June 2026
Special Focus—Gas Processing and LNG
From compliance to safe operations: Why relief systems design documentation matters in LNG facilities
Many engineers, designers and managers assume that relief and flare system process safety information (PSI) is merely a best practice for liquefied natural gas (LNG) facilities since they are not directly covered by the U.S. Occupational Safety and Health Administration’s (OSHA’s) Process Safety Management (PSM) standard. However, other regulations and requirements bridge this gap, making PSI mandatory at U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA)-regulated sites.
Beyond regulatory compliance, robust safety systems supported by comprehensive documentation consistently generate greater operational and financial returns. Studies show that firms with structured PSM programs experience fewer incidents, reduced downtime and improved profitability. Enforcement cases and LNG incident histories highlight the risks of inadequate records, while insurers and financiers increasingly demand robust PSI. Relief and flare documentation is, therefore, not only a regulatory obligation but also a sound business strategy that protects lives, increases uptime and increases return on investment (ROI).
PSM. Every LNG terminal contains cryogenic storage tanks, flare stacks and intricate piping networks that enable continuous global energy delivery. These facilities are often assumed to be engineered for both safe routine operation and effective management of process upsets or emergency shutdowns. However, historical events have demonstrated that this assumption is not always correct. In 2004, an explosion at the Skikda LNG facility in Algeria killed dozens and caused billions of dollars in damages, with inadequate pressure relief capacity identified as a key factor in the event’s escalation.1
Many facilities today are considered “not covered by PSM,” and thus documentation demonstrating that these systems were designed to Recognized and Generally Accepted Good Engineering Practices (RAGAGEP) remains difficult to locate.
Note: The author acknowledges that RAGAGEP is formally an OSHA PSM term. In this article, RAGAGEP is used as shorthand for designing and operating facilities in line with industry norms and standards, even where facilities are not subject to OSHA’s PSM standard. The underlying concept—that design must conform to industry recognized codes and standards—remains fully applicable under PHMSA, which incorporates National Fire Protection Association (NFPA), American Petroleum Institute (API), American Society of Mechanical Engineers (ASME) and other related standards either directly or by reference.
The notion that the design basis for relief and flare systems is optional is incorrect. LNG facilities regulated by PHMSA must maintain this critical element of process safety. In recent years, regulators, insurers and investors have increasingly focused on relief system design and documentation because a well-engineered and thoroughly documented system can reduce incidents, improve operational efficiency and enhance financial performance. For LNG operations, current process safety information is not just a regulatory obligation—it also serves as evidence that the as-built facility was designed properly and is being operated safely.
Safety as a profit driver. Several studies demonstrate that the link between safety and profitability is measurable. The following three studies underscore the financial case for investing in structured safety programs. All reach the same conclusion: facilities and companies that focus management’s attention on structured safety programs, including relief and flare system design, financially outperform their peers.
Case 1: Harvard Business Review (2024). A Harvard Business Review longitudinal study of > 4,600 U.S. firms between 1994 and 2010 found that companies that reduced safety lapses achieved higher long-term valuations.2 The lesson applies directly to process safety: structured systems that capture hazards, document safeguards and ensure training deliver measurable business benefits. For example, the Harvard Business Review reports that firms with stronger safety management saw:
- A 2021 study of 11,451 customers across 1,785 companies in 65 industries found that safety was associated with a 13% increase in sales.
- Mandatory safety training at 32,061 construction sites reduced worker injuries by 15%–18%, generating $18 MM/yr and a 42% ROI.
- A longitudinal analysis of 4,643 firms confirmed that companies that focused on safety performance achieved higher long-term valuations.
These outcomes mirror what happens when a relief and flare system design is fully documented: better reliability, fewer incidents and stronger returns. A safety culture grounded in PSM principles is not a cost center, but a profitability driver.
Case 2: European longitudinal study (2024). A 14-yr study of 829 European firms provides similar evidence.3 Companies that adopted structured safety systems aligned with ISO 45001 and OHSA 18001 reduced injury rates, delivered 3%–5% higher return on assets and had 2%–4% stronger profit margins compared to peers.
The author has concluded that formalized safety programs are essential for reducing injuries and ensuring financial competitiveness. This is the same logic that underpins PSM: a disciplined approach to documenting safeguards like relief and flare systems reduces losses and creates measurable financial gains.
Case 3: Center for Chemical Process Safety’s (CCPS’s) Business Case for Process Safety (2018). The CCPS reached the same conclusion in its 2018 Business Case for Process Safety report.4 Drawing on decades of industry data, the CCPS emphasized that strong process safety programs yield direct business benefits, including:
- Fewer shutdowns and longer uptime
- Reduced rework and maintenance costs through better hazard identification
- Smarter capital spending by cutting costly design rework
- Reduced regulatory resistance to permitting and expansions.
The lesson is clear: investing in safety documentation is not an expense, it is an asset that increases profits and reduces operating costs.
While these studies are not explicitly tied to PSM programs, they all share the common theme that structured safety management drives financial performance through positive ROI. True PSM-level longitudinal studies on catastrophic events are difficult to perform because such incidents are, thankfully, rare. However, Marsh’s 100 Largest Losses in the Hydrocarbon Industry5 shows that when process safety fails, a single event can cost billions of dollars. This helps explain why large operators and industry groups testified in support of OSHA’s PSM standard in 1992. Companies that had already implemented PSM stated that it had “significantly reduced catastrophic incident rates, improved reliability and lowered insurance costs.”6
Based on the experience of operators implementing PSM, LNG facilities can expect to see a positive ROI similar to those documented in the studies above when investing in relief and flare system documentation.
Part 2. Part 2 of this article will be featured in the July issue.
LITERATURE CITED
1 Federal Energy Regulatory Commission (FERC), “Draft environmental impact statement for the Port Delfin LNG project deepwater port application, Appendix R: Major LNG incidents,” FERC, 2016.
2 Mittal, V., A. Piazza and S. Singh, “Safety should be a performance drive,” Harvard Business Review, September 2024.
3 Bautista-Bernal, I., C. Quintana-Garcai and M. Marchante-Lara, “Safety culture, safety performance and financial performance: A longitudinal study,” Safety Science, 2024.
4 Center for Chemical Process Safety (CCPS), The Business Case for Process Safety, 4th Ed., American Institute of Chemical Engineers, New York City, New York, 2018.
5 March Specialty, “The 100 largest losses in the hydrocarbon industry,” March 16, 2018, online: https://www.marsh.com/en/industries/energy-and-power/insights/100-largest-losses-in-the-hydrocarbon-industry.html
6 U.S. Occupational Safety and Health Administration (OSHA), “Process safety management of highly hazardous chemicals, final rule,” February 1992, online: https://www.osha.gov/laws-regs/federalregister/1992-02-24
The Author
Dustin Smith earned a BS degree in chemical engineering from Texas A&M University and is a licensed professional engineer. He co-founded Smith & Burgess in 2007 and serves as Co-Owner and CEO. With more than 25 yr of experience, he specializes in relief systems design, PSM compliance audits, flare system optimization and incident investigations. Smith has contributed to API 520/521 committees and led projects that improved safety, compliance and operational efficiency for clients globally.
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