This client alert considers some of the recent amendments to the IGC Code with which new-build gas carriers have had to comply from 1 July 2016. These changes to the IGC Code are designed to give more flexibility in gas carrier construction and operation, and pave the way for further development in gas carrier technology, and changes in operating practices as experience across the gas carrier industry grows even stronger.

On 1 July 2016 a new regime for gas carrier construction was ushered in. From 1 July 2016 new-build gas carriers have had to comply with the recently revised IGC Code, the amendments to which entered into force at the beginning of 2016.

The amended IGC Code applies to all gas carriers the keels of which have been laid or which are at a similar stage of construction where construction identifiable with the gas carrier begins and assembly of the gas carrier has commenced, comprising at least 50 tonnes or 1% of the estimated mass of all structural material, whichever is less, on or after 1 July 2016.

Existing gas carriers constructed prior to 1 July 2016 but after 1 July 19861 still need to comply with the old IGC Code (on which see below) and will be required to have complied with certain elements of the new IGC Code by 1 July 2021.

Why amend the IGC Code? Although amended lightly more recently, the last major overhaul of the IGC Code was in 1993 (what has become the IGC Code first became mandatory on 1 July 1986), so it has been some while since any major revisions have been adopted. Indeed to call the new IGC Code an ‘amendment’ is something of a misnomer – the whole Code has been overhauled, from top to bottom, such that it is, in several respects, entirely new. The fact that a major revision to the IGC Code has taken some while to even be considered, let alone come into force, is testament to the foresight of the draftsmen of the GC Code and the Existing Ship Code that went before it.

The technology used in the construction, and operation of, gas carriers has of course advanced considerably since the 1993 IGC Code and the fleet has grown rapidly, and operators have gained much experience, however, one thing that has not changed is the impeccable safety record. The new IGC Code tackles several issues that the old IGC Code did not cover, and seeks to ensure that that impeccable safety record remains as intact as possible, and paves the way for future development of the technology in use on gas carriers covered by the new IGC Code. Further below we consider some of the key areas of the 1993 IGC Code that have been revised in the new IGC Code.

What is the remit of the new IGC Code? As with the 1993 Code, the new IGC Code applies to any ships regardless of their size, including those of less than 500 gross tonnage, engaged in the carriage of liquefied gases having a vapour pressure exceeding 0.28 MPa2 absolute at a temperature of 37.8°C and other products specified in the Code when carried in bulk. But there are some grey areas where the applicability of the Code may not be clear.

Conversions The new IGC Code applies to any vessel converted to be a gas carrier on or after 1 July 2016, irrespective of the vessel’s date of construction.

LNG/LPG FPSOs The preamble to the new IGC Code explains that FPSOs designed to handle gases in bulk do not fall under the IGC Code. However, it suggests that designers of such units may wish to consider using the IGC Code to the extent that it “provides the most appropriate risk mitigation measures for the operations the unit is to perform”.

FSRU The new IGC Code applies to FSRU intended to operate at a fixed location in re-gas and gas discharge mode3, but only in so far as the provisions of the Code are applicable to the proposed arrangements. In addition, the Code requires that Flag States / Port States establish additional requirements for such FSRU based on the principles of the Code, as well as recognised standards that address specific risks (examples of which are provided in the Code) not envisaged by the Code.

LNG bunker barges Outside of the conventional LNG market, there has been some confusion as to whether an LNG bunker barge needs to comply with the IGC Code or its new stable mate, the International Code of Safety for Ships using Gases or other Low flashpoint Fuels (known as the IGF Code, which will enter into force on 1 January 2017). Any bunker barge that carries a liquefied gas in bulk will be subject to the IGC Code4, and it is only in relation to the vessel being bunkered that the IGF Code will be applicable – the remit of the IGC Code (both new and old) stops at the delivery flange.

Some key revisions made in the new IGC Code

Use of gas cargoes other than LNG as fuel The old IGC Code did not permit anything other than methane vapour / boil off gas being burnt in gas carriers’ main propulsion plant, however, the new IGC Code expressly permits, subject to acceptance by Flag State and provided that the same level of safety as for LNG is ensured, the use of other non-toxic gas cargoes as fuel. This is a positive development for the LPG and ethane carrier industry, and will allow greater flexibility for such operators.

Following in the footsteps of 4-stroke diesel engines, in recent years 2-stroke diesel engine technology has advanced sufficiently for gas also to be used reliably in such engines in the alternative to fuel oil. The new IGC Code recognises that, and includes specific requirements for gas-fired internal combustion engines. Under the old IGC Code, special provisions for gas-fuelled internal combustion engines are to be considered by Flag State in each case.

In terms of supply of gas as fuel, the new IGC Code introduces specific requirements for high pressure systems. This is intended to permit wider use of engines that require high pressure gas injection systems, such as ME-GI engines.

Filling limits The old IGC Code permits a maximum of 98% level fill but provides that an owner may seek permission of their Flag State to exceed that limit. No doubt in response to increasing numbers of requests from owners to Flag States to permit increased filling limits, the new IGC Code sets out the criteria to be satisfied to increase the filling limit beyond the base limit of 98%, up to an absolute maximum of 99.5%. Although an absolute maximum is now set down, the new IGC Code provisions should give gas carrier operators greater flexibility to build gas carriers with increased filling limits without needing to seek approval from their Flag States.

New containment systems The new IGC Code paves the way for novel configurations of containment systems to be introduced. This is done by setting out functional requirements and safety principles for containment systems and leaves behind much of the old IGC Code’s approach to containment system design, which some criticised for being overly rigid.

In addition to the matters mentioned above, the new IGC Code introduces, amongst other things, revised requirements for gas carriers’ construction, including as to welds and non-metallic to metallic joints. It also revises the ship survival capability requirements, amends the permitted locations of cargo tanks and protective distances between tanks and side shell plating, as well as requiring existing ships to be fitted with stability instruments, all with a view to retaining the impeccable safety record of the industry.

Conclusion The new IGC Code has been a long time in the making, and is the product of a considerable number of interested parties’ input, all with myriad interests. It remains to be seen how the IGC Code will develop further – the IMO is certainly aware that the Code cannot remain static, and that further amendments will almost certainly be required as technology and experience advance. Indeed, some IMO member states are understood to be pushing for certain elements of the new Code to be revised already. For now, however, the amendments seem to be welcomed by many in the industry but, until the new IGC Code is actually applied it is unclear whether all the amendments will have the desired effect.