necessary to define if the risk is
acceptable or not.

Three possible conclusions can be drawn:

The system is adequately protected against this failure;

The system is not adequately protected against this failure;

A final conclusion cannot be drawn, deeper analysis is necessary.

In the first case, the HAZOP facilitator move directly to the next GW or system.

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On the contrary, if the team agrees that the system is not adequately protected
against the failure, the HAZOP leader guide the discussion with the aim of defining
additional safeguards, modification or new studies to be performed.

Once agreed, the recommendation is documented in the recommendation

column together with the Company responsible for the follow up. If no agreement
is found in 10 minutes, the HAZOP leader will report in the recommendation
column that a dedicated study shall be performed on the issue.

Where the acceptability of a scenario is not clear, it is possible to apply a matrix

like approach to assess the risk level on the basis of qualitative frequency and
severity of the event.

MSI suggests the following matrix:

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 Increasing Annual Frequency (reference is
Consequence made to similar operations)

A B C D E

Non- Likely/
Unlike Credib
Severity Rating

credib Probable Freque

ly le
Environ.
le nt
People

Assets Report Report

Happens
Could some Happen
ed at ed
happe times s
least some
n per y weekly
once times
ear

Slight
Slight
health Slight
1 damag
effect/In effect
e
jury

Minor
Minor
health Minor
2 damag TOLERABLE
effect/In effect
e
jury

Major
Local
health Local ALARP (As Low As
3 damag
effect/In effect Reasonably Possible)
e
jury

PTD* or Major
Major
4 single damag
effect
Fatality e

Extensi
Multiple Massive ve
5
Fatalities effect damag
e

(*) Permanent Total Disability Figure 2 Risk matrix

END OF THE MEETING

At the end of the last day the recorded information will be printed for review.

At the end of the review the HAZOP leader and a representative of each party will
sign the printed copy. From this moment on, any modification, apart wording, shall
be avoided.

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HAZOP WORKSHEET

All concerns raised during the HAZOP sessions will be documented in HAZOP review
worksheets which includes the column headers as described in the following table.

Items Description
Session Date Indentifies the session when the System was
analyzed. In case of additions/modifications in
later days, the date is not changed.
System The activity under analysis.
Document/Drawing Indentifies the reference drawing(s) on which
Numbers if any analysis of the system is carried out.
GW Is the guideword i.e. the failure under analysis
Consequences Description of the consequences of the possible
impact of the cause
Safeguard Description of the safeguards in place
Recommendations Description of the recommendation (s) that could
be in place
Responsible Description of the responsible(s) of the
recommendation(s)

HAZOP FACILITATORS

Hazop Leaders:

Capt. Sachin Saxena (MSI Operations), master mariner with over 15 years of sailing
experience on specialized vessels (Gas & Chemical tankers) sailing worldwide.

Also a marine professional trained to carry out independent Ship to Ship Transfer
operations on specialized vessels.

Joined MSI Ship Management in June 2010 June as HSQE Superintendent & since
then looking after the complete operations of VLOC Ore carrier fleet for owners
Vale.

Since Jan 2012, was involved in setting up the initial procedures for FTS Ore
Fabrica (FTS Floating Transfer Station) for owners Vale and responsible for
handling complete terminal operations of Ore Fabrica at Subic / Philippines

The facilitators will explain the HAZOP process to be followed before the HAZOP
session starts.

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The HAZOP facilitators are responsible for the correct implementation of the
present procedure as well as to meet the HAZOP goals and keep the team focused
on the subject.

Hazop Leader will have to ensure that the whole scope of work is covered and that
all the members of the HAZOP team contribute to it.

HAZOP TEAM

The HAZOP team usually comprised a multidisciplinary team of personnel involved

with the process design, instrumentation and control, project, operations, and
maintenance of the facilities, led by the lead auditors.

The HAZOP Team responsibility is to contribute to the HAZOP development staying

focused on the item under discussion and avoiding making separate meetings
during the review.

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