Tarragona leads the way

HUB MED

TANK STORAGE • THE PORT OF TARRAGONA HAS BEEN THINKING HOW THE STORAGE TERMINAL INDUSTRY WILL CHANGE IN RESPONSE TO THE ENERGY TRANSITION AND NEW TECHNOLOGIES

WITHOUT DOUBT, WE live in a time of profound global change. Technological developments, energy transition and socio-political relations are impacting the pace of economic development in all regions of the world.

The deep financial crisis we have experienced over the past decade or more has led to rationalisation in the petrochemical industry, with the closure of many production facilities in Europe and new investments being concentrated in locations that are close to the raw material, such as the Middle East or the US, or to places near end demand, such as China and south-east Asia

This new situation forces the ‘Old Europe’ to be more flexible than ever, to lead technological change and to invest more in its human capital, merely in order to remain competitive. The energy transition is an added challenge for Europe, which is leading the world on the process towards a circular, sustainable and decarbonised economy.

EUROPE’S RESPONSE After the rationalisation experienced during the years of the crisis, there is little room for more large-scale closures of petrochemical plants in Europe, other than in those cases where ageing plant cannot achieve the desired levels of efficiency. Europe’s chemical industry has responded by becoming more specialised, a scenario in which its skills in R&D and its investment in human capital are more relevant. The added value provided allows European producers to compete on the global stage, something that cannot be achieved in commodity markets.

After the economic downturn, 2017 turned out to be a year with historic results for the chemical industry globally, and this was also the case in Europe. This trend has been maintained during 2018 and the beginning of 2019, although at a somewhat lower rate. It seems likely that economic cycles will become shorter and that, while in the past cycles ran for four or five years, in the future we will experience business cycles of only two or three years.

From the point of view of chemical production, the main focus of attention in northern Europe is undoubtedly the ARA area (Amsterdam, Rotterdam and Antwerp). In southern Europe, Tarragona is the only comparable port, having a modern and integrated chemical complex, with port and land infrastructures unique in the Mediterranean, and an investment in human capital that gives it a sustainable advantage.

Recent announcements of investment in petrochemical production, in both northern and southern Europe, have begun to switch back to focus on the expansion of production capacity, rather than dealing with efficiency improvements at existing facilities.

PORTS AND LOGISTICS The competitiveness of the European petrochemical industry depends on the levels of efficiency and flexibility that can be achieved. In this process of improving efficiency, all the elements of the supply chain are relevant, so all those who are active in the supply chain have an important role to play.

From the point of view of bulk liquids storage, increasing flexibility is needed to help operators meet the changing demands of their customers. For the Port of Tarragona,

that means prioritising management of change procedures to guarantee the highest safety levels at the terminals within the port.

Port authorities must also look at investment in infrastructure necessary to support sustainable economic activity, such as appropriate public onshore infrastructures – including hinterland transport links - and efficient port infrastructure with the opportunity to grow in the medium and long term. On the other hand, agile administrative processes are also key in the recipe for economic growth.

TALK ABOUT THE FUTURE The energy transition will mean a profound change for the entire petrochemical industry, first in Europe and then in the rest of the world. The effect on the tank storage industry will therefore be diverse, and uncertain regarding its size and timing. Nevertheless, there can be no doubt that it is going to happen. It seems clear that the need for storage capacity for petroleum products will not increase in Europe, while on the other hand the storage of chemical and gas products may offer growth opportunities in the future. Alternative energies are giving rise to innovative projects, such as those related to the storage of hydrogen.

Innovation and digitalisation in the industry are not an option any longer; they will be obligatory for survival in such a changing environment. The incorporation of technological elements that provide more and better information in real time throughout the logistics chain will be needed to eliminate the multiple inefficiencies in the system.

These and other current issues that affect the petrochemical industry as a whole will be discussed at the Annual General Meeting of the European Federation of Tank Storage Associations (FETSA), due to take place between 11 and 13 June in Tarragona, with the collaboration of the Port of Tarragona. The event has speakers of recognised prestige who will discuss key issues to understand the environment in which we find ourselves, during conference sessions presided over by HCB’s editor-in-chief, Peter Mackay, on 12 June.

The Port of Tarragona will also play host to the inaugural Mediterranean Refining & Petrochemicals Summit, organised by S&P Global Platts, which will take place at the Grand Palas on 26 to 28 June. Josep Maria Cruset, CEO of the port, will update attendees on current developments and there will be a focus on the challenges and opportunities in the petrochemical and oil storage sectors. HCB www.porttarragona.cat www.chemmedcluster.com www.fetsa.eu

BELOW: THREE BULK LIQUIDS STORAGE TERMINAL

OPERATORS HAVE PLANS FOR THE CONTINUED

DEVELOPMENT OF THE CHEMICAL MOLE IN THE PORT OF

TARRAGONA, CEMENTING ITS ROLE AS A CHEMICAL HUB