Tank Storage magazine November/December 2013

The voice of the storage terminal industry

november/december 2013

Volume No. 9 Issue No. 6

On the rise Imports, refining capacity and GDP are all growing in China, leading to a multitude of opportunities for storage operators

Safety fast The best way to describe the ultimate goal of the crude-by-rail sector

regional focus: tank storage in Asia

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comment

Margaret Dunn Publisher

Ending on a high Tank Storage magazine is excited to return once again as the official media partner for Tank Storage Asia in Singapore this December.

It’s been a rollercoaster year for the region given the current market conditions.

Oil storage rates in Singapore have fallen from $7-$8 (€5-€6) to around $6 per m3 since the beginning of this year. In August China Aviation Oil reportedly paid the market rate of $6.50 per m3 to lease approximately 170,000m3 of tank space for fuel oil and fuel oil blend components at Horizon Singapore Terminals.

There have also been reports that Singapore-based oil trading firms BP and Swiss trader Gunvor Group gave up their fuel oil storage space at the Universal Terminal on Jurong Island as the downturn in the global shipping industry made it more costeffective to store the oil on leased tankers.

But, as we explore within this issue, it looks like these tanks were quickly snapped up by other players.

Singapore’s Jurong Town was meant to issue an EPC tender for a very large floating structure (VLFS) for storage, but this has yet to materialise – something which is being put down to weak storage demand.

Even if rates are down at the moment, Singapore is still strategically located between the growing markets of the Middle East and China, so they aren’t expected to be down for long.

Looking slightly further afield than Singapore, however, and the situation looks much brighter.

TANK STORAGE • November/December 2013

As well as a much enlarged exhibition we’re particularly looking forward to hearing from the chief commercial director of Sinopec Kantons, who will be speaking at the conference.

The company, a crude oil trading and logistics arm of Sinopec, has spent much of 2013 investing heavily in storage.

Earlier this year, it acquired a 50% stake in a firm that plans to build 1.16 million m3 of storage facilities in the UAE port of Fujairah, the world’s second biggest vessel refuelling port.

This will cost $340 million. The company is hoping to capture storage demand from the 400,000 barrels per day oil refinery under construction by a joint venture between Sinopec’s parent, China Petrochemical, and Saudi Aramco, the state-backed oil and gas giant, in Saudi Arabia.

It is expected to come on stream late next year.

In southeast Asia, Sinopec Kantons also took a 95% stake in a firm that will build 2.6 million m3 of storage tanks in Indonesia’s Batam Island, near Singapore.

Also at the event will be Chong Rok Park, President of Ulsan Port Authority. Building work officially began on 27 November to create what is to become the ‘oil hub of northeast Asia’ in Korea. If you can’t make the event, or simply can’t wait until then to hear how it’s going, turn to page 41 for further details. And for those of you who are coming to the show we look forward to catching up with you then.

Best wishes, Margaret

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contents

November/December 2013 Volume 9 issue 6 Horseshoe Media Ltd Marshall House 124 Middleton Road, Morden, Surrey SM4 6RW, UK www.tankstoragemag.com

contents

MANAGING DIRECTOR Peter Patterson Tel: +44(0)20 8648 7082 peter@horseshoemedia.com

news 1 Comment

Publisher & editor Margaret Dunn Tel: +44 (0)20 8687 4126 margaret@tankstoragemag.com

2 Contents 4

Deputy editor James Barrett Tel: +44 (0)20 8687 4146 james@tankstoragemag.com

Terminal news

29 News analysis: Ineos claims victory at the Battle of Grangemouth

Assistant Editor Keeley Downey Tel: +44 (0)20 8687 4183 keeley@horseshoemedia.com

32 Incident report 33 Technology news

Staff writer Daniel Traylen Tel: +44 (0)20 8687 4143 daniel@horseshoemedia.com Advertising Sales manager David Kelly Tel: +44 (0)203 551 5754 david@tankstoragemag.com PRODUCTION Alison Balmer Tel: +44 (0)1673 876143 alisonbalmer@btconnect.com

features 39 Profile: New name, old faces

SUBSCRIPTION RATES A one-year, 6-issue subscription costs £150 (approximately $240/€185 depending on daily exchange rates). Individual back issues can be purchased at a cost of £30 each

41 Construction starts at northeast Asia’s oil hub

Contact: Lisa Lee Tel: +44 (0)20 8687 4160 Fax: +44 (0)20 8687 4130 marketing@horseshoemedia.com

42 ‘Greater Singapore’ to become new storage hub 46 Tank terminal update: Asia

Join the Tank Storage group on Linkedi to have your say on important issues

49

On the rise: Imports, refining capacity and GDP are all growing in China, leading to a multitude of opportunities for storage operators all across the country

Follow us on Twitter: @tankstorageinfo No part of this publication may be reproduced or stored in any form by any mechanical, electronic, photocopying, recording or other means without the prior written consent of the publisher. Whilst the information and articles in Tank Storage are published in good faith and every effort is made to check accuracy, readers should verify facts and statements direct with official sources before acting on them as the publisher can accept no responsibility in this respect. Any opinions expressed in this magazine should not be construed as those of the publisher.

69

Cutting emissions from 174 to just 2.2 tonnes/year

ISSN 1750-841X

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November/December 2013 • TANK STORAGE

contents

62

Taking overfill protection to the next level

53 Taizhou, Shell and the ‘doomed’ refinery 55 Intermodal imbroglio 59 Safety fast: the best way to describe the ultimate goal of the crude-by-rail sector

91

Failing to plan is planning to…

66 Ragworm makes waves in the US 69 Cutting emissions from 174 to just 2.2 tonnes/year 72 Silicone-free sealing

The voice of the storage terminal industry

74 ATEX 0 certified pumps in demand 76 Shunts or by-pass conductors... or both?

80 Land of opportunity

A glimpse at this year’s Tank Storage Asia exhibitors

november/december 2013

Volume No. 9 Issue No. 6

On the rise Imports, refining capacity and GDP are all growing in China, leading to a multitude of opportunities for storage operators

Safety fast The best way to describe the ultimate goal of the crude-by-rail sector

86 Ensuring contamination-free fuel 87 Innovative solutions for oil terminals 96 Upcoming events Ad index

TANK STORAGE • November/December 2013

reGIoNal foCus: tank storage in asia

Front cover courtesy of Emerson

3

terminal news

Multi-million dollar petrol terminal for US port The Tampa Bay Authority has unveiled a new $56 million (€41.4 million) petroleum terminal complex as phase one comes online.

Project costs are split evenly between the port and the Florida state, and two new berths are now operational. This means phase one, which took two years to bring to realisation, is now complete and the first ships to dock at them are due to arrive this November.

Port of Tampa CEO Paul Anderson was quoted as saying this project ‘will bring sustainability to our state and region for generations’.

A third berth forms part of phase two and it is believed that will come online during the summer of next year.

The Port of Tampa’s industrial side

Storage development green light for Brightoil

Airedale has been given permission to build 13 new storage tanks at its West Yorkshire site

UK chemicals company to add 13 new storage tanks A UK supplier of performance chemicals has been given permission to add extra storage capacity to its site in West Yorkshire.

Airedale Chemicals had two separate applications, one for six storage tanks and one for seven, approved by the Craven district council in October.

The seven storage tanks will measure 8.5m high and be

4

contained within a concrete embankment, while the six slightly smaller tanks will be located on a different part of Airedale’s site.

Local residents were reportedly concerned the new tanks would become an eyesore, but councillors confirmed the tanks would be well screened and Airedale added no hazardous materials would be stored in them for the foreseeable future.

Brightoil Petroleum has announced the National Development and Reform Commission (NDRC) has granted approval to Zhoushan Brightoil Terminal to develop its construction project involving oil storage and terminal facilities with capacities of more than 10,000 dwt.

The project is located at NingboZhoushan Port in the Laotangshan Port Zone at Waidiao Island, which serves as a key supporting project for the Group’s storage and transshipment base in Zhoushan.

The NDRC has granted approval for a total length of berths amounting to 1,395m in the terminal project. With a designed annual capacity of 32.9 million tonnes, the project will be equipped with four berths which can accommodate vessels of 300,000, 100,000, 50,000 and 20,000 dwt, respectively.

With the construction contract signed with China Petroleum Pipeline Bureau in June this year to build the first phase of oil storage facilities on Waidiao Island in Zhoushan, construction of Brightoil’s storage and transshipment base in Zhoushan is in full progress.

Sit Kwong Lam, CEO of the group, says: ‘Leveraging its strategic geographic location, this project will generate stable rental income for the group and will enable synergies with the International Trading and Bunkering business and Marine Transportation business for better economies of scale. It will also play an active role in the development of a national strategic oil reserve.’

November/December 2013 • TANK STORAGE

terminal news

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5

terminal news

GM vegetable oil discovered at Chinese storage facility A statement by China Grain Reserve (CGR), the state-owned enterprise which maintains the country’s grain and oil reserves and is also known as Sinograin, has revealed it found genetically modified (GM) vegetable oil in its storage.

It claims a total of 1,477 tonnes of the oil made from GM seeds was discovered, split between 994 tonnes from a Hubei company and

483 tonnes from a Hunan business.

Local reports point to a price difference of CY500-1,000 (€59119) per tonne as a reason why some companies, allowed to buy oil on China State’s behalf, have been replacing non-GM oil with GM product to make a profit.

The CGR statement claims the oil has now been removed from its storage.

New terminal on course in Africa It has been reported that Nambian-owned petroleum company Petro Logistics is in the process of constructing a bulk fuel terminal to serve the Zambezi region, plus western Botswana and Zambia.

Petro Logistics MD Mulife Siyambango has revealed the terminal will have a capacity of 2.5 million litres of diesel, plus it could handle petrol grades and illumination paraffin.

‘Namibia’s reliance on fuel imports increases concern about fuel security, although this can be lessened through a diversity of supply,’ Siyambango was quoted as saying. ‘The Namibian government wants to achieve economic efficiency in the liquid fuel industry. Fuel, in particular transportation fuel, is regarded as a necessary factor for economic growth and development in the country.’

A preliminary study by Petro Logistics has already been completed and it hopes to go to tender for the terminal’s construction early in 2014.

Belphar considering further share purchase of PET A release by Belphar, a new limited liability company which seeks to identify investment opportunities in the natural resources sector, claims it is considering a bid to acquire the whole share capital of Pan European Terminals (PET).

The British Virgin Islands-based company intends to approach PET’s board in order to seek a recommendation for the possible offer

and to discuss next steps. It values each ordinary share at around £0.22 (€0.26) and any sale would boost its share in PET from 29.9% to 49.3%.

Belphar confirms any recommendation from the PET board is not a pre-condition to the making of any offer.

PET is a UK-headquartered hydrocarbon refined product storage and transshipment operator.

Kashagan oil operation closed for inspections The North Caspian Operating Company (NCOC) has revealed the offshore Kashagan field in the Caspian Sea is to remain shut for the foreseeable future as inspections are carried out.

According to a NCOC spokeswoman, the inspections are necessary due to earlier detected and potential future gas seeps. The field in Kazakhstan has been closed twice since it opened in 2011 due to gas leaks affecting the pipeline.

‘Experts are investigating the root cause of the pipeline events, so the oil and gas production remains shut in until the results of the expert studies are available and restart of the facilities can be carried out safely,’ a NCOC statement read. ‘The whole gas pipeline from the D Island to the onshore processing facility Bolashak has been depressurised and emptied.’

Kashagan boasts around 38 billion barrels of oil in place, which includes 13 billion barrels in proven recoverable reserves, and NCOC expects output to reach around 370,000 barrels per day by the end of next year.

6

news in brief...

New storage facilities planned at UK port A new fuel storage facility is set to be added at the Port of Blyth in the UK as it expands operations moving into 2014.

The new facility, reportedly being located at the Bates Terminal and made up of three storage tanks, will be built by the port and marine fuels supplier Geos.

It is believed the initial phase will cost around £5 million (€5.8 million) and the tanks will have over 15 million litres capacity.

The development is being backed

by Northumberland development company Arch, which has provided investment the Regional Growth Fund.

Oil storage project urged to move along

by US district judge A US District Court judge ordered the completion of an oil storage tank project located in the northern Mariana Islands, just off the coast of the US. Commonwealth Utilities (CU) is adding the new storage to its Power Plant 1 located in Saipan but judge David Carter says it is ‘imperative’ the construction of Tank 102, which reportedly includes corrections to the existing structure, move forward without delay.

It has been said the order represents an agreement between the Islands government, CU and the EPA to help the company comply with all requirements of the Clean Air and Safe Drinking Water Acts.

Ethanol storage to benefit from loan in Brazil Brazilian ethanol and sugar trader Copersucar has received a bank loan to invest in renewable fuel storage plans.

The $217.7 million (€164.9 million) will come via the Brazilian Development Bank’s PASS credit line, split between four lenders.

It is believed Copersucar traded around 1.2 billion of ethanol during the last harvest season, which accounts for 20% of Brazil’s total production.

November/December 2013 • TANK STORAGE

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terminal news

Logistics set to benefit from new joint venture in UAE Fuel retailer Emirates National Oil (ENOC) and Tristar Transport, a Dubai-based multi-modal liquid logistics service provider, have started a new joint venture in Saudi Arabia focused on logistics services for the Kingdom’s petroleum and chemicals sectors.

With an initial capital outlay of SAR30 million (€5.9 million), the new venture will initially operate a small fleet of vehicles this year for supporting the logistics requirements of the oil, gas and chemicals sectors in the Kingdom.

Envisaged as a selfcontained logistics facility, the JV plans to expand its fleet to contain 500 vehicles by 2017. It will also operate open and covered warehousing facilities for storage of oil and chemicals, and an ISO tank cleaning facility to support the growing requirements from the industry.

The JV agreement was signed at a ceremony

The new venture between ENOC and Tristar will focus on logistics for oil, gas and chemicals held at the ENOC headquarters in Dubai.

‘According to estimates, the contract logistics sector is set to grow by an average 7% in the Middle East through 2015, with the highest growth in Saudi Arabia and the UAE,’ says Burhan Al Hashemi, MD of ENOC Retail. ‘Logistics ventures in Saudi Arabia are also projected to reach over

$20 billion (€14.9 billion) by 2015 underlining the strong business opportunity.’

‘Led by the sustained growth of the energy sector, there are concerted efforts to upgrade the standards and technology of Saudi Arabia’s logistics sector, particularly for the oil, gas and chemicals industries,’ adds Eugene Mayne, Tristar Group CEO.

‘Through our partnership with ENOC, we are bringing to the Kingdom services of the highest safety standards and reliability.’

ENOC has also signed a JV agreement with Aldrees Petroleum and Transport Services, one of Saudi Arabia’s largest petroleum retailers, to set up service stations in different locations across the Kingdom.

Socar Aurora Fujairah Terminal announces second phase commencement

New oil facilities at Kharg Island almost complete

Socar Aurora Fujairah Terminal FZC (SAFT), the joint venture company between the state oil company of Azerbaijan Republic (SOCAR), Swiss investment company Aurora Progress and the government of Fujairah, has completed the second phase of the 815,000m3 oil products terminal in Fujairah.

This phase adds 235,000m3 to the tanks already in operation and has been partly funded with $61 million (€45.1 million) from APICORP and the National Bank of Fujairah.

‘We have been able to complete this second phase four weeks ahead of schedule and well within budget,’ says SAFT CEO Ammar Kutait. ‘Several construction teams have all played their part in a delivering these 11 tanks.

The Persian Gulf is set to have four new oil storage facilities inaugurated within the next six months.

The new facilities, with a capacity to store 1 million barrels each, will be located at Kharg Island, Iran and are set to be online before the end of March 2014. An Iranian Oil Terminal spokesperson put the project at being 80% complete.

The facilities are believed to be coming on stream to the tune of $34.2 million (€25.3 million) and the island’s overall oil storage capacity will hit 28 million barrels by the start of next year.

8

We have adopted many technologies including having a sealing system in place on the domed and internal floating roofs that will minimise the loss of product.’

‘This expansion will provide customers with additional services such as a road loading facility for supply into the local market,’ adds VP of Socar Trading Emil Bayramli. ‘The terminal benefits from a flexible pipeline manifold that allows each tank to hold a different product, if required. We have tanks coated so that they can hold jet fuel and ethanol.’

It is believed the port will make further investments into additional berths allowing it to accommodate vessels of up to 200,000 tonnes.

November/December 2013 • TANK STORAGE

terminal news

TANK STORAGE • November/December 2013

9

terminal news

Protest ‘had no impact’ on Kinder Morgan operation A protest outside of Kinder Morgan’s British Columbia storage facility on 16 October didn’t quite work out the way it was planned, according to local reports.

Environmental campaigning group Greenpeace reportedly had members chained to the front gates of the Vancouver facility before being joined by a dozen or so more demonstrators.

But there were no vessels scheduled to be at the

facility, with a Kinder Morgan spokesman revealing that there ‘was no impact on operations at that time’.

The protestors wanted to highlight opposition against any expansion of pipelines in British Columbia as Kinder Morgan has applied to twin its pipeline to increase its 300,000 barrel per day capacity for Alberta bitumen, and other petroleum products, to a potential 890,000.

Iran’s storage capacity improving following upgrades It has been revealed by local reports that Iran has increased its crude oil exports capacity to 5 million barrels per day (bpd).

The claim came via Iranian Oil Terminals MD Pirouz Mousavi who put the increase down to ‘renovation and reconstruction of oil jetties and to loading and offloading facilities’.

The addition of four new crude oil storage facilities at the Kharg Oil Terminal, due to come online February 2014, will also heighten its storage capacity to 28 million bpd.

Iran is known for holding the third largest proven oil reserves, estimated at over 560 million barrels, and the second largest natural gas reserves throughout the world.

news in brief...

Oil export figures in Iraq fall An oil ministry spokesman has revealed Iraq’s oil exports hit a 19 month low in September.

The country exported 62.1 million barrels of oil in that month and that broke down to the lowest daily average since February 2012 – just over 2 million barrels per day (bpd).

Assem Jihad was quoted as attributing the decline to ‘periodic maintenance activities for the southern ports and other improvement projects’.

Iraqi officials are believed to aiming to increase production capacity to 9 million bpd by 2017.

Gulf Coast pipeline close to becoming operational The VP of TransCanada’s Keystone development has revealed the company is close to having the southern leg of the $2.3 billion (€1.6 billion) Keystone XL pipeline operational.

Corey Goulet says the pipeline should begin moving oil from Cushing to the Gulf Coast by the end of this year, with the entire Gulf Coast section now in the ground. The 485 mile pipeline and its six pump stations are set to move 700,000 barrels of oil a day.

Goulet reveals TransCanada intends to build additional storage tanks near the end of the Gulf Coast line.

South Korea welcomes first UAE crude shipment It has been reported the first shipment of crude oil from the UAE for joint storage in South Korea arrived on 25 September.

The shipment totals 2 million barrels and will be held at a storage facility in Yeosu after an agreement was signed between Abu Dhabi National Oil and Korea National Oil (KNO) last year.

As part of that deal, a further 4 million barrels is set to arrive over the next six months according to the UAE energy ministry.

In return for forgoing leasing fees, KNO has participation rights in developing three oil fields in Abu Dhabi.

A UAE official believes this joint storage ‘is part of South Korean efforts to transform its southern coast into an oil hub for north east Asia’.

10

The shipment from the UAE will be stored in Yeosu, South Korea

November/December 2013 • TANK STORAGE

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terminal news

New contract sees storage business for Dan Balt A wholly owned subsidiary of Pan European Terminals has entered into a contract to store heavy fuel oil on behalf of a major European energy producer.

Dan Balt Tank Lager announced the contract on 1 October and claims the product will be stored at its Aabenraa terminal in Denmark.

The first shipment arrived mid-October and the client, who has not been named at time of writing, will have exclusive use of two tanks for a minimum of six months.

Contracts awarded on Yemen oil terminal project It has been revealed that work on the Ras Issa Oil Terminal project is in progress and an onshore engineering, procurement and construction contract has been awarded.

A consortium consisting of ChemieTech and Indian Oil Tanking Anwesha Engineering and Construction (IOTAEC) has won the work.

‘The project has an anticipated duration of 24 months and includes the provision of 2.2 million barrels of crude storage facility at the Ras Issa peninsula in Yemen,’ says project manager Mohamed Mugalis. ‘This has the potential to expand to 4.3 million barrels of

crude and refined products in the future.’

The on-shore work consists of engineering, procurement and construction of a storage terminal comprising tanks for crude and ship loading pump stations equipped with booster pumps, along with all related land development and civil works, infrastructure/utility networks, firefighting facilities and a sea water intake system.

Mugalis added a project management consultancy contract for on-shore works was awarded to UK-based Mott MacDonald, and the same for off-shore works went to Truine Energy Services in India.

India adding new crude oil capacity A first strategic oil storage project is set to be online from January next year as the country finds ways to safeguard against future supply disruptions.

Facilities across several locations will have combined capacity to store just over 5 million tonnes of crude oil. It is believed India currently imports 79% of its required needs.

Oil ministry officials believe the facility at Visakhapatnam, to be housed in newly-built underground caverns almost 10 storeys tall, will be completed by January and can store 1.33 million tonnes.

Another in Mangalore (1.55 million tonnes) is scheduled to be commissioned by March, followed by another in Padur by the end of the fiscal year.

12

Work on the Ras Issa oil terminal is in progress and set to continue for 24 months

Acquisition to boost Canadian Heartland facilities Pembina Pipeline has acquired a site in the Alberta Industrial Heartland for C$20 million (€14.5 million) to support the future development of rail, terminalling and storage facilities within the so-called Heartland Hub. The Heartland Hub is a further buildout of Pembina’s larger Nexus terminal, servicing crude oil and diluent customers for terminalling, storage and rail.

Key features of the acquisition include: • 232 acres of well-developed industrial land • Over of 5,000 linear feet of rail track, currently serviced by CN Rail • 160 acres of adjacent, existing Pembina lands, which can be developed for future merchant storage and rail expansions • 1,280 acres of Pembina salt rights in close proximity to support future cavern development

• The ability to access over 4 million bpd of existing and future oil sands and conventional crude oil supply through various current and potential pipeline interconnection(s).

Pembina also entered into a multi-year agreement with a North American refiner for the provision of services to load crude oil railcars within the existing infrastructure at Nexus. The agreement provides up to 40,000 bpd of various crude grades and capitalises on the full service offering of pipeline, storage and rail infrastructure at Nexus.

‘Our purchase of this property in the Heartland area and the agreement with a major North American refiner demonstrates the growing demand for terminalling services and the business model being built-out

by Pembina’s Midstream business,’ says Bob Jones, Pembina VP, midstream.

November/December 2013 • TANK STORAGE

terminal news

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13

terminal news

Oil terminal in Houston begins commercial operations TransMontaigne Partners has announced commercial operations are underway for phase one at the 185-acre Battleground Oil Specialty Terminal (BOST) on the Houston Ship Channel.

Approximately 20 of the 51 storage tanks being built during phase one construction were placed into service this October, along with a two-berth ship dock and 12 barge berths. The remaining tanks will come online during the next six months.

A joint venture of TransMontaigne, which owns a 42.5% interest in the facility, and Kinder Morgan Energy Partners, the

Tank terminal acquisition a revisit for Oiltanking Deutschland

$485 million (€357.2 million) BOST at mile marker 43 on the Houston Ship Channel is fully subscribed for a total capacity of 7.1 million barrels, capable of handling ultra-low sulphur diesel, residual fuels and other black oil terminal services.

Phase two of construction at BOST is underway and involves the construction of an additional six, 150,000-barrel, ultra-low sulphur diesel tanks, additional pipeline connectivity and high-speed loading at a rate of 25,000 barrels per hour.

Phase two is expected to begin service in the fourth quarter of 2014.

Oiltanking Deutschland, a subsidiary of tank storage company Oiltanking, has acquired the BayWa tank terminal in the town of Deggendorf with effect from 1 September.

The Deggendorf tank terminal is located directly on the Danube River and has connections to the road and rail network. Its 14 tanks, with a total capacity of approximately 25,000m3, are used to store heating oil and diesel.

Oiltanking, a division of Marquand and Bahls, believes the facility fulfils ‘an important function’ in supplying the regions of Lower Bavaria, the Bavarian Forest and western Austria via barge or railcar.

Marquard and Bahls actually built the Deggendorf tank terminal in 1957 and operated it up until 1983, when Oiltanking Deutschland sold it to BayWa, which operated it under the name DTL Danube Tank Terminal.

Oiltanking Deutschland currently runs 14 terminals at an overall capacity of 2.3 million m3 throughout Germany.

Hefty fine lobbied against petrol storage facility owner A petroleum company in New Hampshire, US has been fined nearly half a million dollars for not complying with environmental concerns raised against its aboveground oil storage tank facilities.

Munce Superior Petroleum was ordered to pay out $420,000 (€314,180), as detailed by a release from the

Environmental Protection Bureau, as the nearby Androscoggin river was suffering from pollution via the tanks.

The fine represents $1,000 for every day it took for Munce to comply with the order, but half of it has been suspended for five years if the company remains compliant with current laws.

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November/December 2013 • TANK STORAGE

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terminal news

New storage depot to come online in India An Indian Oil storage depot is to open in Una according to an announcement by the Himachal Pradesh government.

The depot is reported to cost around Rs 450 crore (€5.3 million) and be located next to a Canteen Stores Department canteen used by military service personnel.

The news came as part of an address in November by chief minister Virbhadra Singh, who also elaborated on the completion of a project which aims to solve flood problems during Una’s rainy season.

The capacity of the depot has not yet been revealed.

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Storage tank fund embezzler pleads guilty A US business owner has pleaded guilty to one count of mail fraud and one count of money laundering relating to embezzlement charges involving the Missouri Petroleum Storage Tank Insurance Fund (PSTIF).

Robert Fine, for over a reported 10 years through his company FINEnvironmental, submitted fraudulent invoices to the PSTIF to receive over $900,000 (€671,000) in illegitimate payments. The company offered services for property owners which used petroleum storage tanks.

Fine could face restitution payments, fines and up to a potential 30 years in prison as punishment.

The PSTIF was first established by the Missouri General Assembly in 1989, in response to federal legislation requiring owners and operators of storage tanks to have financial resources available to pay for clean-up of spills and/or leaks.

Storage solution supplied for purified phosphoric acid in UK UK-based bulk liquid and gas logistic services company Simon Storage is providing storage and handling solutions to Prayon Group, a European producer of purified phosphoric acid.

Prayon has signed a new long-term contract whereby 85% concentrated purified phosphoric acid, manufactured in its production plant in Belgium, will be delivered into storage via Immingham East’s deep water jetty on the river Humber.

Simon has modified two stainless steel tanks at the terminal so each is fitted with heat conservation lagging, automatic tank gauging and overfill protection systems, as well as external thermostatically controlled heating systems to maintain in-tank temperature at the required level.

In addition, Simon will also provide a completely closed road loading system incorporating metered batch controlled loading, overfill detection and an associated remotely operated shut off valve which will close in the event of overfill being detected. It claims the system is designed to protect the driver from product exposure during loading.

TANK STORAGE • November/December 2013

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terminal news

BKEP starts up Oklahoma Arbuckle pipeline Blueknight Energy Partners (BKEP), a midstream energy company providing services for the production, distribution and marketing of crude oil, asphalt and other petroleum products, has announced the operational startup of the southern Oklahoma Arbuckle pipeline.

The Arbuckle pipeline is a 65-mile pipeline from southern Oklahoma to Wynnewood, Oklahoma where it intersects BKEP’s existing Oklahoma mainline system. The pipeline was constructed as part of a long-term transportation agreement with XTO Energy, a subsidiary of ExxonMobil.

Multi-million terminal financing secured by Gunvor Independent oil trader Gunvor has secured multimillion financing for its oil products terminal in Russia.

The $675 million (€505 million) earmarked for its Ust Luga Products terminal has been committed by several Russian and international banks.

The terminal will have a capacity of 960,000m3 once fully complete and will be served by railtank trains logistically. A third jetty, capable of handling tankers up to 300,000 tonnes, became fully operational this summer too.

One arranger is Russiabased Gazprombank which is helping Gunvor encourage local financing of assets and trading.

The BKEP Arbuckle pipeline will transport crude oil to the company’s Oklahoma terminal The pipeline transports crude oil from the Woodford Shale area in Southern Oklahoma to BKEP’s crude oil terminal in Cushing, Oklahoma.

‘The Arbuckle pipeline

represents the first significant expansion to our Oklahoma mainline system and we expect it to positively complement our crude storage and transportation

services already offered to customers in the area. The system provides a more reliable transportation option out of the Woodford Shale,’ says Mark Hurley, BKEP CEO.

New storage and pipelines to arrive in Houston Oiltanking Partners has announced the approval of approximately $200 million (€147.9 million) for crude oil expansion projects, including additional storage, in Houston, US. It intends to construct two new crude oil pipelines to connect its Houston terminal with Crossroads Junction, while also adding 3.5 million barrels of new storage at its onsite Appelt facility.

The company says the storage will be split into two phases, the largest of which includes 3.1 million barrels of storage and a new manifold built on land adjacent to its current facilities. It will also construct a new 390,000 barrel storage tank.

Oiltanking says the total storage capacity at Appelt, upon completion of both phases, will be almost 10 million barrels. Construction of the smaller project is expected to begin

during the fourth quarter of 2013, while the third quarter of 2014 has been earmarked for the larger one to begin. It hopes to place the storage into service during the fourth quarter of 2015 and first quarter of 2016 respectively.

‘This additional storage capacity represents the fourth phase of our infrastructure expansion programme. It is designed to address continuing demand for additional crude storage capacity from both existing and potential new customers,’ says Oiltanking CEO Anne-Marie Ainsworth.

‘Our expansion project also include a new 24” pipeline to the junction to give our customers access to the origination point of Shell Pipeline’s Houston-to-Houma pipeline, which is scheduled to transport crude oil from the Houston area eastbound to refining centres in Texas and Louisiana.’

US storage terminal acquired by Rimrock US-based El Dorado Storage Terminal, located in Kansas, has been purchased from Enbridge Energy Partners by Rimrock Midstream.

The sale price has not been divulged but, concurrent with the closing of the acquisition, Rimrock established a strategic financing relationship with Energy Capital Partners with the ability to expand the funding up to an aggregate $160 million (€119.2 million) to support its growth initiatives.

TANK STORAGE • November/December 2013

The El Dorado Storage Terminal is a service provider to the nearby El Dorado refinery and Rimrock’s facility is the termination point for the Osage Pipeline, with a combined nominal storage capacity of 1.15 million barrels.

‘This facility will be a strong anchor asset for our midstream platform, while offering organic expansion opportunities,’ says John Peterson, Rimrock CEO.

19

terminal news

Debate about revamped storage Storage expansion and transfer facility rumbles on decision to be contested The upgrade of a crude oil storage and transfer facility in Pittsburg, US is subject to several recent discussions this autumn.

WesPac Energy Pittsburg (WesPac) has proposed the modernisation and reactivation of existing marine terminal, oil storage and transfer facilities at the NRG Pittsburg Generation Station, a project set to cost around $200 million (€148.7 million).

In addition, WesPac wants to construct a new rail car transloading facility in an existing rail yard owned by BNSF Railway. It will lease the land from BNSF and build the facility between the existing BNSF and Union Pacific rail lines.

But local residents had a chance to voice their concerns about the project, including reduced air quality, which types of oil will be arriving into the facility and potential fire and spill safety worries, in November

The WesPac project calls for an average of 242,000 barrels of crude or partially refined crude oil to be unloaded daily from both marine vessels and railroad cars and stored in 16 tanks once used

by Pacific Gas and Electric to store fuel oil two decades ago. A network of mostly underground pipes would transfer oil to local refineries that ring the bay.

Planning commissioners are believed to have the subject of the project’s permit on their agenda in a meeting this December.

WesPac says, if given the greenlight, the project will be constructed in two phases. The rail transload facility and supporting facilities at the storage terminal (four storage tanks) will be built first. Construction of the marine terminal and remaining storage terminal facilities will then make up phase two. It aims to have the entire project fully operational by the fourth quarter of 2015.

Imperium Renewables will move ahead with plans to expand its business at the US Port of Grays Harbour despite the Shoreline Hearings Board’s decision to require additional permitting work.

Imperium Terminal Services submitted permit applications for the construction of new storage tanks, rail infrastructure and office space over 10 acres within the port and adjacent to its existing biodiesel plant.

Despite Shoreline rejecting most opposition arguments in relation to the expansion, a majority did believe the City of Hoquiam and the Washington Department of Ecology should have considered the cumulative impacts of this project alongside a similar nearby proposal from Westway Terminals and a third unnamed project which is close by.

‘We respectfully disagree with the Board’s conclusion that any proposed project at another site – anyone who can imagine doing something – provides the basis for denying our permit,’ says Imperium Renewables CEO John Plaza. ‘Such an unfair standard if applied in Grays Harbour County and throughout Washington would effectively paralyse investment across the state.’

Imperium’s proposed expansion would add up to nine new bulk liquid storage tanks and a rail spur intended to serve customer demand for handling bulk liquids, including biofuels and crude oil.

The company is expected to appeal the Board’s order.

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18/11/2013 10:11:55

November/December 2013 • TANK STORAGE

terminal news

‘First ever’ tank storage facility arrives in Outer Hebrides An aboveground fuel storage tank is currently under construction in Scotland to benefit the local residents of South Lochs.

Funding has been received from the Highlands and Islands Enterprise (HIE), the Muaitheabhal Trust and the Big Lottery Fund to establish a local 24-hour diesel and unleaded petrol tank. The move aims to cut down trips for locals to the nearest filling station over 20 miles away.

‘We have been working closely with Pairc Community Co-operative (PCC) for over six years now and it is great to see the new fuel pump being installed, which will complement existing activities and help support the economic growth of the South Lochs area,’ Jane Mackintosh, HIE head of community strengthening, was quoted as saying.

The tank will be located at the Ravenspoint Centre which is run by PCC.

Oil storage project pulled in US

New oil storage terminal for Bangladesh

It has been reported a proposal to build storage facilities in Alabama, US has been withdrawn.

The plan by American Tank and Vessel was to build up to 32 oil storage facilities near the town of Mobile, but environmental and residential concerns meant the city’s Urban Development Department had recommended denial of any green light.

It is believed the company can request reconsideration before the Planning Commission at any time however.

Bangladesh-based Omera Fuels is to bring a new petroleum oil storage terminal online to increase the country’s fuel reserve required to run independent power plants.

The terminal will have a capacity of 70,000 tonnes, which is 63% more than the current combined capacity of three state-owned facilities.

‘The terminal is a solution for quick rental power plants that can import and manage its inventory efficiently,’ Omera chairman Azam Chowdhury was quoted as saying.

Omera and its sister company MJL Bangladesh are now awaiting permission to use a jetty from Bangladesh Petroleum.

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terminal news

Buckeye buys up Hess terminal network Independent energy company Hess has entered into an agreement with Buckeye Partners to sell its US East Coast and St. Lucia terminal network for a total consideration of $850 million (€626 million).

As a result of this sale, Hess is expected separately to release approximately $900 million of working capital, with another $100 million continuing to be retained by the retail business as part of its ongoing operations.

The sale of the terminal network, along with the sales

of four upstream producing assets completed earlier this year and the announced sale of the Energy Marketing business, brings total year-todate divestitures to $5.4 billion.

Hess has used the initial proceeds from its completed asset sales first to repay debt and then to further strengthen its balance sheet.

The agreement is subject to regulatory approvals and other customary closing conditions and is expected to close in the fourth quarter of 2013.

Ups and downs within Singapore storage A division of the Singapore Trade and Industry ministry has reported a rise in middle distillate inventories to the highest level in seven months.

Onshore stock of the liquids, which include types like kerosene and petrol, rose by 1.2% to 10.9 million barrels by mid-September.

Residual fuel inventories, like fuel oil and low-sulphur waxy residue, have fallen 4.4% to a three week low of 22.6 million barrels however.

Strike ended at African oil storage company A strike by the workers at Bulk Oil Storage and Transport (BOST) in Ghana was reportedly been called off on 4 October.

An emergency meeting was held between BOST management and its junior workers, who were protesting against poor conditions of service and began their strike on 1 October.

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stemmed from a belief vital BOST installations were mismanaged with the intent of laying off staff.

A BOST company official has revealed a committee has been set up to review those conditions or services and that supply of petroleum products had not been disrupted during the course of the strike.

New crude oil storage and blending terminal for South Africa Oiltanking Grindrod Calulo (OTGC), a subsidiary of Oiltanking, has signed a joint venture with Mining, Oil and Gas Services (MOGS) to construct a commercial crude oil storage and blending terminal in South Africa.

The project will have a total capacity of 13.2 million barrels comprising 12 1.1 million barrels concrete tanks at the Port of Saldanha Bay. The development, construction, management and operations of the terminal will be carried out by the new company branded Oiltanking MOGS Saldanha. Both companies will own 50% of the new company shares.

MOGS initiated the project in 2011 and has since completed the pre-feasibility studies and design and is in the final stages of obtaining the required statutory approvals.

In a statement OTGC called the Port of Saldanha Bay ‘an excellent location for a crude oil hub as it is close to strategic tanker routes from key oil producing regions to major oil consuming markets. It is ideally situated for the blending of West African and South American crude oils’.

The new crude oil terminal is due to be built as a state-of-the-art facility and its jetty will be designed for handling vessels up to VLCC size.

November/December 2013 • TANK STORAGE

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terminal news

Emarat renews Emoil’s contract with ENOC

Oil storage lease debate in Sri Lanka

It is believed the government of Sri Lanka has refused to sign an agreement with a division of Indian Oil (IO) concerning the lease of Trincomalee oil storages.

Emirates General Petroleum Reports based on sources from (Emarat) has renewed the the Ministry of Petroleum Industry lease contract of Emoil’s say the Sri Lankan government Petroleum Storage FZCO has decided to take over the in Jebel Ali to Emirates China Bay petroleum storage National Petroleum tank complex, which was given to (ENOC) next year. assa Manage Yourfor Inventory Half Page Ad 185x135mm 1301106_Massa Liquid Level Ad 090916 11/6/2013 2:32 PM Page 1 IO onCMYK a long lease by a different The facility, built on an area government 11 years ago. of 47,000m2 in Jebel Ali Free Lanka IO, a subsidiary of Zone, includes nine storage state-owned IO, bought a onetanks of varying capacities third share in Ceylon Petroleum The Sri Lankan lease agreement ‘didn’t comply with for blending and storing high Storage Terminals in 2003 which government standards’ quality petrol products with a operates the China Bay tank total capacity of 203,000m3. farm. Ceylon Petroleum and Emoil was established the City of Colombo entered into a MoU Lanka IO has also applied to the Sri Lanka as a joint venture between with Lanka IO to grant a long-term lease Board of Investment to establish bitumen Emarat, BP Global Investments to the Indian firm for operating the 99 handling facilities at the tank farm, but has and Trafigura Beheer for $32 storage tanks at Trincomalee for 35 years been told any decision will be delayed million (€23.8 million). Emarat for an annual fee of $100,000 (€74,675). until after the lease situation is sorted. owns the largest share and But the current government says The tank farm has 99 tanks, each handles its management that the hand over was not in line with the capacity to hold 12,100 tonnes and operations. with government standards. of oil, spread over 850 acres.

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November/December 2013 • TANK STORAGE

terminal news

Port of Le Havre to be site of new bulk terminal An agreement has been signed between Odfjell Terminals Europe and Grand Port Maritime du Havre (GPMH) to develop a new liquid bulk terminal at the Port of Le Havre, France The planned terminal, to cover approximately 31.5 hectares, will be located inside the French port along the Grand Canal Maritime.

‘This project with Odfjell is a significant stage for us,’ says chairman of GPMH management board, Hervé Martel. ‘It closes the phase of call for projects launched in order to boost bulk liquid storage activity in the port and industrial zone.’

GPMH expects the first phase will consist of 150,000 cbm for the storage of petrochemical and petroleum-related products, requiring a total investment of up to €200 million ($270 million).

Construction is expected to start in early 2015, with a tentative completion date set for mid-2017.

Le Havre will be the site of a new liquid bulk terminal

FM grade achieved by Superior Tank US-based Superior Tank, a manufacturer of bolted and welded factory powder steel storage tanks, has received its initial certification from FM Global.

After a final audit to certify the manufacturing facilities as FM compliant, Superior passed with the highest score possible.

‘This is the result of three years of hard work and commitment to a new system based on quality standards and technology driven processing,’ said Jhon Godoy, CIO. Superior Tank has been manufacturing and installing a complete line of bolted and welded steel storage tanks for industries including crude oil for nearly 30 years. It follows the standards and specifications set by the American Petroleum Institute.

New figures show Singapore on the rise It has been reported residual fuel inventories in Singapore increased 22% during the first half of November, the most in over four years according to the Trade and Industry Ministry.

The Ministry conducted a voluntary survey with storage terminals, oil traders and refiners to record the following results.

Data placed onshore supplies, including fuel oil and low-sulphur waxy residue but not bitumen, at 20.7 million barrels by 14 November – up 3.8 million and the biggest gain recorded since summer 2009.

Stockpiles of middle distillate and kerosene went up 15% to 9.8 million barrels, but inventories of light distillate, including petrol and naphtha, declined by 0.5% to 11 million barrels.

TANK STORAGE • November/December 2013

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terminal news

Tepsa runs new train station in Bilbao Tepsa, a bulk liquid storage terminal operator, has inaugurated a railway station for a new freight car loading and unloading service for chemical products.

The new siding has been built on the terminal site which Tepsa leases from the Bilbao Port Authority. The first product to be loaded at these facilities was sulphuric acid, delivered to the Adisseo plant in Burgos.

The siding is a 936m stretch of railway track, with two switches and two buffer stops. The main track is 384m long, while the rest is made up to 468m with an 84m shunting neck.

The construction work for the siding started in October 2012 and lasted for nine months.

Tepsa’s new railway station will enable loading and unloading of chemical products

New expansion set for Eagle Ford pipeline

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Plains All American Pipeline (PAAP) and Enterprise Products Partners have agreed to expand their Eagle Ford joint venture crude oil pipeline.

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It serves the Three Rivers and Corpus Christi refineries and other markets via marine transport facilities at Corpus Christi.

The pipeline supplies the Houston-area market through a connection to the Enterprise Crude Pipeline terminal in Texas.

The pipeline expansion will be completed in stages which include adding pumping capacity and looping certain segments of the existing system.

The expansion also includes building an additional 2.3 million barrels of operational storage capacity in Gardendale, Tilden and Corpus Christi.

November/December 2013 • TANK STORAGE

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news analysis terminal news

Ineos claims victory at the Battle of Grangemouth

by Daniel Traylen

‘The petrochemical business at Grangemouth has reached a crossroads.

Unless we reform our cost base and secure new gas raw materials the site will close’ Shockwaves were sent through the heart of the UK fuelling industry when Ineos Petrochemicals UK chairman Calum MacLean released this statement on 19 September, followed by a white-knuckle ride of complicated events which prompted a union reaction and much speculation as to how the plant’s closure might also signal the demise of the giant refinery, Scotland’s only crude oil facility, adjacent to it.

The Grangemouth row began after an internal investigation into the conduct of Unite union convener and Labour Party chairman of Falkirk Stephen Deans, who worked at Grangemouth for 24 years, was launched in September.

Unite called for industrial action in response to what they deemed to be unfair

treatment of Deans, with 81.4% of members saying yes to a strike on a turnout of 86%.

Tied up in the furore

has lost over £150 million each year for the last four years, with losses continuing at over £10 million per month

in site costs – could not be negotiated, it was estimated that the petrochemicals plant could close as early as 2017.

surrounding Deans and the subsequent union action was the concern expressed by MacLean and other Ineos bosses that Grangemouth’s future was already seriously compromised due to heavy financial losses. MacLean said the costly industrial action ‘could tip Grangemouth over the edge... unless we find a way back from the brink, Grangemouth will be next’.

Though the strike was later called off, most of the plant was shut down and the refinery closed for weeks amid financial turmoil and negotiations between Ineos and its employees on the site’s future.

According to Ineos, it is the second time in the last 40 years the site has closed, the first having occurred when Unite initiated a strike in 2008.

Around 70 North Sea platforms were forced to shut down or reduce production during the strike then, pushing world oil prices higher as a result.

at the time his statement was released. The site pension scheme was reportedly around £200 million in deficit and pension costs at an ‘unsustainable’ 65% of salary.

In another statement, Ineos said North Sea gases, used as raw materials by the petrochemical site, had declined by 60% in the past 10 years, and the contract with BP is due to expire in 2017.

This meant Grangemouth needed ‘major investment to land gases from the US’.

Ineos also said: ‘We have successfully invested in new infrastructure at our Rafnes site in Norway, allowing it to bring in gas from the US from 2015.

‘The company would like to do the same thing at Grangemouth but the site’s lack of competitiveness makes the necessary investment impossible without change.’

As part of this ‘necessary investment’, Ineos said it had asked the UK and Scottish governments for grants and loan guarantees of £150 million to build a new gas terminal to allow it to bring in ethane from the US, and stated it was willing to invest a further £350 million to support this venture. If this investment – which would also be dependent on reductions

Deans has since resigned from his position at Ineos and the site was reopened on 25 October, much to the relief of the UK fuelling industry.

Grangemouth ‘at a crossroads’ According to MacLean, Ineos has invested over £1 billion (€1.2 billion) since taking over at Grangemouth in 2006 but – despite this investment – the company

TANK STORAGE • November/December 2013

Refinery fears Grangemouth oil refinery, part of a complex that is three-times the size of the city of London, is instrumental to fuel supply in Scotland, meeting around 75-80% of demand, plus supply into neighbouring border areas of England and over to Northern Ireland. Its capacity is some 9.75 million tonnes per year, representing around 10.8% of UK refining capacity.

Highly integrated with the adjacent olefin and polyolefin petrochemicals complex, Unite union vice-chairman Mark Lyon said that any closure of the petrochemical operations would ‘undermine the viability of the refinery, as it’s shown all over the world that there are many benefits when there is integration.’

According to UK petroleum industry association UKPIA, around 70% of the refinery’s crude oil intake is supplied via the BP-operated Forties Pipeline System. The crude comes from the Forties field, around 110 miles east of Aberdeen,

29

news analysis through to its landfall at Cruden Bay, Aberdeenshire. The oil produced at the Forties field is a constituent of the benchmark Brent Crude price, and about a third of the North Sea’s total production is delivered to Grangemouth. Closure of the refinery could have reduced supplies of the major North Sea crude that underpins the Brent oil benchmark, used as a basis for setting oil prices around the world. With five or six European refineries also expected to close over the next two years, a shut down could have led to increased petrol prices.

Grangemouth also provides steam and power for the stabilising process at the Kinneil terminal adjacent to the refinery, and has a pipeline link for crude oil import from Finnart on the west coast.

Jim Ratcliffe, Ineos CEO and main shareholder in Grangemouth, said the closure of the petrochemical plant would ‘likely lead to the demise of the refinery’. This would have threatened the jobs of all of the site’s full-time employees unless an emergency buyer could be found and the impact would have been felt all over the country. Though shortterm contingency plans are in place for such a situation, speculation over a longerterm solution was uncertain.

Survival plan and restart According to earlier reports, the Grangemouth refinery had been struggling in the face of rising competition from refineries in the US, Asia and the Middle East, who supply at lower costs and have less burdensome legislative regimes than Europe, and was being partially kept afloat by sharing production costs with the petrochemicals business.

Regional demand has also seen a decline in recent years.

This, along with the problems facing the petrochemicals plant, lead to Ineos issuing a ‘survival plan’ to all of the workers which included a pay

30

freeze between 2014 and 2016, removal of a bonus up to 2016 and the end of the final-salary pension scheme in efforts to prevent permanent closure.

The plan was rejected by around half of the workforce on 23 October, though it was announced the decision was made to reverse the rejection just two days later, prompting Ineos to restart the refinery and reopen the petrochemical plant after shareholders agreed to invest £300 million in the site to cover losses.

On top of that plan, Unite agreed not to strike at Grangemouth for three years while management restores the loss-making plant to profit.

A Unite spokesman later said: ‘Grangemouth is the powerhouse of the Scottish economy. It now has a fighting chance of upholding this crucial role into the future’.

It has been reported that approximately half of the investment money will go towards funding the gas terminal originally proposed in September, with construction due to be complete by 2017. The rest, says Ineos director Tom Crotty will cover

for an estimated 8% of the country’s manufacturing industry and supplies hundreds of businesses across the UK, triggering government fears that many companies that rely on Grangemouth may have been pushed out of the UK. Scotland’s first minister Alex Salmond, UK prime minister David Cameron and environment secretary Ed Davey all vowed to help aid the situation as best they could for fear of massive economic effects in the event of a site shut down, which underlines the importance of Grangemouth.

‘This outcome matches our worst fears... In preparing for this difficult position we have been pursuing the contingency of potential buyers – we will now be actively exploring this as the main option as a matter of urgency,’ said Salmond at the time.

Safe for now: Grangemouth petrochemical plant Grangemouth’s ongoing monthly losses.

The closure could also have ‘We’ve given the chemicals had an influence on whether business another 15 to 20 or not Scotland would vote to years off the back of new become independent next raw materials, new contracts year, as the referendum is likely and significant investment,’ to hinge on the strength of its said MacLean after news of economy. Salmond described the restart was released. the announcement to restart as a ‘tremendous fillip for the Economic effects workforce and the whole Grangemouth community, The Scottish economy would following what could have have taken a huge blow in been a potential disaster’. the wake of a shut down.

David Bell, professor of Grangemouth accounts economics at Stirling University,

says: ‘If Grangemouth were to collapse, Scotland would have to import its petrol and diesel.

A lot of other industries would have to find other suppliers and Scotland would lose one of its major exporting enterprises.’

The Scottish government has since agreed to provide a £9 million grant to support Grangemouth, and the British government has given initial approval for a £125 million loan guarantee, Ineos have reported. The loan would contribute to the initial £300 million investment by shareholders.

‘This “wake-up” call over Grangemouth,’ says UKPIA communications director Nick Vandervell, ‘makes it all the more important that the Department of Energy and Climate Change’s policy framework review for the downstream sector, taking into account things like security of supply and

resilience both nationally and regionally, comes up with some positive actions when it is released in early 2014.’

Jim Ratcliffe calls the decision to accept the survival plan ‘a victory for common sense’. Though some redundancies will still have to be made, he believes the site now has a ‘great future’ in a time of huge pressure for the European refining industry. For now, at least, oil will continue to flow at Grangemouth.

November/December 2013 • TANK STORAGE

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incident report The latest information on fires, leaks, spills and accidents in the chemical sector n 07/11/13 Mesa Oil Services

North Dakota, US

n 31/10/13 Kansas, US

n 23/10/13

An explosion at a saltwater disposal well site in North Dakota, US took out 270 barrels of oil, 2,440 barrels of saltwater and 13 storage tanks at a facility owned by Mesa Oil Services.

The blast occurred after an oil treater exploded not long after a delivery had taken place on 7 November.

The fire was quelled with a combination of water and foam and an investigation is taking place to establish how it began.

Lightning struck three oil storage tanks, causing two to explode.

The tanks were part of a tank battery farm in Leavenworth County and local reports say one tank became airbourne and travelled 200 yards during the incident.

It is believed the three tanks each had a capacity of 8,500 gallons and contained crude oil, although it is not known how full the tanks were at the time of the incident.

No injuries have been reported and firefighters from several departments were involved in controlling and putting out the blaze.

Texas, US

Officials claim nobody was hurt in a fire at an East Texas oil storage facility, 95 miles away from Dallas.

Smith County authorities revealed two small buildings burned and some nearby tanks leaked a mixture of oil and saltwater, but dikes helped contain the liquid.

Investigators are now trying to determine what started the fire. Fire crews extinguished the flames before returning the site back to the owner for clean-up.

n 09/10/13 Texas, US

n 23/10/13 Arizona, US

n 19/09/13

Anadarko Petroleum Colorado, US

n 12/09/13

Ilsap Biopro Calibria, Italy

n 09/09/13

Texas, US

n 28/08/13 Irkutsk, Siberia

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An explosion happened at an oil storage facility in the town of Gillett and left one man hospitalised.

The cause behind the blast has not yet been released but officials did reveal there was oil and salt water in the storage tank.

A 38-year old worker was inspecting the tank when it went up and had to be airlifted to a San Antonio Military Medical Centre, but later reports claim he is ‘doing well’.

Traffic was also halted for several hours around the site as fire fighters from five stations tackled the blaze.

Two oil storage tanks at a construction materials plant caught fire in Arizona, US this month.

Firefighters and a hazardous materials unit from NorthWest Fire took half an hour to bring the blaze under control.

It was revealed the two tanks, which contained oil and oil liquid products used to make asphalt, were located close to two 1,000 gallon propane tanks but the fire fighiting crew managed to halt the fire from spreading across to them.

There were no recorded injuries and the cause of the fire in under investigation.

An estimated 125 barrels of oil seeped into a river in North Colorado.

A damaged storage tank, owned by energy business Anadarko Petroleum, spilled what the Colorado Department of Natural Resources is calling ‘condensate’ into the South Platte river.

The state oil and gas commission revealed Anadarko deployed absorbent booms on the river. No other details were available at time of writing.

An explosion at an oil storage facility in Italy reportedly claimed the lives of three people.

The blast occurred at a facility near Lamezia Terme owned by fuel producer Ilsap Biopro, but the reason behind it has not yet been disclosed.

Two men died immediately at the scene on 12 September while a third, who suffered 90% burns, passed a day later.

Lightning which hit a storage tank in Texas caused it to become displaced and land in the middle of a nearby road.

The tank was crushed and its contents, identified by emergency officials as methyl mercaptan, were released.

As the chemical can be toxic in high concentrations, local residents were told to stay indoors during the clean-up operation which took just under two hours.

No injuries were reported in connection with the incident.

At least seven people were injured in a fire at an oil storage tank near the city of Angarsk.

A five tonne tank of crude oil caught fire at a refinery and took more than a day to extinguish due to the lack of water and detour routes.

Preliminary theories suggest the fire may have been caused by a violation of the operating rules.

November/December 2013 • TANK STORAGE

technology news

Belven opens new office Belgian valve specialist Belven officially opened its new office building in Mechelen on 3 October. Kris Peeters, the Flemish Minister-President and Bart Somers, the Mayor of Mechelen, were both present at the opening ceremony.

The building can accommodate 65 people – at the moment there are 38 in service, showing significant potential for growth.

The company has also won an award for Excellent Enterprise. This prize is an initiative from the province of Antwerp and chamber

of commerce (Voka) Mechelen to boost entrepreneurship.

The award goes to companies which have experienced rapid growth in turnover, added value and number of employees, and who have a proven record in terms of innovation, human resources, marketing and internationalisation.

Manager Geert Van Mechelen was particularly proud of the recognition: ‘We

have managed to grow in difficult times.’

Belven is a 100% family business and has ambitions to become the preferred partner for quality valves worldwide.

‘We work with a team of specialists, we continuously optimise our internal processes, we develop new quality products within our own R&D department and, thanks to a decentralised stock policy, we can

assure our clients a personal, quick and reliable service.

These have been the foundations for our growth.

And they give meaning to our future possibilities. We always think long term.’

The new company building in Mechelen confirms this growth ambition.

The company is active in the Benelux, but also exports to all European countries, southeast Asia, Russia, the Middle East, north and South Africa. Its turnover in 2012 was €12.8 million ($17 million) – 63% of which was realised abroad.

New order for tanks and systems for Ergil

New storage tank agreement signed in North America

Ergil, an engineering, construction and manufacturing company, has won a contract from Schlumberger Middle East to provide fuel storage tanks, storage tank equipment and a complete loading system.

The order includes supply of truck loading arms, canopy and related equipment, pressure vacuum vents, flame arresters, gauge hatches and 10,000 gallon capacity fuel oil tanks.

‘The complexity involved in operating in such projects is explicit and usually underestimated,’ says Ergil CEO Oktay Altunegil. ‘We have a long history of delivering products for both downstream and upstream projects and the upstream oil and gas projects has always been our area of interest.’

An agreement has been signed by Matrix Service and TransCanada to construct storage terminals in North America.

The agreement is set to last five years and, while principally include construction of new storage tanks,

TANK STORAGE • November/December 2013

may also include the balance of plant for the entire terminal.

Matrix will supply engineering, fabrication and maintenance facilities to run along TransCanada’s experience in developing and operating energy infrastructure.

The Saldanha Bay project will have a total capacity of 13.2 million barrels of crude oil

33

technology news

New mobile transloading platforms from Benko Products The Green Access and Fall Protection line by Benko Products, manufacturer for truck and rail safety equipment, has launched a new product for transloading operations.

Designed for use in the petroleum and crude oil markets, the Portable Transloading Platform provides a safe mobile access solution for transloading operations – either ‘truck to rail’ or ‘rail to truck’. The unit can be customised to provide access to two rolling vehicles simultaneously.

When in use, the operator lowers the gangway and is protected from falls by the safety cage for safe access to the top of the vehicle. The system can use either hose connections or loading arms for a safer option to transfer the products from one vehicle to the other.

The system can be made double sided for maximum flexibility. The Green Access and Fall Protection line also offers fixed transloading platforms for applications where a permanent fixture is needed.

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Todo opens UK manufacturing facility

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Todo, a manufacturer of dry-break couplings has relocated its production facility in Töreboda, Sweden to Margate, England.

The move is part of new plans to expand its product range and increase brand recognition worldwide.

Todo manufactures and supplies couplings and valves for safe handling of hazardous fluids and gases. Designed and manufactured to EN ISO 9001:2000, ISO 14001 and OHSAS 18001 accredited procedures, Todo says the product range will continue to conform to all relevant international quality, performance and safety standards.

34 anzeige_halbe_Seite.indd 1

November/December 2013 • TANK STORAGE 21.12.2012 10:14:10

technology news

Emco Wheaton’s software offers tanker product monitoring Emco Wheaton, a provider of technology for the transportation of oil, gas and hazardous chemicals, has unveiled a new software package which automatically monitors product levels in individual compartments of tankers.

Drawbar + is able to simultaneously monitor levels within any additional multi-compartmental draw bar trailer which may be connected to and towed by a tanker mid-application.

Ineffective monitoring of compartments can result in inaccurate distribution and product recognition at the point of delivery, potentially affecting profit margins and customer relations.

When adding a multi-compartment drawbar trailer, it can prove difficult and time-consuming to keep track.

The Drawbar + , an upgrade of Emco’s compartment volume monitoring software, detects any addition of compartments and alters its display to

accommodate them.

If a twocompartment draw bar trailer is connected to a tanker with four compartments, Drawbar + will monitor and display the product levels in all six compartments.

During loading, details are entered into the litre counter and compartment contents are Drawbar + automatically monitors product displayed graphically and levels in tanker compartments numerically. Drawbar + automatically displays Helping with accurate distribution, the name, location and volume of the volume is recalculated throughout the product in each compartment the delivery process and any throughout transportation. retained product is displayed.

Honeywell to modernise Nordics’ largest refinery Technology and manufacturing company Honeywell has been selected by Sweden-based oil company Preem to modernise Preemraf Lysekil, one of Europe’s largest refineries, by adding in new industrial process controllers.

It is hoped this will extend the life of the existing control system at the refinery, located in southern Sweden. Preem will use the enhanced high performance process manager (EHPM) to ‘as much as triple the capacity of the refinery’s existing controllers’.

‘Our EHPM enables Preem to update their refinery and increase throughput while maximising legacy investments and intellectual property,’ adds John Rudolph, VP for Honeywell process solutions’ lifecycle solutions and services business.

The upgrade will be completed during planned maintenance at the refinery and will not require any additional downtime. It is scheduled to be completed before the end of the year.

Preem has an annual refining capacity of more than 18 million tonnes, which accounts for 75% of refining capacity in Sweden and about one-third of the entire Nordic region.

Strategically located petroleum bulk storage facility featuring the only deep water platform (64’ operating draft) on the U.S. East Coast • 20 storage tanks 80 miles East of New York Harbor • The only deep-water loading/unloading platform on the U.S. East Coast.

• Total Storage Capacity of 5 Million Barrels • Easy reloading for distributon of product to U.S., Canada and Europe

Emerson acquires Enardo Emerson Process Management has acquired Enardo, a provider of safety and environmental control equipment for the oil and gas, petrochemical and refining industries.

Enardo, based in Tulsa, Oklahoma, recorded approximately $65 million (€47 million) in sales last year.

It manufactures tank and

terminal safety equipment, including hatches, vent, pressure and vacuum relief valves and flame arrestors.

Emerson Process Management makes pressure regulators, relief valves, and related products. These technologies help control pressure and flow of industrial gas and liquids, natural gas and propane gas.

TANK STORAGE • November/December 2013

United Riverhead Terminal, Inc. (631) 284-2010

www.urtny.com 35

technology news

New products from Alpeco Alpeco has developed a radio remote control system with an integral digital counter which replicates the counter display of the TE550 electronic register.

The handset incorporates a digital display which replicates the reading of the vehicle mounted TE550 meter reading and allows the operator to monitor delivery volume as well as giving stop/ start and hi/low flow control of the meter when supervising the delivery at the end of the hose. The range of the new remote is over 200m and the handset display flashes when outside of its operating range. When the delivery is finished and the electronic truck meter prints its delivery ticket, the remote display on the hand set is automatically reset to zero.

The new Adtube additive applicator provides a cost-effective means of dosing fuels with additive when it is not possible to dose directly into a customer’s storage tank. The Adtube applicator is available in 0.5 and 1 litre sizes which, when connected to the tanker product return spout, can be filled with the correct ratio

36

Alpeco’s radio remote control system with integral digital counter of additive for the fuel to be delivered.

Additive is then mixed with the fuel by re-circulating within the compartment or drawn through

the manifold during delivery to the customer’s tank. The Adtube applicator is purged clear of product by activating the product return blow down.

November/December 2013 • TANK STORAGE

technology news

Alltec building manufacturing facility in North Carolina Alltec, a specialist in the design, manufacture and development of products and services for grounding and bonding solutions, surge protection and lightning protection, is to open a production facility in Asheville in North Carolina, US. The facility will be used to produce surge protection devices (SPDs) for the global market.

The SPD facility will focus on the development and manufacture of surge protection devices

for main and sub-system electrical power up to 26KV applications, as well as a full array of models for data and telecommunication applications. Production of Alltec’s DynaShield SPDs is expected to begin in the first quarter of 2014.

The Center will include product R&D facilities and will also housing a manufacturing department that has been designed for quick product assembly, testing and packaging.

Land and Marine rebrands Land and Marine Engineering has rebranded its tank and peripheral business as TankServ.

The company is looking to grow further and support more storage facilities.

TankServ offers complete design, fabrication, construction and maintenance of fixed and floating roof storage tanks and has, over many decades, applied this knowledge and experience to a wide range of projects, gaining a reputation for excellence in engineering and construction.

TankServ also provides troubleshooting and solutions for all storage tank problems, from feasibility studies through to detailed engineering, procurement, fabrication, construction, repair and maintenance of any type of storage tank on a routine or emergency basis, with minimum impact on existing facilities.

Griswold pumps for terminal applications A range of centrifugal pumps from Griswold Pumps has been specifically engineered for a number of applications within the storage terminal industry.

The 811 Series ANSI Centrifugal Pumps can be used for transfer applications found within storage terminal operations, including petroleum, biofuels, chemicals and vegetable oils.

The 811 series pumps feature open impellers with two times the wear area of a closed design, which optimises the performance of the pump’s open impeller and allows renewable performance. This open-impeller design feature

also minimises concentrated wear by balancing the hydraulic axial thrust load and reducing the stuffingbox pressure. This not only facilitates corrosive, abrasive, solid and stringy-fibre handling, but also simplifies maintenance, extends pump life and reduces repair costs.

The pump casings can be constructed from a range of

Griswold’s 811 series is engineered for use in the storage terminal industry materials, including ductile iron, 316 stainless steel, CD4MCu and alloy 20. They are constructed

through investment and no-bake casting processes, resulting in a smooth finish.

Surface Technology expands in Australia Surface coating and metal finishing company Surface Technology continues its expansion programme with the launch of a new Armourcote Hi-Tech Industrial Coatings plant in Jandakot.

Following Armourcote Hi-Tech Industrial Coating’s recent integration

with Surface Technology, part of Norman Hay, the group has invested in the larger, purpose built facility in Jandakot. The 2,000m² plant is equipped to provide a range of surface preparation, coatings and paint systems and offers three Australian-

TANK STORAGE • November/December 2013

compliant coating spray booths.

Surface Technology has also recently invested in a new site in Dubai, providing a range of thermal spray coatings to meet increasing demand in the oil and gas and manufacturing sectors.

37

technology news

New biodiesel analyser from Wilks Wilks has brought out an analyser for biodiesel in diesel measurements.

The InfraCal 2 analyser offers additional features to its existing InfraCal Biodiesel Blend analyser, including better repeatability, multiple calibrations, increased data storage, optional internal battery pack, touch screen display, and password protection for instrument settings.

The technology incorporates new electronics

providing a better signal-tonoise ratio that improves the stability and repeatability. The calibration scheme makes it easier to get an accurate zero which contributes to more repeatable readings.

Its multiple calibration capability enables users to have calibrations for numerous types of diesel fuel.

According to Wilks, the InfraCal 2 provides a virtually unlimited amount of internal data storage. For users testing fuels at different locations or

at a remote loading rack, data can periodically be transferred serially or via a flash drive.

The internal Wilks’s InfraCal 2 analyser provides increased battery pack will biodiesel measurement capability last up to 12 hours, meaning the device as password protected is portable and eliminates the calibrations and instrument need to ship samples to a settings, as well as tagging laboratory and wait for results. each measurement with The touch screen of analyst, location and date/ the allows for features such time information.

Storage expansion at Scotland harbour Enviroco, a UK-based provider of waste management and industrial services, has installed four new direct discharge waste tanks at Point Law in Aberdeen, increasing its tank storage capacity at the site by 1,000m3.

The Aturia ND end suction ISO2858 Process pump

AxFlow to distribute Aturia centrifugal pumps AxFlow has entered into an agreement to distribute Aturia centrifugal pumps in the UK. This development will expand AxFlow’s pump offering to include DIN, ISO, split case, mag drive, borehole and fire-fighting pumps.

‘Adding the Aturia to portfolio provides us with another 20 ranges of “mainstream” centrifugal pumps,’ says Malcolm Walker, AxFlow centrifugal pumps manager.

‘With 2,000m3 storage already at the Torry Quay in Aberdeen, our capacity for dealing with bulk waste has now increased by almost a half,’ says Enviroco industrial services director Alister Wait.

Wait explains the new tanks are bigger than the existing tanks, designed to make better use of the limited space on the quayside.

Point Law is situated at the most eastern part of Aberdeen Harbour, which handles over 8,000 vessels a year, many from North Sea oil and gas operations.

The Point Law expansion comes during a significant period of growth for the Aberdeen headquartered waste management company, which is part of international oilfield services provider ASCO Group. Enviroco, which is part of international oilfield services provider ASCO Group, reported turnover in 2012 of over £43 million (€50 million), up 12% on figures for 2011.

Diaphragm line from Wilden designed with pump operators in mind California-based pump and engineering specialist Wilden, a manufacturer of air-operated double-diaphragm (AODD) pump technology, has announced a new line of diaphragms for pump operations.

The company’s EZ-Install TPE diaphragms have been designed so the operator in the field does not need to invert the diaphragm during the installation process. This improvement is intended to reduce the installation time, lower maintenance costs and improve uptime.

The diaphragms are available in

38

Santoprene, Hytrel, Polyurethane and Geolast options. Geolast, a recent addition to Wilden’s material options, is an injection-moulded material that can be used for applications requiring enhanced oil resistance equivalent to that of nitrile (Buna-N) at a lower cost.

EZ-Install diaphragms are available for use in Wilden’s 38, 51, 76 and 102mm original and advanced series AODD pumps. All EZ-install diaphragm options maintain compatibility with existing hardware. Pump performance and durability for all materials are equivalent to traditional diaphragm configurations.

Wilden’s EZ-Install diaphragms

November/December 2013 • TANK STORAGE

profile

New name, old faces Epic Midstream may be a new name to the storage market, but its team are certainly not lacking in experience.

Made up of people with extensive experience gained from working at the likes of Kinder Morgan, BORCO, Vopak, Marathon Oil, First Reserve and Nustar, the midstream investment platform is keen to make its mark.

Last year Blue Water Energy and White Deer Energy formed a partnership to acquire a 100% interest in five refined product storage terminals located across Georgia and Alabama in southern US. Epic Midstream now has $200 million (€149 million) equity allocated and is focused on growing its existing facilities while acquiring and enhancing petroleum and chemical storage and handling assets serving North America.

‘There is plenty of room for investment in this market,’ company president David Vattimo

explains, ‘although you have to be careful not to overspend.

‘We are on the lookout for underutilised facilities, especially in some of the newer shale areas. We have considered international acquisitions but are going to focus on North America for the time being.’

Epic has just announced its first step forward with a $2 million rail expansion project at its terminal in Savannah in Georgia, US. The 870,000 barrel capacity terminal is adding a new rail spur with a 10 rail car loading and unloading capacity.

This is due to be complete by the end of the year to serve the local petroleum and chemical market.

The new rail spur will be served by the Golden Isles Short Line, which provides access to both the Norfolk Southern and CSX. The new access will serve the Epic East tank farm providing an

option to import and export product through the Savannah Port with the use of rail and the facility’s recently renovated 38” draft ship berth.

This is phase one which, with phase two of the expansion adding additional commodity handling, is expected to be complete early next year. Once the rail expansion is complete, Epic will begin construction of additional tanks at the site. It plans to build 150,000 barrels in up to six tanks, split across two phases.

The company also has plans to build rail access at two of its other facilities although is not yet able to divulge any further details.

‘Our strategy is not to compete against our customers,’ Vattimo explains. ‘We would be a good fit for a trading company looking for an asset partner. We may also look into crude to rail and LPG storage opportunities in the future.’

Epic Rail Expansion

Ship Dock

Epic’s New Rail Spur to the East Tank Farm

TANK STORAGE • November/December 2013

Barge Dock

39

page header

versatile.

Always a leading innovator, ROSEN not only supplies pipeline customers with the latest diagnostic and system integrity technologies but also offers flexible solutions and all-round support for plants & terminals. www.rosen-group.com

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November/December 2013 • TANK STORAGE

profile

Construction starts at northeast Asia oil hub Building work officially began on 27 November to create what is to become the ‘oil hub of northeast Asia’ in Korea.

The Port of Ulsan is already home to some 21 million barrels of storage capacity, but this is set to increase by an additional 18.5 million barrels.

‘By 2020 our storage capacity will be as large as that in Singapore,’ Park Jongrok, president of the Ulsan Port Authority (UPA) says.

Ulsan is the third largest port in Korea after those located in Busan and Gwangyang.

In terms of liquid cargo throughput, the port is also ranked fourth worldwide after Houston, Rotterdam, and Singapore, dealing with

200 million tonnes a year.

The project will be undertaken in two stages.

Stage one will create 9.9 million barrels of primarily petroleum storage in 42 tanks.

This is due to be complete by 2016. Stage two will increase the capacity to 28.4 million barrels via another 26 tanks by 2020. Around 10 companies will be involved in the development, including Korea National Oil and Vopak.

The northeast Asian region is experiencing one of fastest rates of increase in oil demand, driven largely by import growth from China.

From the supply side, sources of crude oil flowing in the region will be diversified into

TANK STORAGE • November/December

other areas such as Russian and the North American oil sands. Once the expansion of the Panama Canal is completed, VLCCs will become passable and as such the direction is estimated to shift from the Atlantic Ocean to the Pacific Ocean. Against this backdrop, there is a high possibility the northeast Asian region will become even more important.

Another major driving factor for this project is the market deregulation which is highly anticipated to occur before the end of this year.

‘At the moment the Korean government does not permit blending, although this will be amended for exporters by

the end of the year,’ Jongrok explains. ‘This is the first stage of deregulation and will mean traders can blend and export product to China, Japan and southeast Asia.’

Domestic refining capacity is also on the rise. SK Global Chemical, a subsidiary of the nation’s leading oil refiner SK Innovation, will invest $950 million (€710 million) to build a refinery in Ulsan. And S-Oil, Korea’s third-largest refiner, will spend $7.5 billion next January to expand its refinery.

Jong-rok will be presenting at this year’s Tank Storage Asia conference on 10-11 December in Singapore to share more about this project and the future of the region.

41

storage in asia Located in Johor’s Port of Pelapas on a 30 hectare section of a 50 hectare former mangrove forest site, the existing ATB Tanjung Bin Phase 1 consists of 890,000m3 of storage capacity

‘Greater Singapore’ to become the new storage hub Demand for additional storage terminal capacity continues to grow in southeast Asia, driven by growing domestic fuel requirements and the rising volume of strategic petroleum supplies being stored in Singapore and nearby locations.

Despite current backwardation in the petroleum market, storage capacity availability remains tight in Singapore and neighbouring countries.

Although a decision by several Japanese trading houses to give up rented tank storage capacity in Singapore created business press headlines earlier this year, industry sources say the vacated tanks were quickly snapped up by other traders as early signs begin to appear that overall fuel demand is starting to pick up again.

Growing refining capacity

42

Despite backwardation, storage capacity in Asia just keeps on growing in China, India and the Middle East is another factor boosting liquid storage requirements.

China’s two top oil and gas companies Sinopec and PetroChina, for example, were both given larger diesel and petrol export quotas this year by the Ministry of Commerce.

With land availability to construct new tank farms almost exhausted in Singapore, the neighbouring Johor state in southern Peninsular Malaysia and several nearby Indonesian islands are among the new locations working hard to attract the next generation of worldscale third party storage projects to a region now being known as ‘greater Singapore’.

The impact of shale The US’ changing energy supply situation already is having an effect on the Asian petroleum market.

Greater US reliance on North American energy resources means the Middle East’s strategic value to the US as a major energy supply source is declining, while American refiners now have a price advantage that allows them to export to Europe.

‘The US is buying cheaper oil than in Europe due to increasing domestic production from shale oil and plus Canadian tar sands. The price for US domestic crude is about $10 (€7.50) per barrel lower than oil prices in Europe,’

Chris Skrebowski, director of Peak Oil Consulting, explains.

‘Middle Eastern and Asian refineries are in competition for different reasons although they may pay more for crude.

They have more modern and efficient refineries and so there has been a shake up in oil movements.’

Recent changes in global oil supply movements, due to the US being able to supply more of its own needs, means more petroleum storage is needed in Asia to ensure energy supplies are secure as fuel demand is growing ‘Where the liquid storage comes into play is the moment you tack on a trading element, and not just supply local demand.

It then becomes attractive to have storage facilities to load big ships and sell to markets at the most profitable point,’ Skrebowski comments.

November/December 2013 • TANK STORAGE

storage in asia ‘That’s what storage is about – it’s sorting seasonal supply fluctuations out.’

Competition between European and Asian markets for Middle East petroleum is likely to grow in the near future. Additional storage being built in southeast Asia will help increase security of petroleum supply in the region.

Emergency storage A similar development has been reported in South Korea this year where Abu Dhabi National Oil (ADNOC) recently has supplied Korean National Oil (KNOC) with 2 million barrels of crude oil for storage at KNOC’s Yoesu terminal complex as part of South Korea’s national emergency oil reserve. ADNOC has announced it will supply KNOC

by March 2014 with a further 4 million barrels of crude, also to be held in reserve.

ADNOC is not the only Middle Eastern producer supplying South Korea’s emergency oil reserve. Iraq has also signed a MoU with South Korea this year to store around 4 million barrels of crude at an unannounced location as part of KNOC’s emergency stockpile.

KNOC is understood to hold 131 million barrels of crude at the Yoesu emergency storage complex, 40 million barrels of which are stored there by foreign companies.

‘In the next year or two we are going to see more Middle East products moving eastwards. The US could buy more, but that’s unlikely, so the US is becoming less important in the Middle East,’ Skrebowski comments.

‘So competition between Europe and Asia is likely; and the east Asian economy is growing. Currently there is enough petroleum for everyone, but now petroleum is going east more rapidly and

the volume is expanding.’

Spare space?

Petroleum storage remains tight in Singapore where little space is available to build new terminals or expand existing facilities.

Although decisions by several Japanese trading houses to give up tank storage in Singapore created business press headlines earlier this year, the vacated tanks were quickly snapped up by other traders. Overall demand for petroleum storage remains strong in Singapore as several major players build up large strategic storage capacity in the region.

At least three Japanese trading houses moved out of the low sulphur oil market due to insufficient products being available for trading.

This situation is a result of more oil being used for power generation in Japan where most nuclear stations are out of service awaiting safety checks due to fears over nuclear safety in the wake of the Fukushima nuclear power plant disaster.

According to regional press reports earlier this year, a Marubeni of Japan subsidiary gave up leases on three tanks totalling around 120,000m3 combined at the YTL PowerSeraya power plant terminal, while Itochu gave up tanks totalling about 180,000m3 at Hellios terminal. Sumitomo was also reported as giving up more than 100,000m3 of storage held with Vopak.

‘Those tanks did not stay empty. They were taken up immediately by Castleton Commodities International of the US. All the capacity was leased,’ comments one oil trader.

‘Brightoil also gave up some tanks and a Chinese client gave up some Horizon tanks, which were taken up

by China Aviation Oil which is

TANK STORAGE • November/December

doing more trading now. Some oil trading houses are slimming down, while other traders are performing well. Basically there is consolidation underway among oil trading houses.’

Long-term outlook Construction of strategic petroleum storage capacity is continuing as companies look to the future.

The Gunvor Group, along with Oiltanking, recently announced the start of joint construction of Phase 1 of Oiltanking Karimun, a 760,000m3 petroleum storage scheme on Indonesia’s Karimun Island, near Batam Island. Due to enter service in 2016, the entire Phase 1 capacity will be used for trading by Gunvor.

Also planning to establish a strategic petroleum storage base in southeast Asia is Sinopec Kantons, the crude oil trading and logistics arm of China Petroleum and Chemical (Sinopec). Last year Sinopec announced plans to take a 95% shareholding in the PT West Point terminal project in Indonesia’s Batam Island Free Trade Zone (FTZ), near Singapore.

The $850 million investment is intended to boost Sinopec’s petroleum trading activities in the region. Some 360 hectares of land in Batam FTZ has been allocated to the 2.6 million m3 PT West Point terminal and related refinery and petrochemical projects that are due to be in service when the second phase of development is completed.

Phase 1 storage facilities totalling 1.3 million m3 are due to be completed at PT West Point in 2016.

Sinopec Kantons will also expand trading operations in the Middle East where, earlier this year, the company acquired a 50% stake in a firm planning to build a 1.16 million m3 storage terminal in Fujairah.

The terminal is expected to store products made by a 400,000 bpd refinery being built in Yanbu, Saudi Arabia,

by Sinopec’s parent company, China Petrochemical, and Saudi Aramco.

Some of the Yanbu refinery’s products may also be stored at Sinopec’s PT West Point terminal in future.

Meanwhile, several large petroleum terminal expansion schemes are underway in Singapore and neighbouring Johor state in Malaysia. Tank Store is building an 800,000m3 expansion to its Pulau Busing terminal which is leased from Jurong Town in Singapore.

Local listed firm Rotary Engineering was awarded Tank Stores’ S$300 million (€180 million) EPC expansion contract earlier this year in February. All the additional tanks at Pulau Busing are due to be leased by the neighbouring Shell refinery.

VTTI Johor state in Singapore’s neighbouring southern Peninsular Malaysia is one of several nearby locations aiming to attract international oil traders and third party terminal operators.

VTTI, for example, the independent bulk terminal storage company that is 50% owned by the Vitol Group and 50% by MISC Berhad, Malaysia’s international shipping conglomerate, recently started construction of its Phase 2 expansion scheme at the company’s ATB Tanjung Bin terminal in Johor state.

New tanks to be installed will increase the terminal’s storage capacity by almost 30%, while a planned new jetty will upgrade the terminal’s vessel handling capability.

‘Currently VTTI is building another 250,000m3 and one additional 120,000 dwt Aframax jetty. This new build capacity will be ready for

43

storage in asia commercial use in the second quarter of 2015,’ says Jasper Schmeetz, commercial manager at VTTI Asia. ‘Some 150,000m3 is for fuel oil and 100,000m3 for clean petroleum products. The new capacity is interconnected to the existing 890,000m3 facilities and will have access to six berths in total, offering partially laden VLCC access.

‘We are currently in the market securing tenants for the Phase 2 capacity. In this respect we are in discussions both with our shareholders as well as with third parties.’

Located in Johor’s Port of Pelapas on a 30 hectare section of a 50 hectare former mangrove forest site, the existing ATB Tanjung Bin Phase 1 consists of 890,000m3 of storage capacity, of which 340,000m3 is for black products and 550,000m3 for white products. Phase 1 storage facilities comprise 41 tanks ranging from 7,000m3 to 45,000m3 in size.

VTTI’s Phase 2 expansion scheme involves construction of a further 250,000m3 of storage capacity which will boost the terminal to 1.14 million m3 when construction is completed in 18 months time.

Tanjung Bin was commissioned in April 2012 and has been fully leased out since its inception.

‘The majority of the 890,000m3 is underwritten with long-term contracts and the contracts that came up for renewal, all got extended,’ Schmeetz says. ‘The terminal has been performing very well, with approximately 2 million tonnes of product handled every month. More than 100 ships call at the Tanjung Bin terminal each month.’

In addition to ATB Tanjung Bin’s close proximity to Singapore, lower costs is another attraction for customers using the terminal.

Competition currently is faced from around 20 VLCC

44

tankers offering about 5 million tonnes of floating storage capacity in the nearby Pelapas anchorage. These will begin to be redeployed by their owners, however, once tanker charter rates move above storage rates for land-based tanks.

‘Storage costs are about 10% lower than prevailing Singapore market rates.

Other auxiliary charges are in line with Singapore,’ Schmeetz says. ‘The big difference is in the port costs for ships calling at Tanjung Bin in the Port of Pelepas which are approximately 50% discounted to Singapore port charges. Also, wharfage fees in Tanjung Bin are 50% lower than in Singapore.

‘At the same time products ex-Tanjung Bin are commercially pricing at parity with Singapore terminals in the Platts trading window and offering a competitive advantage to our tenants.’

Meanwhile, VTTI is also looking at other opportunities to build new terminals or to acquire existing facilities in southeast Asia and the wider Asia-Pacific region.

‘On the clean product side we still see a strong demand for petrol tanks.

Indonesia, for example, will soon be taking over the US as the biggest petrol importer in the world,’ Schmeetz says.

‘Also, Vietnam lacks sufficient refining capacity, together with the emerging markets in Myanmar, Bangladesh, Sri Lanka, Laos and Cambodia.

This, together with the fact that all pricing takes place in Singapore, means there is a fundamental driver for clean product tanks in this region.’

Vopak Vopak already runs four terminals in Singapore at Sebarok, Sakra, Penjuru and Banyan, storing both petroleum and chemicals

(including gaseous liquids) with a combined storage capacity of more than 3 million m3.

‘Earlier this year, we completed an expansion of our Banyan terminal, adding 102,000m3 of capacity for chemicals,’ says Vopak’s spokesman Gerbert van Genderen Stort. ‘Our Banyan terminal is currently undergoing an additional 10,000m3 expansion for ammonia while our Penjuru terminal is undergoing an expansion of 47,000m3 for chemicals. Both projects will be completed in 2014.’

Elsewhere in southeast Asia, Vopak also operates two terminals totalling 320,000m3 of storage capacity in Indonesia, a mixed terminal in Thailand and a small chemical terminal in Vietnam.

In Indonesia, Vopak Terminal Jakarta is a joint venture company between Vopak and AKR Corporindo

Asia by about one third.

‘Together with our joint venture partners, the Dialog Group of Malaysia and the state government of Johor, we are constructing a 1.3 million m3 independent oil terminal at Pengerang at the southeastern tip of Johor,’ a Vopak spokesman explains.

‘Besides being our first crude facility in southeast Asia, Pengerang oil terminal is able to accommodate VLCC carriers with its deepwater jetty facilities of up to 24m in depth.

‘Located along major international shipping routes, and poised to benefit from the vibrant oil trading scene in the region, Pengerang oil terminal has provisions for expansion of another 1 million m3. We expect the first phase of the terminal to be commissioned in the first quarter of 2014.’

Meanwhile, in addition to expanding storage facilities at some of its terminals,

‘Storage costs in Tanjung Bin are about 10% lower than prevailing Singapore market’ Jasper Schmeetz, commercial manager, VTTI Asia

that operates a petroleum terminal with a storage capacity at 251,000m3.

Elsewhere in Java, Vopak Terminal Merak has a storage capacity of 68,900m3 which is used to store chemicals and liquefied gases.

In Thailand, Thai Tank Terminal located in Map Ta Phut Industrial Port on the eastern seaboard is a joint venture terminal between Vopak and PTT Global Chemical. Its 713,000m3 of storage capacity is used for chemicals, liquefied gases, petroleum products and vegetable oil.

Vopak is building a new terminal in Malaysia’s Johor state which will increase its storage capacity in southeast

Vopak is carrying out work to upgrade liquid cargo handling at a number of terminals.

‘We constantly review our facilities for upgrading possibilities. One area of improvement includes jetty expansions in Singapore, Sydney and Thailand,’ the spokesman continues. ‘We have built two additional jetties at Banyan terminal in Singapore to cater to the storage capacity expansion.

‘In Thailand, we are expanding Jetty Two in our terminal located in Map Ta Phut Industrial Port. This will improve efficiency at the terminal resulting in faster vessel turnaround and reduced waiting times.’

De-bottlenecking

November/December 2013 • TANK STORAGE

storage in asia

Rotary Engineering is one company benefitting from rapid growth in ‘Greater Singapore’

works are ongoing at the jetties at Vopak’s Sebarok terminal in Singapore.

‘We are building more pipelines to connect the jetties to the tanks so that product discharge from vessels can take place concurrently with loading from tank to vessel. This improves jetty efficiency and turnaround time for our customers,’ the spokesman remarks.

Major players Another company to have expanded storage capacity recently is Oiltanking Odfjell Terminal Singapore (OOTS) which Oiltanking jointly owns with Odfjell Terminals Asia.

Until the expansion OOTS operated 365,000m3 of chemical storage capacity consisting of 79 tanks ranging from 800 to 18,000m3 capacity including eight stainless steel tanks. Other facilities include five marine berths for vessels up to 80,000 dwt and six loading bays for road tankers and ISO-tank containers.

OOTS serves southeast Asia and southern China from its Singapore terminal which

stores cargos for a number of Singapore’s chemicals producers. The company is understood to have built a number of storage tanks on unused land at the terminal for a specific client.

The number of tanks built and the storage capacity have not been announced.

Space to construct more chemical tanks is still available at the terminal.

Meanwhile, plans and preparation work for a new chemical terminal to be built by Stolt in Singapore remain unclear after rumours emerged that site owner, Jurong Port, reduced the size of the terminal site after discovering a neighbouring cement plant had claim to use part of the port area expected to be developed by Stolt.

Stolt already operates a chemical terminal on Jurong Island where construction of Phase 2 already has started.

Plans for Stolt’s proposed Jurong Port terminal were expected to involve using the facility to store lube oil for which more storage capacity has been sought recently.

TANK STORAGE • November/December

Contractors Rotary Engineering recently won a series of contracts in Singapore and Saudi Arabia worth around S$200 million that together involve building more than 120 storage tanks to hold lubricants and a variety of petrochemical products.

‘Our Singapore contract win is an EPC contract awarded by a joint venture of three multinational oil companies to build a shared lubricants storage facility in Tuas South in Singapore,’ explains Roger Chia Kim Piow, chairman of Rotary Engineering. ‘The EPC contract covers construction of about 80 tanks, common pipelines, import/export jetty topsides and infrastructure supporting the operation of the project.’

‘The shared lubricant storage facility is the first of its kind in the lubricants industry and will serve the three oil majors’ lube oil blending plants (LOBPs) and grease manufacturing plants (GMPs), which are located adjacent to the storage facility.’

Rotary Engineering sees southeast Asia as offering

a number of interesting business growth opportunities in future. The company’s TankStore expansion project in Singapore is one of its major current contracts though Rotary also is pursuing various other local opportunities.

‘The TankStore project is progressing well, with completion and handover to our client targeted by the end of 2014,’ Chia Kim Piow says.

‘At the project completion and handover, our client will own 24 new tanks adding almost 800,000m3 to their total storage capacity, with the whole expansion phase fully tied in and integrated into their original operational storage facilities.’

Other works included in the TankStore project include installing a new pump station and valve manifold, tie-ins to existing terminal facilities and related E&I works including topside works for a jetty expansion.

‘The project site, being situated on the offshore island of Pulau Busing, certainly brings about logistical challenges in terms of mobilising materials and manpower. But with advanced planning and coordination, our team is on top of it,’ adds Chia Kim Piow.

Nearby Johor state in Peninsular Malaysia also offers Rotary Engineering important business potential, particularly the planned integrated refinery and petrochemical development (RAPID) project, along with plans to build LNG terminal facilities at Pengerang.

Chia Kim Piow concludes: ‘Johor has huge potential given the announced RAPID and LNG terminal projects.

There is also news of a second refinery project led by private players. Given their proximity, Singapore and Johor will provide a congregation point for the oil and gas industry, and the area will serve as a top choice for investors.’

45

tank terminal update

Tank terminal update – Asia Eastern Refinery and West Marine Services

Location Products Capacity Construction / expansion / acquisition Completion date Investment Comment

Chittagong, Bangladesh Oil Three 13,000 tonne tanks Construction 2014 BDT50 crore (€4.7 million) West Marine Services previously erected two 50,000m3 storage tanks with floating roofs for Bangladesh Petroleum’s refinery, which are still considered to be the largest storage tanks in Asia

Odfjell

Location Products Capacity Construction / expansion / acquisition Project start date Completion date Investment Comment

Omera Fuels Location Products Capacity Construction / expansion / acquisition Completion date Investment

Bangladesh Petroleum oil 70,000 tonnes Construction September 2013 $12.8 million (€9.5 million)

China National Petroleum Location Products Capacity Construction / expansion / acquisition Designer / builder Project start date Completion date Comment

46

Burma Oil and gas 1.2 million m3 Construction Huanqui Contracting & Engineering Underway 2014 Six 100,00m3 tanks have already been completed. The facility will also feature two pipelines: a crude oil pipeline that will transport 440,000 bpd when it comes online in 2014, and a 12 billion m3 natural gas pipeline due to start up by the end of 2013. The terminal is being built on a 10km2 island off Burma and will supply oil and gas to Yunnan province, China

Quanzhou, Fujian province, China Petrochemicals 184,000m3 Construction Technical design review and engineering are underway 2016 $137 million (€101 million) The terminal will be located on 14.8 hectares of land, enough to build a total 184,000m3 of storage capacity, in addition to two jetties (5,000 dwt and 100,000 dwt). The JV could expand the facility by 400,000m3 in the future as it will have the option to purchase an extra 23 hectares of nearby land

Hutchison Port Holdings Location

Quanwan Port Zone, Guangdong, China Products Petrochemicals Capacity 50,000 tonnes Construction / expansion / Construction and expansion acquisition Project start date Underway Completion date 2014 (trial operations to begin in 2015) Comment The project includes three petrochemical berths: two at 50,000 tonnes and one 10,000 tonne. The berths will total 350m in length and be 15.3m deep when the terminal comes online in mid2014. The expansion will upgrade the existing 30,000 tonne oil facility to a 50,000 tonne LPG berth

November/December 2013 • TANK STORAGE

tank terminal update CNOOC Location Products Capacity Construction / expansion / acquisition Completion date Investment

Jawaharlal Nehru Port Trust (JNPT) Tianjin, China LNG 2.2 million tonnes (first phase) Construction December 2013 $539 million (€398 million) (first phase)

Brightoil Petroleum Location

Ningbo-Zhoushan Port, Zhoushan, China Products Oil Capacity 32.9 million tonnes Construction / expansion / Construction acquisition Project start date June 2013 Comment The project will be equipped with four berths which can accommodate vessels of 300,000, 100,000, 50,000 and 20,000 dwt, respectively

Hin Leong Location

China, East Timor, Indonesia and Myanmar Products Oil, jet fuel, kerosene, petrol and asphalt Capacity 41 million barrels of oil (China) 100,000m3 (East Timor) Construction / expansion / Construction acquisition Investment Around $2.7 billion (€2 billion) will be used to develop storage and terminal facilities in China and East Timor. An additional $300-400 million will be used to construct more projects in Indonesia and Myanmar

Aegis Group Location Products Capacity

Haldia, West Bengal, India Liquid cargo, furnace oil, lube oil 15,100KL (phase I) 60,190KL (total) Construction / expansion / Construction acquisition Completion date 2014 Comment With this new capacity, Aegis Group will be handling liquid volumes of over 2.5 million tonnes and more than 750,000 tonnes of gas

Location India Products Liquid cargo Capacity 15 million tonnes a year Construction / expansion / Construction acquisition Investment €20.5 million ($27 million) Comment It will include a tank farm on more than 70 hectares and a liquid jetty, the land for which has already been acquired

Oiltanking and Gunvor Group Location Products

Karimun, Indonesia Clean petroleum products and black oil Capacity 760,000m3 Construction / expansion / Construction acquisition Completion date 2015

Iranian Oil Terminal Company Location Products Capacity Construction / expansion / acquisition Completion date Investment

National Iranian Offshore Oil Company (IOOC) Location Products Capacity Construction / expansion / acquisition Completion date

Aegis Logistics

TANK STORAGE • November/December

Iran Oil 2.2 million barrels Construction

2013

Vopak Location Products Capacity Construction / expansion / acquisition Designer / builder Completion date Investment Comment

Location Products Capacity

Pipavav Port, India Liquid and gas 120,000KL of bulk liquids and 2,700 tonnes of gas Construction / expansion / Expansion acquisition Comment The liquid terminal will be the first of its kind at the Pipavav Port, which has already built a new berth for the terminal’s liquid cargo. Aegis Logistics is currently able to handle in excess of 2 million tonnes of liquid volumes and this will increase by 1 million tonnes following the completion of this expansion project

Kharg Island, Iran Oil 1 million barrels each (four facilities) Construction

March 2014 $34.2 million (€25.3 million)

Malaysia Petroleum 5 million m3 Construction Johor Petroleum Development 2014 €2 billion ($2.7 billion) Phase one of the petroleum storage facility has the capacity to store up to 1.3 million m3 of petroleum products. It will be built in phases on 200 hectares of reclaimed land.

The project also includes a liquefied natural gas import terminal

Oilhub Korea Yeosu Location Products Capacity Construction / expansion / acquisition Project start date Completion date Investment Comment

South Jeolla province, South Korea Crude oil and petroleum 1.3 million m3 Construction

2011 April 2013 $500 million (€390 million) Features 36 storage tanks which range in size from 6,000-80,000m3

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tank terminal update Onsan Tank Terminal Location Products Capacity

South Korea ‘Dirty’ products such as bunker fuel 20,000KL of storage has been converted from storing ‘clean’ products to ‘dirty’ fuels. The terminal has a total storage capacity of 50,000KL Construction / expansion / Conversion acquisition

Completion date June 2013 Comment Of the 50,000KL capacity S-Oil, an oil refiner in the Asia-Pacific, is leasing 20,000KL for bunker fuel.

A further 20,000KL is being utilised by a Japanese trading house

Concord Energy Location Products Capacity Construction / expansion / acquisition Designer / builder Project start date Completion date Investment Comment

48

Port of Fujairah, UAE Crude oil, fuel oil, diesel, naphtha, petrol 1,155,000m3 Construction Rotary Engineering January 2013 End of 2014 $252 million (€193 million) The project will consist of eight tanks totalling 569,000m3 for crude oil and fuel oil, four tanks totalling 164,000m3 for fuel oil only, six tanks totalling 152,000m3 for gasoil (diesel) and 14 tanks with a total storage capacity of 270,000m3 for petrol and naphtha

Kuwait Petroleum International, PetroVietnam, Idemitsu Kosan and Mitsui Chemicals Location Products Capacity Construction / expansion / acquisition Project start date Completion date Investment Comment

Thanh Hoa, Vietnam Petrochemicals 10 million tonnes of crude oil Construction

June 2013 2016 $9 billion (€6.7 billion) The project also includes new storage infrastructure and pipelines. It will handle products such as petrol, diesel and jet fuel for sale to the local market

This list is based on information made available to Tank Storage magazine at the time of printing. If you would like to update the list with any additional terminal information for future issues, please email keeley@horseshoemedia.com

November/December 2013 • TANK STORAGE

storage in china

Imports, refining capacity and GDP are all growing in China, leading to a multitude of opportunities for storage operators all across the country

Demand for third party liquid storage capacity has grown quickly in China’s coastal provinces over the past decade, driven by the nation’s expanding chemicals market and rising consumption of imported chemicals.

China’s rising diesel and petrol exports also offer global traders and storage tank operators an opportunity to enter the mainland market.

Local mainland investors are also building new storage capacity to serve their expanding domestic customer base. Some are newcomers to the terminal sector, viewing storage terminals as an attractive business diversification opportunity.

International operators expanding their storage capacity in China include LBC Tank Terminals, which is building eight new 1,000m3

TANK STORAGE • November/December

chemical tanks at its Shanghai storage facility.

According to Anthony Ho, GM of LBC Shanghai Shipping Terminal, the new tanks are sized to meet customer chemical delivery parcel size in eastern China and are due to be commissioned in early 2015.

‘Business is still good though throughput is down; all our tanks are full,’ Ho comments. ‘The global economy is down so exports from China to Europe and the US are down, but the domestic market is still strong.’

Although throughput of most chemical products, ranging from aromatic solvents to DOP, has been affected by the international economic downturn, LBC and other terminal operators already see signs of an upturn in the chemicals market. ‘From discussions with customers

they think the market has already reached rock bottom, so there are already signs of a comeback,’ remarks Ho. Sited at a river mouth location on the Changjiang River at Wai Gao Qiao in Shanghai, LBC Shanghai Shipping Terminal has 54 tanks, including 17 stainless steel tanks ranging from 650 to 3,000m3 that provide 66,200 m3 of storage capacity. Other facilities include three tanker berths, a drumming plant and 10 tanker truck loading bays.

To meet growing demand for storage tanks, LBC is carrying out an upgrade and expansion programme at its Shanghai terminal, due to be completed in 2015.

‘Our current tanks are from 650 to 3,000m3 in size. When we finish this expansion and add 8,000m3, the terminal will be 74,200m3 in size,’ Ho says.

49

storage in china LBC first entered China in 2007 with Great Eastern Provident (GEP) of Singapore when the two firms set up GEP Asia (LBC 90%, GEP Singapore 10%) to take a 70% shareholding in a joint venture chemical storage terminal in Shanghai, a few years after GEP set up an oil drum manufacturing plant in Guangdong province.

More recently, LBC bought out GEP Singapore’s 10% shareholding in GEP Asia in 2011. As a result, LBC now owns 70% of LBC Shanghai Shipping Terminal, while Shanghai Shipping, the local joint venture partner and a subsidiary of China Shipping, holds the remaining 30% stake.

LBC increased its shareholding in the Shanghai terminal in 2011, around the same time the company completed work extending the terminal jetty length from 330m to 430m while the number of berths was increased from two to three.

The new jetty had previously been designed to accommodate one 35,000 dwt tanker and one 3,000 dwt vessel, but it is now able to handle two 35,000 dwt vessels and a 3,000 dwt ship simultaneously, which has increased the chemical handling capacity.

Growing imports have boosted demand for chemical storage in China in recent years.

‘Around 90% of our cargos are imports. Usually our clients ship in and truck out,’ Ho explains. ‘We serve a 500km hinterland radius from Nanjing in Jiangsu province to Hefei, capital of Anhui province.

The radius we serve is not growing as it is not economical to truck further away. Also, there are other terminals elsewhere that can be used.’

Many import cargos are transshipped through other ports in Asia en route to the LBC Shanghai terminal. Cargos from the US are typically

50

transshipped in Ulsan in South Korea, while European cargos are transshipped in Singapore.

In addition, direct cargos are received from Singapore and Japan.

According to Ho, major cargos handled at the Shanghai terminal include aromatic solvents, MEG and DOP. Eastern China LBC Shanghai Terminal provides a full range of drumming services and offers clients door-to-door truck delivery. Ho points out that drums traditionally have been an important means of transporting chemicals in the Shanghai area as many

Shanghai, serve Shanghai and the surrounding region.

Oriental, a subsidiary of state-run Sinochem, owns one terminal while Vopak of the Netherlands has a 50% shareholding in a 378,000m3 chemical terminal in Shanghai Chemical Park, which has pipeline connections to nearby customers.

According to industry estimates, total liquid terminal capacity in eastern China, including Shanghai, is about 10 million m3 at present, of which chemical storage capacity totals about 4 million m3 and petroleum storage capacity around 6 million m3.

The Port of Ningbo in Zhejiang province has more

Total liquid terminal capacity in eastern China, including Shanghai, is about 10 million m3 factories used small quantities of chemicals in the past and did not require bulk delivery.

In addition, access to some older factories by tankers is still not possible due to narrow streets approaching entrances. LBC has seven drumming machines, each capable of filling 300 drums per day. However, the chemical drumming market has changed as more companies using chemicals open new plants in purposebuilt industrial parks.

Demand for drumming is going down because of the cost. Most companies building plants that use bulk chemicals prefer ISO-tanks for delivery because of the cost saving involved.

LBC owns around 15 ISOtank units to deliver cargoes to clients, outsourcing the truck unit operation. Most of the ISO-tanks are 25m3 units.

Two other third party terminals, in addition to LBC

chemical storage capacity than Shanghai. Most of the terminals in Ningbo are distribution terminals handling cargos for chemical company clients in Zhejiang.

LBC is looking to expand terminal operations in eastern China and in other coastal regions.

‘We are looking at another possibility near Shanghai; also, we are looking at the Fujian area,’ Ho says. ‘Shanghai would be a greenfield site.

We are trying to get land and a jetty first. We are optimistic about Shanghai and east China. Our tanks are full and we are getting enquiries. We hope to open a new terminal in three years time. Permits take about 18 months to get.’

Southern China First to open will be LBC’s new terminal in Fujian province, southern China which is due for commissioning in 2014.

Phase 1 will offer about 200,000m3 chemical and petroleum storage capacity in tanks ranging from 1,000 to 20,000m3 in size.

Land is available at the Fujian site to build a terminal of more than 500,000m3 in capacity. Plans for Phases 2 and 3 have yet to be decided.

The eventual storage ratio in the Fujian terminal will be 60% petroleum and 40% chemicals.

‘We hope to build Phase 2 as soon as possible. We will start with one main jetty which can handle tankers up to 50,000 dwt,’ Ho says.

‘Petroleum storage clients will be both local and foreign traders. Chemical storage clients will be local companies bringing in their chemical supplies.

‘In Fujian we will have drumming and cooling and heating tanks. We will have all the standard facilities there.’

Among other foreign terminal operators expanding operations in China, Odfjell Terminals recently signed a joint venture agreement with the Founder Group to become 50:50 equity partners in a petrochemical terminal in Quanzhou in Fujian province.

Under the agreement, Odfjell will invest $21 million (€16 million) to take a 50% stake in Fujian Fantong Terminals, which will become Odfjell Terminals Fujian (Quanzhou), and build a new chemical terminal in Quangang Industrial Zone, on the south side of Meizhou Bay that Odfjell Terminals will operate and manage.

Odfjell Terminals Fujian has almost 15 hectares of available land that will be sufficient to build about 185,000m3 of tank storage capacity supported by two jetties. One jetty will be capable of handling vessels up to 100,000 dwt, the other small vessels and barges up to 5,000 dwt.

In fact, the joint venture

November/December 2013 • TANK STORAGE

storage in china already has the option to acquire 23 hectares of adjoining land, which is large enough to build a further 400,000m3 of storage capacity if demand develops as expected in future.

Design work is currently under way on Phase 1 of Odfjell Terminals Fujian which is planned to be in operation by Q1 of 2016.

The basic terminal design is planned to be completed and ready for project tender by the end of 2013.

The Fujian terminal will raise the total number of Odfjell terminals in China to four when commissioned.

A 100,000m3 petrochemical terminal is currently in operation at Jiangyin Economic Development Zone, located 150km west of Shanghai, and a 120,000m3 joint venture terminal at Dalian New Port in North China that handles mineral oil and chemical cargoes.

Vopak is also building a major oil terminal at Yangpu on Hainan Island in southern China as a joint venture enterprise with the State Development Investment Corporation (SDIC) to handle crude and petroleum products.

The site chosen for development is believed to be suitable for expansion to store up to 5.2 million m3 of oil and petroleum products eventually.

Vopak has a 49% shareholding while SDIC holds a 51% controlling stake in the terminal that will be operated

by Vopak. Under construction on a 58 hectare site in Yangpu Economic Development Zone, the terminal will act as a transshipment hub for oil cargoes originating in the Middle East and Africa for buyers in Asia.

Phase 1 of Yangpu terminal will be capable of storing 1.32 million m3 of crude oil and petroleum products. Facilities being

installed include two jetties, one with a berth capable of handling VLCC carriers up to 375,000 dwt. Yangpu will be the first third party terminal in southern China able to receive VLCCs of this size.

Yangpu terminal marks an important stage in the development of oil and petroleum transshipment and storage hub operations in China.

Vopak has one other terminal at Lanshan in Shandong province which has 144,000m3 storage capacity, part of which is dedicated to petroleum cargoes, the remaining storage being for chemical clients.

Work currently is underway at Dongguan southern Guangdong province to build Vopak’s eighth chemical terminal in China. The terminal will be capable of storing 153,000m3 of chemical products, giving Vopak a combined chemical storage capacity of about 1.49 million m3 in China when completed.

Northern China Odfjell is building a joint venture terminal in the Nangang Industrial Zone of Tianjin Port in northeast China that will offer 345,000m3 of chemical storage when fully developed. Phase 1, totaling 145,000m3 of storage tanks, is due to enter service by the start of 2014.

Meanwhile, Stolt-Nielsen recently sold its stake in the company’s joint venture Stolthaven (Ningbo) chemical terminal that is located on Daxie Island in Ningbo where the facility acts as a hub for customers in eastern China.

Stolthaven Terminals, Stolt-Nielsen’s terminal division, reported a $8.3 million Q2/2013 profit on the sale of its terminal stake though further details have not been revealed.

Opened in October 2009 with 18 storage tanks, the Ningbo terminal has 60,000m3

TANK STORAGE • November/December

storage capacity and offers customers drumming services in addition to blending, mixing and homogenising services.

Stolt-Nielsen had planned an expansion at Ningbo but was waiting for a go ahead from its partner.

Space is available at the terminal for up to 200,000m3 of storage facilities.

Stolt-Nielsen’s sole remaining terminal in China is located in Tianjin where it serves customers in Lingang and the Bohai Gulf region, as well as the rest of northern China.

Opened in December 2008 and owned by Tianjin Stolthaven Lingang Terminal, the Lingang terminal was expanded about 18 months ago with the addition of a further 50,000m3 of storage capacity, lifting the overall storage capacity to 180,000m3.

‘Our Tianjin terminal is for chemical storage only,’ a Stolthaven source says. ‘We have room for up to 400,000m3 storage at the terminal.’

Lingang terminal is served by three jetties each with a single berth capable of handling tankers up to 50,000 dwt in size.

The terminal location is in an industrial zone close to a chemical industry park. Some customers are connected by pipeline to the terminal which offers blending, mixing and homogenising services.

Refinery growth Meanwhile, China’s growing refining sector is creating new opportunities for third party terminal operators and foreign oil traders. New refineries coming on stream are creating local excess diesel and petrol supplies that the government is permitting to be exported until domestic demand grows to use the surplus fuel.

The China Daily newspaper recently reported that China added 35 million tonnes of

new refining capacity in 2012, boosting the nation’s total refining capacity to 575 million tonnes.

With production now exceeding domestic demand, China’s two top oil and gas companies, Sinopec and PetroChina, were both given larger diesel and petrol export quotas this year by the Ministry of Commerce.

Diesel exports are also expected to reach 3.5 million tonnes this year, according to China Daily, and will expand to more than 6 million tonnes in 2014, offering trading companies more diesel to sell and additional cargoes for terminal operators serving these traders.

‘China is exporting because new refineries add large chunks to petroleum supply,’ explains Chris Skrebowski, director of Peak Oil Consulting.

‘Refineries must run at around capacity to at least break even, so they export their surplus until the local demand catches up. This means they need storage for surplus production.

‘If refineries are running at about 85% of capacity they are generally profitable but down at about 75%, then the owners are starting to sweat. Refineries in the US, for example, have been running at about 95% for the last year or two.’

China will continue to expand its refining capacity in future to meet rising domestic demand for petroleum products and petrochemicals.

Although third party storage has expanded to handle growing chemical imports, petroleum products have been controlled by state-run Sinopec and PetroChina which have their own storage facilities. But with the energy market beginning to open, international terminal operators believe demand for their storage services will grow in future.

51

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china

Taizhou, Shell and the ‘doomed’ refinery

by Daniel Traylen The Chinese government’s decision to cancel a 400 million barrel per day (bpd) refinery project in Taizhou will have ‘far-reaching consequences’ for the Asia-Pacific refining industry’s future growth potential, according to research and consulting firm GlobalData.

Jeffrey Kerr, GlobalData’s managing analyst for downstream oil and gas, believes the decision to cancel the project, which was to cost Shell, Qatar Petroleum (QP) and China National Petroleum (CNPC) upwards of $13 billion (€9.5 billion) to develop, has led to a high level of uncertainty surrounding the fate of many future projects in the region.

Some confusion has arisen as a result of Kerr’s analysis however, as Shell insists the project is still undergoing a feasibility study and a specific site has not even been selected as yet. The last official news Shell released on the project was back in 2008. Since then both Shell and QP seem to have gone quiet on the subject.

There are a number of reasons why such a cancellation could have happened, though at this stage it still amounts to mere speculation as none of the companies involved offered an explanation as to why Kerr’s press release was given so much attention. QP and CNPC could not be contacted, and Shell senior spokesman Jonathan French confirmed there has been no formal information from the company on the project for around four years.

Despite this, Kerr has spoken at length on the alleged project shelving. The analyst believes China’s new 400 million bpd refinery project was ‘doomed almost from the beginning’ due to pressures from local officials, opposition from some members of the Chinese government and reports Shell, QP and CNPC had

difficulties in securing the land upon which the new refinery was to be built.

In terms of ‘far-reaching consequences’, Kerr also believes the cancellation will have a profound effect on future refinery projects in China by other companies, bringing an end to the recent construction boom within the area.

‘If this refinery, along with all other currently proposed projects, was completed successfully, Chinese refining capacity could have been expected to climb from its current level of 10.51 million bpd to 13.66 million bpd by the end of 2020, before reaching 14.1 million bpd in 2025,’ he says.

‘However, the cancellation of this project has raised some doubts over the development of other refineries set to come on-stream in the region between 2016 and 2025. For instance, industry heavyweights Kuwait Petroleum, ExxonMobil, Petroleos de Venezuela and Total are all involved in joint venture refinery projects that are planned to come on stream over the next few years – but it now remains to be seen whether these investments are now at risk.

‘Overall, the cancellation of this refinery seems to herald the end of Asia-Pacific’s refining construction boom, and a sign that the region’s refining industry may have reached a tipping point in total capacity.’

China’s energy industry has been under intense scrutiny as of late, with a large-scale investigation into corruption at CNPC resulting in the arrests of four former executives and former CNPC chief Jiang Jiemin, not to mention the suspicion this has in turn put on the oil giant and its affiliated companies. If Kerr’s information is indeed correct, it is believed this is one of the main reasons the Chinese government may have pulled the plug on the development.

TANK STORAGE • November/December

Residential concerns about the environment have also been brought up.

According to Kerr and an article written in UK newspaper The Telegraph in October, local residents staged a number of protests when fears emerged that the plant may be used to secretly produce the toxic chemical paraxylene, found in polyester. It would not be the first time local opposition has taken place against oil projects in China; this May more than 2,000 people in southern China participated in a demonstration against plans for a petroleum refinery in Kunming.

The Telegraph’s article contained the only other quotes from sources within the industry, though both remained unnamed: ‘It is not clear what killed it, I heard it might have been to do with land problems,’ said a senior petrochemical executive. ‘Shell told me it was still being planned, but the Chinese confirmed it has definitely been cancelled.’

A second source close to the Chinese oil industry said: ‘The project will be permanently suspended. At the beginning, it was the local government that really pushed it because officials were hoping for promotion. Now all these executives are being investigated, nobody cares about the project.’

The case remains somewhat mysterious, and Kerr has not released any further insight since his initial press release. It has been reported, however, that the Ministry of Environmental Protection announced in August it would suspend environmental approvals for new refinery projects proposed by both CNPC and Sinopec, the Beijing-based oil giant, because they had failed to meet their emissions reduction targets last year. Overseas projects are still going ahead as planned.

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page header safety

Rail failures in 2013 instigated emergency actions and higher scrutiny from the US and Canadian government, while a new study says pipelines are safer and more reliable.

So why are new pipeline projects still being delayed?

North American oil booms have popped up in places with virtually no refining infrastructure or marketplace, and truck and rail have been placed under enormous pressure to transport crude to coastal energy manufacturing and distribution centres. Advocates of pipeline expansion have had a series of recent episodes to argue that rail is beginning to crack under the pressure of this growth in bulk freight shipments.

The Association of American Railroads says crude oil shipments increased 443% in the US between 2005 and 2012. In just one year, carloads of crude oil increased from approximately 65,600 in 2011 to approximately 257,450 in 2012. Can rail handle moving hundreds of millions of tonnes of crude and refined products per year?

Uncertainty was renewed in October when a train carrying crude oil and LPG derailed in Alberta, Canada, causing an explosion and fire. Luckily no one was injured, but the accident aggravated a tense situation started by the July tragedy in Lac-Megantic, Quebec, when a runaway train carrying crude products exploded in the centre of the town, killing 47 people.

The facts of the disaster have emerged slowly. At approximately 10:45pm on 5 July, a Montreal, Maine and Atlantic train travelled eastward from Montreal, Quebec to St. John, New Brunswick, weighing over 10,000 tonnes. It carried 72 tank cars loaded with crude.

Moments later the operator secured it and left the train unattended on a downhill section of mainline track.

pipeline expansion delays put on other transportation sectors.

‘Truck and rail have a higher rate of accidents, leaks and worker fatalities than pipelines, yet the general public seems to be more opposed to pipelines,’ says Kenneth Green, Fraser Institute researcher and author of the report Intermodal transport of oil.

‘Trains, by their very nature, are designed to go

Crude oil shipments in the US increased 443% between 2005 and 2012 Within an hour, a local resident had reported a fire, which drew an emergency response. The local fire department extinguished the small blaze. By 1:00 am the train began rolling and picking up speed downhill toward the centre of Lac Megantic.

Near the centre of town, the box car and 63 of the loaded tank cars derailed.

The Fraser Institute, one of Canada’s leading public policy ‘think tanks’, recently examined the consequences of pipeline approval delays, their role in Canada’s economic life and the continued pressure

TANK STORAGE • November/December

right through a city centre.

They’re also moving at higher and higher velocities as more pressure mounts to increase the rate of delivery,’ Green adds. ‘The biggest surprise is that the public has not really considered the actual nature of transport – pipelines are often located far away from populations, and present little risk to human health.’

Meanwhile, the Transportation Safety Board of Canada has not reached any final conclusions, but it has made a determination that the braking force applied to the train was not sufficient to

hold it on the 1.2% descending slope between Nantes and Lac Megantic, Quebec.

In response to the accident, Transport Canada issued an emergency railroad directive related to the Canadian Railway Safety Act, but this did not really affect safety protocols already in place.

‘The work rule changes impacted nobody,’ says Anthony Hatch, a rail analyst and founder of ABH Consulting, New York. ‘Almost all the companies already had these mandates in place – nobody leaves the trains, no lone operators, etc. – everybody but the Montreal, Maine and Atlantic Railway evidently was already doing this. Here, you have an operator stopping on a hill and turning off a locomotive with rolling freight, the interference of local police probably not trained for the situation and a lot of other unusual circumstances.

‘In addition, no rail car of any type could possibly have survived running into a concrete wall at 70 miles per hour, unless it was a solid steel car. This was a work rules accident, an operational error,’ Hatch says. ‘It was not a failure of the railroad, not a failure of tank builders, but the cars

55

safety probably will change, so the politicians can say they are doing something. That’s what politicians like to do and that’s why we have them around.’

Bakken crude investigations In the wake of Lac Megantic, criticism has nevertheless been levelled at the rail workhorse, DOT 111A. The tank car has been recently labelled as ‘rigid’ and prone to ‘derailment and puncture.’

DOT 111 and DOT-111A tank cars account for about 60% of the equipment used in North America, but critics say the cars are not designed to handle ‘dangerous’ forms of crude oil considered more corrosive than conventional grades.

Since the disaster, proposals have surfaced calling for an increase to the safety standards for rail cars and older trucks.

Ultimately, it is an economic decision. Is the risk high enough to justify the expense? While the Fraser Institute report touts the superiority of pipelines, Green admits rail is mostly safe.

‘Do you retrofit thousands of railcars to prevent one accident?’ he asks. ‘Normally changes are made on a moving forward basis, by making regulations for new productions – we usually don’t make changes to the legacy fleet.’

Hatch agrees that the industry and regulators should not over-react. ‘It’s not in anyone’s interest to hurt this supply chain,’ he says. ‘This was an unusual set of circumstances and we trust rail to handle much more dangerous materials and chemicals than crude oil and refined products.

Maybe the backlog of new cars out there slated for production will help to solve the problem.’

The characteristics of Bakken crude – which composed the Lac Megantic load – are also drawing fresh scrutiny from regulators concerned the cargo is adding environmental and safety hazards. Since Lac Megantic,

56

the Canadian government imposed new regulations requiring tests to be conducted on crude oil before transporting or importing it into Canada.

In the deadly crash, inspectors determined oil the train carried was more explosive than labelled.

Canadian regulators are testing the composition of crude from the wrecked freight train. A lingering mystery: why did the derailment lead to such an intense inferno? It was abnormal for crude oil.

‘I’m not an expert on materials, I’m a rail analyst, but it’s obvious that one of the possibilities that come out of this is that maybe Bakken light crude is a little

involving dangerous goods, a 48% decline from 2003.

In 2012, non-main track derailments and collisions accounted for 91% of all rail accidents involving dangerous goods. ‘In 2012, there were six main track derailments with dangerous goods, compared to 20 in 2011 and 38 derailments in 2003. Of the 118 main track and nonmain track accidents in 2012 involving dangerous goods, there were two which resulted in the release of dangerous goods into the environment.

The Parliament of Canada recently released a report, Moving Energy Safely, which references US data on incident, injury and fatality rates for

Pipelines spill three times as much oil over comparative distances as rail closer to a refined product than other varieties… certainly more so than tar sands crude,’ Hatch says.

The US Federal Railroad Administration is investigating whether chemicals used in Bakken Shale hydraulic fracturing are corroding rail tank cars and increasing risks. Further evidence of the chemical volatility of Bakken crude includes Enbridge’s request – from the Federal Energy Regulatory Commission – for the right to reject North Dakota oil with too much hydrogen sulphide, a toxic, flammable component it claimed was reaching terminals and putting workers at risk.

Pipeline versus rail Until the Lac Megantic disaster, the overall safety record of cargo transportation by rail had been improving. From 2003 to 2012, train accidents in Canada declined by 25% and main track derailments decreased by 60%. Accidents involving dangerous goods have also been trending downward. In 2012, there were 118 accidents

pipelines, road and rail for the 2005 to 2009 period. In line with the Fraser Institute’s study, Canada’s parliament agrees ‘road and rail have higher rates of serious incidents, injuries, and fatalities than pipelines, even though more road and rail incidents go unreported’.

In perhaps the most dramatic response to Lac Megantic, the Canadian parliament has recommended regulators find ways to accelerate the phase-out of the CTC-111A and DOT-111 tank cars and apply minimum liability coverage thresholds to rail companies to ensure they have the financial capacity to cover damages caused by a major accident.

As pipelines and rail are competing for volumes of crude oil shipments, they have become increasingly staged as oppositional businesses. Lac Megantic provided a platform for pipeline advocates to attack rail and lobby for expansion and the approval of key projects like the East Energy Pipeline and Keystone XL. The fact remains, however, that pipelines spill three times as much oil over

comparative distances as rail, the International Energy Agency says. It is true the risk of a rail spill is six times as high as the risk of a pipeline spill, but pipelines spill more when they rupture. This corroborates research from the American Association of Railroads, which found that rail transport spills 0.38 gallons of oil per million barrels moved, compared to 0.88 gallons for pipelines.

Green says rail and truck transport pose greater risks to the public and to workers, and resistance to pipeline transport is sending oil to market by modes of transport that pose higher risks of spills and personal injuries such as rail and road transport.

The modes of transport are more complimentary than they are competitive. Rail and trucks carry materials away from pipelines, and all of these modes will be necessary for the future.

But this is not an ‘either-or’ situation. The transport of crude by both railway and pipeline pose risks to communities and waterways where it is extracted, the routes upon which it is transported, and at the endpoint where it is consumed, and many Canadians have taken offense at the way proponents have used the Lac Megantic disaster to make the case for pipeline expansion. ‘Now is not the time for business as usual, and it’s certainly not the time to make the case for the building of the Keystone XL and Energy East pipelines,’ says Brent Patterson of the Council of Canadians.

‘The politics of oil transport is in the public’s hands when they elect legislators and vote on initiatives – it should know all of the facts to make an informed decision,’ Green adds. ‘British Columbians, for instance, put a high value on environmental protection. They want state-ofthe-art remediation in place and a trust fund set up to pay for clean-up of pipeline leaks if they approve a project. But they should realise the risk of oil transport does not go away simply by delaying a pipeline.’

November/December 2013 • TANK STORAGE

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safety

Classic British carmaker MG started an advertising slogan in the 1940s for their line of convertibles – ‘Safety Fast!’

Safety fast With the current shale oil boom across North America, ‘safety fast’ really is the best way to describe the ultimate goal of the crude by rail industry

TANK STORAGE • November/December

rail economics has driven major rail construction at refineries and terminals across the US. While the regulatory requirement for renewable fuels may increase with RFS2, the surge in ethanol use has already resulted in many refineries and independent marketing terminals gaining easy access to rail.

Now with the oil shale boom, energy-related rail traffic increases even more drastically. Most of the shale plays are in areas not traditionally associated with crude drilling, so they lack the pipelines and

gathering systems that would otherwise help these producers to quickly grow their assets. The Bakken and Niobrara plays have a good backbone of rail service, but relatively little pipeline capacity. The Marcellus and Utica plays are in heavilypopulated areas that make laying pipeline more time consuming and costly.

But oil won’t stop moving, so many oil producers turn to rail as a way to generating revenue quickly. In some areas, rail is simply a shortterm solution until pipeline infrastructure can be Data provided by AAR August 2013

In 2012 alone, crude movement by rail more than doubled and in, the last four years, has increased more than 30-fold. Based on Q1/Q2 data for 2013, and the newly developing shale plays, this growth is expected to continue.

There are around 150,000 miles of freight rail in the US alone (about three times more than the US Interstate highway system) which provide all types of rail service to millions of customers across North America. Rail infrastructure in particular has benefitted from the recent demand created by the Environmental Protection Agency’s (EPA) ethanol renewable fuel standards (RFS). Given the relatively low volumes of ethanol demanded by RFS requirements (when compared to petrol throughput volumes), and the difficulties of distributing ethanol via traditional pipelines, many terminals and refineries had no option to meet government regulations except by truck and rail. In the last decade, favourable

59

safety

••• Railroads have a long history of safely moving huge volumes of hazardous materials across the continent, so it is no surprise crude by rail (CBR) has excellent safety and spill records to date. According to the Association of American Railroads, 99.9977% of all CBR shipments reach their destination without incident.

In fact, the last 10 years have

60

Oil production in US (1990-2020 projected)

seen only 2,268 barrels of oil spilled, compared to roughly 475,000 barrels released from pipelines over the same time period. Rail spills are naturally smaller due to the discrete volume of the tank cars, while pipelines carry much larger volumes and have the potential to slowly leak over time. But maintaining safety at any rail site still requires diligence.

All CBR sites require a few universal things: • Safe operating environment to limit potential for personnel injuries • Compliance with rail regulations and guidelines • Containment measures per EPA, and in some cases modified by state agencies • Fire protection, given the flammable/hazardous nature of the commodity.

In order to make sure these concerns are met, consulting with the authorities having jurisdiction (AHJ) is necessary early in the design process.

This can be done at the outset of any project, and can limit your exposure to change (and change cost) as well as establishing a good working relationship with these agencies.

Operator safety is a top priority within both the rail and terminal industries.

Employing qualified operators, trained according to the equipment and systems they will use, is critical. Access

platforms, good lighting and general site safety should always be the foundation of good system design.

Similarly, compliance with rail regulations is straightforward. The Class 1 railroads in particular are clear about what is and is not required for track layout and construction. This includes where track can be located, distances from track to tanks and ‘permanent structures’ (such as loading platforms, offload headers, lights and fencing), and requirements for crossing track with fire roads, pipelines, storm/containment piping and other required features. More importantly, the railroads themselves will work with the design engineers to establish how the rail will operate on a day-to-day basis.

This may include steps such as deciding which direction deliveries will come from, if sidetracks or runaround tracks will be required, if a unit train loop or ladder track is better for the site and how many rail deliveries can be made per day or week. Defining the operating process and track configuration best for the site is essential to determining project construction cost, and determining if a particular site is suitable.

Compliance with containment is more complicated. Since containment deals with controlling potential spills (environment) of flammable

Data provided by EIA

developed. It is a more longterm solution in areas unlikely to justify the time and cost of pipelining. Developing new pipeline infrastructure to move oil is by far the most costly and time consuming approach but, once complete, is also the most cost-effective and efficient mode of transport.

So in order for pipelines to be considered worthwhile, there needs to be a large enough long-term demand to justify the cost and time invested. Looking at the most recent US Energy Information Administration (EIA) data on oil production in the US alone along with industry growth predictions, the oil is there but justifying pipelines based on well production forecasts is difficult – at least initially.

One issue with the oil shale boom is that it requires considerable risk tolerance to develop these assets in areas where the plays are still developing. That, in turn, typically attracts the more aggressive firms who are willing to take the gamble, as well as some smaller firms who are drawn by the huge upside of developing the infrastructure ahead of the game. While the scramble to be first is a necessary part of making these plays feasible and economic, it can also result in issues with regulatory compliance, safety, and public opinion. And the multiple federal and state agencies involved in each area can and do muddle the picture even more.

and combustible liquids (fire), both regulating authorities get involved. This overlap can often cause confusion but, nationwide, containment is dictated by the Spill Prevention, Control and Countermeasure (SPCC) regulations from EPA, as well as guidelines from NFPA 30 and the International Fire Code.

State agencies are often involved as well, providing modifications to the rules both from an environmental and a fire perspective, but regardless of state modifications, the EPA will always apply as a minimum.

In the SPCC, two categories of containment are discussed – ‘sized’ containment and ‘general’ containment – and most CBR facilities fall into the latter.

This is due to a distinction the EPA made in 2008 between ‘loading rack’ and ‘loading areas’. Only loading racks require sized containment, meaning you must contain a spill equivalent to the volume of the largest compartment (which for most rail cars is 30,000 gallons), plus an allowance for precipitation (110% is an accepted rule of thumb though).

However, a ‘loading rack’ per EPA definition is any loading operation that includes two features – a fixed structure (such as a gangway or platform) and ‘loading or unloading arm’.

This clarification of an ‘arm’ was intended to separate load racks with hard piped arms from those with hoses. It was done to avoid requiring large-sized containment for the many small facilities where it would be prohibitively expensive or difficult to find space. However, most CBR systems do not include loading/unloading arms.

Instead, most use hoses since so many connection points are needed, and working space is limited. So rail systems are required by SPCC to only have containment complying

November/December 2013 • TANK STORAGE

safety with the general containment requirements (49 CFR 112.7(c)).

This general containment regulation leaves room for judgment though. It requires ‘appropriate containment and/or diversionary structures…’ to prevent a discharge that could reasonably be expected.

And this system must be able to contain the oil until clean-up can occur. In other words, it is up to the CBR operator and the design engineer to determine (a) what is a reasonable quantity of discharge, and (b) how long it will need to be held?

In CBR systems, the most likely releases are clear – either a leak from the belly valve or from a hose rupture during unloading, or an overfill during loading. Unfortunately all of these occur at the tank car itself, so any spill will result in contaminating the soil under and around the track.

The potential soil clean-up cost can be high – requiring track removal to remove soil, track reinstallation and lost revenue during the outage time. So most operators choose either to install track pans when working with existing track, or to install under-track liners or concrete containment for new track systems. Due to their small capacities, these systems are best used solely to redirect

any spilled oil to a remote containment pond or swale where it can be held until removal. This is where the risk analysis comes in.

The cost to make this remote swale larger is minimal, while the risks and potential costs of undersized containment is high (for example, if an operator was unable to close a dumping belly valve in a reasonable timeframe). So although SPCC only requires ‘general containment’, many operators design for 100% of a single tank car volume plus freeboard as their containment given the high costs and lost revenue of any spill.

The last consideration, but potentially the most dangerous to life and property, is fire protection and, unfortunately, fire regulations tend to be the least prescriptive. As a result, decisions are often made through meetings and discussions with local and state fire authorities. The local fire departments have a vested interest in how the system will operate, as they will likely be the first responders who have to react to a dangerous event.

NFPA, the primary body that provides standards on fire and electrical safety, contains no specific considerations for fire suppression measures for railyards. NFPA 30 states ‘28.6 Fire Protection (Reserved)’

with no content. This primarily allows NFPA the future ability to dictate requirements, but this omission to date is probably because railyard size and configuration (from transload to unit trains) as well as fire department response and capability can vary so widely, it would be difficult to write regulations for this vast range of sites. NFPA does require, however, all facilities handling flammable and combustible liquids perform hazard analysis and engineering evaluation with the consultation of the AHJ (state and local fire agencies).

Regardless, the best approach for fire protection in railyards is two-fold: early detection and divide-and-conquer.

Early detection means having fire detection systems and hand-held extinguishers in the working areas of the railyard, tied to local horn and alarming, is essential.

Responding to a small fire quickly can mean avoiding a larger event. By subdividing and directing the drainage and containment of the railyard (divide-and-conquer), you can minimise any pool fire spread to avoid heating other tank cars. In these cases, having an active fire hydrant or hydrants nearby, as well as either a portable foam trailer or portable monitors, can

effectively minimise your risk without a huge investment. In addition, long fire department response times for facilities in remote areas may necessitate the installation of automatic fire suppression systems. Facilities in urban areas may require additional protection to mitigate risks to neighboring properties.

Ultimately, coordination with the local fire department is essential to determine how their capabilities may affect the facility design.

When planning and building CBR facilities, keep in mind considerations for containment, fire, safety and of course an efficient system for moving the crude. Always involve governing agencies and players up front as the scope is developed. Take a hard look at the potential cost of a risk (spill, fire, injury) versus the costs of constructing up front. The result can be a profitable CBR facility that is both designed for safety, and is built quickly and cost effectively to capitalise on our many opportunities nationwide – ‘Safety Fast!’.

For more information:

This article was written by Todd M Eldridge, programme manager for oil and gas – midstream, Pond & Company, eldridget@pondco.com

Sign up now to receive your FREE weekly newsletter providing upto-date information on acquisitions, mergers, new terminals and the latest regulations: www.tankstoragemag.com/tsm_newsletter.html

If you would like your company’s name to feature in this please contact margaret@tankstoragemag.com (+44 (0)20 8687 4126) TANK STORAGE • November/December

61

overfill prevention

Taking overfill prevention to the next level

IEC 61508/11 (SIL) certified equipment is now a requirement for automatic overfill prevention systems in new facilities according to API 2350

Still using old mechanical pointlevel gauges for overfill prevention?

Technology has changed and there are safer, more efficient options available today.

The new API 2350 overfill prevention standard combined with IEC 61508 (SIL)certified continuous level measurement also for the HiHialarm, is the way forward to meet current and future safety requirements 62

Nowadays petroleum tank spills are major news that can easily escalate from local media to regional and global publicity. The Buncefield overfill accident, which caused Europe’s largest vapour cloud since the Second World War, is by far the most famous example.

But new incidents are continuously occurring and there are several examples of terminals that have gone bankrupt due to oil spills.

Safety is becoming increasingly important and the underlying driver is clear: a gradual reduction in acceptable societal risk throughout the entire world.

The same trend also applies to tank farms and bulk liquid storage facilities where it is driving development of new technologies, standards and best practices towards safer options.

Overfill prevention is important due to numerous reasons. Human safety,

environmental protection, public relations, clean-up costs and indirect effects such as down-time are pretty obvious. Maybe less obvious is, by better knowing what is in the tank, the insurance cost can be reduced, while simultaneously improving the operational efficiency due to increased tank utilisation and higher transfer rates, for example. Often petroleum products with high volatility and flammability are stored.

Mix an ignition source with the right amount of air and the combination can cause a vapour cloud explosion, which is exactly what happened at Buncefield. Besides causing considerable damage to surrounding tanks and nearby assets, vapour cloud explosions are also a realistic and serious safety concern for the on site employees.

Overfill prevention technology is currently undergoing the same transformation as tank

gauging technology once did.

The establishment of API 2350, which is becoming the globally recognised overfill prevention standard, is a major step in this development (compare with API 3.1 for tank gauging).

New reasonably priced products have emerged that allow for replacement of mechanical and electromechanical point-level switches to new and modern electronic level gauges.

Traditional and well-proven tank gauging concepts, such as continuous level measurement, is rapidly becoming the preferred industry choice and the new ‘best practice’ also for overfill prevention sensors. This transformation is on-going and inevitable. Although traditional switches are well-known, inexpensive and easy to understand, the inherent problem with these will always be it is difficult to know whether they are working or not.

November/December 2013 • TANK STORAGE

overfill prevention To prevent and mitigate overfills from occurring, a multitude of independent protection layers should be used.

Secondary containments and dikes are commonly used passive protection layers, but these are only for mitigation.

Commonly used for prevention is a combination of a basic process control system (BPCS) and an independent safety layer. Often the BPCS is referred to as the ‘tank gauging system’, and the safety layer is referred to as the ‘HiHi level alarm’ or ‘overfill prevention system’.

A common misperception, inevitably caused by the nomenclature, is that the safety layer is the most critical component. This should not be the case in a

to a modern tank gauging system is therefore one of the most important activities to reduce the risk for overfills.

Another benefit with most modern tank gauging systems is built-in temperature compensated leakdetection, which can be used as a critical tool for early detection of small and gradual spills due to e.g. corrosion.

International standards From a global perspective there are two key standards for overfill prevention:

Emerson and the API committee chairman have developed a guide and checklist to API 2350

2xATG for level and overfill prevention. An increasingly common view when old mechanical level switches are replaced with modern solutions properly designed system; the tank gauging system is continuously in operation 24/7 and is the operators’ primary tool to prevent overfills from occurring. The overfill system is only to be used in exceptional circumstances, and the more seldom the better. Exchanging old mechanical tank gauges

API 2350 and IEC 61511.

These standards establish best practices which are accepted by most judicial systems. In the past it was relatively common with country-specific requirements and deviations (e.g. TÜV/ DIBt WHG in Germany), but also these are slowly being

TANK STORAGE • November/December

influenced and replaced with their global counterparts.

API 2350 Ed. 4 is an application specific standard for ‘Overfill Protection for Storage Tanks in Petroleum Facilities’ covering a range of topics associated to this subject. IEC 61511 on the other hand is a generic functional

safety standard targeted specifically towards ‘Safety instrumented systems for the process industry sector’.

Therefore compliance with IEC 61511 is usually an excellent way, and sometimes even required, to comply with API 2350.

However, this is not a sufficient requirement because the two standards complement each other perfectly.

The new API 2350 Ed. 4 standard is an indirect consequence of Buncefield.

As a response, a large portion of the industry gathered under the API framework to develop a better overfill prevention standard.

Although the API name indicates otherwise, the committee had a global representation covering tank owners and operators, safety experts and vendors.

UK government officials also participated in the committee to ensure that the result from the Buncefieldinvestigation was leveraged to the fullest.

It is however important to understand this is a consensus standard covering the bare minimum requirements; alternative solutions that provide equal or better safety are acceptable if they can be technically justified.

Another necessity to get the standard through the consensus process was to limit the scope. API 2350 is intended for atmospheric storage tanks above 5,000 litres containing petroleum products. It is not intended for underground tanks, LPG/LNG tanks or pressure vessels. The principles however are generic and may, with proper precautions, be applied also outside the standard’s designated scope.

API 2350 has been inspired

by IEC 61511’s life cycle approach. The entire journey from requirement specification to commissioning, and from operations to decommissioning is covered.

An essential part of this is the risk assessment and

63

overfill prevention Independent Level Alarm High-High (LAHH) Automatic Overfill Prevention System (AOPS)

Rosemount 5900S Radar Level Gauges

Automatic Tank Gauging (ATG) 2240S Rosemount Multi-Point 5900S Radar Temperature Level Gauges optional)

L2

SI

SI L3

management system, which now both have become mandatory parts of the standard. A clear indication of the importance of these systems is the Buncefield accident, where the electromechanical servo gauge had stuck 14 times in the three months prior to the accident.

With a proper management system, this problem could have been solved.

All tank farms are different and the risks vary based on things like location, products stored, tank integrity and operational procedures. API 2350 categorises tanks based on attendance level and degree of complexity. Basically any modern tank farm will be classified as a category 3 facility, which shall be equipped with (at a minimum): • 1x automatic tank gauge (ATG) and • 1x independent overfill prevention system (OPS).

Automatic overfill prevention systems in new facilities shall be compliant with IEC 61511 according to API 2350. For existing facilities, an alternative approach (loop-hole) where the automatic overfill prevention system complies with Annex A in API 2350 is also available. However, as it has turned out, this Annex A approach usually requires more or equal amount of work than the IEC 61511 approach, but without being future-proof.

2230 Graphical Field Display (optional)

SIL2/SIL3 Discrete Signal

FCU Data Concentrator

Connection to TankMaster (optional)

FCU Data Concentrator

2410 Tank Hub

TankMaster Tank Inventory Software

Includes Visual & Audible Level Alert High and Level Alarm High-High (optional)

Most bulk liquid storage tanks will be characterised as category 3 according to API 2350. Category 3 tanks are required to have an automatic tank gauge and an independent overfill prevention system safety applications and overfill prevention systems.

API 2350 requires point-level gauges to be proof-tested every six months, and

continuous level measurement technology can change the entire industry’s behaviour.

The most obvious advantage is the operators obtain two

API 2350 Ed. 4 is a milestone in overfill prevention that will contribute to safer and more efficient tank farms throughout the world

Technology breakthroughs The ongoing safety trend has also spurred equipment manufacturers to develop new products. An evident advancement in this direction is that there are now 2-wire radar level gauges certified according to IEC 61508 for up to SIL 3 overfill prevention applications.

This finally allows for the usage of well-proven tank gauging technology also in overfill prevention systems.

A requirement for device verification emerges with

64

2410 Tank Hub

other equipment at least annually (unless a technical justification says otherwise).

For point level gauges, the proof test has traditionally been performed on the tank roof, using labour intensive procedures like water tests, pushing buttons or pulling levers. But, as one tank operator explains: ‘I don’t know if my level switch works right now even if I proof-tested it according to schedule.’

Fortunately proof-testing is one of the fields where new

independent measurements that can be compared with each other. Often a fairly generous deviation alarm (e.g.

5cm) is sufficient to help the operators early detect any problems while at the same time avoiding false alarms.

Some users refer to this testing technique as online or 24/7 proof-testing. Nevertheless, plenty of research is on-going in this field and it would be no surprise if there soon exist devices with the capability to perform proof-test remotely.

Requirements are continuously changing, and overfill prevention is no longer synonymous with mechanical level switches. The completely revised API 2350 standard for overfill prevention is a major milestone that will streamline and drive the industry forward together with IEC 61511.

Equipment that traditionally has been used only for tank gauging can also be used for overfill prevention and will thereby play a major role in this transformation.

Although traditional level switches can still be used, the most efficient and future proof solution today appears to be an IEC 61508 (SIL)certified overfill prevention sensor that measures the level continuously and independently of the automatic tank gauge.

For more information:

This article was written by Carl-Johan Roos, business development manager, Emerson Process Management

November/December 2013 • TANK STORAGE

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CONFERENCE HIGHLIGHTS DAY ONE 10 DECEMBER • The emergence of a storage hub in Northeast Asia • Indonesia as a market and Pertamina as a challenge • Growth of the Malaysian storage market

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67

tank cutting

Ragworm makes waves in the US The Netherlands-based company Ragworm has set new records by cutting out the entire bottom of a 70m tank into 6m x 2m plates in 100 cutting hours, despite the fact that 50% of the tank was double plated. Two 55,000 psi jet edge-powered Ragworm waterjet cutting systems were used to complete the project.

The Ragworm is a patented robotic waterjet system manufactured by Jet Set Hydro Technics. It uses dual ultra-high pressure abrasive waterjets to strip tank walls from their old floors and roofs without the risk of explosion or creating toxic fumes associated with traditional cutting methods such as oxyacetylene torches.

Named after a baitworm that lives on the ocean floor, the Ragworm crawls along the bottom of the tank and cuts away sheet after sheet of steel plate. It can also ride along the side of the tank and separate the walls from the floor.

Ragworm is powered by

66

a 3,800bar diesel waterjet intensifier pump manufactured

by Jet Edge of Minnesota, US. Using only 1 gallon of water a minute, the system has minimal impact (5cm or 2 psi) on the underlying foundation. It requires only two operators: one controls the diesel generated power pack and Jet Edge waterjet pump located outside the tank; the other controls the cutter unit within the tank.

Recent refinements have almost doubled Ragworm’s speed. It can now cut through 6mm thick carbon steel at an average of 100m per hour.

‘Ragworm is at least 10 times faster than cutting with torches and 50 times faster than the standard gouging method and you have no follow-up damage to the tank foundation,’ explains Martin Grijpstra, president of Jet Set Hydro Technics and inventor of the Ragworm. ‘We can set up to three or more Ragworm robots at once in the tank to do the job and you can be doing other work in the tank

at the same time as we are cutting.’

After trying different waterjet pumps, Grijpstra decided to power Ragworm with Jet Edge hydraulic intensifier pumps because of the Jet Edge pump’s ability to produce a flow rate of 4 gallons per minute and power two machines at the same time.

Jet Set Hydro Technics sells Ragworm cutting systems and services worldwide. In the US Ragworm systems and services are available through Safe-Cut of Texas.

For more information:

www.ragworm.nl, +31(0)227602977, info@ragworm.nl

November/December 2013 • TANK STORAGE

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November/December 2013 • TANK STORAGE

vapour recovery

Cutting emissions from 174 to just 2.2 tonnes/year Oil vapour emissions (OVE) have harmful effects on people and the environment, so selecting a proper internal floating roof to seal up the vapour space to reduce unnecessary loss is critical.

One of the internal floating roofs that have been extensively used in oil storage tanks are metallic internal floating roofs on floats (also known as float tube type). Its deck is above the liquid, supported by closed pontoon compartments for buoyancy and typically constructed of aluminum alloy or stainless steel. This kind of internal floating roof is easy to construct, but it has some drawbacks: • Not in full contact with the liquid surface, resulting in multiple vapour spaces

• Great quantities of vapourisation are unstoppable • Float units are separated so it is easy to cause fluctuation while oil filling or draining • The deck may deform as the thickness is often too thin • Short lifespan.

There are two other types of internal floating roofs which are also commonly used: metallic pontoon and metallic sandwich panels. Their construction is stronger than float tube type and able to carry heavy loads. However these two kinds still have some serious design flaws.

These may contribute to the damage of the tank shell or joint parts may peel off after a soak in oil.

Taiwanese manufacture Full Most has developed an internal floating roof which combines all the benefits and eliminates the defects from existing internal floating roofs, called the Brick Style Honeycomb. Its concept is to use a metallic pontoon type with a honeycomb core inside, built within a welded corner rectangular shaped box.

Some of Tube style IFR damaged and sunk to the its advantages bottom of the storage tank

TANK STORAGE • November/December

include: • The cost is lower than metallic pontoon type • Easy to construct (all parts can get in and out through the manhole) • Rigid structure • Long lifespan • Light in weight • High buoyancy • Able to carry heavy loads • At least six workers can stand within one area at the same time • Full contact with the liquid surface • Honeycomb core does If the honeycomb core connects with the not contact with stored liquid it can become swollen and damaged the product.

The material used in the liquid mounted rim seal and wiper are fully compliant with API 650 appendix H; the envelope has a TPU coating, which is wear-resistant with high tensile strength. It can isolate most oil and some chemical liquid corrosion, while the wiper is lightweight, airtight and fire safe.

It also features another design called two-way pressure relieving vents. Its activation is to release air pressure by shifting the cover of the floating roof during oil filling operation, allowing air to flow in for smooth oil draining by moving the individual float panel. As it is liquid mounted it reaches a sealing efficiency of 99%.

Calculating vapour losses There are two kinds of calculation for vapour loss from an oil storage tank without an internal floating roof: 1. Standing storage loss – these losses result because a tank is not a completely closed container, but has openings and gaps in the seals and fittings that allow the escape of volatile components 2. Withdrawal loss – these losses result from clingage of product that remains on the walls of the tank as the roof is being lowered. The loss also results from clingage which occurs on the roof support columns that may penetrate the internal roof.

69

vapour page header recovery Based on the calculations from the formula provided by the EPA, the annual vapour loss for an oil storage tank without an internal floating roof is approximately 205.3 tonnes/year.

For oil storage tanks using float tube type internal floating roofs, there

roof is 174 tonnes/year.

There are two kinds of working conditions for internal floating roof with full contact liquid surface: 1. First kind is normal operation, means internal floating roof is floating up or down by oil (or any product) 2. Second kind is roof standing, means oil storage volume in the tank is lower than the roof supports and internal

LW = withdrawal loss MV = vapor molecular weight, lb/lb-mole PVA = vapor pressure at daily average liquid surface temperature, psia Q = annual net throughput, bbl/yr KN = working loss turnover factor, dimensionless for turnovers>36,KN=(180+N)/6N for turnovers≤36,KN=1 KP = working loss product factor, dimensionless for crude oils KP=0.75 for all other organic liquids, KP=1

A brick style IFR construction

LS 365 KE D2 HVO KS WV

is no calculation formula under EPAAP 42 because the measurement area of contact liquid surface is deficient.

However the estimated annual vapour loss for a float tube type internal floating

= standing storage loss, lb/yr = constant, the number of daily events in a year = vapor space expansion factor, dimensionless = tank diameter, ft = vapor space outage, ft = vented vapor saturation factor, dimensionless = stock vapor density, lb/ft3

LTL = total losses during roof landing, lb per landing episode LSL = standing idle losses during roof landing, lb per landing episode LFL = filling losses during roof landing, lb per landing episode Based on these two kinds of working condition, the oil vapour loss will also be different in below categories: • Four categories of loss under normal operation: 1. rim seal loss 2. withdrawal loss 3. deck fitting loss 4. deck seam loss • Two categories of loss under roof standing: 1. standing idle loss 2. filling loss.

Base of the calculation of the formula, if using a brick style honeycomb type roof the annual vapour loss is only

LT = total loss, lb/yr LR = rim seal loss, lb/yr LWD = withdrawal loss, lb/yr LF = deck fitting loss, lb/yr LD = deck seam loss (internal floating roof tanks only), lb/yr floating roof is basically standing on the bottom of the oil storage tank.

around 2.2 tonnes/year.

The brick style honeycomb type roof has been indepependently verified by SGS. For more information:

Contact: www.fullmost.com. tw or fullmost@fullmost.com.tw

The panel is welded as a brick (Honey comb core inside)

Brick style IFR has strong structure

70

Brick style IFR can up to 1,200 kgf by load test

November/December 2013 • TANK STORAGE

page header

TANK STORAGE • November/December

71

tank roofs

Silicone-free sealing Atreus Deck and Dome, a business unit of the Austriabased industrial service provider, Kremsmueller Group, has been awarded a contract for the design, manufacture and supply of nine aluminium dome (ADRs) and internal floating roofs (IFRs) for the Socar Aurora Terminal in Fujairah, UAE. Belleli Energy was the EPC contractor for the second extension phase of the terminal. This multi-purpose product terminal is a joint venture between the state oil company of Azerbaijan and Swiss trading house Aurora.

It was the first project to be carried out at Kremsmueller’s new manufacturing shop in Turkey, which is dedicated to the manufacturing of Atreus products.

The workshop is equipped with modern machinery, partially designed by

72

Kremsmueller Group to suit the manufacturing requirements of aluminium domes and internal floating roofs, ensuring the shortest lead times at the

starting from 20m up to 45m.

All tanks were also fitted with an Atreus IFR. The IFRs were partially cable suspended from the dome roofs in order

‘The client technical requirement for domes and IFRs were quite challenging for this project. We have been constantly working in close cooperation with the Atreus team, from the engineering phase till completion of the erection at site and we were satisfied with the materials and technology supplied’ B. Fassone, project manager SAFT II, Belleli Energy s.r.l.

highest quality standards.

The aluminium domes and IFRs were supplied for tanks in a range of diameters,

to provide the necessary flexibility for storing various products at the terminal.

This was the first project

where Atreus has implemented its silicone-free aluminium dome roof sealing technology.

It provides weather protection that allows for faster installation of aluminium dome roofs by the contractor.

This is in comparison to the conventional procedure of making the dome watertight by applying silicone around the gusset covers, which is currently widely used in the industry.

The IFR features a brand new design that provides higher stability via the use of, strong double-I-beam profiles.

A clamping bar design allows higher clamp force thus ensuring perfect sheet seam vapor tightness. The maximum use of extrusions provides a perfect weight to strength ratio. Even the floatation tubes are extruded and come with a wall thickness of 2.5mm. This increases operational safety

November/December 2013 • TANK STORAGE

tank roofs

Atreus slide shoe design – all Aluminium extrusion by eliminating the longitudinal weld seam, which is normally present in welded pipes throughout the IFR industry.

The Atreus IFR is entirely designed in line with API 650, App. H and exceeds API requirements, in order to also comply with European standards. The Atreus IFR is supplied fully prefabricated, ensuring minimum installation time and replicable quality, regardless of the experience of the installation crew. This goes against the current industry trend of reducing

mistakes onto site engineers for the sake of reducing cost.

Another design feature for the silicone-free aluminium dome roof is the use of full aluminium sliding supports.

These are all made using strong extrusions. Due to the use of extrusions, Atreus was able to eliminate all support weld seams, utilising full material strength and providing a safer system compared to welded support designs. An additional benefit is that no carbon steel is used in any Atreus dome structure, providing a separation of dissimilar materials.

Furthermore, Atreus uses an advanced aluminium alloy that has only recently been included in the aluminium design manual. This alloy

with the same corrosion resistance, compared to the usual materials used in the industry. All of these new design features are in line with API 650 requirements and European standards.

The project took approximately eight months to complete, from design stage to final installation.

Atreus puts high emphasis on the packing in order to ease the site handling for the clients. One of the lessons learned in this harsh MEenvironment was to improve the component marking which partially faded away.

This feedback from site was put into the permanent improvement process Atreus implemented in order to learn from experience made on site.

provides higher material mechanical property values,

As well as ADRs and IFRs, Atreus manufactures floating suction units. Seven units are currently under manufacture for a new terminal in Cyprus and will be supplied and installed alongside three internal floating roofs.

For more information:

This article was written by Mark Winker, Atreus international sales manager at KremsmĂźller, www.atreusdomes.com

Diameter 45m Atreus dome during lifting prefabrication, consequently shifting workload and potential

Diameter 45m Atreus dome finally installed

TANK STORAGE • November/December

73

pumps

ATEX 0 certified

pumps in demand

The challenge of safely and economically dealing with rainwater and petrochemical spills in ATEX Zone 0 areas is growing, as more stringent monitoring controls come into place for tank storage terminals, particularly in European countries.

Certain ATEX Zone I areas within these terminals have been redefined as ATEX Zone 0 areas, requiring a risk assessment review but also providing an opportunity for pump manufacturers.

Crane Process Flow Technologies in Germany is reporting an increasing number of enquiries for its DEPA Air Operated Double Diaphragm (AODD) pumps which are certified for ATEX Zone 0 use by PhysikalischTechnische Bundesanstalt, Germany. The pumps, which can be air or nitrogen powered, eliminating the requirement for monitoring control systems, are proving particularly suitable for tank storage terminals.

One of the main applications is their use on movable rooftops of huge gas tanks. The defined area above the rooftop is an ATEX Zone 0 area because inflammable gases could occur. The self-priming AODD pump can evacuate the rainwater and any fluid spills easily in a safe manner, as the pump has a Tx classification.

The pumps are designed to deliver a 7bar head pressure,

74

and can handle running dry and with the 25m continuously changing altitude as the tanks empty and are refilled.

Another recently identified area that requires ATEX Zone 0 certification is underneath tanks where a sump collects both rain water and any waste liquid from spills. With the possibility of inflammable gases occurring in both the sump and collecting vessel, both areas are designated ATEX Zone 0 with existing submersible centrifugal pumps shut down due to nonconformity to ATEX regulations.

The AODD’s ability to selfprime means the pumps can be located more accessibly, adjacent to the tanks but still in an ATEX Zone 1 environment.

Thomas Walbroehl, applications engineer at DEPA, explains: ‘As AODD pumps self-prime, it simply wasn’t necessary to locate them under the tanks in the Zone 0

A typical moving rooftop of a gas tank

environment. It made more sense to locate them in the less stringent Zone 1 environments.

We were also able to offer a variety of housing materials including stainless steel, ductile iron and aluminium as they would be dealing with non-corrosive liquid, although, again, housings for corrosive liquids would not have presented a problem.

‘Previous tests revealed

the old valves and impellers of EPDM (synthetic rubber) had failed due to oil content in the product. It was also, therefore, the inclusion of our nopped E4 diaphragms within the pumps that impressed as these offer a high chemical compatibility and provide an extended lifetime, thereby meeting ATEX requirements for a high safety level of the process. The purchase of DEPA pumps have saved one customer about €25,000 for each pump installation against the previously installed Zone 0 vertical centrifugal pumps.’

The terminal had been temporarily shut down last year because of safety issues in the EX-area but now fulfills all necessary ATEX requirements while also saving on running costs.

For more information: Areas where DEPA AODD ATEX certified pumps are cleaning up

Contact Tomlinson Hall, +44 (0) 1642 379 500 or www.depapumps.co.uk

November/December 2013 • TANK STORAGE

page header

Visit us at: Tank Storage Asia - Singapore Stand Number C2

TANK STORAGE • November/December

79

page header lightning protection

Shunts or by-pass conductors... or both?

In 2009, along with the new Recommended Practice API 545, came the requirement for by-pass conductors between an external floating roof (EFR) and tank shell. This is in addition to, and supplements, the historical requirement for shunts.

However, operators repeatedly ask: ‘Do we need both shunts and by-pass conductors?’

The answer is: ‘Yes’.

The reason both are needed may be found in the signature components of a lightning strike. There are two distinctly different components, however the drawings typically referenced to represent those components, may be part of the problem in understanding why both shunts and by-pass conductors are required.

The nature of the lightning strike The current flow and wave forms of a lightning strike are typically shown by a chart that looks like Figure 1.

The event consists of several components. It begins with a short-duration, high amperage discharge, followed by intermediate ramp down, and ends with a lower amperage, longer duration tail (we prefer to call it the tail, as it looks like one). This stroke may be followed by additional, similar strokes. The number of strokes per event is typically three to four, but, according to Martin Uman in All About Lightning, may range from one to 30, continuing until the cloud charge and ground charge are essentially neutralised.

The first component typically lasts up to 500 µs (microseconds) and may reach a peak amplitude of 200,000 amps.

The intermediate portion typically lasts up to 5 µs and averages 2,000 amps.

The third component lasts from 0.25 of a second to 1 second, averaging 200 to 800 amps.

In Figure 1 the depiction is wildly out-of-scale, and this lack of relative scale may lead one to believe that the components are roughly similar in rise time, duration and current flow, possibly leading to the conclusion that one type of conductor system is capable of handling all three components.

However, if drawn to scale, it would look more like Figure 2: Even in this graph, the time axis is wildly out-of-scale, but at least it gives one a better idea of relative current flow.

Looking at Figure 2, it becomes obvious that there exists a vast difference in the nature of the energy flowing at different times during the lightning stroke, and that different types of conductors are required to carry each.

Due to the fast rise-time of the initial front, it behaves like a high-frequency discharge, tending to follow the lowest impedance path.

The intermediate and tail, looking more like a high current, direct current event require low-resistance paths.

The problem

Figure 1

72 76

As the name implies, the roof of a floating roof tank floats on the stored product.

November/December 2013 • TANK STORAGE

lightning protection Direct lightning strike to floating roof

Figure 2 Primary and secondary seals separate the roof from the tank wall, keeping the product in and foreign objects out. As these seals are constructed of insulating material, by its nature a floating roof tends to be electrically insulated from the shell of its tank.

Under normal conditions, the tank shell is at the potential of the earth upon which it rests. The mass of the tank and the surface contact between the tank bottom and the mass of earth causes it to assume that potential. Over time, the floating roof assumes the same potential. When there is a difference in potential between the tank shell and the floating roof, it must equalise across the rim gap, possibly producing arcing and sparking and causing ignition of vapours and a rim fire.

There are three separate lightning events that could cause a difference in potential between the tank shell and the floating roof: a direct lightning strike to the floating roof, a direct lightning strike to the tank rim (including the

gauging platform) and a nearby lightning strike. That difference in potential and the resulting current flow may cause arcing and ignition of vapours leading to a rim fire.

In the case of a direct lightning strike to the roof, the roof changes potential immediately and dramatically.

The tank shell, being at earth potential, tends to remain at that potential. As the current attempts to flow to ground through the tank shell, all of the lightning energy must flow across the rim seals in what is referred to in API 545, Annex 1.4.2 as a sheet of current. This description may not be entirely accurate, but the mental picture it draws may help in understanding the phenomena.

This is the most serious event, as all of the lightning energy must flow across the seal gaps to reach ground through the tank shell. The conductor system must not only equalise potential between the roof and tank shell, it must also carry most of the lightning current from

TANK STORAGE • November/December

the roof to the tank shell. Any current not carried by the conductor system will likely arc between the roof and shell. Also, because of the high resistance of the shoes sliding on a contaminated surface, sparking is likely. As API 545 notes, this condition is most likely to occur on a larger diameter tank with the tank mostly full so the floating roof is

the same effect to a lesser degree than a direct strike to the tank shell. The ground beneath the tank changes potential as the ground charge equalises toward the point of the lightning strike. The floating roof tends to remain at its pre-strike potential. Again, the resulting difference in potential can cause arcing across the rim seals as the roof

outside the zone of protection provided by the tank rim.

In the event of a direct lightning strike to the tank shell, usually to the rim or gauging platform, the tank shell immediately and dramatically changes potential. The floating roof tends to stay at its original potential. The resulting difference in potential

potential equalises to that of the shell. The conductor system primarily must simply equalise the potential between the roof and tank shell.

In order to have ignition, there must be a flammable mixture available where the arc takes place. This highlights the importance of well-fitted, well-maintained rim seals. If

Direct lightning strike to tank shell

can cause arcing across the rim seals as the roof struggles to assume the potential of the shell. In this event, most of the lightning energy flows directly to ground through the tank shell. Only a small percentage of that energy travels across the floating roof to ground around the tank perimeter, but the likelihood of arcing is still high. Most of the work required is simply equalising the potential of the floating roof to the tank shell.

A nearby strike produces

the seals are performing as designed, there will be no flammable mixture, hence, no ignition. However, if the arc takes place where there are flammable vapours, the vapours may ignite, causing a rim fire. That is why many EFR tanks are permanently equipped with foam fire suppression systems.

The solution API 2003 has historically recommended the use of

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lightning protection Nearby lightning strike

shunts, which are stainless steel straps installed at intervals not to exceed 10” around the perimeter of the roof. These shunts are mechanically attached and electrically bonded to the perimeter of the roof, and are spring-loaded to press up against the inside of the tank shell. As the roof rides up and down on the stored product, the shunts ride up and down against the tank shell providing an electrical bond between the two. They provide a low-impedance path between the floating roof and the tank shell.

API 545 also recommends the use of by-pass conductors.

By-pass conductors are simply conductors run between the perimeter of the floating roof and the tank shell rim at intervals not to exceed 100”. They are electrically well-bonded at both ends, and provide a low-resistance (< 0.03Ω) path between the floating roof and the tank shell.

Why are both shunts and bypass conductors necessary?

Shunts, being a short and direct path from the floating roof to the tank shell, offer a lowimpedance path favourable for conducting the fast rise time, high-energy transient.

Being flat straps, they may more readily carry the ‘sheet of current’ comprising the lightning current. However, with the tank in service, after the tank roof makes a few trips up and down, instead of riding on bare metal, the shunts are now contacts sliding on a contaminated surface. They rely on the pre-loaded spring pressure to maintain contact,

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and the contamination on the tank shell likely raises the electrical resistance between

the roof and tank shell rim.

This is required to conduct the lower amperage, longer duration energy from the floating roof to the tank shell without arcing or excessive heating. However, they may also present a high-impedance path to the initial fast current rise. Therefore, it normally takes a short time for the bypass conductors to become conductive but, when they do, it quenches any arcing

Shunts

that problem, Richard’s crews installed 8-10 lengths of 2/0 welding cable around the perimeter of each tank. The top ends of the welding cable were supported by davit arms on the tank rim extending out over the roof, with the bottom ends terminating on lugs welded to the tank roof.

This approach reduced lightning related ignitions by 98%. Unfortunately, these conductors had to be replaced frequently, as they became fouled on legs, hatches and other objects on the tank roof, and bent or pulled loose from the davit arms. Hence the need for improved designs for by-pass conductors.

Conclusion

it and the shunt. Current flow over a high resistance generates heat, producing sparking and potential ignition. Although originally envisioned to prevent arcing, shunts often emit a shower of sparks as the energy travels through the resistance of the contamination. Therefore, the committee recognised the need to supplement the shunts with low-resistance by-bass conductors.

By-pass conductors provide a low-resistance path, as they are fixed (nonsliding) conductors with good electrical connection to both

By-pass conductors

at the shunts. They may take many forms, the simplest being a wire attached to the tank rim and to the edge of the floating roof. Round conductors are acceptable, as DC current flows throughout the entire conductor.

By-pass conductor technology is not a new approach. Richard King, of HMT recalls when he was performing contract maintenance work for a major tank operator in Port Arthur, Texas. The operator had experienced multiple incidents of rim fires from lightning strikes. To address

Due to their lower impedance, the shunts tend to conduct the initial, high frequency-like portion of the strike, albeit with arcing. The high resistance of the shunt to the tank shell renders them unable to conduct the lower energy tail without excessive heating and additional arcing. The by-pass conductors, because they are lower resistance, take over and conduct the longerduration, lower amperage tail, quenching the arcing at the shunts. The combination of shunts and by-pass conductors are also better suited to handle the subsequent return strokes that comprise a typical lightning event.

Based on the present understanding of lightning, the combination of shunts and by-pass conductors offer the optimum application of known technology to control the ignition phenomenon it by accommodating all components of current flow from a lightning strike.

For more information:

This article was written by Bruce Kaiser, president of Lightning Master Corporation, and William Goldbach, engineering consultant, Lightning Master Corporation, www.lightningmaster.com

November/December 2013 • TANK STORAGE

page header

Don’t miss out on the first issue of 2014!

Bonus distributio n: NISTM, O rlando, Florida

EXCLUSIV E delegate bag distributio n!

Tank Storage magazine is the OFFICIAL media partner for NISTM conference & tradeshow in Orlando, Florida in April 2014 and will be the ONLY magazine included in all delegate bags.

By advertising now not only can you reach the 1,500 attendees, you will also increase your company’s exposure prior to the event.

Plus Major Global Tank Terminal Owners Give Their 2014 Forecasts The January issue will include a special 2014 terminal operator outlook. Make sure your company appears next to the likes of Oiltanking, Buckeye, Interterminals, Tepsa, Botlek, Standic, EPIC midstream and more.

Other features include: z z z z

Terminal automation Loading arms, racks & hoses Mixing equipment Safe access & fall protection

z Roof seals & drains z Secondary & tertiary containment z Vapour recovery & combustion Ad deadline: 3rd January 2014

To get advertising prices or to request a copy of the media pack for 2014 please contact: David Kelly on +44 (0) 203 551 5754 or david@tankstoragemag.com TANK STORAGE • November/December

For editorial information please contact: Margaret Dunn on +44 (0) 208 687 4126 or margaret@tankstoragemag.com 75

preview

Land of

Opportunity Industry representatives from around the globe are invited to Singapore, centre of the newest growing region in tank storage, this year for Tank Storage Asia – a unique two-day conference held over 10-11 December 2013.

Here are some of this year’s exhibitors…

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Colfax Fluid Handling Oil and Gas Solutions The Colfax Fluid Handling Terminal series pump provides operators with a broad flow range, as well as the twin screw benefits such as low NPSH requirements, tank stripping and the ability to fill at constant rates across a pressure range. With the Terminal series, users can handle multiple fluid types including heavy oils such as bitumen, as well as light fluids such as petrol and naptha. The Terminal series is highlighted by the 500mm model, targeting loading and unloading applications for Very Large Crude Carriers or other crude carrying vessels with a maximum flow rate of 6,000m3/h (26,420 gpm).

The pump case is made with carbon steel (welded

or cast) and comes with a replaceable liner made of nodular cast iron. Design performance to API 676 third edition is available.

Visit Colfax at booth C15

Emerson Emerson displays the latest Rosemount tank gauging system based on accurate and maintenance-free noncontacting radar technology.

Part of the Colfax Fluid Handling Terminal series

November/December 2013 • TANK STORAGE

preview Other common use-cases are mass balance and loss estimation, leak detection and overfill prevention.

Visit Emerson at booth C1 Kanon Loading Equipment

Emerson’s latest Rosemount tank gauging system It delivers both standardised volume and mass besides level, average temperature, pressure and other measured data through a user-friendly operator interface.

The fully scalable

system is based on open communication technology.

Key applications include custody transfer, inventory assessment and/or operational control of tank farms at refineries and terminals.

Kanon Loading Equipment is a Netherlands-based supplier of marine, rail and road liquid transfer systems. The company designs according to the latest developments with regard to safety, low maintenance and operator convenience.

Kanon has also established a production facility in Malaysia, which also acts as a service/maintenance centre.

Its loading systems are in operation for a range of liquids and gases, from cryogenic to high temperature applications, including hazardous or corrosive fluids.

Where applicable, Kanon equipment can be pneumatically, hydraulically

and/or electrically operated.

Kanon has supplied equipment direct to customers in all areas of the processing industry including chemical, petrochemical and storage terminals, as well as providing systems via international engineering houses.

Visit Kanon at booth D9 Klenco (Singapore) PTE Established in 1971, Klenco is an independent distributor and manufacturer of professional and industrial cleaning and maintenance machineries, accessories and chemicals. Klenco’s products are used in South Asia, the Middle East and Europe.

Klenco is representing both Idrojet and NLB at TSA this year as a distributor, aiding the launch of the former’s Kidextractor and NLB’s water jet technology.

Kidextractor hydraulic

Ultra High Pressure Mobile Water-jet Cutting Safe Fast and Efficient Economical Automated • Specialised UHP Coldcutting Tank Floors & Roofs • Pipes • Vessels • Concrete • Asphalt • Fiberglass

• Environmentally Friendly • Adaptable Configurations • Single & Double Cutters • Easy Set-up • Minimal Support

JETSET HYDRO TECHNICS USES PATENTED RAGWORM® TECHNOLOGY THAT HAS BEEN PROVEN AROUND THE WORLD

+31 (0)227 - 602977

|

E-mail: info@ragworm.nl

TANK STORAGE • November/December

www.ragworm.nl 81

preview technology for moving heat exchanger tube bundles allows companies to move large bundles around refineries with ease.

NLB’s high pressure water jet technology allows industrial cleaning using convertible pumps from 8,000-40,000 psi, with a wide-range of accessories and options, at a low maintenance cost.

Pumps can be used for refinery and plant cleaning, surface preparation and paint/ coating removal, reactor and tank/heat exchanger cleaning to name but a few.

Visit Klenco at booth E13 Mascoat Mascoat, based in Houston, US, manufactures a line of spray-applied insulating coatings that can help retain energy, prevent CUI, reduce radiant heat gain, prevent condensation, and protect personnel up to 190˚C. While not suitable for every tank application, there are many

adequate protection.

Visit Mascoat at booth E3 Next Planet

An NLB water jet in use areas where the products are superior to conventional types of insulation.

Since Mascoat’s coatings are applied to the exterior of the tank, they adhere directly to the substrate or primer. This forms a seamless barrier that rain and moisture cannot penetrate, effectively preventing the possibility of CUI. There are not any gaps like with steel jacketing or panel systems. Their

performance is not diminished by regular foot traffic and can also reduce the effects of flash cooling due to a passing rainstorm, so they are well suited to tank roofs.

Since Mascoat’s coatings can keep heat out, as well as keep heat in, some facilities use the coatings for content stabilisation or to combat vapour loss. In older facilities that do not have floating roofs or other vapour recovery technologies, the coatings can reduce product loss.

Mascoat’s coatings are also ideal for personnel protection by preventing burns, slips, falls and other hazards. The coatings only need to be applied to areas touched by personnel, whereas conventional insulation requires extensive fabrication next to stairways, and anything other than the sides of tanks, to provide

Next Planet is focusing on its Ametank, Ampreva and Flaretot products at this year’s event.

Ametank enables the configuration, design, and detailing of aboveground shop-built and fielderected storage tanks. From configuration and design to 3D geometry, detailed bill of material, purchase list, cost data, and to-scale fabrication and layout drawings, in two hours. Within minutes design changes can be made to modify, add or delete features.

The 3D geometry, drawings, bill of materials, plate cut data and cost reports are automatically updated.

Ampreva enables the configuration and detailing for generation of 3D production detailed models, layout and fabrication drawings, production lists, BOM and fabrication detailing and costing, FEA model and result. It also supports exports of drawings to AutoCAD, other CAD systems, BOM to business applications and import of COMPRESS and PVElite design calculations.

Flaretot is an integrated flare software solution for all aspects of flare design.

In contrast to traditional solutions using multiple packages for flare design,

Applying a Mascoat insulated spray-on coating

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November/December 2013 • TANK STORAGE

Flaretot Professional uses data linking from the piping network simulation through to the calculation modules. It is therefore easy to prepare calculations for all flare system load cases (e.g. design and turndown case) without transcribing data. This approach minimises man-hours (design and checking), project delays while calculations are being prepared and potential costly transcription errors and project rework.

Visit Next Planet at booth A3 Philadelphia Mixing Solutions Philadelphia Mixing Solutions solves a major problem facing the crude oil and refined products storage tank market with its Lancer Advanced Pitch Propeller (LAPP).

The company offers a mixing solution to eliminate basic sediment and water in crude oil tanks.

The Lancer Advanced Pitch Propeller provides accurate predictability for blending, effective heat transfer and yields energy saving in excess of 30%.

This technology focuses on lowering electrical energy consumption, improving tank integrity and oil movement performance in aboveground storage tanks.

The advanced pitch design of the impeller gives fluid motion with energy savings.

Visit Philadelphia Mixing Solutions at booth B3

Think Tank Craftsmanship and safety.

Quality and flexibility.

Innovation and progress.

Many claim it, we deliver it.

Protego Protego has built and provided safety devices and tank equipment since 1954.

It supplies global services to its customers, which include research and development, application-specific engineering and overall protection system design.

Visit Protego at booth C8

Noorderlaan 710, Haven 540 B-2040 Antwerp T +32 3 568 81 28 ivens@ivens-cb.be www.ivens-cb.be

Quest Integrity Group Quest designs and delivers asset integrity management and asset reliability solutions for clients in the refining and chemical, pipeline,syngas and power industries.

It will be showcasing how it

Ivens a name renowned in the port of Antwerp and far abroad. Ivens builds storage tanks for chemicals and fuels.

We are a family run business with a rich tradition and an excellent reputation.

Apart from its impeccable range of services, Ivens also takes care of pipelines, steel constructions and floating roofs for tanks. Our huge range comprises, among others, engineering, special transports and crane activities. All this is executed from A to Z by an internal and experienced team which always disposes over the latest systems and equipment.

In short, Ivens offers every customer a total package tailored to their needs.

TANK AND STEELCONTRACTORS

Philadelphia Mixing Solutionsâ&#x20AC;&#x2122; LAPP

TANK STORAGE â&#x20AC;˘ November/December

83 275 x 90 E.indd 1

16/01/13 10:38

preview helps tank operators optimise inspection planning through its ‘fitness-for-service’ methods.

Over the last 10 years, Quest has assisted many tank operators with integrity assessments of storage tanks. Risk based inspection methods can be used to identify inspection intervals and highlight areas for improving the risk factors of the tank and thereby extend the inspection frequency.

Visit Quest Integrity Group at booth E7 SchuF Fetterolf The SchuF Group designs and manufactures a range of industrial valves for the chemical, petrochemical, polymer, oil, gas and offshore industries.

Its valves are used to control, divert, isolate and sample gases, liquids, slurries

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Protego has been building tank equipment since 1954 and powders. SchuF was founded in 1911 in Germany and is the inventor of flush bottom outlet valves, the lift plug valve, various diverter valves and the modern control valve.

SchuF has also developed in-tank shut-off valves for the safety of storage tanks containing dangerous liquids and gases such as LNG, chlorine, VCM, VC, propane, propylene or ammonia.

During a loss of electrical power the valves close automatically via an in-lying

spring or weight securing the tank and its content. SchuF

in-tank valves are notably adequate for ‘Tank Systems for Refrigerated Liquefied Gas Storage’ (API 625 Standard).

In 2012 the SchuF Group launched the ‘Cam-Slide’, a new product in the SchuF Fetterolf Line Blinding Valve series. It is most frequently used in critical applications to completely close off the downstream section of a pipeline in a safe way.

SchuF’s Tank Emergency Shut-off Valve

November/December 2013 • TANK STORAGE

preview Vacono Vacono is a German company with over 100 years experience in the aluminium industry 35. of which have seen the production and supply of VaconoDomes – geodesic dome roofs – and VaconoDecks – lightweight internal floating covers – to protect product and reduce evaporation losses in the petrochemical industry.

Vacono has developed a lightweight stainless pontoon floating cover, and has now designed and developed a lightweight stainless steel full contact floating cover which guarantees a lower vapour emission level and is also compatible with TTS’s paneling can be equipped with various rim seal designs

They are installed in pipelines where product cross contamination and hazardous material could possibly be harmful to people or the environment. It has been designed for applications where space is limited.

Visit SchuF Fetterolf at booth C13

650 Appendix H standards.

TTS full-contact IFRs have the following features: • Full contact type – no vapour zone under floating deck • High emission reduction • Corrosion resistant and

durable service life • Excellent strengthto-weight ratio • Easy installation • Can be equipped with various rim seal designs.

Visit TTS at booth F13

virtually all products stored.

Its design further meets all the requirements as laid down in API 650 App.H as well as the fact that it can be fitted with a variety of seals, including a mechanical shoe seal.

Visit Vacono at booth C9

TTS TTS designs and manufactures products for IFRs, IFR/EFR seals, roof drains, floating suction units and oil skimmers for liquid bulk storage tanks.

The company also provides Full Contact Type IFRs using aluminum honeycomb panel. This panel maintains full contact with the liquid surface and prevents evaporation of the stored product. Full contact honeycomb roofs could minimise emissions and evaporative losses of storage products, as well as cause fewer corrosive or oxidising elements by removing the vapour zone from the fixed roof storage tanks.

The design complies with environmental regulations and the latest edition of API

A VaconoDome roof

TANK STORAGE • November/December

85

filtration

Ensuring contaminationfree fuel The same fuel contamination problems found in on-engine fuel systems also create problems in storage and dispensing facilities.

Fuel problems can be caused by water, dirt, asphaltenes and cold weather if the storage is outside and aboveground.

No matter how carefully it is handled, contaminants will find their way into fuel during transfer and storage.

Water is a diesel engineâ&#x20AC;&#x2122;s number one enemy and condenses directly from the air inside the storage tank during normal daily heating and cooling cycles. In addition to water, solid and semi-solid (microbiological) particulate contamination is prevalent.

Bulk storage application with Racor RVFS installed

Bulk storage application with Racor FBO installed

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The right filter

To prevent microbiological growth, the water should be removed as soon as possible. The most efficient way is to provide water separators for the fuel filtration system and recirculate the fuel through them, removing the water through the drain port. In large storage facilities greater than 380,000 litres, it is recommended that one complete turnover of the fuel is made every 168 hours.

A pre- or micro-filter can be used in combination with the water separator to remove other solid contaminants which, in addition, will extend the serviceable life of the water separator. A portable filtration cart comprising a fuel filter water separator, re-circulation pump, suction and dispensing hose assemblies is a costeffective solution for tank cleaning in areas with limited or restricted access.

Size the filters correctly A right sized fuel filter water separator will ensure unrestricted flow from the storage tank to the vehicle or stationary application during the transfer process. Consideration must be given to the maximum pump flow rate, environmental conditions and origins of the fuel supplied to the storage tanks.

It may be appropriate to install a filtration system prior to the storage tank and another after it. Consideration should also be given to the serviceability of the fuel filters, ease of access and

accessories, such as differential pressure indicators, air eliminators and drain valves which will make the maintenance of the fuel filtration system easier.

Biodiesel effects

Pure biodiesel is most often added to diesel fuel in a 2, 5, or 20% blend. Most biodiesels have a low interfacial tension. This means that water easily disperses and dissolves in fuel, making it more difficult to separate. Biodiesel is also known to attack certain synthetic compounds, causing them to swell and soften, or shrink and harden. For these reasons it is imperative that a fuel filter water separator is compatible for use with biodiesel applications.

Conclusion Diesel engine manufacturers operate globally. They depend on the diesel fuel being used by their customers to be of recognised international standards. While the production and quality systems employed at refineries are stringently controlled, there are many opportunities throughout the fuel storage, delivery and dispensing system for contamination to occur, thus it is essential proper precautions are put in place to ensure maximum operational efficiency and profitability. This applies to on-engine as well as during fuel storage, transfer and dispensing.

For more information:

This article was written by Derek Martin, business development manager for Racor Filter Division Europe

November/December 2013 â&#x20AC;˘ TANK STORAGE

pumps

Innovative solutions for oil terminals Centrifugal pumps have long been the primary equipment of choice to move fluids in and out of oil terminals, tank farms and bulk storage facilities.

The use of centrifugal pumps stems primarily from their general suitability, widespread familiarity and low price.

Yet the adoption of positive displacement pumps continues to increase in this application because of market trends that require operators to handle multiple fluid types, an ever-growing need for speed-of-transfer, better inventory management and increase site profitability.

It is important to remember storage is not the objective of the terminal or tank farm manager; rather, it is the timely delivery of a stored product.

Typical centrifugal pump curve

Typical positive displacement (pd) pump curve

Typical centrifugal pump curve with rated system head curve

Typical pd pump curve with rated system head curve

Centrifugal versus positive displacement A centrifugal pump transits velocity to a fluid. As the fluid

TANK STORAGE â&#x20AC;˘ November/December

87

pumps and benefits of a system flexible enough to handle these variations.

Five aspects to consider

Combined PD and centrifugal pump curve with rated system head curve

With this basic understanding of the two technologies, below are several concerns that tank and terminal managers face today:

1. Varying liquids Depending on the age of the storage system, fluid stored there currently may not be the one for which it was originally Combined PD and centrifugal pump curve designed. Many with range of variation of actual system facilities were head curve designed to handle a certain passes through a precisely type of fluid; pumps and designed vane passage it peripheral systems were likely converts the velocity into designed to accommodate pressure (a kinetic energy this single fluid. If that has machine). Most centrifugal changed, most likely the fluid pump impeller vanes characteristics have also are designed for water changed. This may affect the performance as its basis; reliability and performance of standard correction factors the equipment and, in some are applied to account cases, may also impact the for varying viscosities. fluid properties (particularly Alternatively, a positive in terms of viscosity, shear displacement pump separates sensitivity and resultant system a fluid from its suction passage, head curve variations). encloses that volume in a This should also be taken chamber and displaces the into consideration when new fluid to the pump’s discharge. storage facilities are designed The key operating principle as they are typically planned of a positive displacement for decades of operation. It is pump is the prevention in the best interests of both the of the fluid’s internal slip, system designer and facility generally achieved by owner to consider market designing set clearances changes that may affect between rotor and stator. future storage objectives.

With this in mind it is The application of positive important to determine displacement pumps offers (preferably in the design stage the flexibility to accommodate of a facility) the variability of such changes without the operation being managed compromising the initial fluid before realising the features handling requirement.

88

2. Varying temperatures This phenomenon sometimes has slow and subtle effects on a storage facility’s fluid delivery system.

As an example, consider a storage facility in Hong Kong designed 25 years ago to deliver ISO VG 150 and 380 grade lube oil to ocean-going vessels. Over the course of the system’s life the operator recognised a serious loss of flow and performance of the ISO VG 380 system, which eventually resulted in the pump’s shaft failure. Repairs were made but the situation repeated itself several times.

After extensive study, it was found the failure normally occurred in January and it was determined the VG 380 oil exceeded a critical threshold where the system response created demands on the pump beyond its design and capabilities.

The clue came from the frequency of pump failures that occurred in January – arguably the result of climate change – as original specifications set ambient temperatures and resultant product viscosities at far different levels than experienced today.

In environments where wide swings of temperature (and therefore viscosity) can be anticipated, it would be important to consider the resultant system head response and the effects it will have on the pumping equipment. The solution: manage product temperature (a costly approach) or select a pump that offers a wide tolerance for temperature and viscosity changes, such as a positive displacement pump.

3. Energy costs If cost of operation – particularly energy – is a concern, then further analysis of the real cost of operating the delivery system (pump) must be considered.

Assuming the storage system design is conservative

in many of the system (and liquid) characteristics, it is essential to determine or anticipate the actual (not theoretical) point where the system curve will intersect the pump curve.

Consider the following three aspects of system design: • A certain hydrocarbon designated as the target fluid • Fluid viscosity is conservatively estimated • A conservative operating temperature.

These values all form a single point ‘rated’ condition for which the pump will be sized. If the pump selected is a centrifugal pump, the engineer has selected one with the best efficiency point (BEP) most closely associated to the rated (theoretical) system curve. Once the system is installed and operating, it is nearly certain the actual field conditions will push the system curve either up or down, moving the centrifugal pump away (either to the right or left) from the BEP. The result is a less efficient operation and potentially higher energy costs than originally calculated.

Positive displacement pumps do not have a similar characteristic curve.

Application of such a pump in the same situation results in more of a vertical ‘curve’ that moves up or down a straight line and provides only a slight change in flow (due to slip), but with little penalty on the power required to operate.

This option should be considered in any situation where fluid changes occur such as change in environment, fluid stored or flow demand. Resulting comparisons of efficiency can be calculated into reliable and substantial energy cost savings over a given period of time. Energy calculators are provided by some pump manufacturers to assist the system designer in determining the cost associated with choosing a

November/December 2013 • TANK STORAGE

pumps given pump technology.

Separate consideration of energy savings should also be factored in applications that require the process fluid to be heated in order to maintain a certain viscosity enabling centrifugal pump use. The elimination of the need for heat or the lowering of fluid temperature (even

designerâ&#x20AC;&#x2122;s best interest to look at the operating objective and then size the pump and system to avoid the damaging effects of cavitation.

The use of multiple pumps operating in parallel is a desired alternative to a single pump system in larger and more modern storage facilities, as it provides further process

Atmoshpheric Pressure

speed does not affect its ability to achieve pressure and (in the case of rotary timed twin screw pumps) the combination of near pure axial flow and low internal velocities (through the large open suction passage) contribute to its superior low NPSH capability. Further, the suction specific speed limiting criteria

Minimum Design Level Centrifugal Pump

Minimum Design Level Positive Displacement (PD) Pump Static Head Theoretical Level with PD Pump Two-Screw Technology Fr iction Loss

Pump

Determining the liquid level by pump technology

by a few degrees) can result in substantial energy savings easily accommodated by positive displacement pumps.

4. NPSH No topic elicits a wider range of explanation and is more misunderstood than net positive suction heat (NPSH).

In the context of storage facility operators however, the situation is simple: they are all interested in reliable delivery of product at a desired rate of delivery.

This can be a challenge when the storage vessel is at a low level. When vessel levels are low, the resulting suction pressure (in combination with other factors such as specific gravity, elevation, vapour pressure and friction losses) will affect both the delivered capacity and reliability of the pump, primarily due to cavitation. It is in the facility

flexibility and redundancy in the system. If positive displacement pumps are used, then one pump can be fitted with a variable-frequency drive (VFD) and the others can be at a fixed speed.

This permits the operator to exercise a greater range of flow and, when necessary, operate a combination of pumps and speeds to permit the storage vessel to pass through the NPSH limitation normally created by the more limited centrifugal pump.

As mentioned earlier, this is explained by the difference in operating principles of the two technologies. The centrifugal pump needs velocity in order to create pressure, and velocity is a limiting factor in centrifugal NPSH calculations.

The positive displacement pump only needs to separate the fluid from the suction passage and displace it;

TANK STORAGE â&#x20AC;˘ November/December

(as applied to centrifugal pump design) is not applicable with rotary PD pumps 5. Emptying a tank In certain circumstances, storage facility operators may desire to empty a tank. Two reasons for doing this are: 1. To prepare for a different fluid to be stored 2. To conduct periodic cleaning maintenance and inspection of the vessel.

If a storage facility operator would like to do either, then there are also concerns over the time required to evacuate the tank and prepare to clean it, and the cost to actually clean it. Providing the ability to pump a tank dry is a key process advantage. If the pumping system is flexible enough to empty the tank, accept contaminated fluids

(typically found on the tank bottom) and be able to also pump a cleaning agent (such as water, solvent or distillate) that could be recirculated during the cleaning process, the time to perform this and the cost could be significantly less. It may, in some circumstances, eliminate the need for human intervention inside the tank.

There are some positive displacement pumps (particularly timed ones) that can perform these tasks reliably. They can run at lower speeds, permitting the operator to progress through the critical range of cavitation traditionally experienced with centrifugal pumps, and eventually run dry and strip a good deal of the residual fluid in the lines.

The benefits come from many different directions â&#x20AC;&#x201C; when suction is lost with a centrifugal pump (due to vapour lock or loss of prime), it may be necessary to stop and heat the fluid, resulting in energy and time loss, plus extra labour.

In some cases, where tank emptying and cleaning is to be performed, the operator will have portable pumps and hoses and this exposes them to potential spills.

In the case of a portable centrifugal pump, the pump cannot strip its own lines. The operator must restart the process (if unfinished). The hoses, pump and drip pans must be cleaned once the task is complete. Despite the fact the operation is complete, the costs continue.

A method to determine PD pump consideration In certain circles of fluid engineering a simple method is used to evaluate the two technologies suitability to a given application. When evaluating the pump type, consideration should be given to fluid handling through a Fluid/ Discharge/Suction/

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pumps

High capacity tank unloading system operating three pumps in parallel. Capacity per pump is 2,220m3/hr for various fuel oils.

Location: Turkey

Operating (FDSO) objective approach. The following general guidelines indicate when a positive displacement pump should be considered because of its favourable performance characteristics.

However, if the condition is not met, a user is able to consider either a positive displacement or kinetic pump: • F – From the fluid perspective, will the pump encounter a range of liquid viscosities or entrained gas or pump a shear, sensitive liquid? If so, consider a positive displacement pump for its ability to handle higher viscosity liquids more efficiently • D – From the discharge perspective, will the system have varying pressure requirements?

If so, consider a positive displacement pump for its ability to deliver a nearly constant volume of liquid over a large pressure range. It is important to point out that when operating multiple pumps in parallel, two centrifugal pumps in parallel will not deliver 2x flow … a positive displacement pump will deliver 2x flow (less associated slip) • S – From the suction perspective, will the system have varying supply conditions? If so consider a positive displacement

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pump for its versatility in handling a range of NPSH available, a range of fluid characteristics (such as shear sensitivity and viscosity) and its ability to vary speed efficiently. In particular, where fluid levels are low and vapour pressures are high. Some positive displacement pumps even handle ultra-low viscosities effectively while often still providing a lower NPSHR • O – Will operating objectives require occasional or even frequent changing demands to flow or pressure? If so, consider a positive displacement pump because of its ability to respond immediately to pressure changes and varied speed.

The most current innovations in tank farm and terminal pumping using twin screw pumps The use of positive displacement pumps – and in particular, twin screw positive displacement technology – as a flexible, cost-efficient technology for tank farm and terminal pumping applications has become more attractive to storage facility designers.

This can be attributed to a number of reasons: 1. Twin screw technology

High capacity tank unloading system operating five pumps in parallel. Capacity per pump is 1,260m3/hr for crude products.

Location: Singapore

has made advancements in size, having a range from 50m³/hr (220 gpm) to 5,000m³/hr at nominal discharge pressures for typical tank unloading pressures 2. Twin screw technology does not depend on a fluid film to operate; synchronised screws prevent screw-to-screw contact and bearings prevent screw-to-bore contact. This permits features such as dry running, low speed operation, the ability to handle contaminants, free or entrained gas, and an ability to handle a range of viscosities such as condensates, naphthas, methanol and jet fuels to high viscosities. This technology also can handle temperatures to 370°C 3. Depending on viscosity, the twin screw pump can operate with lower energy consumption than many centrifugal pump selections 4. The twin screw terminal pump is one of the most flexible pumping technologies in the industry. Features include the ability to run at various speeds, handle a range of fluids with different densitiy and viscosity, run dry, operate at much

lower NPSH then most pumps and is available in a range of materials with the potential to be driven by a variety of mechanisms.

Conclusion There remain many challenges in the industry for the fluid engineer. For the most part, the future holds even more unforeseen challenges. Design criteria can no longer be limited to technical aspects alone. There are business, environmental, flexibility and cost concerns that play a larger role then ever before.

Open and innovative thinking will ensure that fluid engineers and system designers continue to add value to their organisations. Moving fluids in innovative ways is one way to achieve that.

Above are examples of where using twin screw positive displacement pumps for tank and terminal pumping have made the difference and proven to be successful and innovative.

For more information:

This article was written by Mark Korzec, director of oil and gas sales for Colfax Fluid Handling

November/December 2013 • TANK STORAGE

investment

Failing to plan is planning to… million tonnes of crude • Two berths, accommodating vessels up to VLCC Phase II • Terminal throughput of 35 million tonnes of crude • Two or three berths, accommodating vessels up to VLCC/Suezmax Phase III • Maximum terminal throughput • Three berths, accommodating vessels up to VLCC/Suezmax

Management consulting firm Systems Navigator gives a fictional example of how it is possible to evaluate over 30 different scenarios in order to find the optimal terminal design before beginning construction.

The company uses simulation modeling to minimise construction costs, while ensuring a high level of service to terminal customers.

Using this method the company is able to get a clearer idea of just how much investment would be needed to operate the waterside operations of one particular terminal. Major cost savings can be achieved by minimising the number of berths per construction phase and by minimising the dredging requirements.

In general it is either the

landside or the waterside operations which suffer from bottlenecks. An optimal terminal design balances these operations and a waterside design can be used as an input for designing the landside design.

Simulation modeling is required to dimension the terminal and minimize CAPEX, to analyse potential bottlenecks, and to maximise terminal performance per operational phase.

Building in phases The terminal is constructed in three phases and will be used as a 100% commercial storage terminal, without any strategic storage of crude. The phases are characterised as following: Phase I • Terminal throughput of 25

TANK STORAGE • November/December

Every phase will add a number of storage tanks and, if required, pumps.

However, since this case study is focusing on waterside operations - landside details such as storage capacity are outside of the scope.

One of the main goals of the design team is to minimise construction costs, while ensuring a high level of service to the terminal customers.

Major cost savings are: • Adding a third berth in phase III instead of phase II. • Accommodate vessels up to Suezmax instead of VLCC on at least one berth, minimising dredging costs.

Terminal management has the following design questions: 1. What is the expected berth occupancy and vessel waiting time in phase I?

2. Is an additional berth required if terminal throughput is increased to 35 million tonnes in phase II? 3. What would be the maximum terminal throughput in phase III? 4. If we add a third berth in phase II or III, should it accommodate vessels up to Suezmax or VLCC? Key performance indicators To investigate the terminal performance per operational phase a combination of simulation modeling and Scenario Navigator interface software is used.

The interface software is capable of easy scenario creation and comparison.

To analyse the problem over 30 scenarios are created and analysed using key performance indicators (KPIs).

Case study scope Tank sizes: The demonstration simulation model does not include tanks.

All products are stored in one large (theoretical) tank per product group. In this case study only crude is used.

Project phases: The terminal construction as foreseen includes three phases.

Expected throughput

Berth configuration

Phase I

25 million tonnes

Two berths

Phase II

35 million tonnes

Two or three berths

Phase III

Maximum

Three berths

Project phases

91

investment Products at berth The following berths are assumed to be available per phase:

Berths

Product

Max vessel size

Phase I

Berth 1

Crude

VLCC

Berth 2

Crude

VLCC

Berths

Product

Max vessel size

Phase ll

Berth 1

Crude

VLCC

Berth 2

Crude

VLCC

Berth 3

Crude

VLCC or Suezmax

Berths

Product

Max vessel size

Phase lll

Berth 1

Crude

VLCC

Berth 2

Crude

VLCC

Berth 3

Crude

VLCC or Suezmax

Variability explained The key issue in predicting future system performance is variability. One of the major advantages of using simulation modeling is the ability to include variability in the analysis of the system, such as the terminal environment. The importance of variability can be shown in a simple test that includes two scenarios.

Scenario 1 has a constant arrival pattern and a constant process time. Scenario 2 has a variable arrival pattern and a constant process time.

Products per berth – phase I

Products per berth – phase II

Products per berth – phase III

Fleet mix At the basis of the terminal simulation model lie a number of operational assumptions. The design team estimates that half of the crude unloaded at the terminal is arriving on VLCC’s, while half of the exported crude in loaded on Aframax vessels. A summary of the main vessel related data is given below.

Vessel type

Crude IN (%)

Crude OUT (%)

VLCC 50 10 Suezmax 30

40

Aframax 20

50

Fleet mix

Design vessel

Max LOA (m)

Max beam (m)

Max draft (m)

Typical parcel (tons)

VLCC

350 55 23 275,000

Suezmax

280 50 17 150,000

Aframax

250 45 15 100,000

Scenario 1 has no waiting time and no vessels in queue, since every vessel that arrives can berth due to the constant arrival pattern and process time. When analysing these scenarios over a period of a year and running 10 replications, it can be seen that the number of arriving vessels waiting in queue before berthing is increasing over time in scenario 2. The same pattern is seen when analysing the average waiting time per vessel.

Long waiting times lead to large demurrage costs and a lower level of service.

Vessel dimensions and capacities

Vessel type

Average turnaround time (loading)

Average turnaround time (unloading)

VLCC

32 hrs

32 hrs

Suezmax

25 hrs

25 hrs

Aframax

22 hrs

22 hrs

Average turnaround times per vessel type

92

November/December 2013 • TANK STORAGE

investment Limitations Scenarios are created to test the robustness of every construction phase. The main aim of a scenario is to test the terminal infrastructure for bottlenecks. Scenarios are evaluated using pre-defined boundaries for waterside limitations. Scenarios that do not exceed the waterside limitations are considered as high level of service scenarios.

Waterside limitations • Total waiting time exceeds 1,500 hours • Berth occupancy has a maximum of 75%.

Simulation parameters and assumptions The simulation model uses a number of parameters to define the various terminal configurations. The most important parameters are described below: General assumptions Below listed assumptions are used for all analysed scenarios: • No strategic storage of crude • No limitations on the possible number of simultaneous operations for crude loading and unloading • The model assumes that tanks, pumps, connection lines etc. are always available • Landside details, such as detailed storage capacity per tank, pump characteristics, tank pit design etc. are excluded from the scope • Tugs are not used • No pipeline is used • No loading or unloading rate restrictions at the terminal • No departure restrictions

• No weather influences • No failures and maintenance of equipment • Pre-pump, pump, postpump time and navigation times are included in the turnaround time Scenario specific parameters The scenario specific parameters include: • Berth configuration • Crude throughput.

KPIs To compare scenarios and to analyse the results, the following KPIs are used: • Berth occupancy • Waiting time analysis: - Average waiting time - Number of ships waiting - Accumulated waiting time.

Vessel scheduling The simulation model derives the number of ships by dividing the total throughput over the fleet mix. The arrival schedule of the number of resulting vessels is then equally distributed over the year. The model introduces irregularities in the periodical arrival pattern by randomly delaying or advancing the calculated arrival date by 0-24 hours.

It should be noted that the model does not plan (or schedule) the arrival of the vessels. If two vessels arrive at the same time, or are in overlap and as a result one of them cannot be served at the berth, this results in vessel waiting time.

Simulation settings The model simulates terminal operations for the duration of one year, using five replications. Scenario results are the average of the

Simulation settings

Settings

Timeframe

1 year

Replications

5

Used simulation settings

TANK STORAGE • November/December

model outcomes of these 5 replications. Applying this approach produces statistically significant results allowing scenario comparison.

Variability Simulation modeling allows the use of variability in analysing the terminal configuration and is therefore the preferred modeling technique.

Why use variability?

In a perfect world vessels would arrive at the exact second as scheduled and the equipment never fails or needs maintenance. Unfortunately, a perfect world does not exist, so vessels arrive in a certain timeframe. This works as following for a 24 hour arrival timeframe: if a vessel is scheduled to arrive at 4pm, it has an equal chance to arrive at any time between 4pm the previous day and 4pm the next day. This arrival variability leads to waiting vessels and increased waiting time.

To show the importance of variability in the analysis of the terminal and why variability should always be taken into account in such studies, two scenarios are studies using three variability settings: • No variability • 24 hour arrival interval • 48 hour arrival interval

If the terminal throughput increases, more vessels will arrive at the terminal to import and export crude. An increase in the arrival timeframe leads to increasing waiting times.

By not taken into account the impact of variability some scenarios might be treated as feasible, while in real life this is not the case. If so, the terminal might suffer an unexpected drop in the quality of service, which may lead to increased OPEX/demurrage costs.

Detailed results Detailed results are generated for every scenario. A scenario is a combination of terminal characteristics, such as the number of berths, berth configuration, terminal throughput, initial tank level etc. The results are shown for scenario 1, describing phase I terminal configuration (2 berths) with a throughput of 25 million tonnes of crude.

Phase I: 25 million tonnes throughput, two berths The initial terminal configuration should be sufficient to handle crude throughput, without exceeding described waterside limitations. An initial tank level is required to prevent waiting times due to unavailability of crude.

Scenario: terminal phase II, 34 million tonnes throughput, two berths

Vessels waiting

Accumulated waiting time (hrs)

No variability 150 1500 24 hr arrival timeframe 154 1554 48 hr arrival timeframe 169 1815 Impact of variability on terminal performance

Scenario: terminal phase III, 57 million tonnes throughput, three berths

Vessels waiting

Accumulated waiting time (hrs)

No variability 182 1338 24 hr arrival timeframe 227 1633 48 hr arrival timeframe 283 2291 Impact of variability on terminal performance

93

investment a starting point for the design of the landside operations.

Terminal configuration Number of berths

Two

Throughput – crude

25 million tonnes

Initial tank level

750,000m3

Phase I – 25 million tonnes, two berths terminal configuration Overview results Phase I, 25 million tonnes throughput, two berths

• • •

•

Berth occupancy <= 50% Waiting time is within limits Total ship arrival per year: - VLCC: 53 - Suezmax: 116 - Aframax: 174 Bottleneck: no bottlenecks

per layout configuration and are the most interesting to terminal management, since they are used to answer all design questions.

The case study focuses only on the waterside operations of the terminal. In

Detailed results phase I, 25 million tonnes throughput, 2 berths Phase: I

Crude throughput: 25 million tonnes

Berths: 2

VLCC berths: Two

Table: Detailed results analysis phase I. KPI Berth occupancy

49.09%

Average waiting time

9.05hrs

Ships waiting

65

Accumulated waiting time

591hrs

KPIs Phase I – 25 million tonnes two berths terminal configuration Limitations: None

4.2 Design questions Terminal management has the following design questions that need answering: 1. What is the expected berth occupancy and vessel waiting time in phase I? 2. Is an additional berth required if terminal throughput is increased to 35 million tons in phase II? 3. What would be the maximum terminal throughput in phase III? 4. If we add a third berth in phase II or III, should it accommodate vessels up to Suezmax or to VLCC? 4.2.1 Expected berth occupancy and vessel waiting time in phase I The results of scenario 1 show an expected berth occupancy of <= 50% and an average vessel waiting time of around 9 hours. This is well within the pre-defined boundaries for waterside limitations and the scenario is therefore considered as a high level of service scenario.

berth is required. However, if terminal management wants to construct the third berth in the third phase of terminal operation, there are a couple of options: 1. Accept an increased cumulative waiting time of 1716, which exceeds the boundaries for “high level service” with 216 hours per year.

Terminal management might build a business case comparing the costs of the construction of a third berth to potentially increased demurrage costs.

2. Limit the annual terminal throughput to 33 million tonnes of crude Scenario 5 shows that the maximum annual throughput within waterside limitations is 33 million tonnes of crude.

If terminal management decided to limit the annual throughput the construction of an additional berth is not required in phase II. 3. Change vessel mix for

4.1 Overview scenario results Scenario

Terminal configuration

Max crude throughput

Bottleneck

Scenario 1

2 berths, 2 berths suitable for VLCCs

25 million tonnes

No waterside bottlenecks

Scenario 2

2 berths, 2 berths suitable for VLCCs

35 million tonnes

Pre-berth waiting time

Scenario 3

3 berths, 2 berths suitable for VLCCs

35 million tonnes

No waterside bottlenecks

Scenario 4

3 berths, 3 berths suitable for VLCCs

35 million tonnes

No waterside bottlenecks

Scenario 5

2 berths, 2 berths suitable for VLCCs

33 million tonnes

No waterside bottlenecks

Scenario 6*

2 berths, 2 berths suitable for VLCCs

35 million tonnes

No waterside bottlenecks*

Scenario 7

3 berths, 3 berths suitable for VLCCs

56 million tonnes

No waterside bottlenecks

Scenario 8

3 berths, 2 berths suitable for VLCCs

55 million tonnes

No waterside bottlenecks

Scenario 9

3 berths, 2 berths suitable for VLCCs

56 million tonnes

Pre-berth waiting time

Overview of scenario results *Scenario 6 uses an alternative vessel mix for exporting crude Conclusion The scenarios described in the above table are a selection of all analysed scenarios.

The selected scenarios describe the boundaries of the terminal performance

94

general either the landside or the waterside operations are leading as bottleneck. Optimal terminal design balances the waterside and landside operations. Therefore, the conclusions as found in this case study should be used as

4.2.2 Increasing annual crude throughput to 35 million tonnes Scenarios 2 to 6 are used to analyse an increased annual terminal throughput of 35 million tonnes. If the waterside limitations are strictly applied an additional

exporting crude Currently terminal management foresees a differentiation in the fleet used to export crude as follows: - 10% of the crude is exported on VLCC

November/December 2013 • TANK STORAGE

investment - 40% of the crude is exported on Suezmax - 50% of the crude is exported on Aframax.

If terminal management is able to increase the percentage of crude exported

by VLCC to 20% and decrease the percentage of crude exported by Aframax to 40%, for example, by altering contracts with terminal customers, the terminal’s waterside operations are within limitations.

The maximum annual terminal throughput is 56 million tonnes.

As scenario 7 shows, this requires the construction of a third berth that needs to be able to handle vessel sizes up to VLCC. The terminal needs to dredge part of the basin to facilitate VLCC’s on the third berth, which has an impact on CAPEX. However, terminal management has other options, as is shown in 4.2.4.

is required when adding a third berth to the terminal.

The current third berth basin is able to accommodate Suezmax vessels and needs to be dredged to accommodate VLCC’s, therefore increasing CAPEX.

VLCC or Suezmax berth

Phase II The terminal management has three options to operate the terminal within waterside limitations using only two berths.

Maximum terminal throughput in phase III

Terminal management wants to know if dredging

Phase III Dredging of the basin is

not advised to terminal management, since adding a berth capable of handling VLCC is increasing annual terminal throughput by 1 million tonnes.

For more information:

This article was written by Joost Smits, business development manager at Systems Navigator, joost.smits@systemsnavigator.com +31 15 750 1032

Each listing includes: Terminal name Country Town Company website Capacity in m³ Number of tanks Products stored

Independent Tank Terminal Map 2013 With over 800 terminal locations plotted, the updated 2013/14 version is the most comprehensive map yet of oil and chemical tank terminal locations worldwide.

With so many sites being upgraded in terms of expanded capacity and products handled, the Tank Storage magazine Independent Tank Terminal Map is the perfect reference source.

So if your company is, or looking to be, active in the tank terminal business then this is an invaluable and unequalled source of market information.

Contact us today to order your copy at marketing@horseshoemedia.com or order through our website at www.tankstoragemag.com/its_map.php

TANK STORAGE • November/December

95

events december 2013 Official magazine n 10-11th December Tank Storage Asia Max Atria, Singapore Expo This two-day conference and expo brings together terminal operators, traders, regulators and equipment suppliers.

Technology on display at the exhibition includes everything from tank design, construction and maintenance, to innovations in metering and measuring, pumps and valves, and automation and loading equipment.

February 2014

n 24-27th February 4C Environmental Conference Austin, Texas Formerly known as the LBTF Conference, the event’s name change to the 4C Environmental Conference reflects its broader focus on addressing the most pressing environmental issues. A fourth day has also been added to the schedule to accommodate additional trainings and a new advanced training track.

The 2014 conference will bring together industry experts to share insights and best practices and environmental enforcement topics of the day.

MARCH 2014 Official magazine n 18-20th March StocExpo Ahoy, Rotterdam, the Netherlands The Storage Terminal Operators’ Conference & Exhibition (StocExpo) provides a platform for terminal operators, traders, regulators and equipment suppliers to do business. The 2013 event boasted more than 180 exhibitors from 29 countries across the world. A worldrenowned conference will run alongside the three-day exhibition.

APRIL 2014

n 9-10th April FPS Expo 2014 Harrogate, UK A key event for the oil distribution industry in the UK and Ireland, FPS Expo will take place at the Harrogate International Centre. It will be attended by a range of senior professionals from across the UK, Europe and as far afield as the US to learn more about the latest industry innovations.

advert index 8 Arflu

n 23-25th April NISTM: 16th Annual International Aboveground Storage Tank Conference & Trade Show Orlando, Florida The conference and tradeshow will be held at the Rosen Shingle Creek Hotel for three days.

A golf tournament and welcome reception will take place on 22 April.

15

8 Atreus 75

8 Auma 34

8 Belven 20

8 Bornemann 28

8 CB&I 9

May 2014 n 6-8th May Tank World Expo & Congress Dubai, UAE Over 60 exhibitors and 1,000 customers are expected to attend the expo next year, which is supported by industry players such as Saudi Aramco and Horizon Terminals. An unmissable event for suppliers of all tank farm civil, mechanical and instrumentation systems and services.

8 CST Covers

68

8 Diamond Key

82

8 EA Projects

26

8 Emco Wheaton

17

8 Emerson

Front Cover, 7

8 Endress & Hauser

23

8 Ergil 11

June 2014 n 2-4th June Gold sponsor ILTA Houston, Texas The International Liquid Terminals Association aims to provide its members with information and tools to facilitate regulatory compliance and improve operations, safety and environmental performance, in addition to offering opportunities for relationship building, networking and knowledge sharing.

8 Full Most

71

8 Hayward Baker

57

8 HMT 67 8 Honeywell Enraf

27

8 IMHOF 84

8 Ivens 83

8 Kanon 5

october 2014

8 L&J 31

n 21-22nd October Official magazine TSA Canada Calgary, Canada Tank Storage Canada provides the opportunity for terminal operators, traders, regulators, as well as equipment suppliers, to come together to network and do business. The show consists of a two-day conference and exhibition, where visitors from around the world, including Singapore, Pakistan, Europe and North America, are expected to attend.

8 Lightning Master

13

8 Magnetrol 58

8 Massa 24 8 Nordic Storage

22

8 Oreco 25 8 Port of Amsterdam

18

8 Protego 21

8 Ragworm 81

8 Rosen 40 8 Rotary

Outside Back Cover

8 Saval 36 8 StocExpo

Inside Back Cover

8 Tank Storage Asia

65

8 Toptech 52

Tank Storage magazine (ISSN 1750-841X) is published six times a year (in January, March, May, July, September and November) by Horseshoe Media Ltd, Marshall House, 124 Middleton Road, Morden, Surrey, SM4 6RW, United Kingdom.

The 2013 US Institutional subscription price is $240. Airfreight and mailing in the USA by Agent named Air Business, C/O Worldnet Shipping USA Inc., 155-11 146th Street, Jamaica, New York NY11434. Periodical postage pending at Jamaica NY 11431.

Subscription records are maintained at Horseshoe Media Ltd, Marshall House, 124 Middleton Road, Morden, Surrey, SM4 6RW, United Kingdom.

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8 TTS Seal

48

8 United Rivermead Terminals

35

8 Veolia P43

Inside Front Cover

8 Vincotte 54 8 Volcanic

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