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FSO Safer: Operational Plan (April 2022) [EN/AR]

UNCT Yemen
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1. The FSO Safer: a problem and its solution

1.1. The problem

The Floating Storage and Offloading Unit (FSO) Safer is moored approximately 4.8 nautical miles off the coast of Yemen. Constructed in 1976 as an oil tanker and converted in 1987 into a floating storage facility, the vessel is singlehulled, 376 meters in length and contains an estimated 1.14 million barrels of light crude oil. It has been under the control of the de facto authorities in Sana’a (hereafter referred to as the DFA) since March 2015. Production and offloading operations are suspended due to the conflict situation in the area and no maintenance operations have been undertaken since 2015. Safety systems and gas monitoring systems have not been maintained and therefore there is an increased risk for fires and explosions The FSO’s insurance cover has lapsed and it is now uninsurable as its certificate of seaworthiness has expired. The Safer’s age and lack of maintenance have resulted in significant deterioration of its structural integrity and the vessel is at risk of spilling oil due to leakages, an explosion in its tanks, or a strike from a floating mine. A significant spill could occur at any time and would quickly surpass national capacity and resources to mount an effective spill response. The consequences of a spill would thus be catastrophic, devastating the Yemen coast, destroying livelihoods and forcing a closure of the ports of Hodeidah and Saleef - which are essential for the importation of lifesaving humanitarian assistance and food for millions of civilians affected by the conflict. The unique environment of the Rea Sea would suffer enormous damage. Depending on the season and prevailing wind and currents, the environmental impact also risks affecting Saudi Arabia, Eritrea, Djibouti and Somalia, and would disrupt vital shipping through the Bab al-Mandab Strait and the Red Sea. The recent explosion of the Trinity Spirit, a vessel carrying considerably less oil than the Safer, underlines the risk of a serious spill. The clean-up costs alone for a spill from the Safer are estimated to be up to USD 20bn1 , based on Exon Valdez costs. In addition, there would be massive economic losses due to the contamination of shipping lanes.2

1.2. Proposed solution

The long-term solution to the FSO Safer is to provide a replacement storage and offloading capability. This can be done either by converting a Very Large Crude Carrier (VLCC) to a self-contained storage and offloading facility (FSO) - essentially a newer, and double-hulled, version of Safer - or by use of a Catenary Anchorage Leg Mooring (CALM). These options are explored in more detail in section 3. FSOs – unlike normal tankers – are not commonly available and are usually made to order by adapting an ordinary oil tanker. This adaptation is a complex process that takes around 18 months.

Initial enquiries revealed that no FSOs are currently available on the market, thus the adaptation route would have to be followed. Using a CALM buoy could be quicker but would still require some time, either to adapt a VLCC as a storage facility or to build storage tanks onshore. The technical review carried out by SMIT, including discussions held at Ras Issa, gives reason to believe that the vessel is at risk of being the cause of a major oil spill and thus constitutes an emergency situation that cannot wait. In addition, the monsoon winds at the end of the summer create a much more difficult environment for the operation and greatly increase the risk of an accident.

The United Nations (UN) has therefore developed an operational plan that has two processes going forward in parallel: the first – the primary plan - comprising technical work with SMIT on the provision of a permanent solution; and the second – the emergency action plan – being the temporary ship-to-ship transfer of the Safer’s cargo of crude oil into a replacement tanker. The combined budget for an emergency operation plus the longer-term replacement of Safer by another FSO would cost in the region of USD 144m (see section 10). Indicative costings for the CALM buoy options are being developed with SMIT and initial estimates suggest they will be no more expensive, and possibly cheaper, than a replacement FSO. These figures assume it will be possible to sell Safer for scrap at present day values and all figures are subject to variation as the maritime marketplace is volatile and prices for both vessels and scrap can vary widely depending on global markets.

1.3 The UN role

In September 2021, the UN Resident and Humanitarian Coordinator for Yemen (RC/HC) was requested by UN HQ in New York to provide UN system-wide leadership and coordinate all efforts to mitigate the threats posed by the FSO Safer. The work builds on the earlier agreement in principle between the DFA and the Fahem Group to have SMIT carry out a ship-to-ship transfer of the oil and clean-up of the tanks and responds to the requests of both SMIT and the DFA that the UN hold the contracts for the work. The UN agreed to this because of the significant environmental and humanitarian impact of any oil spill, an event that must be avoided if at all possible. Accordingly, the RC/HC and his office has worked in collaboration with the relevant UN specialist agencies to develop the plan outlined below. In parallel with this the UN has held discussions with all the main stakeholders and has developed a funding strategy.

While the overall project is under the leadership of the RC/ HC, UNDP will be responsible for the project management of the emergency plan. This includes leasing of the replacement vessel, contracting the vessel crew, and maintenance and insurance of the vessel. In December 2021 a meeting of the UN Principals was held in New York and UNDP was instructed to fast-track a single-source procurement with SMIT Salvage. the necessary due diligence work for this has now been completed. This proposal assumes a successful outcome of that process. UNDP, as the contract holder, will develop a full project document with a detailed budget as the basis for receiving funds from the Peace Support Facility (PSF).

While the final timelines are contingent on the provision of funding, without which contracts cannot be awarded, the aim is to have commenced the contract by 1st June, thus ensuring that the work can be completed before winter winds and sea conditions put additional stress on the mooring system of the FSO Safer and make conditions more dangerous. A timeline for the technical work can be found in section 4, and for the overall project in section 10.