c1a appendix a

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Cabrillo Port LNG Deepwater Port Risknology, Inc.Independent Risk Assessment January 2006

APPENDIX AHAZARD IDENTIFICATION STUDY

(HAZID)

TO THE

INDEPENDENT RISK ANALYSIS(APPENDIX C1)


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Cabrillo Port LNG Project

Hazard Identification Study (HAZID)

Final Report

January 2006

Prepared for:

Ecology and Environment, Inc.San Francisco, California

Prepared by:

Risknology, Inc.previously A.J.Wolford & AssociatesHouston, Texas

Project No.: 304


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DISCLAIMER RELATING TO THIS REPORT

Risknology, Inc. previously AJ Wolford & Associates (AJW+) has made every reasonableeffort to perform the work contained herein in a manner consistent with high professionalstandards. This work is dependent on the accuracy of information provided by BHP Billitonand its contractors.

January 2006


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Cabrillo Port LNG Deepwater Port Risknology, Inc.Independent Risk Analysis Appendix A i January 2006

TABLE OF CONTENTS

1.0 Introduction..................................................................................................................... 2

2.0 Design Basis used in Workshops................................................................................ 2

3.0 Security Vulnerability Assessment (SVA)................................................................... 3

4.0 Hazard Identification (HAZID) Study............................................................................ 3

5.0 Release Scenarios.......................................................................................................... 5

6.0 Conclusion...................................................................................................................... 8

ANNEX 1: List of Drawings (Hazid Binder Index.xls)

ANNEX 2: Guidewords (Hazid Guidewords.xls)

ANNEX 3: Security Vulnerability Assessment Logsheets (304 Cabrillo Port SVA

Logsheet.xls)

ANNEX 4: Hazard Identification Workshop Logsheets (304 Cabrillo Port Logsheet.xls)


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Cabrillo Port LNG Deepwater Port Risknology, Inc.Independent Risk Analysis Appendix A 1 January 2006

CABRILLO PORT LNG PROJECT

HAZARD IDENTIFICATION STUDY (HAZID)

REPORT SUMMARY

1.0 INTRODUCTION

BHP Billiton, Inc. (BHPB) is in the process of applying for a deepwater port license for theCabrillo Port project. Ecology and Environment, Inc. (E & E) has been contracted by the UnitedStates Coast Guard and California State Lands Commission to write the Environmental ImpactStatement (EIS). The purpose of this report is to outline the methodology that was used toconduct the Security Vulnerability Assessment (SVA) and Hazard Identification (HAZID)workshops. Results of the workshops are discussed are including recommendations for release

/ consequence modeling to be conducted within the Independent Risk Analysis.

Objectives

The objectives of the SVA and HAZID workshops were:

To identify possible security threats and accidental hazards that have the potentialto impact the public and/or environment;

To document the identified threats and hazards associated with the security,installation, and operational activities that have the potential to impact the publicand/or environment;

To incorporate (identify and analyze) the public concerns that were recorded duringthe public scoping meetings;

To identify and determine adequacy of critical safeguards (hardware systems

and/or procedures) associated with the identified risks and proposerecommendations to improve the vulnerability and safety systems of the project;

To develop release scenarios, for which physical effects (consequence) modelingis to be conducted.

Study Dates

The SVA was conducted in Long Beach, California in the California State Lands Commissionoffices on April 5, 2004, and the HAZID workshop was conducted April 6-8, 2004.

2.0 DESIGN BASIS USED IN THE WORKSHOPS

BHPBs Cabrillo Port project is a liquefied natural gas (LNG) facility. The facility will consist of afloating storage and regasification unit (FSRU) that will receive incoming gas from LNG carriers,store the gas onboard the FSRU, and regasify the LNG to send to shore via pipeline. TheFSRU will be permanently moored approximately 12.2 nautical miles (NM) offshore of OxnardCounty, California in a water depth of approximately 2,900 feet. The FSRU will have a storagecapacity of 273,000 m3. Offloading time for the LNG carriers to the FSRU will take about twentyhours, and it is expected that there will be two to three carriers per week. The regasification unit


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will be designed for a peak production of 1.5 bscfd of gas and will send the gas through theexport risers to subsea pipelines. The pipelines will primarily be above the sea floor until awater depth of 45 feet, approximately 3,100 feet offshore. At a water depth of 45 feet, thepipeline will be directionally drilled, buried, and run underground to the metering station locatedinside Reliant Energys Complex. Once the natural gas pipeline reaches shore the pipeline willbe owned, operated, and maintained by Southern California Gas. Southern California Gas will

be responsible for delivering the gas to the end users.

3.0 SECURITY VULNERABILITY ASSESSMENT (SVA)

This SVA was conducted using a facilitated, team-based consensus process. Mr. William Baileyof E & E facilitated the SVA workshop. Mr. Bailey is a security professional with acomprehensive background in terrorism and intentional threat identification and assessment,qualified to design and lead security vulnerability assessments. He was the designatedmember of the third party EIS team that had security clearance and access to the BHPBCabrillo Port Security Plan. Mr. Bailey was assisted by William Daughdrill, also of E & E, andDr. Andrew J. Wolford of AJ Wolford & Associates. Sam Autry of AJ Wolford & Associates

recorded the workshop.

The report worksheets document the Threat and Potential Consequence defining eachscenarios identified by the Workshop Team. Specific vulnerability was not evaluated during theworkshop. Recommendations were generated by the SVA team for the scenario the team feltrequired additional safeguards.

The SVA team agreed not to use a Risk Ranking Matrix because many recommendations, thisearly in a project life, involve further studies and definitions necessary to perform a more precisequalitative risk ranking.

Sixteen different scenarios were discussed during the workshop. One specific recommendation

was made by the Workshop Team. The recommendation captured by the team addressedmitigation of the threat of a small craft being used to deliver a bomb or shape charge to theFSRU or LNG carrier alongside.

Consider having onsite standby vessel at all times to enforce safety zones aroundthe FSRU. The thought is that an onsite standby vessel could be used to deter orintercept incoming or unknowing vessels.

An additional column, Continued Work was added to the SVA worksheets after the workshopwas complete. The purpose for this column is to show which concerns are linked to the releasescenarios described below as a result of the SVA workshop discussions.

4.0 HAZARD IDENTIFICATION STUDY (HAZID)

This HAZID was conducted as a facilitated, team-based review using hazard guidewords asprompts for identification. The work, conclusions and recommendations resulting from theworkshop are the result of consensus of the team participants and is based upon the cumulativeexperience and expertise of these professionals in the LNG industry. Dr. Andrew J. Wolford ofRisknology, Inc., previously AJ Wolford & Associates, a firm that specializes in process safetyand risk assessment, facilitated the meetings and provided knowledge of the HAZIDmethodology that was used. Dr. Wolford has been trained in the HAZID methodology, and has


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conducted numerous HAZIDs for a variety of offshore platforms, floating terminals and othermarine facilities. Team members were provided with an overview of the technique prior tobeginning the study.

The workshop team utilized the What-if? technique to identify potential hazards. The What-if? technique is recognized as an acceptable method of identifying and evaluating hazards.

The technique involves asking questions that require the team to analyze deviations from theanticipated normal operation of the FSRU complex. A representative example is What-if LNGis spilled overboard? Potential Consequences of each scenario are documented in the reportworksheets. Existing Safeguards were documented for those safeguards that already exist orare planned design / operational features that reduce the risk associated with the specificscenario.

The HAZID was broken up into nine different study sections:

Cargo System FSRU

Cargo System LNG Carrier

Marine System Ballast Control

Marine System Bilge

Utility Systems Pipeline Systems

Turret & Subsea Pipeline including Mooring and Risers

Hull Design

Operational Modes

Each morning BHP representatives provided the team with a presentation and details of each ofthese study sections. The BHP team was then excused from the meeting and did not participatein the workshop proceedings. Once the team had working knowledge of the individual sections,potential threats or concerns were identified and defined using the guideword technique. A list ofguidewords can be found in the appendix along with the log sheets.

The HAZID team agreed not to use a Risk Ranking Matrix because many recommendationsinvolve further studies and definitions necessary to perform a more precise qualitative riskranking in terms of severity and likelihood.

There were 40 identified concerns that generated 8 recommendations to address them. Belowis a list of concerns and recommendations from the study.

Verify or confirm the safeguards associated with the flame in the SCVs. There is aconcern that the flame could be considered a possible ignition source for an LNGleak or cloud.

The team expressed a concern that the potential exists for common cause failurethat can cause LNG cargo tank overfilling with liquid carryover to the compressorand possible over-pressurization of the tanks.

Verify whether or not a liquid spill valve will be installed on the local tank vents. Theconcern is for an LNG release from local vents potentially causing natural gas to bereleased around the process equipment.

The team expressed concerns about the understanding and decision as to why aninternal turret was not considered.

Team expressed concerns about the durability of the turret mooring system. Theconcern dealt with whether or not the extended amount of time the LNG carrier will


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be moored alongside the FSRU has been properly analyzed. This extended amountof time is more than most turrets operating today are exposed to.

Team expressed concern about seismic activity in the area and the potential extremeloads on the PLEM. The concern dealt with whether or not these extreme loads onthe PLEM have been properly analyzed.

Consider including in the operations manual the philosophy to shut down loading if

thrusters are lost. Clarify BHPBs intent to use tugs upon loss of thrusters. The team expressed concerns that the pump maintenance frequency will be much

higher for FSRU than trading LNG carrier, thus necessitating more frequent tankentries and higher exposure to air/gas mixtures.

5.0 RELEASE SCENARIOS

During the study it was agreed that the following release scenarios would be modeled. sescenarios were developed based on the concerns that arose from the meetings, and they aremeant to be used as bounding scenarios to all concerns discussed during the workshop. A briefdescription of the seven scenarios and the release results are given below. As discussed above,

a column was added to the workshop log sheets to link the scenarios below to each correspondingconcern.

Scenario #1: Accidental Explosion in Void

The scenario includes the following assumptions and/or estimates that will be proven during thedetailed modeling process:

LNG leak into void

Ignition source

Explosion over-pressure possibly ranging between 120 140 psi

Potential failure of bulkheads and venting

Potential structural failure to center cargo tank support

Potential collapse/displacement of center cargo tank

Progressive failure of center cargo tank

Potential escalation for this scenario includes the following:

Ignited pool fire with entire center cargo tank inventory

Structural failure of hull/buckling/sinking

Release of adjacent cargo tank inventory subsea

Partially filled buoyant cargo tank float/drift causing the cargo tanks to heat up fromseawater heat transfer and failure with LNG release from cargo tanks at surface


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Scenario #2: Accidental Explosion in Cargo Tank

This scenario includes the following assumptions and/or estimates that will be proven during thedetailed modeling process:

Center cargo tank under maintenance, air environment (gas-free)

LNG introduced into center cargo tank Ignition source

Explosion

Potential missile generation

Penetration/leak from either or both adjacent cargo tanks

Potential escalation for this scenario includes the following:

Ignited cargo tank fire from one adjacent cargo tank

Structural failure of hull/buckling/sinking

Release of cargo tank inventory subsea

Scenario #3: Accidental / Intentional Marine Collision

The scenario includes the following assumptions and/or estimates that will be proven during thedetailed modeling process:

Collision large enough to penetrate single LNG cargo tank

LNG leaks at approximate water line

Ignition source

Escalation for this scenario includes an ignited pool fire from inventory of center cargo tank.


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Scenario #4: Accidental Explosion between Vessels

The scenario includes the following assumptions and/or estimates that will be proven during thedetailed modeling process.

LNG loading arm failure

LNG spill between FSRU and LNG carrier onto water

Ignition source

Explosion in confined space

Combination of venting and excessive loading on hulls

Scenario #5: Intentional Cargo Tank Breach Events

Scenario includes the following assumptions and/or estimates that will be proven during thedetailed modeling process:

Breach of side shell, inner bulkhead and multiple Moss Tanks, with equivalent hole sizeappropriate to intentional event mechanism (e.g. Rocket Propelled Grenade, othertactical weapon)

Release of LNG at water line

Ignition source (immediate and delayed)

FSRULNGCarrier

X

Waterline


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Scenario #6: Accidental / Intentional Cascading Multiple Tank Release (Escalating Events)

It was recognized that many postulated release scenarios have the potential for cascading(escalation) of the primary release by causing subsequent failures that result in additional releaseof LNG. Escalation should be evaluated in such a manner that does not require construction of

specific sequences of events and physical processes.

6.0 CONCLUSION

The above analysis should be considered preliminary, based upon the level of definitionprovided in design documents for review. The overall conclusions are:

Due to the early stage in design and limited data there are 40 identified potentialmajor risks with 8 recommendations to address them. The normal project designactivities should address these risks, but project hazard management processes

should verify follow-through.


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Cabrillo Port LNG Deepwater Port Risknology, Inc.Independent Risk Analysis Appendix A January 2006

ANNEX 1

LIST OF DRAWINGS


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ANNEX 2

GUIDEWORDS


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HAZID Categories/Guidewords

Natural Disasters Equipment/Instrumentation Malfunction Loss of Containme

High winds - typhoons Cryogenic pump failure Leak from LN

Squalls, swells Pump seal failure Leak from pi

Hurricane Safety systems Leak from pr

Tornado Communication Leak from lo

Extreme wave Common cause failures Leak from tu

Extreme current Process Upsets Leak from exTsunami Pressure deviations Leak from va

Extreme heat Temperature deviations Leak from fu

High humidity Flow deviations Leak into ba

Lightning Level deviations Drains

Earthquake Improper mixing Bunker oil fir

External Effects Corrosion/erosion Engine roomDropped object Startup/shutdown Generator ro

Marine collision Simultaneous operations Accommoda

Helicopter impact Explosive ha

Reduced visibility Composition Problems Energy relea

Sabotage/terrorism Moisture Environmental ImpMooring line failure H2S Concentrations Flaring/venti

Structural failure CO2 Flaring/venti

Loading arm failure Utility Failures LNG leakTank sloshing Blackout Waste water

FSRU listing Cooling water Ballast water

LNG carrier listing Instrument air Oily water tre

Loss of station keeping Inert gas Crew TransportatioLoss of buoyancy Nitrogen Crew boat ac

Fatigue/cracking Fire water Accident dur

Human Factors HVAC system Helicopter ac

Occupational accidents Ballast system Inspection/MaintenImproper/inadequate training Thruster Confined spa

Weather monitoring Emergency Operations Machinery/inShipping traffic monitoring Escape/egress/rescue Reduced visMaterial handling Disconnect during loading

Man overboard Turning bow against intruder

Dynamic situations hazard Release from vent

Appendix A - Annex 2.xls - HAZID Guidewords


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ANNEX 3

SVA STUDY LOGSHEETS


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1 Interagency response2 Crew background checks

Security force onboard cruise shipsCruise ship industry security's comparable to the airline industry

4 ARPA radars (not helpful for small craft, night time or fog)5 24 hour manned control room for vessel traffic control6 Use of a standby vessel for monitoring (proposed)

LNG carrier must give 96 hour agency notice to arrive

Notice must have crew list communicated to agency8 Safety zone around FSRU will be marked on charts of appropriate scale9 MMS rules for pipeline in water depths of less that 200 feet

10Pipeline will go underground at a water depth of 45 feet (approximately 3100

feet offshore) all the way to Reliant

General Mitigations Discussed for Security

Cabrillo Port Workshop

3

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Appendix A - Annex 3_Mitigations.xls 1 of 1Risknology, Inc.

January 2006


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ANNEX 4

HAZID STUDY LOGSHEETS


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Keywords/Concerns Captured During the Workship - Not Discuss Further

Relief Case?

Tank fatigue

Caustic materials

Loss of LNG containment from SCV tube into the water

Increased potential for human error due to increased frequency of loading

Failure of inert gas generator

Valve shuts at GC (offspec gas or GC malfunction)

Structural failure of the yoke

Commercial pressure to operate outside design envelop

Increased loads from accepting larger LNG carriers than currently available

Rapid reversal of currents during loading

Rapid reversal of winds during loading

Misjudgment or calculation of pipeline and seafloor coefficient of friction

Seawater in the SCVs

Dropped diesel refueling tank

Extreme weather causing tug to seek shelter

c1a appendix a

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