Investing in GCC tank depots

THE CLEAN TEAM

TANK DEPOTS • EXPANSION IN THE MIDDLE EAST PETROCHEMICAL INDUSTRY IS BRINGING WITH IT ADDED DEMAND FOR LOGISTICS SERVICES. TANK CLEANING FIRMS ARE RUSHING TO HELP

THE RAPID EXPANSION of petrochemical production in the Gulf Cooperation Council (GCC) states – and, in particular, Saudi Arabia – in recent years has led to rapid development of logistics chains, a significant section of which rely on tank containers for the movement of product in and out of the region. In response to that, there has been a similar urgent need to install, upgrade and expand tank cleaning and maintenance facilities in the region, a need that depot operators are now rushing to meet.

For instance, since the start of the year, Kanoo Tank Services (Sahreej) has opened two new state-of-the-art facilities in Saudi Arabia, both replacing existing depots. Sahreej, a joint venture between YBA Kanoo and Stolt Tank Containers (STC), put its new depot in Dammam into operation in February and in March held a formal ceremony to mark the new facility in Jubail. This greenfield site is located in the Royal Commission Logistics Area of Jubail 2, adjacent to the main rail line, and has all necessary permits to operate legally and to handle wastes.

The Jubail tank cleaning, inspection and repair depot is one of the largest in STC’s global network of owned and joint-venture facilities, with a footprint of some 100,000 m². It has 24 cleaning slots, with a base cleaning capacity of 1,000 tanks per month, 36 inspection slots, 12 dedicated hydro and pneumatic testing bays, and steam heating for up to eight tanks at a time.

The fully covered repair bays offer full shell and frame repairs, using fully qualified welders, and are equipped with six tank rotators. In addition, there are 24 plug-in points for reefer tanks; storage for up to 500 loaded tank containers, with emergency containment tanks; space for a further 1,000 tanks to be stored; and a wastewater treatment plant and scrubber designed to European/US standards.

THE BEST THERE IS Mike Tunstall, general manager of Sahreej, explains that the new Jubail site has been built to international standards, similar to those employed at other major depots around the world, and was designed by world-class engineers to bring the latest technology to the Kingdom of Saudi Arabia. The standards were set by the partners, leveraging global expertise in the sector, and were designed to exceed rather than just to meet customer expectations. Sahreej is now in the process of getting the new sites assessed according to the Gulf SQAS scheme.

It is also notable that the Jubail depot is open to all operators, leasing companies and chemical producers, as it offers some services that are unique in Saudi Arabia. It is equipped to clean tanks that have carried diisocyanates (MDI and TDI) and latex and its repair and welding services are second to none. As far as Saudi Arabia goes, Tunstall says, “Nobody can come close to what we’re doing.”

The Sahreej site in Jubail is opposite the massive Sadara petrochemical plant, a joint venture between Saudi Aramco and Dow, which has been coming progressively onstream over the past two years and is now generating further investment in downstream chemical production. This new capacity is responsible for generating much of the new chemical traffic through Jubail and, Tunstall says, Sahreej is now for the first time seeing more work at Jubail than at its Dammam depot.

In contrast, Dammam serves a more mature market, which has thus far always been the main access into the Saudi chemical business. The Sahreej site in Dammam has always experienced a high level of demand, which is holding steady. Nevertheless, Sahreej took the decision to upgrade and expand operations at the facility.

Since February, the Dammam depot can clean 450 tank containers per month and is equipped with a covered repair facility, »

THE NEW SAHREEJ DEPOTS OFFER SERVICES

including two rotators – the first in operation in Saudi Arabia. It has covered inspection bays for leak testing, and for statutory pneumatic and hydro testing, along with storage for 832 empty tanks, steam heating facilities, and a European/US-standard wastewater treatment plant, which will deliver significant cost savings.

Now that the Dammam depot has been completely redeveloped and the greenfield depot in Jubail has been opened, the old Jubail depot will be dismantled and moved to Jeddah, where it will replace an existing but smaller facility.

SOHAR, SO GOOD Elsewhere in the GCC region, Joint Tank Services (JTS) is currently putting the finishing touches to a greenfield depot development in Sohar, Oman, scheduled to be in operation by the end of the second quarter. This will be the first project outside Dubai for JTS, another joint venture involving YBA Kanoo and STC together with Alsace Holdings Ltd. As with the Jubail development, the new 20,000-m² facility in the Sohar Port Free Zone is designed to meet the needs of the growing petrochemical industry in Oman and Qatar.

The Sohar depot will be dedicated to cleaning, storage, repair and support services for tank containers. However, JTS says it plans not only to consolidate existing services on one site but also to expand its portfolio to develop other business offerings for the chemical industry, including drumming, warehousing and distribution.

JTS has already gone through a similar process at its Jebel Ali depot in Dubai. It has established a new division, JTS Chemical Logistics, that will offer storage of loaded tank containers (goods of Classes 3, 4.1, 6.1, 8 and 9, as well as non-hazardous chemicals); drumming of liquid chemicals from tank containers and road tankers into drums and intermediate bulk containers (IBCs), along with interim storage; transport and local distribution of full tank containers, IBCs and drums; and cross-stuffing of chemicals from tank to tank or road tanker to tank.

JTS Chemical Logistics, due to open by July 2019, is located at a new site, close to the existing depot, which has 12 cleaning bays and also undertakes cleaning of road tankers and IBCs. As with the new Sahreej sites, the JTS cleaning station in Jebel Ali is equipped to deal with difficult cargoes, including latex, and it is also certified to ISO 9001, ISO 14001 and OHSAS 18001 and is SQAS-assessed.

Both Sahreej and JTS have a client list that includes most of the major international tank container operators; JTS also serves tank lessors, although Tunstall says there is less demand from this segment of the market in Saudi Arabia. Nevertheless, he adds, the volume of work for Sahreej is already “huge” and, with continuing investment in the petrochemical sector, is only likely to get larger over time. HCB www.sahreej.com www.jts.ae

BOTH SAHREEJ AND JTS ARE INVESTING TO MEET THE

GROWING DEMANDS OF TANK CONTAINER OPERATORS

AND LESSORS AS THE GCC STATES ARE EXPANDING

PETROCHEMICAL PRODUCTION CAPACITY