Piracy Attacks On LNG Ships

One could be easily forgiven for thinking that, despite the

increasingly audacious attacks by Somali pirates on merchant

shipping in recent months, LNG carriers are still relatively safe.

The prospect of taking over a ship which is carrying liquefied

natural gas at a temperature of minus 163°C ought to be enough

to deter most pirates, particularly where more easy pickings are

available. Piracy, however, is a booming commercial enterprise in

Somalia. The frequency of attacks in recent months and the

indiscriminate nature of those attacks suggest that LNG operators

now need to consider and address the previously unthinkable

questions of how to avoid or minimise the risk of capture of LNG

carriers transiting the Gulf of Aden and what to do if a vessel is

attacked and captured by pirates says Clare Calnan.

Increasing Frequency of Attacks

The Gulf of Aden is situated in the Arabian Sea between Yemen on

the south coast of the Arabian peninsular and Somalia on the Horn

of Africa and it connects with the Red Sea through the

Bab-el-Mandeb Strait. As such, it is an important route for

commercial shipping. It is reported that about 11% of the

world's oil carried by sea passes through the Gulf of Aden on

its way to the Suez Canal or to regional refineries. What has

provoked Somali pirates to attack shipping in the Gulf of Aden is

far from clear. However pirate attacks have almost doubled in the

first quarter of this year compared with the same quarter in 2008.

There were 102 attacks in the first three months of 2009 as

compared with 53 attacks in the first three months of 2008.

The manner in which the attacks have been carried out has also

changed. Pirate motherships have begun co-ordinating attacks on

merchant vessels off Somalia. According to the European Union Naval

Force's commander, of the 102 pirate attacks since December

2008, 31 were successful. Averaged out that is a capture rate of

almost two ships a week. The pirates are reported to be ever more

inventive and ruthless. Their attacks have become increasingly well

planned and often take place up to 600 nautical miles from their

pirate bases off the Somali Coast.

It is also clear that piracy has proved to be a successful

commercial enterprise for the pirates who live in a country that

has no formal government and where law and order has long ceased to

have any meaning. In November 2008 the Kenyan Foreign Minister

reported that the Somali pirates have been paid more than US$150

million in ransom in the previous 12 months. Given that Somalia is

one of the poorest countries in the world, it is perhaps not

surprising that the attacks continue and that the pirates seek ever

more lucrative targets in order to increase their ransom

demands

A turning point of sorts was thought to have been reached when,

at Christmas last year, a Saudi oil tanker was captured carrying a

US$100 million oil cargo. It was, at the time, the largest and the

most valuable ship and cargo to have been hijacked. Since then a

cruise ship has been attacked along with numerous other vessels. It

is therefore perhaps only a matter of time before we hear that the

first LNG vessel has been attacked or captured. Whilst this will no

doubt cause immediate alarm in the world's press, in reality

the carriage of LNG by sea is a remarkably safe operation. Thus,

despite the almost inevitable alarmist media headlines, it is

unlikely that there are any greater risks associated with a LNG

vessel being captured by pirates as compared with any other vessel

carrying a liquid cargo. In fact the risks may be considerably less

than with other liquid cargoes.

Charter Protection

Given that the LNG spot market is still relatively small, the

vast majority of the LNG carrier fleet is currently employed under

long or medium term charters, many of which were negotiated long

before pirate attacks off the cost of Somalia were thought to be a

serious problem. Thus the prospect of the LNG carrier being

hijacked was very far from the contemplation of those negotiating

these...