For the present purposes, Chapter 16 which bears the heading “Use of Cargo as
Fuel” is significant. The aim of it is to ensure safety whenever cargo is used as fuel.
Methane is the only LNG cargo the vapour or boil-off gas can be used in certain
machinery spaces where it may be used only in boilers, inert gas generators, internal
combustion engines, gas combustion units, gas turbines and the likes. For vaporized
LNG, the fuel supply system must comply with the relevant prescriptions. There are
also provisions relating to the requirement for no visible flame to be exhibited by gas
consumers and the uptake exhaust temperature must be maintained at a prescribed
level.
17
3 The Private Law Dimension
As mentioned previously, whilst the regulatory legal regime addresses both aspects
of LNG being carried on board as cargo and as bunker fuel, it is noted that in the
private law side of the equation which involves issues of liability and compensation
for damage, there is a lacuna in the law which needs to be filled.
18
In this context, the relevant international instrument is the International Convention on Liability and Compensation for Damage in Connection with the Carriage of
Hazardous and Noxious Substances by Sea 2010 (HNS Convention 2010).
19 The
Convention, originally adopted in 1996, was revised through a Protocol in 2010. The
consolidation of the two came to be known as the HNS Convention 2010. The
solutions adopted in the 2010 Convention reflect the reasons which necessitated the
changes which are to remedy the underlying costs which prevented the original
Convention of 1996 to enter into force.
One reason is the heavy burden placed on states requiring them to report the
extensive range of packaged substances received by them.
20 The shipowner’s
limitation amount in this respect has been increased to maintain the two-tier system
taking into consideration the exclusion from contributions to the Fund.
21 Another
reason is that in respect of LNG cargos the original Convention of 1996 made the
titleholder responsible for making contributions.
22 The third reason is that a series of
17 Corkhill (2016).
18 Xu et al. (2017), p. 148.
19 https://www.hnsconvention.org/wp-content/uploads/2019/05/2010-HNS-Convention-English.
pdf.
20 This was resolved by adopting a differentiation between bulk and packaged HNS goods by
excluding packaged goods from the definition of ‘contributing cargo’ and providing an exemption
to receiving states from the obligation to contribute to the HNS Fund in respect of them. However,
under the shipowners’ compulsory insurance, damage caused by packaged goods remains covered
and any excess is met by the HNS Fund.
21 See IOPC Fund (2019), p. 1, paragraph 4.
22 It was recognised that such person may not be subject to the jurisdiction of the state party and as a
result, contributions may not be recoverable. The 2010 Convention makes the receiver responsible
The International Legal Regime Governing Shipboard LNG
697
Fuel” is significant. The aim of it is to ensure safety whenever cargo is used as fuel.
Methane is the only LNG cargo the vapour or boil-off gas can be used in certain
machinery spaces where it may be used only in boilers, inert gas generators, internal
combustion engines, gas combustion units, gas turbines and the likes. For vaporized
LNG, the fuel supply system must comply with the relevant prescriptions. There are
also provisions relating to the requirement for no visible flame to be exhibited by gas
consumers and the uptake exhaust temperature must be maintained at a prescribed
level.
17
3 The Private Law Dimension
As mentioned previously, whilst the regulatory legal regime addresses both aspects
of LNG being carried on board as cargo and as bunker fuel, it is noted that in the
private law side of the equation which involves issues of liability and compensation
for damage, there is a lacuna in the law which needs to be filled.
18
In this context, the relevant international instrument is the International Convention on Liability and Compensation for Damage in Connection with the Carriage of
Hazardous and Noxious Substances by Sea 2010 (HNS Convention 2010).
19 The
Convention, originally adopted in 1996, was revised through a Protocol in 2010. The
consolidation of the two came to be known as the HNS Convention 2010. The
solutions adopted in the 2010 Convention reflect the reasons which necessitated the
changes which are to remedy the underlying costs which prevented the original
Convention of 1996 to enter into force.
One reason is the heavy burden placed on states requiring them to report the
extensive range of packaged substances received by them.
20 The shipowner’s
limitation amount in this respect has been increased to maintain the two-tier system
taking into consideration the exclusion from contributions to the Fund.
21 Another
reason is that in respect of LNG cargos the original Convention of 1996 made the
titleholder responsible for making contributions.
22 The third reason is that a series of
17 Corkhill (2016).
18 Xu et al. (2017), p. 148.
19 https://www.hnsconvention.org/wp-content/uploads/2019/05/2010-HNS-Convention-English.
pdf.
20 This was resolved by adopting a differentiation between bulk and packaged HNS goods by
excluding packaged goods from the definition of ‘contributing cargo’ and providing an exemption
to receiving states from the obligation to contribute to the HNS Fund in respect of them. However,
under the shipowners’ compulsory insurance, damage caused by packaged goods remains covered
and any excess is met by the HNS Fund.
21 See IOPC Fund (2019), p. 1, paragraph 4.
22 It was recognised that such person may not be subject to the jurisdiction of the state party and as a
result, contributions may not be recoverable. The 2010 Convention makes the receiver responsible
The International Legal Regime Governing Shipboard LNG
697