AbstractsLaw & Legal Studies

There are different ways to transport natural gas. One way is to cool it to a temperature of -162°C and transport it in liquefied form (LNG). This is both a well known and often used method in the shipping industry. It is also possible to compress the natural gas (CNG) and contain it in cylinders / bottles. The development of the latter has only recently begun, and for now, the only real option when it comes to transportation of gas at sea is LNG. Nevertheless, the concept of CNG is still very interesting because it has the capability of reaching stranded gas reservoirs. Whereas exploitation of these areas using vessels transporting LNG would be far too expensive, shipping companies have with the introduction of CNG developed a much more cost-effective and less time consuming method. CNG has been discussed within the shipping industry since the 1960 s, but it is recently that the technology has become sufficiently developed. It is only just now that one has obtained the means to finance the project and been able to make it profitable. Unfortunately, since CNG only exists in theory and on paper, the regulatory framework around the concept is not completely developed. In an attempt to explain the CNG concept, I will therefore look at not only the technical, but also the economical and legal aspects concerning the subject. In this paper I will show that there is a need for CNG and that it is a better economical alternative to the LNG system when it comes to transporting gas over shorter distances. I will also show that although well known international classification societies, such as Det Norske Veritas (DNV) and American Bureau of Shipping (ABS), have developed their own CNG standards it does not mean that the concept is also covered by the mandatory international regulations produced by the International Maritime Organisation (IMO). After analysing the legislations of several international maritime conventions and codes, I will demonstrate that there exists a definition problem in the different conventions and that CNG falls outside the scope of some of the most significant codes. I will firstly evoke the technical aspect of the concept by considering the need for this new type of innovation, before I look into the differences between CNG and LNG to verify the cost-effectiveness of the two methods of transportation. The Norwegian shipping company Knutsen OAS is currently developing a CNG vessel and it will therefore be used as an example to illustrate how the system works in practice. The papers fifth section examines if the international maritime classification societies have acknowledged the CNG concept and what the consequences of this is. I will then look at IMO in the attempt to answer the question if CNG is in compliance with the international conventions SOLAS and MARPOL, before I look into the problems of the International Maritime Dangerous Goods code (IMDG) and the more important International Gas Carrier code (IGC). This is important whereas to the survival of CNG. Finally I will also take into…