Tank Storage magazine January 2013

The voice of the storage terminal industry

january/february 2013

Volume No. 9 Issue No. 1

2013: is luck in store for the storage sector?

In the storm’s wake

Hurricane Sandy put terminals, tanks and the supply chain to the ultimate test

Double capacity: double trouble?

We speak to the local terminals about whether Fujairah is in danger of too much storage supply

Regional focus: middle east

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Margaret Dunn Publisher

As we enter 2013 there’s been a lot of talk about whether this year is lucky or unlucky. But when it comes to business, very little comes down to luck

Get a head start to the New Year It is safe to say that over the last few years, where many sectors have struggled to survive in troubled economic times, the terminal industry has remained relatively resilient.

To see if the same will remain true for 2013 we’ve interviewed a selection of the market leaders to hear their thoughts.

Despite a decline in demand for many products and a slower than expected economic recovery, all the operators we spoke to reported positive results from 2012, with investments and growth as fervent as ever.

What this comes down to, we’ve found, is not so much luck, but strategy and above all a deep understanding of the market.

Prolonged backwardation continues, for example, leading to lower utilisation rates compared to previous years. In Singapore some of the biggest fuel oil traders in Asia are even giving up tanks, saying that onshore storage has become just too expensive under these market conditions.

Throughput, however, remains strong as customers use tankage more intensively. To capitalise on this, operators need to ensure their terminals work as effectively as possible, focusing on customer service and safety.

When it comes to staying in the red, the importance of understanding your location cannot be underestimated.

In North America, for example, shale play developments continue to stimulate new demand for capacity, and refinery closures, product imbalances and biofuels growth all play their part.

It is the Middle East, however, that is the shining star of the moment. Storage capacity in the region is anticipated to double to 15 million m3 by 2015 from 5.4 million m3 at the end of 2012, largely due to new refineries, pipelines and its emergence as a new break bulk location.

Within the space of just a year up to

TANK STORAGE • January/February 2013

six terminals have or will come online, prompting the question of whether such a growth spurt may prove too much.

Within this issue we’ve put this question to the local operators. The general consensus is that over capacity will not be a problem in the long term, and that growth will stabilise in the next two to three years as the market absorbs all the new capacity.

Some terminals, such as Vopak and VTTI, however are sensibly exercising caution.

Despite having the location and space in Fujairah and the potential to grow, the companies are unwilling to commit to a timetable for expansion until it is justified by market demand.

This is something the industry, as well as us, will be keeping a close eye on this year.

For the first time Tank Storage magazine will be the lead partner in a new event in Dubai, Tank Storage Forum: MENA 2013, in April this year.

As mentioned, in order to succeed in this business it is absolutely critical to stay ahead of market changes. And that’s where we come in – we aim to keep you informed and, if last year is anything to go by, 2013’s going to be another busy one!

Best wishes, Margaret

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contents

January/February 2013 Volume 9 issue 1 Horseshoe Media Ltd Marshall House 124 Middleton Road, Morden, Surrey SM4 6RW, UK www.tankstoragemag.com MANAGING DIRECTOR Peter Patterson Tel: +44(0)20 8648 7082 peter@horseshoemedia.com Publisher & editor Margaret Dunn Tel: +44 (0)20 8687 4126 margaret@tankstoragemag.com Deputy editor James Barrett Tel: +44 (0)20 8687 4146 james@tankstoragemag.com Assistant Editor Keeley Downey Tel: +44 (0)20 8687 4183 keeley@horseshoemedia.com Advertising Sales manager David Kelly Tel: +44 (0)203 551 5754 david@tankstoragemag.com South American sales representative Roberto Bieler +55 21 3268 2553 +55 21 9465 2553 rbieler@farbitec.com PRODUCTION Alison Balmer Tel: +44 (0)1673 876143 alisonbalmer@btconnect.com 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 Contact: Lisa Lee Tel: +44 (0)20 8687 4160 Fax: +44 (0)20 8687 4130 marketing@horseshoemedia.com 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.

contents news 1 Comment 2 Contents

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4 Terminal news

Searching for a liner resistant to benzene

24 Technical news 30 Incident update

features 32 Germany: new changes explained 34 2013: is luck in store for the storage sector?

A snapshot of operators across the globe share their hopes for the year to come 43 Double capacity: double trouble?

Operators in Fujairah are feeling pleased with themselves: refinery capacity is growing, the new ADCOP pipeline has just opened and the location is attracting traders from all across Asia. We speaks to the main players to find out whether they are now in danger of overcapacity..

48 Tank terminal update – Middle East 53 In the storm’s wake

Hurricane Sandy shut oil distribution infrastructure in the Northeast down cold at the end of last year, putting terminals, tanks and the supply chain to the ultimate test

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Covering all angles How one terminal combined GPS and laser scanning for a comprehensive insight into the facility’s containment capacity

ISSN 1750-841X

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January/February 2013 • TANK STORAGE

contents

41 76

High risk upgrades The Port of Los Angeles is a flurry of activity as pressure intensifies to upgrade and repair oil terminals, some of which have been labelled ‘high risk’ by California state officials

A Prime location With so much happening in Fujairah, Tank Storage magazine talks to IL&FS Prime Terminal, one of the latest companies to break ground in rapidly developing region

56 Training: just line a fine wine

features 60 Renovated tank foundations – design and safety considerations 63 Is a floating roof enough for shale oil tanks?

66 Making the commitment

Since degassing is one of the most dangerous and regulated procedures in a refinery, it’s important for all vendors to remain 100% dedicated to compliance and safety

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Tank Storage Asia 2012: good news all round

67 Vapour recovery: a glossary of terms 71 Logistics solution for marine loading arms holds key to refinery expansion

The voice of the storage terminal industry

JANUARY/FEBRUARY 2013

Volume No. 9 Issue No. 1

2013: is luck in store for the storage sector?

74 How to avoid breaking the supply chain 88 Events page Ad index

In the storm’s wake

Hurricane Sandy put terminals, tanks and the supply chain to the ultimate test

Double capacity: double trouble?

We speak to the local terminals about whether Fujairah is in danger of too much storage supply

REGIONAL FOCUS: MIDDLE EAST FC_TSM_Jan-Feb_2013.indd 1

16/01/2013 16:56

Front cover courtesy of CST Covers

TANK STORAGE • January/February 2013

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terminal news

CLH Group plans €60 million investment throughout 2013 Spain-based oil transportation and storage provider CLH Group has set aside €60 million which it will earmark this year for infrastructure network expansions and improvements.

Around €41 million of this total budget will be used for improving the company’s storage terminal facilities.

This includes completing Phase I of a new storage facility at the Port of Bilbao and €2 million that will be used to finalise the construction of new storage terminals in Castellanos de Moriscos (Salamanca). A further €3 million will be used for expanding storage capacities at other sites.

Additionally, various safety and environmental improvement projects will get underway this year with a €17 million investment, and a further €15 million to be spent on operational improvements.

CHL has dedicated €15 million to extending its pipeline network, more than €5 million of which will go towards building a pipeline that will connect its Torrejon de Ardoz-based storage terminal and the Madrid-Barajas airport.

The company says it also wants to expand and improve a number of its CLH Aviacion facilities.

Between 2007 and 2011 CLH Group spent in excess of €750 million to establish 1.2 million m3 of new storage capacity and over 500km of pipeline infrastructure. This included the startup of new storage terminals in Arahal, Seville; Mahon, Minorca; and Burgos.

The group also expanded storage capacity at several centres, including in Albuixech (Valencia), Huelva, Leön, Gijón, Son Banya (Majorca), Navarre, Barcelona, Castellón, Algeciras, Cartagena and Malaga.

This significant capital expenditure also saw expansion and improvement works carried out at several airport facilities, such as Alicante, Malaga, Vigo, San Javier, Pamplona and La Rioja. CLH also built on its aviation fuel distribution network at Barcelona airport, with the construction of two new fuel supply lines between the CLH Aviación facility and the new hydrant network in El Prat’s new Terminal 1.

URS to assess Holly Energy Partners proposed pipelines Holly Energy Partners has selected URS to carry out initial engineering, routing and cost estimates on two new pipelines the company hopes to develop.

The first proposed pipeline will transport crude oil from Cushing, Oklahoma to a refinery in Tulsa, owned by independent oil refining company HollyFrontier’s subsidiary Holly Refining and Marketing – Tulsa (HRM Tulsa).

This 20” pipeline would stretch 50 miles, carrying local and Canadian crude oil to HRM Tulsa’s 125,000 bpd facility. Crude oil processed at the refinery is currently transported on pipelines owned by Sunoco Logistics and Magellan Pipeline Company.

The second proposed pipeline by Holly Energy Partners is a 100-mile, 8” interstate petroleum products pipeline between Denver, Colorado and the 52,000 bpd Frontier Refiningowned Cheyenne, Wyoming refinery. Frontier Refining is another subsidiary of HollyFrontier.

Petroleum products produced at Frontier Refining’s Wyoming-based refinery are currently transported to Denver on the Rocky Mountain Pipeline’s products line owned by Plains All-American.

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CLH will invest €41 million on storage terminal improvements this year

Calumet completes acquisition of NuStar terminal and refinery Calumet Speciality Products, a hydrocarbon product refiner and processor, has finalised the previously-announced acquisition of NuStar Energy’s San Antonio, Texas-based refinery, the Elmendorf terminal, and crude oil pipeline connecting the two facilities.

Calumet acquired the assets for $115 million (€87 million): $100 million purchase price and $15 million closing date inventory.

The San Antonio refinery, with a 14,500 bpd throughput capacity, handles various products including jet fuel, ultra-low sulphur diesel, naphtha, reformates, LPG, speciality solvents and other specialised fuels.

The Elmendorf terminal is approximately 12 miles away from the refinery and stores the processed crude oil at the refinery.

After signing the purchase agreement, NuStar said in a

statement that its decision to sell the facility is part of its strategic redirection to focus more on its pipeline and storage operations.

‘This transaction will give the refinery employees the opportunity to be a part of a refining company with multiple refineries, that also has the depth of refining resources and expertise to provide the support the refinery needs to succeed over the long-term,’ NuStar president and CEO Curt Anastasio said at the time.

NuStar purchased the refinery and terminal out of bankruptcy in April 2011 for $41 million, and the company has invested approximately $54 million since then on improvements. For example, it built and put into service a 12-mile pipeline between the terminal and the refinery that now moves the crude to the refinery.

January/February 2013 • TANK STORAGE

terminal news

Crude oil throughput grows at Port of Rotterdam The Port of Rotterdam has reported a 1.7% increase in freight throughput, with a total 442 million tonnes of cargo passing through the port in 2012.

Speaking about liquid bulk throughput Hans Smits, president and CEO of the Port of Rotterdam Authority, says: ‘More crude oil and oil products in particular were handled. The latter category has actually tripled in size over the past 10 years.

That shows that the port is increasingly becoming a hub for global trade. This helps it to continue to grow, as global trade generally develops faster than the Dutch and the European economies.’

The port enjoyed a 6% increase in crude oil during 2012. The handling of mineral oil products was up by 12%.

The port authority attributed this to increased oil product trade, mainly due to price differences of fuel oil in Europe and Asia. For example, shipping Russian fuel oil via the Port of Rotterdam to the Far East is beneficial.

The throughput of naptha, gasoil, diesel, kerosene and petrol also grew last year.

Crude oil handling increased last year at the Port of Rotterdam

LNG imports, on the other hand, were low as it was transported mainly to the Far East rather than Europe due to high prices in Asia.

In a statement, the authority said the handling of other liquid bulk products rose by 4% due to the start-up of Neste

Gibson Energy to spend $137m on terminal and pipelines sector Canadian independent midstream energy company Gibson Energy will invest $304 million (€234 million) in 2013 after its capital spending plans were approved by its board of directors.

Under the plan, Gibson will spend 77% of the total $304 million on growth investments, $137 million of which is earmarked for the terminal and pipelines segment.

Investments are also planned for the truck transportation and environmental services segments.

‘Planned spending is heavily weighted towards our terminals and pipeline segment, which should enable our integrated oil-levered assets to provide diversified cash flow and stability through various commodity and drilling cycles,’ explains Gibson Energy’s president and CEO Stewart Hanlon.

Throughout 2013, Gibson’s funds will go towards continuing

to expand the Hardisty Terminal by adding large storage tanks backstopped by long-term contracts and unit train rail opportunities, and growing the Edmonton Terminal by increasing pipeline connectivity.

The company also wants to increase its presence in the North American oil plays such as the Western Canadian Sedimentary Basin, Bakken, Niobrara, Granite Wash, Eagleford, Tuscaloose Marine and the Gulf of Mexico regions through expanding its terminal and pipelines business in the US. Gibson will spend approximately $69 million on upgrades and replacements this year. That is higher than previous years due to the growth in assets across the company and resultant EBITDA growth.

Gibson believes its 2014 spending capital will exceed $200 million with 60-65% of this allocated to the terminals and pipelines segment.

TANK STORAGE • January/February 2013

Oil’s palm oil imports and rising biodiesel imports. A total 214 million tonnes of liquid bulk was handled in 2012.

The Port of Rotterdam Authority expects growth of around 2% this year, with 2013’s throughput levels expected to reach around 450 million tonnes.

MIC companies recover from Hurricane Sandy Macquarie Infrastructure (MIC) has reported that its operating companies InternationalMatex Tank Terminals (IMTT) and Atlantic Aviation have largely recovered from the effects of Hurricane Sandy in the US. IMTT’s bulk liquid storage facility at Bayonne, New Jersey was affected during the storm but the company says the facility is now substantially receiving and delivering all products by all modes of transport.

Permanent power has been restored to most of the facility and those parts still without have backup systems in place.

Atlantic Aviation’s fixed base operations at airports in Teterboro, New Jersey; Farmingdale, Long Island; and Bridgeport, Connecticut, as well as its heliport in New York City were damaged or disrupted by the hurricane. Each facility has been restored and normal operations have resumed.

MIC expects its financial results for the fourth quarter to reflect approximately $2.3 million (€1.7 million) in payments of insurance deductibles and less than $5 million in total impact from the storm.

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terminal news

Westway sells foreign terminals to ED&F Man Holdings An affiliate of private equity investor EQT Infrastructure II will acquire all of the outstanding equity securities of bulk liquid storage and liquid animal feed supplement provider Westway Group after the group entered into a definitive agreement.

EQT will invest approximately $419 million (€318.4 million) in aggregate cash consideration, or $6.70 in cash per common share (the merger agreement).

Westway has also entered into a definitive agreement to sell a number of its bulk liquid storage terminals located in Ireland, Denmark, Korea and the UK to an affiliate of ED&F Man Holdings, its largest stockholder, for a purchase price of around $115 million, in addition to its liquid feed supplement business called Westway Feed Products.

‘EQT Infrastructure II has a strong track record in the bulk liquid storage sector and will be an excellent

partner for our terminal employees and customers,’ says Francis Jenkins Jr., chairman of Westway and chairman of the special committee.

Glen Matsumoto, partner at EQT Partners in the US, investment advisor to the EQT Infrastructure II, adds: ‘Demand for storage services continues to grow as the global supply chain for a number of industries becomes increasingly complex. We believe that Westway’s ability to provide reliable storage services to existing customers while expanding storage services to other growing markets will help foster its next stage development.’

Under the terms of the merger agreement, Westway’s stockholders will receive $6.70 in cash for each outstanding share of Westway Class A Common Stock or Class B Common Stock they own.

The transaction is expected to close later this quarter.

TransMontaigne to participate in BOSTCO project Petroleum fuels distributor TransMontaigne Partners has received approval from Morgan Stanley to acquire a 48.75% ownership interest in the Battleground Oil Specialty Terminal Company (BOSTCO) terminal project.

The BOSTCO project involves building a new black oil terminal facility on the Houston Ship Channel – part of the Port of Houston in Texas, US – for an estimated $415 million (€317 million). The initial phase involves the construction of 50 storage

tanks totalling 6.1 million barrels capacity for residual fuel, feedstocks, distillates and other black oils.

The terminal will also feature one of the deepest vessel drafts in the Houston Ship Channel. Its development comes at a time when the trend of exporting petroleum products overseas continues to grow.

The transaction is expected to be finalised before February, subject to agreements and approval from TransMontaigne’s board of directors.

Plains All American invests $125m in Eagle Ford assets Plains All American Pipeline (PAAP) has acquired crude oil and condensate gathering assets from a Chesapeake Energy subsidiary.

The assets are located in the Eagle Ford area of south Texas and cost PAAP approximately $125 million (€95.5 million), including: • 300,000 barrels of storage capacity under construction • 40 miles of crude oil/

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condensate gathering pipelines with a throughput capacity of around 50,000 bpd • 150,000 barrels of existing crude oil and condensate storage capacity • Truck unloading terminal.

‘The acquired assets are complementary to and will be connected with our existing crude oil and condensate gathering systems,’ PAAP said in a statement.

news in brief...

Longwei Petroleum upgrades storage at Gujiao facility China-based energy company Longwei Petroleum Investment has completed upgrades and scheduled maintenance works at its storage facility in Gujiao, Shanxi Province.

The upgrades included new coatings for its large storage tanks. The facility has a storage capacity of 70,000 tonnes of petroleum products.

Longwei Petroleum’s Gujiao plant has been in service since November 2009. The company currently has three facilities in Shanxi Province.

The company’s Huajie facility is the most recent and came online in October last year.

Fifty-five oil projects to come online by Q1 this year Fifty-five Mehr Mandegar oil projects worth $21.5 billion (€16 billion) are planned to come online in Iran by the end of March.

Thirty-two of the 55 projects are oil and 13 petrochemical. A further eight are gas and two are oil refining projects. Two of the 13 petrochemical projects – Kavian Petrochemical Plant and West Ethylene Pipeline – worth $2 billion began operations in December. The remaining projects are scheduled to come online gradually.

Mohesen Khojastehmehr, the deputy oil minister for planning and supervision on hydrocarbon resources and secretary of Mehr Mandegar Projects HQ at the Petroleum Ministry, was reported to have said: ‘The Kermanshah petrochemical plant plus eight projects in Imam Kohmeini Port, south of Iran, including an NF3 project are ready for start-up.’

Government to reacquire oil tank farm from IOC Sri Lanka’s United National Party government is to reacquire the Trincomalee oil storage tank farm in China Bay that it currently leases to the Indian Oil Corporation (IOC).

The tank farm is based on 850 acres of land and consists of 99 storage tanks, each with a capacity of 12,100 tonnes. It connects to the Trincomalee harbour and is the largest tank farm located between the Middle East and Singapore.

It was reported that IOC has violated a number of government standards and a cabinet paper is soon to be issued for the reacquisition of the tank farm.

January/February 2013 • TANK STORAGE

terminal news

TANK STORAGE • January/February 2013

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terminal news

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Oiltanking keeps on growing The company’s senior management talks us through the latest acquisition of Helios terminal in Singapore

Breaking ground in the literal sense With the Jurong Rock Cavern operatorship still scheduled to begin next year, JTC discusses the project so far

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To get advertising prices or to request a copy of the media pack for 2013 please contact: David Kelly on +44 (0) 203 551 5754 or david@tankstoragemag.com For editorial information please contact Margaret Dunn on +44 (0) 208 687 4126 or margaret@tankstoragemag.com January/February 2013 • TANK STORAGE

terminal news

Ineos signs LOI to build new ethane storage tank Chemical company Ineos and project contractor TGE Gas Engineering have signed a letter of intent to build a new ethane storage tank at Ineos’ Rafnes terminal in Norway.

The deal also includes expanding existing infrastructure at Rafnes, due for completion in 2015.

The additional tank and new infrastructure follow Ineos’ recent completion of supply and infrastructure agreements that allow it to access ethane feedstock from the US which it will use in its European cracker facilities.

Ineos says the additional ethane will supplement existing supplies and create options to replace liquid petroleum gas (LPG) which is more expensive.

The companies are due to break ground on the project in February or March (subject to signature of the final contractual agreements), with construction slated to last two years. The tank will be able to store initial loads of ethane from Q2 2015.

Under a 15-year agreement, Range Resources Appalachia will lift the ethane from the Marcus Hook Industrial Complex in Philadelphia from 2015 onwards.

‘This is good news for Rafnes and for the petrochemical industry in Grenland. The investment is a real vote of confidence in the Rafnes site by Ineos that helps secure our long-term future and profitability of the site,’ Magnar Bakke, site manager at Ineos Olefins and Polymers Norway, says.

He adds: ‘The building of the tank will provide construction jobs over the next two years, but it helps to secure jobs here for much longer. The investment in a new storage tank and infrastructure gives the site important longterm options, in addition to our current supply arrangements, to access raw materials from around the world.’

TANK STORAGE • January/February 2013

Spectra Energy to purchase 100% of Express-Platte pipeline Pipeline transportation and energy storage company Kinder Morgan Energy Partners is to sell its 33% stake in the Express-Platte pipeline.

Natural gas infrastructure firm Spectra Energy is acquiring 100% of Express-Platte for $1.49 billion (€1.14 billion) and this means Kinder Morgan’s Canada-based JV partners, Ontario Teachers’ Pension Plan Board and Borealis Infrastructure, will also sell their interests in the pipeline system.

Express-Platte is a 1,700 mile oil pipeline system connecting Canadian and US producers to refineries in the Rocky Mountain and Midwest regions of the US. The 280,000 bpd pipeline, which is made up of both the Express and Platte crude oil pipelines, begins in Hardisty, Alberta and terminates in Wood River, Illinois.

The sale is expected to close later this year subject to customary

consents and regulatory approvals.

Kinder Morganx’s chairman and CEO Richard Kinder says the deal is a ‘win-win transaction for both KMP and Spectra Energy’, adding: ‘Spectra Energy is purchasing a good pipeline system. In exchange KMP will receive a very attractive price.

‘Based on the structure of KMP’s investment with our Express-Platte partners, KMP receives approximately $15 million of cash flow on an annual basis from this investment, which is primarily debenture interest. We will redeploy the proceeds from this sale into various growth projects to further benefit our unit holders.’

Greg Ebel, president and CEO of Spectra Energy, comments: ‘This system is strategically located to supply crude oil to the US refining markets. It also represents an incremental growth platform for us that enables further investment in related crude and refined product assets.’

Express-Platte will connect producers to refineries in the Rocky Mountain region

Enbridge Income Fund acquires crude oil storage assets Publicly traded corporation Enbridge Income Fund Holdings and Enbridge Income Fund have bought crude oil storage and renewable energy assets after closing the acquisition of entities which own these assets from Enbridge and some of its indirect wholly owned subsidiaries.

The acquisition, closed by indirect wholly owned subsidiaries of the Fund, cost $1.164 billion (€895 million).

‘We are pleased to add these assets to the Fund’s low-risk energy infrastructure portfolio,’ says John Whelen, president

of Enbridge Income Fund Holdings.

‘They are all underpinned by long-term fixed price contracts which generate steady cash flow and will serve to further diversify the Fund’s overall business mix.

‘Going forward, we expect that crude oil transportation and storage will generate roughly 40% of distributable cash flow, while green power and gas transmission will contribute approximately 40% and 20% respectively,’ he continues, adding the ‘acquisition will substantially scale up our crude oil transportation and storage business in Western Canada’.

9

terminal news

Jathavedan Nampoothiri Senior Vice President (Terminalling) IOT Infrastructure & Energy Services Limited

We Can, We Care As part of the Business Development team at IOT Infrastruc-

sectors in India and abroad, by providing both independent

ture & Energy Services Ltd. (IOT), Jathavedan Nampoothiri

terminalling services and customised exible business models

actively pursues opportunities to develop new terminals on

for design and engineering, construction and the operation

the Indian subcontinent every day. IOT has been and will

of terminals. Jathavedan Nampoothiri is always enthusiastic

remain important for the Petroleum and Petrochemicals

about his work because he cares about making a difference.

Your reliable storage partner for liquid bulk.

10

Admiralitaetstrasse 55 | D-20459 Hamburg Germany Tel. +49-40-370990 0 | Fax +49-40-37099 499 | www.oiltanking.com

January/February 2013 • TANK STORAGE

terminal news

Plains All American withdraws from $500m tanker terminal

BlendStar’s train terminal is located in Birmingham, Alabama

Green Plains subsidiary opens new terminal Ethanol producer Green Plains Renewable Energy’s wholly owned subsidiary BlendStar has commenced operations at its newly built 96-car train terminal in Birmingham, Alabama.

The new terminal is served by the BNSF Railway and has an annual throughput capacity of 300 million gallons of ethanol.

‘The Birmingham terminal will provide more efficient distribution

of ethanol to underserved markets in the south eastern US,’ says Todd Becker, president and CEO of Green Plains. ‘We have unloaded the first unit train of ethanol and expect the terminal to be at full capacity in January 2013.’

The Birmingham terminal currently has storage for 160,000 barrels and a four-lane covered truck rack but both of these have the potential to be expanded.

Vopak EMEA enters negotiations for Vassilikos storage terminal The government of Cyprus is establishing a petroleum storage and delivery terminal in the island’s southern location of Vassilikos and has selected Vopak Oil EMEA (Europe, Middle East and Africa) Division as a strategic partner and investor for the project.

Vopak Oil EMEA has already been awarded the tender for the terminal, which has been under development since 2004. A basic plan for the project was completed in 2006.

Talks between the two parties started on 12 December. When negotiations have finished, the issue will be taken back to the Council of Minister for a final decision. It is not known how long it will be until a final decision is made, however

government spokesman Stefanos Stefanou reportedly said it was important for the ‘issue to proceed as quickly as possible’.

‘After evaluating the results of the tenders’ requests [Vopak] was selected as a strategic partner for the fuel terminal and storage facility in Vassilikos. We are now in the final stretch of the creation of a petroleum delivery and storage terminal,’ Stefanou was quoted as adding.

The project is believed to be of great economic benefit to Cyprus when it becomes operational. In addition, it will resolve the problem of limited storage capacity for petroleum products.

Private company VTT is also building a fuel terminal at Vassilikos, expected to be completed in 2014.

TANK STORAGE • January/February 2013

Houston, US-based Plains All American Pipeline (PAAP) has pulled out of building an oil tanker terminal at the Port of Los Angeles.

Following project approval in 2008, the company was to construct a $500 million (€387 million) berth for oil tanker terminals and a new pipeline which would transport the incoming oil to nearby storage terminals.

However, PAAP has withdrawn its plans, saying a number of reasons affected development at the port, including on-going delays, the economic financial crisis and a significant shift towards domestic oil production. The port was notified about the company’s change of plan in November last year.

Fifty per cent of the $3 million environmental impact report was paid by Plains All American and the other half came from the Port of Los Angeles, which will not be repaid for this. The port says it hopes to fill the now redundant site as soon as possible.

The project was a concern within the local community as it was feared a new tanker terminal would create increased levels of pollution in the area.

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terminal news

news in brief...

Plains All American Pipeline closes acquisition of crude rail terminals Plains All American Pipeline has closed the previously announced $500 million (€382 million) acquisition of loading and unloading assets and various contractual arrangements from US Development Group.

The assets include four operational crude oil rail terminals: three crude oil rail loading terminals located in Eagle Ford, Bakken and Niobrara; and a 140,000 bpd rail unloading terminal at St James, Louisiana.

Canexus will connect NATO to Meg Energy’s Stonefell Terminal via pipelines

Canexus NATO expansion approved Calgary-based chemical manufacturing and handling company Canexus will go ahead with the $125 million (€95.5 million) expansion of its Bruderheim, Alberta-based North American Terminal Operations (NATO) following approval from its board of directors. The expansion involves developing pipeline-connected unit train operations.

The company has also reached an agreement with Canadian oil sands company Meg Energy to connect the Bruderheim terminal to pipelines which interconnect with Meg’s Stonefell Terminal.

Canexus will provide Meg with terminalling services, under the agreement, for the loading of bitumen blends for transport by rail and the receiving of diluent shipments by rail.

In addition to connecting the terminal to Meg’s pipelines, this next phase of the NATO expansion could see Canexus connect the Bruderheim terminal to a second pipeline-connected facility close by.

It also plans to build out the rail infrastructure, loading/offloading and aboveground tank storage required to allow for a unit train movement of up to 118 tank cars (approximately 70,000 barrels) in single trains daily.

The expanded capabilities are slated to be operational in the second half of this year.

‘We are pleased to announce full project approval of the expansion of our Bruderheim terminal capabilities that will include pipelineconnected unit train operations for large scale movements of bitumen blends and diluent by rail,’ says Gary Kubera, president and CEO. ‘An agreement has been reached with Meg Energy to connect Bruderheim with the Stonefell Terminal. Significant progress on a potential second pipeline/terminal connection to Bruderheim has also been made and negotiations are proceeding with additional customers for unit train shipments from Bruderheim under multi-year, take-or-pay terms.’

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Inergy Midstream completes COLT Hub acquisition Inergy Midstream, a Kansas, Missouri-headquartered energy storage and transportation company, has completed the acquisition of Rangeland Energy for $425 million (€326 million).

Rangeland owns and operates the COLT Hub – a system made up of a crude oil rail terminal, storage capacity and related infrastructure. The hub serves oil refiners, marketers and producers, and has contracted aggregate volume commitments of approximately 150,000 barrels of crude per day.

By acquiring the COLT Hub, Inergy Midstream has expanded its shale-focused infrastructure portfolio.

Inergy Midstream has also finalised the long-term debt and equity financing related to the COLT acquisition.

Klaipèdos Nafta signs construction agreement for terminal upgrade Lithuanian oil terminal Klaipèdos Nafta is reconstructing its Dark Fuel Facilities Park.

Having signed an LTL21 million (€6 million) agreement with construction company UAB Rudesta, this is one of the largest investments by Klaipèdos Nafta for the renovation of its infrastructure scheduled for this year.

The reconstruction involves pulling down four 5,000m3 storage tanks and building two new ones, each with a 32,250m3 capacity.

When the project is completed within 12 months, Klaipèdos Nafta will be able to handle both light and dark oil products.

Iran continues to ramp up oil storage capacity Iran now has the world’s largest floating oil terminal, in the Persian Gulf near Bahregan field, Bushehr province.

The terminal alone can handle exports of 2.2 million barrels of oil, and Iran is also building new crude oil storage facilities in the Persian Gulf to increase its onshore storage capacity by 8.1 million barrels, planned for March.

The country is also said to be constructing a new oil storage terminal close to the Strait of Hormuz and, in May, Pirouz Moussavi of Iranian Oil Terminals Company announced that Iran is planning the development of a new export terminal at Bandar Jask on Iran’s Sea of Oman coast, which would be connected to Neka port via a 1 million barrel a day pipeline.

The terminal, expected to cost around $2.2 billion (€1.7 billion) to build, will have a storage capacity of 20 million barrels.

January/February 2013 • TANK STORAGE

terminal news

Pan European Terminals refinances loan note Pan European Terminals has completed a re-financing of its $11 million (€8.5 million) secured fixed-rate loan (the 2011 note) which was raised to fund the acquisition of Dan Balt Tank Lager Terminal in Denmark last November.

The US dollar-denominated 2011 note will be repaid from the proceeds of an £8.5 million (€10.5 million) secured convertible fixed-rate loan note which has been issued by Dan Balt Terminals, a 100% subsidiary of the Pan European Terminals.

The loan note matures on 19 November 2015, carries interest at 10% a year and has been admitted to the Official List of the Channel Islands Stock Exchange (CISX). At the

same time the 2011 note has been delisted from the CISX. The 2011 note carried interest of 15% with an early redemption premium if paid out before May next year. However the early redemption fee has been waived on the 2011 note and no payment has been made.

The loan note may also be converted into ordinary shares of 1 pence each in the capital of the company (ordinary shares) at a price of 22p per ordinary share (conversion), a premium of 25.7% to the closing price of 17.5p on 19 November 2012 and 30.6% to the threemonth average closing price prior to the same date.

Conversion would result in

The state-owned oil company is investing in storage

Sonatrach plans to meet Algeria’s refined demands Algeria’s storage capacity for petroleum products is to grow following an announcement from Sonatrach, the company’s state-owned oil and gas company, that it plans to invest DZD198 billion (€1.9 billion) in the sector.

Sonatrach’s CEO Abdelhamid Zerguine said the investment will help meet the increasing demand for refined petroleum products such as fuels.

He added that the planned capital would raise the country’s refined products storage capacity from seven to 30 days.

Zerguine described the investment plan as a ‘redeployment of our storage strategy that will strengthen and modernise the business to meet the growing demand for refined products’.

TANK STORAGE • January/February 2013

the issue of 38,636,363 ordinary shares representing 27.7% of the Pan European Terminals’ current issued share capital as enlarged by conversion.

Conversion is subject to the company’s shareholders approving the relevant authorities to issue the new ordinary shares arising upon conversion and Pan European Terminals is liable to a penalty payment of £550,000 if such authorities are not approved by 19 November 2013.

It can redeem the loan note at any time after 19 November 2013 on 60 days’ notice without penalty.

The balance of funds, after repayment of the 2011 note, will be used for transaction costs and general working

capital purposes.

Current trading remains in line with the board of the company’s expectations and progress is being made to utilise all the capacity of the company’s terminals in 2013. In addition, the board is continuing to review strategic options for its Russian assets.

Pan European Terminals intends to issue a fuller trading update in due course.

Simon Escott, CEO says: ‘I am pleased to have strengthened the company’s cash position and to have refinanced the loan well before its maturity date at a much reduced cost.

This is especially pleasing in an extremely difficult financial market.’

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terminal news

Hydrocarbon storage facility gathers pace in Far East Singapore-based industrial infrastructure company JTC has launched the second of its two-stage request for proposal to engage an operator to manage, operate and maintain the first phase of the Jurong Rock Caverns (JRC).

The JRC will be Singapore’s first underground hydrocarbon storage facility located at Jurong Island. The first phase will comprise of five caverns to be completed between 2013 and 2014.

Four operators have been shortlisted under the terms of the first stage of the proposal request and they have been invited to submit second stage proposals for evaluation by JTC. The second stage will also include a pre-qualification stage for new interested participants however.

‘JRC will cater to the growing need

14

JTC is developing an underground hydrocarbon storage facility on Jurong Island

for additional storage capacity for liquid hydrocarbons at Jurong Island. The project will help to optimise our land resource and ensure the competitiveness and sustainability of Singapore’s chemical

industry in the long run,’ says JTC assistant CEO David Tan. ‘We’re confident that through this rigorous two-stage RFP we will be able to bring on board a suitable and qualified operator for JRC by next year.’

January/February 2013 • TANK STORAGE

terminal news

Odfjell to expand JV with Lindsay Goldberg Odfjell has signed a letter of intent to expand its existing joint venture with private equity company Lindsay Goldberg.

Under the transaction, Lindsay Goldberg will acquire a 49% stake in Odfjell Terminals (OT), the holding company for Odfjell’s tank terminals business. All remaining tank terminal activities outside of the OT holding company will also be included in the transaction apart from two minority investments. It is further intended for the assets in the existing JV is be fully owned by OT. In exchange for its 49% share, Lindsay Goldberg will contribute its 49% of the existing JV as well as $226 million (€170 million) to OT. Odfjell is currently developing a new tank terminal facility in Charleston, South Carolina and is expanding its existing facility in Houston, Texas. It was also selected to evaluate the development of a new bulk liquids terminal facility in La Havre, France and is exploring opportunities in China, India, Middle East, Africa and South America.

Odfjell president and CEO Jan Hammer says: ‘The proposed transaction follows the success of our existing joint venture with Lindsay Goldberg, who has proven itself as a long-term orientated partner with a strong dedication to developing and creating value for our business. Our greenfield projects in China are significant and we are confident that together with Lindsay Goldberg we can accelerate the development of these projects.’

The proposed transaction is subject to confirmatory due diligence, negotiation and execution of definitive documentation and customary closing conditions.

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TANK STORAGE • January/February 2013

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January/February 2013 • TANK STORAGE

terminal news

NuStar and ConocoPhillips sign long-term agreement Independent liquids terminal and pipeline operator NuStar Energy has formed a longterm pipeline and terminal services agreement with ConocoPhillips to expand its crude oil pipeline system in southern Texas, US. The expansion, expected to cost $100-120 million (€76-92 million), includes building a new pipeline and a 100,000 barrel terminal near Pawnee, Texas. The pipeline will originate from the Pawnee terminal and connect to NuStar’s existing 12” pipeline system between Pettus and Three Rivers.

This existing pipeline will then be linked to the company’s recently completed terminal in Oakville for crude delivery to the NuStar North Beach Terminal.

From here the crude will be transported to the city of Corpus Christi via existing and new pipeline connections that will be established at refineries within the area.

NuStar will also provide truck receiving facilities at the new Pawnee terminal and its facility in Oakville. In addition, NuStar has broken ground on a new ship dock in

Corpus Christi that will support the North Beach Terminal under a long-term lease with the Port of Corpus Christi.

The pipeline expansion project will be completed by the end of 2013 and the new dock facilities are expected to come online early in 2014.

The agreement will allow NuStar to serve ConocoPhillips’ growing production in the Eagle Ford Shale play. The new pipeline and terminal facilities will provide Eagle Ford producers with a cost-effective transportation alternative for their growing production.

‘We are excited to announce another major, accretive expansion in the Eagle Ford region so soon after the acquisition of TexStar’s crude pipeline assets in the Eagle Ford region as it further expands the area our pipeline system can serve,’ says Curt Anastasio, president and CEO of NuStar.

‘We are fortunate to have extensive pipeline and terminal assets already in operation throughout the region with the capacity to easily support an expansion of this size and help support the incredible production

The agreement will see NuStar serve ConocoPhillips’ production in the Eagle Ford Shale play

growth taking place in the Eagle Ford Shale play.’

The investment is backed by a 10-year throughput commitment and, according

to Anastasio, the projects are expected to generate approximately $15 million in incremental, annual EBITDA once fully implemented.

Gulf Petrochem builds new Indian oil terminal

Port of Sohar develops new liquid jetty

Oil company Gulf Petrochem Group has broken ground on its 90,500m2 Pipavav Oil Terminal in Gujarat, India.

The new state-of-theart terminal will be able to handle and store bulk liquid cargoes, and its proximity to major transportation networks means it will have easy access to India’s northwest and central markets.

‘Gulf Petrochem’s Pipavav Oil Terminal is strategically located in southern Gujarat, giving us a logistical

The Port of Sohar in Muscat, Oman is to build a new liquid jetty to accommodate increased liquid imports.

The jetty is designed to handle tankers of up to 120 dwt. It is predicted that the majority of this increased bulk liquid volume will come from OiltankingOdjfell Terminals’ central tank terminal, which has expanded significantly since its opening in 2008.

The joint venture’s storage terminal can

advantage and strongly positioning the company to take advantage of India’s abundant northwest markets,’ Sanjeev Sisaudia, Gulf Petrochem’s group CEO, says.

‘This project will accelerate our expansion drive in key Asian markets.

We will continue to invest in major projects that will enhance our ability to provide reliable, tailor-made solutions at competitive prices, which will ultimately benefit our clients.’

TANK STORAGE • January/February 2013

handle just under 1.3 million m3. It was launched with 842,000m3 of storage capacity and expanded by an additional 425,000m3.

The new terminal grew by a further 27,300m3 in July 2012.

The project is currently in the design phase and this is expected to be finalised in the second half of 2013, when tendering for the construction will start. The new jetty will be brought into operation in early 2015.

17

terminal news

Magellan and Occidental Petroleum proceed with BridgeTex Pipeline

REG expands terminal locations

Magellan Midstream Partners and Occidental Petroleum are continuing with the development of the previously announced BridgeTex Pipeline in the US. With access to refineries at the Houston Ship Channel, Texas City and others across the Gulf Coast via third party pipelines, the BridgeTex Pipeline will move up to 300,000 bpd of Permian Basin crude oil from Colorado City, Texas to the Houston Gulf Coast area.

The project includes the construction of 1.2 million barrels of crude oil storage at Colorado City

Renewable Energy Group (REG), a producer and marketer of biodiesel, has established new biodiesel blending locations at four New York terminal sites.

‘Gaining access to the largest biodiesel terminal network in New York is part of our strategy to expand into the Northeast market as a reliable biodiesel supplier,’ REG president and CEO Daniel Oh says.

These biodiesel distribution points are in New Jersey’s Whippany, and New Hyde Park, Port Chester and Brookhaven in New York and will offer quick access for blending biodiesel to enhance heating oil and diesel supplies.

‘REG has biodiesel onsite in New Hyde Park to allow area distributors and heating oil retailers to increase supply as the New York City biodiesel blend B2 requirement goes back into effect,’ Gary Haer, VP of sales and marketing for REG, adds.

This B2 requirement was scheduled to come into effect on 1 October, however was delayed until 1 December as a result of tight fuel supply issues following Hurricane Sandy.

REG markets its REG-9000 biodiesel and currently producers over 225 million gallons a year.

In addition to its new terminal locations in New York and New Jersey, the company also operates from terminal locations in California, Iowa, Illinois, Minnesota, New Mexico, Texas and Ohio.

and 1.4 million barrels at east Houston.

Around 400 miles of 20” pipeline will be built, going from Colorado City to Magallen’s terminal in east Houston, in addition to a further 50 miles of 24” pipeline between east Houston and Texas City.

The BridgeTex pipeline is expected to come online by mid-2014.

The pipeline project is supported by long-term transportable commitments and has received a favourable order from the Federal Agency Regulatory Commission approving the tariff structure for the pipeline.

The BridgeTex Pipeline will transport crude oil from Texas to the Houston Gulf Coast area

Ceylon and Lanka Indian Oil form pipeline partnership Sri Lankan state owned petroleum distributor Ceylon Petroleum Storage Terminals and private oil company Lanka Indian Oil, will together develop a new pipeline after forming a joint venture.

The pipeline, 14.5km long and 18” in diameter, will transport oil from the Colombo Harbor to the Kolonnawa storage terminal faster than the

18

existing transportation infrastructure, in turn saving an estimated $8 million (€6.2 million) a year.

Tanker unloading is expected to take two days when the new pipeline comes into operation, replacing the current system whereby a ship takes around four to five days to unload fuel due to the thinner diameter of the pump. The existing

pipelines are also said to leak frequently.

Ceylon has called for international bids for the pipeline and is already in the process of awarding a bidder with a $45 million contract on a PAT basis. Lanka Indian Oil owns a 33% stake in the project.

Construction on the new pipeline will begin later this year. The project is expected to take around 12 months.

January/February 2013 • TANK STORAGE

terminal news

Saudi Aramco moves forward with Jizan terminal and refinery Energy company Saudi Aramco is continuing to develop its $6 billion (€4.7 billion) Jizan oil terminal and refinery in Saudi Arabia, and has awarded EPC contracts to eight companies.

The project is slated to come online at the end of 2016, when it will be able to handle 400,000 barrels of oil per day.

A marine terminal will allow the refinery to receive and export crude oil.

Local company Ali Al-Ajmi Group will clear and prepare the site ready for the construction phase. Contracts have also been signed with Hanwha Engineering & Construction, JGC, Hyundai Saudi Arabia, SK Engineering & Construction, Petrofac Saudi Arabia, Hitachi Plant Technologies and Tecnicas Reunidas.

More than 1,000 direct jobs and around 4,000 indirect jobs will be created by the terminal and refinery project.

Abdullatif HE Abdullatif A. AlOthman, governor and chairman of the Saudi Arabian General Investment Authority’s board of directors, says the project is key to the development of the Jizan Economic City (JEC) project.

Saudi Aramco HQ ‘Work is underway to develop the required plans to accelerate the JEC’s infrastructure construction works in order to attract industrial and service

investments, provide appropriate job opportunities for the area’s people and form the nucleus of diversified economic activities,’ he was reported to have said.

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19

terminal news

Greenergy North Tees starts fuel supply Greenergy, the UK’s leading supplier of petrol and diesel, has commenced diesel, gasoil and kerosene supply from its terminal at Teesside, now known as Greenergy North Tees.

The North Tees facility was already closed when it was acquired by Greenergy in July 2012, having ceased commercial operation earlier in the year following the administration of Petroplus Refining Teesside. Since taking over at the terminal Greenergy has undertaken a condition survey and made certain improvements prior to commencing supply.

The company now intends to make further significant investments at the site in order to create an integrated supply system for petrol and diesel in the North East and a new hub for its rail distribution network.

Andrew Owens, Greenergy CEO, comments: ‘Our North Tees terminal will complement our existing petrol manufacturing facilities on Teesside, by adding the infrastructure for a new rail head, our own jetty capable of receiving large diesel ships and product interchange between terminal locations.’

Diesel, gasoil and kerosene are now available from the Greenergy North Tees terminal

There are more than 20 tanks at the site and the company has not ruled out construction of additional tankage in the future.

Planned improvements at North Tees over the next 18 months include: • Jetty modifications including conversion to allow a more commercial based multi-product import and export into the terminal

Work at Pengerang oil terminal on schedule Storage tank construction will now get underway at the $620 million (€477 million) Pengerang oil terminal in Johor after project developer Pengerang Terminals completed dredging for Phase 1 of the project, according to Platts.

Malaysian terminal operator Dialog owns a 51% stake in Pengerang Terminals and storage provider Vopak holds the remaining 49%. Dialog will operate the terminal once it comes online.

Platts has reported that work on the storage tank foundations has begun, the first phase of which will comprise a total 1.3 million m3 of storage capacity and six berths.

Clean products storage up to 432,000m3 is on schedule to come online at the beginning of 2014, with a further 432,000m3 for clean products and 420,000m3 for crude oil slated to be operational by January 2015.

An additional 1 million m3 will be added at a later date during the development of Phase 1.

20

• A new pipeline to link Greenergy North Tees to other terminals in the Teesside area. The plan is for the pipeline to carry petrol and diesel.

• Additional road loading facilities for petrol and diesel.

• Refurbishment to tankage and road loading facilities; • Enhancements to IT. The project at North Tees

follows investments by Greenergy in storage and distribution facilities at amongst others Thames Oilport (2012, joint venture between Vopak, Greenergy and Shell), Cardiff (2010), Teesside (2009), Plymouth (2008) and West Thurrock (2008).

Greenergy continues to supply petrol, diesel and gasoil from Vopak Terminal Teesside.

BP to invest £300m on Sullom Voe upgrade Oil company BP is investing £300 million (€370 million) to upgrade its Sullom Voe terminal in Shetland, Scotland which could see the facility remain operational for another 30 years.

The improvement programme will take place over five years and, with 200 contractors on board, will include plant and piping replacement, oil tank refurbishment and jetty maintenance. This project will ensure the terminal is able to produce oil from west Shetland oil fields.

BP runs the Sullom Voe terminal, which produced 9.2 million tonnes of oil last year, transporting oil from the East Shetland basin fields via the Ninian and Brent pipelines operated by BP and TAQA Bratani, respectively.

‘Given the scale of the work we are going to do on the plant here, and then the potential gas plant that’s going to be built at the terminal, we could be talking about investment in excess of £300 million,’ terminal manager Arthur Spence was quoted as saying.

January/February 2013 • TANK STORAGE

terminal news

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terminal news

Petrom opens new storage terminal in Romania OMV Petrom, the largest oil company in Romania, has opened a new fuel storage terminal in Isalnita, Dolj. The facility, designed to deliver petroleum

products to the south of Romania, cost €26 million to build and has a storage capacity of 11,000m3.

The project is part of an extensive

OMV Petrom’s new storage terminal is in Isalnita, Romania

investment programme, which has seen the construction of three new depots over the last three years. OMV Petrom’s new facility in Isalnita can store 11,000m3 of petroleum products, its terminal in Jilava can handle 27,000m3 and its recent build in Trees has an 8,000m3 storage capacity.

Neil Anthony Morgan, of the Petrom executive board, says the total project cost was just under €90 million. ‘This is the third fuel depot built from scratch over the past three years. This modern network will continue to provide Petrom customers with products that fully comply with European standards. For the construction of the three warehouses in Jilava, Trees and Isalnita, we invested €87 million.’

Petroleum products supplied to the three facilities are stored in doublewalled steel aboveground tanks, fitted with automatic volume and temperature measurement gauges, in addition to a fixed fire extinguishing system.

During the construction phase of the Isalnita terminal, Petrom used over 5,200m3 of concrete, more than 1,300 tonnes of structural steel and over 90km of electric cables.

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January/February 2013 • TANK STORAGE

terminal news

Fujairah Oil Terminal on track for 2014 The Fujairah Oil Terminal (FOT), currently under development in the Port of Fujairah, UAE, is on track to begin commercial operations by the end of 2014, Singaporebased trading company Concord Energy says.

Concord is developing the terminal with a subsidiary of China’s Sinopec and, on 8 January, announced the completion of the sale of a 50% interest in FOT to Sinomart KTS Development.

The oil storage facility will have a total storage capacity of 1,155,000m3. This 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.

‘We were awarded the concession to develop the site at the end of 2011 and, since then, we have cleared the land and prepared the site ready to start construction immediately,’ John Stuart, CEO of Assets Group Concord Energy, says.

Concord expects 100% of this storage capacity to be contracted prior to the

terminal’s start-up, and reveals it has already had strong interest from a number of traders and oil majors.

‘We have also spent the last nine months raising a $252 million (€193 million) project finance facility and we successfully signed with a consortium of six international banks at the end of December 2012,’ Stuart says. ‘Given the challenging debt markets, we see the signing of this facility as a major endorsement of the quality of this project.’

MUC Oil & Gas is the project management consultant on the project and Rotary Engineering has been awarded the EPC contract. Construction will take 21 months and ground is expected to break before the end of January. Stuart explains: ‘The municipality of Fujairah has already constructed all of the port facilities that FOT will utilise, and with foundations of solid rock, it does not face any soil stabilisation risks inherent in many terminal construction projects.’

Fujairah is the second largest bunkering location in the world, behind Singapore

Oiltanking Deutschland announces change in management Oiltanking Deutschland’s Walter Dornhof resigned from his position of MD on 31 December 2012. His successors Ulfert Cornelius and Sven Thiessen took over as joint MDs on 1 January.

Dornhof held his position of Oiltanking Deutschland MD for 19 years, but has been with Oiltanking for over 36 years.

He will remain as an ambassador for the company.

Cornelius has been with the company since April 2000 and in 2011 was appointed MD of Oiltanking Deutschland, when he took joint responsibility with Dornhof for the entrepreneurial activities of the company.

Thiessen has held a number of leading positions within the oil industry for over 20 years. He has comprehensive knowledge in particular in the areas of tank terminals, logistics/supply and HSSE.

TANK STORAGE • January/February 2013

Fujairah’s mountain range along the coast reduces the risk of overcapacity

and ahead of Rotterdam, and is being developed as the key logistics hub for the UAE. However, Stuart believes the location is not in danger of overcapacity as its coastal mountain range will cap the number of storage terminals developed in the region.

‘Fujairah has one of the highest throughput capacity

ratios. Independent storage capacity is forecast to grow from approximately 3.5 million m3 to 7 million m3. Demand for bunkers alone in 2010 was 24 million tonnes. There is also a limitation on the ability to develop further land in Fujairah due to the proximity of the mountain range along the coast,’ he he says.

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January/February 2013 • TANK STORAGE

technical news

Greenergy works with tanker drivers on safety UK-based petrol and diesel supplier Greenergy is installing new equipment at its supply locations in order to improve safety for drivers when they fill their road tankers with fuel.

The initiative introduces drip trays to prevent the potential build-up of petrol and diesel residue in the loading bay area.

‘The drip trays are simple but effective. By collecting

even the smallest leaks of fuel from the loading arms, they help keep the loading area clean and reduce potential slip hazards,’ explains tank driver Dean Lawrence.

These drip trays have already been installed at West Thurrock, Plymouth, North Tees, Eastham and Clydebank, and are on order for Grays and Vopak Teesside.

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Jet Edge initially developed the metal-onmetal seal to meet the increased performance demands of its X-Stream pressure intensifier pumps, which produce dynamic cutting pressures of 75,000 psi. It then expanded the technology’s use into additional product lines, including tis Eco-Jet direct drive pumps and several of its 60,000 psi intensifier pumps.

TANK STORAGE • January/February 2013

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Contact us: 1-800-749-6800 info@lightningmaster.com | www.lightningmaster.com 25

technical news

Krohne introduces new flowmeter Krohne, a developer, manufacturer and distributor of measuring instruments for the process industries, has launched a new mass flowmeter for the energy, chemical, oil and gas, petrochemical and power industries.

The Optimass 6400 twin bent tube Coriolis mass flowmeter is equipped

with a new signal converter that features advanced device and process diagnostics, and has been approved for custody transfers of both liquids and gases.

It also features advanced entrained gas management (EGM), with no loss of measurement with gas entrainment

up to 100% per cent of volume.

Available in stainless steel 316L, Hastelloy C22 and Duplex steel, the new flowmeter ranges in size from DN 08 to 250. It operates in high temperatures (up to 400°C) as well as cryogenic applications down to -200°C. It also handles pressures up to 200bar.

Eriks acquires Valve Entreprise Bilbao, Spain-based Valves Entreprise, a manufacturer of dual expanding plug valves, has been acquired by technology company Eriks.

The brand is known among industrial companies in the field of tank storage, refinery, bulk loading, naval and aviation refuelling systems and metering systems, and provides a safe and reliable environment for liquid storage and transfer.

The acquisition will see Valves Entreprise renamed ‘Eriks Valves Entreprise’.

Valves Enterprise has been renamed Eriks Valves Enterprise following the acquisition

Tepsa wins Atlante 2012 Bulk liquid storage operator Tepsa (Terminales Portuarias) has been awarded the Atlante 2012 for best training initiatives, information and awareness on the prevention of occupational hazards in the category of SMEs (small and medium enterprises).

The prize was awarded by federation sponsor Foment del Treball at its biannual gala to the ‘Drivers Training’ project, a scheme that teaches truck drivers about the risks at terminals and how to operate in safety conditions, applying preventative measures.

In a statement Tepsa said: ‘We constantly monitor safety at our facilities and the people who are working inside. This led us to be innovative and implement ongoing enhances and new initiatives that will ensure excellent operations.’

Tepsa is located in the main ports of the Spanish port system: Barcelona, Bilbao, Tarragona and Valencia. Its total storage capacity is around 890,000m3.

26

Engenda’s new business provides confined space rescue training Engineering specialist Engenda Group, which provides mechanical, electrical and instrumentation engineering services, is launching a new company that will deliver confined space and height rescue services and training.

The new business, Column Rescue, will operate under the Engenda brand from a new £50,000 (€61,000) purpose built training centre in Staffordshire, UK. It will provide training and rescue support for plant workers operating in the oil and gas, power, chemical, manufacturing and infrastructure sectors.

It will complement the work

done by fellow group company and column turnaround specialists DTEC Site Services but will be delivered as a standalone service, and has already been contracted to a number of UK-based blue chip companies in the upstream and downstream refining sectors.

‘The HSE is strictly monitoring companies’ compliance with the Confined Space Regulations.

They are reinforcing that all confined space entries must have a deliverable rescue plan and rescue cover in place,’ explains Steve Colclough, operations director for both Column Rescue and DTEC.

January/February 2013 • TANK STORAGE

technical news

Capital Safety upgrades vertical climbing system Fall protection equipment supplier Capital Safety has implemented a series of new additions to its vertical climbing system, designed to save the installer time and to maximise safety for the end user.

The Protecta Cabloc system, suitable for the oil industry among others, provides assurance of safe access on vertical structures such as fixed ladders and poles. It allows the user to ascend or descend unrestricted while connected to a fall system.

Enhanced features of the system include: - Top and bottom anchors designed specifically for use with ladders - A new tension indicator incorporated into the bottom anchor gives a visual indication that the cable is correctly tensioned - The Cabloc Pro Traveller allows users to bypass intermediate cable guides without removing hands from the ladder, providing continuous movement on the system. In addition, the antiinversion feature prevents the traveller from being incorrectly mounted on to the cable.

The Protecta Cabloc conforms with, and is tested in line with, EN353 part 1:2002 and CNB/P/11.073. It is also CE marked, meeting the latest standards and legislation.

Dantec will target the Danish market after partnering with Fontenay

Dantec signs contract with Danish distributor UK-based Dantec, a manufacturer of composite hoses for the transfer of petrol, oil products, chemicals and liquefied gases, has signed a deal with a Danish distributor in a bid to ramp up exports.

The new deal is with Fontenay and brings its total number of distributors to 49, 41 of which are overseas. Dantec says its distributor network is key to its exports drive, which sees 70% of its £5.6 million (€6.9 million) turnover coming from abroad.

The contract will focus on selling Dantec’s Danoil hoses to the Danish market.

These hoses are used to transfer petrol and oil-based products between fuel trucks and storage tanks in filling stations or storage terminals.

FRANKLIN

In similar news, Dantec has seen its sales in the marine sector triple over the last 12 months.

The company’s MD John Laidlaw attributes this rise in marine sales to the ‘ship to ship’ and ‘ship to shore’ markets, in which Dantec’s hoses are used to transfer oil, chemicals and LPG between ships or between ships and terminals. It has also secured contracts with chemical tanker operator Odfjell and UK-based Safe STS. Laidlaw said the company ‘is determined to win more of the ship to shore market’ from terminal operators. ‘We presently have a small percentage of this market globally but see massive potential for growth,’ he comments.

TANK STORAGE • January/February 2013

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terminal news

Saska chooses EAP web-based terminal automation platform European Automation Projects (EAP), a supplier of automation products and services, has recently completed the next stage in the roll out of a large terminal automation system for Bulgarian company Saksa OOD Novi Iskar Terminal Bulgaria.

The terminal is said to have tripled in size since the original system was installed around 18 months ago. Saksa began working with EAP when its growing business meant its requirements changed; EAP made phased alterations to the Terminal Automation package to reflect these new requirements.

The i-Supervisor terminal automation system (TAS) includes the following functions: - Tanker loading across multiple multi-arm loading gantries and weighbridges - Tanker unloading through import meters and weighbridges - Rack injection of multiple performance-enhancing additives

Saska has installed automation solutions at its terminal in Bulgaria - -

Tank gauging across 30 storage tanks High level and low level shutoff system for tank gauging - Rack blending of biodiesel and bioethanol at selectable ratios - Site access control - Export of data to Bulgarian Customs system - Export of daily withdrawal data to third party clients.

The system is fully dual redundant and runs across multiple local clustered servers with a web interface for individual users.

Vopak installs the world’s largest Bornemann twin screw pump Independent tank storage provider Vopak has chosen to install flexible pump technology at its storage terminal currently under construction in the Port of Algeciras, Spain.

The terminal will have a total storage capacity of 403,000m3 comprising 22 tanks for handling a range of white and black petroleum products. Instead of choosing dedicated fixed pump installation such as centrifugal, vane or gear type, Vopak and Ecolaire Engineers opted for Bornemann Twin Screw pumps in order to deliver high flow rates at different operating conditions.

The number of pumps required for the complete

28

terminal was reduced to just seven units which can handle low and high vicious products and carrying duty points. Two HC 500 (<2,500m3/hr), three HC 370 (<1,500m3/hr) and two HC 300 (<800m3/hr) will be installed. The HC 500 pump is the largest casted twin screw pump available on the market, Bornemann claims.

Vopak will benefit from twin screw technology advantages such as self-priming, constantly high flow rates, high suction lift, smooth and low pulsations, and maximum flexibility.

A need for fewer pumps and related equipment has resulted in reduced investment costs for Vopak.

The latest upgrades to the system include the addition of bioethanol storage and a bioethanol rack blending module, i-Blend.

EAP will next be installing a customised module to handle the storage and loading of exothermic additive products which are to be stored at the site by a major client in the near future, with further expansion of the site and the system planned for this year.

The terminal is open 24 hours and loads between 100200 road tankers per day.

Edgen Murray acquires HSP Group Edgen Group, through its subsidiary Edgen Murray Europe, a distributor of specialty steel products for the energy and infrastructure markets, has acquired UKbased HSP Group to enhance its portfolio of valve and actuation products.

HSP sells valves and actuation products and services to the global petrochemical, refining, offshore oil and gas and power markets in the UK, US and Qatar, and distributes ball gate, globe and check valves for manufacturers around the world.

‘The integration of HSP will allow us to better meet the needs of our shared and new customers in the energy sector across European, Middle East and Caspian regions,’ says Craig Kiefer, Edgen Murray’s president.

The acquisition came into effect on 10 December 2012. HSP’s projected revenue for 2012 is approximately £23 million (€28 million). Financial details of the cash and stock acquisition were not disclosed.

January/February 2013 • TANK STORAGE

terminal news

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Ayman Asfari FEI,

• • • • • • • •

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Tuesday 19 February 2013, Park Plaza Victoria, London

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TANK STORAGE • January/February 2013

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incident report Providing terminals with up-to-date information on fires, leaks, spills and accidents in the oil and petrochemical industry n 5/01/13

Indian Oil Corp. (IOC) Surat, Gujarat, India

n 25/12/12 Chevron

Louisiana, US

Three people died after an oil storage tank owned by IOC caught fire.

The tank is located at the company’s terminal at Hazira in Surat and it took fire fighters around 21 hours to contain the fire.

The Hazira terminal comprises nine storage tanks. Tank 4, where the fire broke out, was filled with almost 5,000kl of petrol which burnt out. The fire fighters worked to contain the blaze by spraying the surrounding storage infrastructure with water and foam.

There will be an investigation into the cause of the fire and union petroleum minister Veerappa Moily says a report should be available by the end of January.

He also announced Rs.5 lakh in compensation for the families of those who have been killed.

Lightning has been blamed by fire officials as the cause of a blaze at Chevron’s gas well site in south Louisiana.

The Duson Volunteer Fire Department visited the site after smoke was reported coming from storage tanks.

Foam was used by the Lafayette Fire Department’s Hazardous Materials Response Team to put out the fire in the 3,780-gallon tank battery, which authorities say held oil and another product.

Nobody was injured.

n 14/12/12 Boston Marine Transport A large amount of fuel oil leaked into Newark Bay around 11.30pm during a transfer

Newark Bay, New Jersey, US operation.

Containment boom and several skimmers were put in place around the site but failed to contain all of the fuel. A sheen of oil was visible on the surface of the water in the bay.

112,000 gallons of fuel oil was in the tank at the time of the incident but the total volume of escaped fuel has not yet been determined. n 30/11/12 Mantua Creek,

New Jersey, US

n 29/11/12 Trans Mountain Pipeline

Abbotsford, British Columbia,

Canada

n 15/11/12 BP

Deepwater Horizon,

Gulf of Mexico

30

Hazardous material leaked into Mantua Creek after a freight train derailed.

The incident happened at the Marine Terminal in Paulsboro, where four tank cars fell into the river. The US Coast Guard was notified of the incident as it was feared chemicals could leak into the Delaware River.

A reported 18 people suffered from breathing problems and a number of local residents had to be evacuated. No one was injured.

The cause of the derailment is not yet known.

Trans Mountain Pipeline operators took over three hours to respond to a gasket failure which led to a crude oil spill in January last year.

A report from the National Energy Board reveals warning alarms sounded at the company’s Sumas tank farm for three and a half hours before staff responded.

When they arrived at the scene, six hours after the first alarm was recorded, a crude oil spill was discovered. It had not flowed beyond the containment area, however noxious emissions had escaped into the atmosphere.

The report highlights failures by Trans Mountain’s monitoring staff located at the Edmontonbased control centre. According to the report: 1) staff at the control centre did not set an alarm within the allotted 15 minute timeframe following an oil transfer; and 2) they then did not respond to leak warning alarms that went off hourly until the end of the operator’s shift.

Since these findings have been published, Trans Mountain Pipeline is said to have identified corrective actions to address the report’s findings.

According to the report, the night shift control centre operations did not correctly identify why the volume in the tank was dropping and attributed the alarms to the weather. In fact, the spill was a result of a gasket failure on the roof of a tank caused by pressure from frozen water in the roof drain system.

BP has reached a settlement with the US Department of Justice (DoJ) following its part in the Deepwater Horizon event in 2010.

The settlement reached a total of $4.5 billion (€3.5 billion) to resolve all federal criminal charges and claims by the Securities and Exchange Commission. The agreement is also cash positive because it clarifies the level of criminal fines imposed on BP. The Deepwater Horizon event occurred after an explosion accidentally caused a BP oil spill to hit the Gulf of Mexico in 2010. It flowed for three months and released almost 5 million barrels of crude oil, making it the largest marine oil spill in petroleum history.

While BP has accepted criminal responsibility for the accident, it has done so on the ground of ‘negligence’ as opposed to ‘gross negligence’ as it eliminates the threat of a possible indictment by the DoJ and reduces the chances of BP being barred from future US government contracts.

The settlement with the DoJ will increase case-related provisions by approximately $3.85 billion and take the total pre-tax charge to just under $42 billion. BP has committed to paying the agreed $4.5 billion over a six-year period with no single instalment exceeding $1.2 billion in any one year.

BP is still facing civil claims, however, including those arising under the Clean Water Act. The DoJ has said it is determined to prove BP’s gross negligence before the civil courts.

January/February 2013 • TANK STORAGE

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regulations

Updated requirements for preventing explosions at tank storage facilities and filling plants for flammable liquids came in on 31 December 2012

Germany: new changes explained Up until 2003 the requirements for the explosion prevention of tank storage facilities and filling plants for flammable liquids in Germany were legally based on the ‘Verordnung über brennbare Flüssigkeiten (VbF). The technical rules for this (TRbF) were prepared by the German Committee on Flammable Liquids (DAbF).

In 2003 the VbF was replaced by a new regulation without including the DAbF, which meant that the TRbF was not updated because there was no legal requirement to do so.

In 2008 a date was set to remove the TRbF from this new regulation – 31 December 2012.

However as part of the TRbF20 storage facilities for packagings (drums and IBCs etc) were ‘saved’ in a

technical rule falling into the scope of a regulation dealing with hazardous substances. In the TRGS 510 the requirements for storage facilities for transportable containments for hazardous substances are also summarised, but in very general terms.

As part of the TRbF20 storage facilities were ‘saved’ in a technical rule falling into the scope of a regulation dealing with hazardous substances: In the TRGS 510 the requirements for storage facilities for transportable containments for hazardous substances are also summarised, but in very general terms.

Saving TRbF 20 and 30 A similar TRGS 509 for the tank storage and filling plants is in

preparation but still deals with these plants in a general way. So a more detailed rule regarding this TRGS 509 is needed for anybody concerned with tank storage.

There was significant interest in ‘saving’ the contents of TRbF 20 ‘Storage facilities’ and TRbF 30 ‘Filling and emptying plants’ and a private working group was founded by German Association of TÜV (VdTÜV).

The group’s aim is to: • Combine the requirements of TRbF 20 and 30 as far as possible in one rule • Update the technical contents of TRbF 20 and 30 regarding new technical rules in Germany • Delete obsolete requirements • Adopt the new prepared rule as law • Implement some national consequences resulting from Buncefield.

The group also wants to add: • Requirements concerning the combined storage of transportable containments and tanks in one plant • Requirements for the storage of highly viscous liquids in tanks • Some very special regulations e. g. concerning the collection of flammable liquids in workshops or as waste.

32

Specific requirements, i.e. regarding storage facilities in which transportable containments are connected directly with a production plant (active storage), are dealt with in annexes to allow a reduction of the main text to the applicable one for the most part of the users.

Publication of VdTÜVMerkblatt 967:2011-11 The working group has produced VdTÜV-Merkblatt 967 ‘Requirements to storage facilities with fixed tanks, to the active storage in transportable containments and to filling and emptying plants for flammable liquids’.

VdTÜV-Merkblatt 967 deals with : • Storage of liquids either under- or above ground • Storage facilities in which transportable containments are connected directly with a production plant • Transportable collection containments • Filling and emptying plants for liquids with a flash point of up to 100°C. The liquids have been differentiated into those with a flash point of up to 55°C, dealt with by the old European law concerning hazardous substances (in the Merkblatt these liquids are abbreviated as ‘elh’), and liquids with a flash point between 55°C and 100°C (in the Merkblatt these liquids are abbreviated as ‘se’).

The new flash point limits

January/February 2013 • TANK STORAGE

regulations of the Globally Harmonised System (GHS) can be implemented without any changes, bearing in mind that in general a liquid with a flash point of more than 55°C causes no explosion risk in Germany under normal storage and filling conditions.

Grades for storage Firepotential Volume Grade 1

All se-liquid with > 5000 l

Grade 2

< 3000 l

Grade 3

3000 – 10000 l

Grade 4

> 10000 l

Grades for filling Grade 11

All se-liquid

Grade 12 Grade 13 Grade 14

< 200 l/h 200 - 1000 l/h > 1000 l/h

Graduation of facilities A new scheme of graduation has been implemented differentiating between storage facilities and filling plants: This graduation is especially necessary for the distinction of requirements for the fire safety or the extension of areas with an explosion hazard.

Updating requirements Due to the TRbF 20 and 30’s long existence, there was the need to re-discuss all requirements. In many cases a complete change in wording was necessary to make the intention of the requirement clearer. In other cases there was only an editorial adoption to the new national legal basis or the content as well as the wording could be taken as given. But even with

TANK STORAGE • January/February 2013

newly worded requirements it was the intention to save the level of safety of TRbF 20 and 30 in both directions: no weaker or stronger requirements as given before.

Structure of the Merkblatt Some items were placed in annexes to allow a reduction of the main text. Some of these annexes are dealing with very specific items, e. g. the necessity of a bund for liquids with a vapour pressure of more than 2bar or the description of the ‘active storage’. Other annexes were created only to save knowledge that otherwise would be lost.

The main text is structured mainly in accordance to TRbF 20. That means that after some general clauses (e. g. scope, definitions) • The principle concepts of storage facilities

and filling plants • The fundamental construction requirements and retention of leakages • The fire safe construction of rooms with tanks and/or filling plants • Safety distances to the neighbourhood or in the tank storage facility • Underground storage • Explosion hazardous areas an explosion prevention • Safety equipment of tanks and of filling and emptying plants including venting devices • Electric flow between parts of the facilities/plants and/ or the neighbourhood and electrostatic charges, lightning protection and operational requirements.

For more information:

www.vdtuev.de/publikationen/ merkblaetter

33

outlook 2013

– is luck in store for the storage sector?

Charles Smissaert, general manager, Botlek Tank Terminal

Right location, right connections 2012 was good for Botlek Tank Terminal (BTT). The sector as a whole has seen steep backwardations in the oil market especially towards the end of the year, providing no incentives to store product.

We are quite optimistic about 2013. BTT is mainly active in clean fuels, biodiesel and petrol diesel and we are optimistic for those products.

Demand is there, but it is essentially for immediate demand. The longer term outlook is still not so strong and we would like to see that grow a little bit. However, the demand is there for quality, highly flexible, efficient tankage.

Charles Smissaert, general manager, Botlek Tank Terminal

Andrés Suárez, deputy director of strategy and business development at CLH

Facing the challenges of the future The international economic situation continues to be highly complex and raise major uncertainties. The demand

34

In Rotterdam, we have the whole Odfjell case, and we now have more stringent inspections from the authorities.

While there is the risk that the authorities may overreact, on the whole I believe it is good that operators adhere to what is in their permits and make sure that they fulfil their requirements.

We are quite positive on the longterm demand and the long-term drivers of demand for tank storage. There is a structural imbalance in oil products across the world. Europe is short on jet fuel and diesel, so that provides a steady import flow, but there is a steady export flow of petrol. On the back of that, refineries have been closed and more will follow. That means less imported crude into the region and more imported refined products. We still see an increase in the trade volumes, physical and in paper trade.

for products and services has undergone a significant decline ever since the economic crisis began and, despite the efforts made by countries, companies and citizens, recovery in the EU countries is proving to be slower than was expected.

The effects are obvious in all sectors, including energy, which traditionally has depended on the evolution of the economy and furthermore

has been affected by the high volatility of oil prices.

In the case of Spain, oil product consumption, particularly in the area of transportation fuels, has fallen progressively since 2008 and the demand currently stands at levels similar to those of 1997.

The forecasts suggest that 2013 will still be quite a difficult year for the Spanish economy, although some

January/February 2013 • TANK STORAGE

outlook 2013

Andrés Suárez, deputy director Strategy and Business Development at CLH national and international bodies are beginning to indicate that the first signs of recovery will start to show towards the end of this year.

With regards to oil

products, since demand is closely bound up with the economic situation, any recovery of consumption levels will depend on economic recovery occurring.

Bill Henderson, vice president of liquids development, Kinder Morgan Terminals

even coming up in 2013 we have had our largest capital programmes for growth that we have ever seen. For 2012 capital spending was close to over $600 million (€449 million) with over $1.4 billion committed projects, and we are going to be in excess of the 2012 capex in 2013 on the liquids side.

Overall, certainly from both commercial and growth perspectives, 2012 has been a very good year for Kinder Morgan Terminals and we see that trend continuing.

However, the past year has not been without challenges,

Well-positioned for further growth Overall we consider 2012 to have been a very good year, certainly commercially. For the Terminals Group, we are positioned to take advantage of the ever evolving shale plays developments on the North American continent. This also applies for Kinder Morgan’s other business units as well.

Through 2011, 2012 and

TANK STORAGE • January/February 2013

particularly in the northeast US. we see the market being The biggest incidents stable and continuing to that we experienced in 2012 grow in the coming years. were both hurricanes. Isaac We are very upbeat on hit New Orleans in August the outlook for demand and that was a challenge for the North American for two of our facilities. The bulk liquids storage sector. floods challenged some of our We observe the changing competitors more. We had dynamics in the market on initial tankage and customer both the supply and on the disruption at our Harvey demand side, most of which terminal, and there was even is driven by the new drilling more significant disruption and fracking techniques and damage at our New in the various shale plays.

Orleans coal export facility.

The latter is changing the However, the biggest markets as we speak which impact came from Hurricane provides opportunities for Sandy which affected all new infrastructure, including three of our New York Harbour pipelines, tanks and docks. terminals significantly. While The majority of the the damage was extensive, opportunities are not and there is still much work to necessarily related to demand do, we were able to resume driver growth. The change is operations, limited in some going to be driven by the shift cases but quicker than we in where fuel is sourced from could have hoped for. and the further end product Overall though, 2012 specification changes driven has been a solid year in by changes in government regards to throughputs that regulation, as well as refinery we have seen throughout closures outside the Gulf our petroleum, chemical, Coast. The changes in crude and other bulk liquids sourcing are what will fuel the terminals, with all facilities opportunities and need for performing pretty close to investment by Kinder Morgan. budget with the couple of exceptions mentioned above.

Imports into the North East US remain strong.

The throughput of petroleum products through our Gulf Coast facilities from USGC refiners remains strong.

Owing to changes in the marketplace, we have seen an unprecedented demand on our docks. We have identified and are tackling a number of initiatives to Bill Henderson, vice president of help alleviate Liquids Development, Kinder Morgan Terminals this. Overall,

35

outlook 2013 The prognosticators believe that North America is looking at energy independence by 2025.

The whole dynamic is shifting from North America being an import region for feedstocks, etc to being self sufficient, with a large potential for exports. So the whole infrastructure play starts to change.

We observe the petrochemical business where a few years ago major petrochemical companies were looking outside of North America for the development of petrochemical facilities.

Now, given the supply growth in North America, there has been a significant number of petrochemical announcements for new plants and additions to current manufacturing facilities. The latter is all driven by lower supply costs and availability of supply.

So from an infrastructure perspective, to be able to link that supply to demand creates a wealth of opportunities for terminal and storage companies. And in those markets where the US and Canada can become exporters, there is room for even further growth in North America.

Robb Barnes, vice president of Magellan Terminals

Investing for future growth Our assets performed well in 2012, experiencing both increased throughputs and lease storage levels.

Our refined products transportation, storage and distribution business is solid and we have significant growth opportunities for our crude oil transportation, storage and distribution services as well as the refined product business.

36

Brett Simpson, Group CEO, LBC Tank Terminals

Committed to safety and growth Overall the market appears positive and strong; however, on closer inspection we have observed some differences in performance between regions and by product type.

Globally LBC has continued in its commitment to invest and grow in 2012 and utilisation has been high within the geographical hubs, throughout the group. In addition we have seen strong growth in certain product areas. LBCâ&#x20AC;&#x2122;s investments are directly linked to customer demand. Typically, rather like a matrix, we experience both a strong demand in certain geographic sectors, such as in the US for example, and in certain product areas.

Demand for storage at an international level is driven by product dislocation in one form or another, i.e. the dislocation between supply and demand. Asia continues to grow, however we anticipate a slower pace for 2013; and within our European region, LBC is firmly focused on customer service and investment in our business infrastructure allowing us to leverage global product flows under longer term contracts for European imports.

We see the biggest single change around fracturing techniques which has opened up the market for shale gas and tight oil reserves in North America. In the longer term, it is reasonable to expect to see a similar pattern in China, which has the worldâ&#x20AC;&#x2122;s

Thanks to enhanced drilling techniques, domestic oil production is continuing to increase. Many new production basins in the US do not have adequate pipeline takeaway capacity to safely transport the crude oil from where it is produced to where it is refined. As a result, substantial investment in new pipeline and storage infrastructure is necessary.

Magellan is actively working on new crude oil infrastructure projects to transport, store and distribute North American crude oil.

largest reserves of shale gas.

These two economic and industrial power houses will therefore import and export different things.

In respect of 2013, LBC is responding to an increasing number of requests for storage and is actively building out Brett Simpson, Group CEO, its land bank in LBC Tank Terminals the global hubs.

Currently our focused buildout activities are centred on the US Gulf Coast, where LBC has a valuable land bank with deep water access.

More specifically, over the coming year, we anticipate growth in certain areas such as base oil and chemicals, as a response to industry changes.

Providing value adding services is routine day-to-day business for LBC. As an example, probably the most significant service we are able to provide in Houston is in continuing to provide our low at-dock demurrage, a notorious industry issue in the Houston Ship Channel area. This is possible because we have the ability to build a new dock parallel to building new storage.

These projects include the reversal of our Crane to Houston pipeline system and the construction of the new BridgeTex Pipeline system.

Both systems originate in the Permian basin and require additional storage capacity at the origin and destination points.

Generally, we expect 2013 demand for our storage services to be strong. Our customers like the fact that Magellan does not compete with them in the marketplace.

While our base transportation and storage

business remain solid, our growth opportunities are associated with the increase in domestic crude oil production.

In fact, we expect 85% of our expansion spending for the next two years will be on crude oil transportation and storage assets.

Regarding the longer term outlook, forecasts for increased domestic crude production in various basins around the US are strong, especially in the Permian Basin of Texas. As long as we have a reasonable regulatory environment, our country

January/February 2013 â&#x20AC;˘ TANK STORAGE

outlook 2013 will have the opportunity to achieve the goal of energy independence in the future.

An increase in domestic production creates significant opportunities for new pipeline and storage projects.

Factors which will impact demand for refined products include the CAFÉ standards, the Renewable Fuels Standard and other environmental initiatives such as EPA’s Tier III regulations.

Storage demand at our marine terminals is driven by market structure, pricing volatility and connectivity.

Demand for marine storage has resulted in significant new tank construction projects. We have added

Danny Oliver, senior vice president of marketing and business development, NuStar Energy

Set fair for continued growth

We consider 2012 a successful year for NuStar as earnings in the storage segment were roughly 7% higher than the previous year.

I believe one thing that differentiates NuStar from some of the other storage providers is that we have a very high percentage of what I categorise as ‘fundamental storage’, where storage is associated with a necessary product flow or crude flow. We have a lot of terminals that receive finished product out of refineries and as those refineries run, those terminals are always going to be used to clear the refinery regardless of market structure.

We don’t have a lot of the socalled ‘contango’ storage that is subject to trading opportunities.

The market structure has not been there during the past couple of years in the contango storage Robb Barnes, vice president of Magellan segment, with Terminals and Crude Oil the market being backwardated. almost 7 million barrels of Consequently, the contango marine storage since 2007. type of storage locations Throughput at our have not been as popular as inland terminals is driven by they were two years ago. We demand for refined petroleum have seen that, especially products. We expect stable in Europe where the storage refined products demand sector has suffered a little going forward but overall more than here in the US. volume growth due to On a more global basis – recent higher volume and this has worked well for commitments.

NuStar specifically – or on a macro basis in North America, one of the drivers for storage

TANK STORAGE • January/February 2013

that we have seen in the past couple of years has been in shale oil development.

The other development has been rapid expansion of crude oil production off the coast of Brazil. This new production is trying to find the logistics to get it to market and that has driven some demand and expansion opportunities in the Caribbean.

Our St Eustatius terminal in the Netherlands Antilles has benefited from these new trade flows out of South America. St Eustatius is our largest terminal with about 13 million barrels today and, in January, we will put another million barrels into service.

We also are looking at further expansion of the St Eustatius facility associated with the crude oil flows from South America, but it is still early in the process.

The shale plays in the US and some of the new South American crude oil production have not only driven some specific projects for NuStar, but also for the storage segment in general.

We are not seeing the same significant growth opportunities in the European storage sector, however.

Nevertheless, we have been very pleased with our operations in the UK and

In the UK, our expectation for 2013 is to see similar earnings to what we saw in 2012. It is definitely a more challenging environment. Utilisation in the UK is perhaps a bit lower than it is in North America.

However, for the most part, we have our UK storage locked up in long-term contracts so we are not feeling the immediate pressure there.

As for the longer term, even five years out, we see a continued need to expand infrastructure, especially in North America, to move

Danny Oliver, senior vice president of Marketing and Business Development, NuStar Energy

increased production out of these shale oil plays. I think that is going to be with us

‘We are not seeing the same significant growth opportunities in the European storage sector’ Danny Oliver, senior vice president of marketing and business development, NuStar Energy

elsewhere in Europe. We have seen slight increases in our earnings in our European operations in 2012 versus 2011.

for quite some time. And of course, there is always the possibility that the market structure comes back to

37

outlook 2013 support storage from a trading perspective – that there is more contango in the market. That’s an easy driver for storage when the market structure supports it.

Our challenge right now is being an early responder to the shale oil infrastructure requirements. NuStar was the first mover for the Eagle Ford Shale play in Texas and

that has helped establish ourselves and it drives new developments. So we will continue to focus on infrastructure for some of these shale plays in North America.

With regard to our overall strategy, at the highest level there is a strategic direction change going on at NuStar.

We had three refineries that we owned: two asphalt and

Colin Conner, managing director, Oiltanking

Planning for the long term The storage industry experienced divergent trends in 2012 with different regions around the world facing their own set of challenges.

From a global perspective, continued backwardation, marked by future prices remaining too low to hold inventory, purged the demand for speculative storage. On the other hand, continued motorisation of developing regions, economic recovery in select markets and dramatically changing supply demand imbalances across the globe and within domestic markets, fuelled demand for longterm energy infrastructure.

Political tensions in the Middle East and North Africa, continuing North American shale revolution, slower than anticipated growth in Asia and further consolidation of the refining sector in Europe were the major topics driving the oil and petrochemical industries in 2012 and having the major impact on the storage industry in both the short- and long-term.

In 2012 the industry witnessed the effects of increased focus by local authorities on compliance with safety, environmental and security regulations.

Ability to serve customers in a safe, efficient and environmentally sound way is becoming the most crucial competitive factor within the industry.

Oiltanking’s commitment to these ideals is absolute as we continue to manage our assets around the world with ‘best in class’ approaches and long-term investment planning.

38

one fuels. We have been divesting those refining assets and turning away from that margin-based side refining business to focus on the fee-based storage and pipeline operations. So there is very much a strategic direction change at NuStar to focus on the storage and pipeline segments.

More specifically, to sum

up our specific growth plans in those segments: it would be continued development of shale oil infrastructure in North America and expansion in the Caribbean to address the infrastructure needs around South American/Latin American crude oil production.

Oiltanking expects that 2013’s resources versus value-creating developments in the storage sector manufacturing of energy derivatives. will, to a large extent, reflect the latest In 2012 Oiltanking performed revolutionary changes in the global well, with many of our terminals oil and chemical markets. Modern exceeding the expectation we set large refineries in the rapidly growing at the beginning of the year.

Middle East and Asia, increasing We see the main challenges of competitiveness of the North American the market in the increasing volatility oil and petrochemical sectors due to and unpredictability of the oil the new feedstock base and closures markets: a number of ‘wild cards’, of older and smaller refining facilities in such as the impact of changing Europe, will further change the global growth dynamics of the Chinese trade flows of liquid bulk and increase economy or further technological the role of long-distance shipping. advancements, can seriously influence International independent storage the future flows of liquid bulk. operators with a broad, long-term customer base will be able to benefit from these trends in 2013 as well as in the following years.

As the largest share of incremental oil supply is expected to come from North America, while Asia and the Middle East will add most to the future incremental demand, these regions are projected Colin Conner, managing director, Oiltanking to see the major growth of storage infrastructure. However, the demand for storage capacities is expected to remain strong in practically all parts of the world – being concentrated around both the established and new ‘hub regions’. Further decisions which will impact the industry include Japan’s conclusion concerning nuclear energy and the US’ evolving strategic view on exports of energy

Looking to the years ahead, Oiltanking aims to further diversify both its geographical and product portfolios. In terms of preferred locations for the new terminals, Oiltanking is focusing on the growing storage markets of Asia, North America, Middle East and Africa, while further strengthening its positions in Europe and Latin America.

January/February 2013 • TANK STORAGE

outlook 2013 Walter E. Wattenbergh, president, Stolthaven Terminals

A long-term perspective Focusing on 2013 is much too narrow a perspective.

We take a long-term view and, based on that, we are continuing to execute Stolthaven’s global expansion strategy.

Indeed, macroeconomic concerns notwithstanding, I am optimistic about the division’s growth plans. The demand for safely managed and responsibly operated high quality storage is there. Steady as she goes.

Stolthaven has benefited from significant investment in recent years, as its London-based parent StoltNielsen has seen fit to underwrite Stolthaven’s substantial global expansion. Stolthaven Terminals is one of three legs of Stolt-Nielsen’s diversified bulk liquid logistics business, along with Stolt Tank Containers and Stolt Tankers.

Walter E. Wattenbergh, president, Stolthaven Terminals

All told, total capacity for Stolthaven’s global network has doubled to 3.9 million m3 over the last four years.

Will the pace of Stolthaven’s expansion continue in 2013? There’s no question that it takes time and effort to integrate acquisitions and to align them with Stolthaven’s own global standards for safety – which always comes first – efficiency and operational performance.

Planning and executing capacity expansions at our terminals around the world is no less taxing. That said, we are constantly looking at new growth opportunities, be they acquisitions, new joint ventures or greenfield projects.

The demand is there and, working together with Stolt Tankers and Stolt Tank Containers, we can offer customers integrated transportation and storage solutions. As long as these opportunities continue to present themselves, we will pursue them.

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39

outlook 2013 Aernout Boot, commercial manager, Vitol Tank Terminals International

Balancing growth and day-to-day performance 2012 has been a good year for the terminals sector. The industry has had strong headwinds, with a backwardated market that has been very persistent for the whole year across all markets and all products.

Nevertheless, I believe that most terminals in all the major markets were operating at 100% capacity and I don’t see a lot of idle capacity in main markets. So in that sense it has been a good year for the industry if you compare it, for instance, to the shape the tanker industry has been in during the past two years with enormous overcapacity.

That certainly is not the case in the terminal sector.

With the oil market in backwardation for the past 12 months, everyone that looks for tanks has to ask themselves twice whether they really need one before they make a commitment. Despite the fact that people are facing these conditions, as I said, we don’t see idle capacity. I think that is also because a lot of tank capacity is tied up in longterm contracts. The test will

come when these contracts expire. If these contracts were to expire in 2013, we might see a bit more pressure.

With regard to 2013, I believe the year will bring more of the same that we have seen in 2012. Structurally, there is still growing demand for tankage in the world, although terminal operators need to be very selective about locations for new tanks, which must add value. Having said that, most markets will probably stay in backwardation during 2013. We do see a bit of contango coming back in various products and various markets this year, but by far it won’t be the state we saw in 2008/2009 when people were scrambling to get tanks.

The ongoing trend to shut down oil refineries in Europe is more of a good thing for European terminal owners because it means more imports coming into the region, more new flows and new dynamics in supply and demand. I believe the refinery capacity will also be made available to the market in most cases; Coryton is a good example of that. On the whole, the refinery shutdowns perpetuate the volatility and the dynamics in the market which are both good for terminals.

In terms of the outlook for longer-term demand, terminal operators need to be

Aernout Boot, commercial manager, VTTI

40

selective where they invest in new tanks. The industry needs to be careful about not over reaching and building more tanks in the same locations.

The oil shipping industry is a good analogy and a good example of what the terminals sector shouldn’t do.

A place like Fujairah is also a good example of where we have seen tremendous over investment in storage capacity, which, in our view, is not justified by market demand at that location at the present time. A lot of capacity is coming on stream at Fujairah at the same time.

We saw one terminal come online last year. In 2013 we will see probably three new facilities coming on and in 2014 there will be another terminal starting up, perhaps even two new facilities; so we have five or six terminals all being added to the existing market.

Our existing business was also good. We saw record throughputs in Fujairah, Ventspils and Europoort, so 2012 has been an extremely busy year for us flow-wise.

Regarding 2013, we are still on a strong growth track.

We will start operating the Mombasa terminal later this month and the facility will receive its first oil. That’s a milestone. We have our Vasiliko terminal project in Cyprus, which is being built right now. The first phase of the project is on track for completion in May 2014.

We also look at opportunities to grow and develop new business either by means of new tanks or by means of smart investments at existing locations, such as new jetty lines, manifold upgrades, extra flexibility, and so on; investments that enable us to handle more oil at existing sites.

Due to the backwardated market, our customers try to use our tanks more intensively and that is the reason we saw the increase in our oil throughput volumes in 2012.

I think that will also be the

case in 2013; players certainly are not sitting on oil, they are turning it over a good deal.

VTTI has a clear goal to grow further. We have set up an organisation in Rotterdam, as well as in various parts of the world, to enable us to implement our growth plans in a structured way. At the same time, it is all about being selective in the growth opportunities that we pursue. With our Fujairah terminal, we have an optimal location; a prime sea front plot in close proximity to the Port of Fujairah which enjoys the shortest distance to the oil jetties. We already operate 47 tanks with a total of 1.18 million m3 capacity.

Newly added to the existing site is 250,000m2 of the reclaimed land and we are looking at the right opportunities to use that position constantly. There are currently several business plans under study on which our business development team work actively. These potential business plans can lead VTTI FT to have additional storage of up to 1 million m3.

At the same time, we are mindful of all the new capacity that is coming on stream around us in the market in Fujairah this year and next.

For us, any new development will not be a ‘copy and paste’ exercise,. it needs to be something that adds value.

For the time being, we have no approved timetable for the execution of any specific expansion plan at VTTI FT. It is important to keep a good balance, on the one hand, between trying to grow the business in the right places and at the same time keep a clear focus on the day-to-day business. It requires a thorough understanding of the market in which we operate, to know whether it makes sense to invest and whether it doesn’t.

It is important to have the discipline not to chase every opportunity that comes along.

January/February 2013 • TANK STORAGE

profile

A Prime location The Port of Fujairah in the UAE is one region where storage overcapacity, in the long term, is definitely not a problem. Despite being the second largest oil bunkering port in the world, it has storage capacity of only 3 million m3 – insufficient for its growing daily volume of oil cargo handled.

Although the storage capacity at Fujairah is envisaged to increase to 7 million m3, significant additional capacities will still be required to meet the increasing cargo volumes anticipated.

The port is increasingly becoming a trading hub for petro products due to its proximity to shipping routes and high demand of oil products from Saudi Arabia, Iraq, Yemen, India and northeast African nations.

Fujairah is strategically located outside Straits of Hormuz, a major international shipping passage carrying approximately 40% of the worlds crude oil supply. It naturally offers deep water ports and the ideal climate for all weather deep water port, enabling open sea terminal operations round the year. It is free from events such as piracy risk, offering better security for businesses.

In addition to all this, Fujairah is also close to OPEC countries having an oil production allocation of around 20 million bpd.

With such strong attributes

With so much happening in Fujairah, Tank Storage magazine talks to IL&FS Prime Terminal, one of the latest companies to break ground in the rapidly developing region it is no surprise that at least seven major storage terminal projects are planned in the coming years.

IL&FS Prime Terminal FZC (IPTF), a joint venture between India-based IL&FS Maritime Infrastructure Company (IMIC) and UAE-based Prime Terminals FZC, is just one of these. IMIC is part of the IL&FS group of companies, which is one of the prime companies in India developing large infrastructure projects.

The IPTF Oil Terminal, located in the vicinity of the Port of Fujairah with a draft of 15m, will benefit from a dedicated pipeline direct to the Port of Fujairah.

The land on which on the terminal will is being built has been leased from the government of Fujairah under a 25+25-years contract. The company expects a full return on investment within eight years.

The terminal is being developed in two phases.

Phase 1 of the terminal comprises 14 product tanks with an aggregate storage capacity of around 333,000m³.

Phase 1 is scheduled for commissioning by early 2014.

TANK STORAGE • January/February 2013

Construction has started on earthworks for the site fill and preparations have been completed. Mobilisation of construction materials of tank and associated works is underway.

The project cost for Phase 1 is approximately $130 million (€100 million).

Phase 2 will have a capacity of approximately 300,000m³.

At the time of completion the total storage capacity for the terminal for product storage will be around 630,000m³ with 26 operational product tanks.

The terminal has been designed to handle heavy fuel oil, fuel oil, gasoil/diesel, jet fuel, petrol and additives.

Provision for additional facilities like blending, heating, internal/ external transfers and flexibility in product usage have been incorporated in the terminal.

As it is still early days, IPTF is in discussions with potential customers in this sector.

The feedback received is confirmatory and firm tie-ups are in process, according to Shruti Arora, from IMIC and project director for the Fujairah project.

In October last year the Phase 1 EPC contract was

awarded to IL&FS Engineering and Construction Company (IECC), who has employed IOT Infrastructure and Energy Services as its subcontractor.

‘A combination of project management, expertise, experience and local presence are the key reasons that led to the selection of IECC,’ Arora explains.

Multinational construction company Saudi Binladen Group has a significant shareholding in IECC, providing the company with significant experience in successful implementation of mega infrastructure projects, as well as proven project management abilities.

UAE-based engineering consultancy firm MUC Oil & Gas Engineering Consultancy has been appointed as the employer’s representative/ consultant and will be taking the project management consultancy role for the project, including project design management and overall construction management, as well as the project quality management and HSE management.

IMIC is already engaged in projects in India and has been considering opportunities overseas as well, particularly focusing on MENA and eastern Africa. It is the first time IMIC is ventured into the port based oil logistics business, and with everything going for the project, it is very unlikely to be the last.

41

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January/February 2013 â&#x20AC;˘ TANK STORAGE

storage in the middle east

= double trouble?

Operators in Fujairah are feeling pleased with themselves: refinery capacity is growing, the new ADCOP pipeline has just opened and the location is attracting traders from all across Asia.

We speak to the main players to find out whether they are now in danger of overcapacity

Oil terminal storage capacity in the Middle East is forecasted to grow by about 5 million m3 over the next four years mainly due to the huge planned increase in storage capacity in Fujairah, United Arab Emirates (UAE).

The region’s construction boom comes at a time of rising oil production in the Middle East to meet growing international demand, especially from India, China and expanding energy markets in southeast Asia.

Demand is also growing in the Middle East itself, where several new refineries are planned to open over the next few years in Saudi Arabia, Kuwait and Fujairah, while a number of countries are planning to expand existing refineries.

The choice of Fujairah as the location to build new storage terminals owes to the emirate’s strategic location near to major oil producing countries at the mouth of the Strait of Hormuz, with safe, deep

water anchorage available in UAE territorial waters.

Already the world’s second largest bunkering centre, the growth of oil storage facilities in the Port of Fujairah is receiving strong support from the Fujairah government.

5.4 million m3 of storage capacity was in operation in Fujairah at the end of 2012, which is forecasted to increase to 7 million m3 by the end of 2013 with the completion of new storage projects totalling 1.6 million m3 Some 5.4 million m3 of storage capacity was in operation in Fujairah at the end of 2012, which is forecasted to increase to 7 million m3 by the end of 2013 with the completion of new storage projects totalling 1.6 million m3.

Based on terminal projects approved and land allocated for terminal construction, the government expects Fujairah’s storage terminal capacity to increase to 9 million m3 by the end of 2014 and reach around 10 million m3 in 2015.

‘Not all storage companies are fighting for the same clients.

For example,

TANK STORAGE • January/February 2013

Concord is with Sinochem, Gulf Petrochem is with Glencore and Socar Aurora Fujairah Terminal (SAFT) is with Socar of Azerbaijan,’ Salem Abdo Khalil, technical advisor to the Government of Fujairah, explains.

Currently 12 companies

already operate, or are planning to construct, oil terminal facilities in Fujairah with almost all offering third party storage facilities. In addition to those already mentioned, others include Vopak Horizon Fujairah (VHFL), VTTI Fujairah Terminal (VTTI FTL), EPPCO, ENOC, Emarat, GPS-Chemoil, Gulf Petrochem, IL&FS Prime Terminals FZC (IPTF), Concord Energy Fujairah Oil Terminal, ENOC Depot and Main Oil Crude Terminal (MOT).

Until recently almost all storage terminal capacity in Fujairah was built for bunkering use. This is changing however, due to the completion of the ADCOP Abu Dhabi-Fujairah Crude Oil Pipeline and the planned construction of a new refinery in Fujairah which will increase demand for crude oil and refined product storage in the port in future.

43

storage in the middle east oil pricing centre.

‘Becoming an oil pricing centre could be a byproduct of Fujairah’s storage terminal development,’ Khalil remarks.

‘Fujairah government’s idea is to fully utilise its location potential to open up jobs for locals.’

Vopak Horizon Fujairah currently offers 2.1 million m3 of storage. Although there is space for another 1 million m3 no decision has been reached on expansion proposals In addition, oil producers elsewhere in the Middle East and their customers, as well as international oil traders, are looking for safe storage outside the Strait of Hormuz for which Fujairah is ideally placed to serve the global oil market.

‘We have major players operating here so we want to be selective. We prequalify applicants, study them and their plans, then take a decision,’ Khalil says. ‘We have limited land in Fujairah Port and we are considering diversification of terminals’ activities such as encouraging blending services and consolidating cargoes so that end users have options.’

The government of Fujairah has invested in developing modern, high capacity oil terminals to handle the large volume of crude and refined products expected to pass through the port in future.

Facilities include seven berths, with a combined length of around 2,000m, able to accommodate six large vessels or 13 small tankers.

Some 52 marine loading arms are installed in the port at present while the central matrix manifold connects all storage terminals to all the berths and interconnects each storage terminal with each other as well.

To serve the growing number of vessels calling at the port as the number and

44

size of the storage terminals increases, there are two additional berths (8 and 9) with a combined length of 800m.

Fujairah Port Master Plan calls eventually for 21 berths to operate in the Oil Port Basin and adjacent breakwater.

These will include berths with a 23-25m draft designed to accommodate VLCC tankers.

In addition to these facilities, Khalil notes that Vopak operates six independent berths and has one Single Point Mooring (SPM) for loading and discharge from its recently expanded storage terminal.

In addition to building the port infrastructure, the government of Fujairah is also attracting investors of tank terminals with attractive port tariffs.

‘The government is reasonable with port charges.

There is a volume incentive – the more throughput, the more incentives there are,’ Khalil notes. ‘Also, the government of Fujairah has taken on the burden of investment in the port infrastructure.

Companies only have to build their terminals which is a great cost saving to them.’

With the volume of crude, bunkers and refined products stored and traded in Fujairah poised to increase substantially, it is expected to be only a matter of time before Fujairah becomes an

The operators’ point of view

Terminal operators building capacity in the region are confident overcapacity will not be a problem given the large growth potential as an international oil hub.

‘I am a firm believer in creating the infrastructure first and then the business comes.

There were similar concerns about overcapacity when Singapore developed but now storage is fully utilised there,’ Sanjeev Sisaudia, CEO of Gulf Petrochem says. ‘Once people know storage capacity is available business will follow.

As several projects are going on in Fujairah it can give an overcapacity impression but after a while no more land will be available. There is a limit.’

with the facilities and through connectivity with the Port of Fujairah as all terminals and jetties are connected.

Around 25% of Gulf Petrochem’s storage capacity is expected to be used for inhouse trading activities for project partner Glencore, while the remaining 75% share of capacity will be for third party rental.

‘If we see interest for higher contracted capacity then we will open up as all our tanks are profit centres,’ Sisaudia says. ‘Some storage capacity already is leased. The balance is under negotiation and should be finalised soon.

‘Most contacts are from major trading companies who see Fujairah as the next big location. These are companies evaluating their business options. There is a mix of companies; some are European, southeast Asian and some from China.’

Gulf Petrochem expects the majority of its storage capacity to be used for fuel oil, including bunkering, followed by gasoil products. Phase 1 utilisation is expected to exceed 65% for bunkering alone.

‘Depending on the availability of arbitrage, products stored here will come from Indian refineries; also, a

‘I’m a firm believer in creating the infrastructure first and then the business comes. There were similar concerns about overcapacity when Singapore developed but now storage is fully utilised there’ Sanjeev Sisaudia, CEO, Gulf Petrochem Phase 1 of Gulf Petrochem’s planned 1.2 million m3 oil terminal will be commissioned at the end of January.

There are 17 tanks in Phase 1 totalling 412,000m3, ranging in capacity from 12,000m3 to 40,000m3. There is flexibility

lot from the Middle East region and southeast Asia,’ Sisaudia says. ‘In terms of product destinations Fujairah is the reexporting hub to different parts of the world, plus the Middle East, East Africa, southeast Asia, India and Pakistan.’

The company is still

January/February 2013 • TANK STORAGE

storage in the middle east planning its Phase 2 development with its overall size and tank capacities still to be confirmed. The terminal site has space to construct an additional 788,000m3 of storage. One possibility is that Phase 2 also will be 412,000m3, doubling the terminal’s capacity.

‘We expect Phase 2 commissioning will not be before 2015. We are trying to get clearance as there are mountains to be cleared on the site.’

Chemicals: new opportunity?

‘We are not planning chemical storage for Fujairah right now but we are not ruling this out for Phase 2 if market analysis proves positive and we see market potential,’ Sisaudia adds.

Although most new storage capacity in Fujairah is planned to handle crude and refined products, the Port of Fujairah also has approved construction of a chemical terminal, anticipating growing demand for chemical storage in future.

‘Ganesh Benzoplast of India handles acetone and other chemicals for import and re-export, supplying the local market with chemicals for the paint industry and plastics,’ points out Khalil.

‘Chemical storage is in a separate area of Fujairah Port. Initially chemicals will be imported through an oil berth, but, later on, chemical tankers will use their own berth.’

Siavash Alishahpour, MD, VTTI FTL consisting of 11 tanks totalling 235,000m3, is underway and due for completion later this year. Phase 3 will consist of eight tanks totalling 295,000m3 to be completed in 2014.

When fully operational the terminal will handle over 5 million tonnes per year of crude and refined products.

Aegean Oil Terminal is also due to start up this year.

Located on a 100,000m2 site, the 465,000m3 capacity terminal consists of eight tanks which are due to be operational by early 2013.

Emirates National Oil Co (ENOC) is another company expanding its storage facilities, but for its own use only. ENOC owns 200,000m3 of refined product storage capacity in Fujairah Port and a further 2 million m3 of storage capacity at Jebel Ali oil refinery in Dubai that

serves its expanded refinery.

ENOC Fujairah Distribution and Trading Terminal totalling 240,000m3 is due to enter service by mid-year to boost the company’s refined products storage capacity in Fujairah Port.

Meanwhile, existing terminal operators in Fujairah Port are also planning further growth in capacity including VTTI Fujairah Terminal (VTTI FTL) which has space to build another 1 million m3 storage capacity and nearly double its terminal size.

‘We completed major terminal expansion projects during 2009 and 2010. Our terminal capacity expanded from 470,000m3 to 1.18 million m3,’ says Siavash Alishahpour, MD of VTTI FTL. ‘We have completed several other small and medium projects over the past three years to further improve it.’

The VITOL Group is currently VTTI FTL’s sole client though this could change after the terminal is expended. The terminal currently handles crude and a wide range of petroleum products including condensate, naphtha, jet fuel, diesel and different fuel oil grades.

In preparation for future expansion VTTI FTL recently added 250,000m2 of reclaimed land to its existing sea front site.

No decision to build new tank

storage has been taken so far.

‘There are several business plans under study by our business development team,’ Alishahpour says.

‘These potential business plans can lead us to build additional storage up to 1 million m3. However, there is no approved timetable for execution of any specific plan for the time being.’

No sign of a slow down Rapid expansion of Fujairah’s storage capacity is expected to slow in two to three years as the oil market absorbs the new capacity.

However, various other new terminal and expansion schemes are expected to move ahead if demand for storage continues to grow.

Eurex European Emirates Industries, for example, plans to build a 317,000m3 storage terminal in Fujairah Port while Falcon Fujairah Terminal plans to build a 600,000m3 capacity terminal in two phases.

Meanwhile, no decision has been taken yet on proposals to build Phase 7 at Vopak Horizon Fujairah (VHF) oil terminal where sufficient space is understood to be available to build an additional 1 million m3 storage capacity.

VHF currently offers 2.1 million m3 of storage after Phase 6 of the VHF project,

The big players Phase 1 of Socar Aurora’s Fujairah terminal was also completed in 2012. It is being built in three stages totalling 645,000m3. Phase 1 consisted of three tanks totalling 115,000m3, including pump facilities designed to handle up to 4,500m3 per hour of products and 3,000m3 per hour for clean products.

Construction of Phase 2,

VTTI Fujairah terminal has added 250,000m2 land for future expansion but has yet to reach a decision on the timetable for this

TANK STORAGE • January/February 2013

45

storage in the middle east 20 new tanks ranging from 20,000 to 40,000m3 in size and totalling 606,000m3 in capacity, was commissioned at the VHF terminal in 2012.

Vopak owns a 33.3% stake in the petroleum terminal while other shareholders are ENOC subsidiary company Horizon Terminals, the Government of Fujairah and the Independent Petroleum Group of Kuwait.

ENOC uses tanks for fuel trading while ENOC’s own petroleum terminal in Fujairah is used to blend fuel additives to produce petrol for the domestic market.

The VHF terminal has seen almost constant expansion since the original 489,000m3 capacity Phase 1 facility opened in 1999. Phases 2 and 3, completed in 2000 and 2001, added a further combined 323,000m3 capacity, expanding the terminal’s storage facilities to 812,000m3.

After commissioning the SPM buoy in 2003, VHF added a further 300,000m3 of storage with the completion of Phase 4 in 2004. Phase 5, which involved commissioning tanks totalling 380,000m3, was completed in 2008.

Prior to the recent Phase 6 expansion, the VHF terminal offered 1.5 million m3 of storage capacity in 48 mild steel tanks ranging in size from 6,000m3 to 60,000m3.

Flying high One terminal development scheme that has just secured funding is Concord Energy Group’s planned 1.15 million m3 Fujairah Oil Terminal (FOT), which is due for completion in time to handle its first cargo in October 2014.

‘We have spent the last nine months working hard to raise a $252 million (€189 million) project finance facility.

We successfully signed with a consortium of six international banks at the end of December 2012,’ says John Stuart, CEO of Concord Energy’s Assets Group. ‘Given the extremely

46

John Stuart, CEO of assets group, Concord Energy Pte challenging debt markets, we see the signing of this facility as a major endorsement of the very high quality of the project.’

Concord is partnered

by Sinopec and a Fujairah government nominee company in developing the new terminal. Sinopec’s involvement in the project began after Concord sold a 50% stake in the project to Sinomart KTS Development (Sinomart), which has significant experience in storage terminal operations and is a wholly owned subsidiary of Sinopec Kantons Holdings.

Rotary Engineering has been awarded a fixed price EPC contract to complete the new terminal in 21 months.

Construction is due to get underway by the end of January according to Stuart, who notes: ‘The government of Fujairah already has constructed all of the port facilities that our terminal will utilise. With foundations of solid rock the terminal does not face any soil stabilisation risks inherent in many terminal construction projects.’

Concord’s terminal will consist of 32 tanks when completed. Eight tanks totalling 569,000m3 will be built to store crude and fuel oil while four tanks totalling 164,000m3 will be installed to store fuel oil only.

Six tanks adding up to 152,000m3 will be constructed to store diesel while a further

14 tanks totalling 270,000m3 will be built to hold petrol and naphtha. Consequently, refined products will occupy about 40% of the terminal’s storage capacity.

ADCOP recently completed a 1.5 million bpd pipeline from Abu Dhabi to Fujairah.

‘In addition to bunker storage we will offer significant crude oil storage capacity as we anticipate taking crude supplies directly from the ADCOP pipeline. There is interest from oil majors in bringing in crude from the pipeline and storing it in our terminal. In future crude also will be imported for the new refinery planned for Fujairah.

Not all crude for the new refinery will be available from the Abu Dhabi-Fujairah pipeline,’ Stuart says.

FOT will connect its pipelines to the Fujairah Port matrix manifold to load and unload cargos for clients.

Connected to seven jetties in the port, Concord’s terminal will be designed to load and unload crude and fuel oil at 4,000m3 per hour for batches up to 120,000m3. Facilities installed will allow petrol and naphtha to be loaded and unloaded at 1,500m3 per hour for batches up to 30,000m3.

‘We are the first third party terminal project here to provide multiproduct storage.

Until now all storage terminal development has been for bunkers,’ Stuart says. ‘We have deliberately planned capacity for the storage of crude, gasoil and petrol.

‘The demand for crude storage is driven by the flow from the ADCOP pipeline, crude supply into the planned new refinery, and break-bulk and make-bulk flexibility. Our terminal will facilitate imports of “short” products such as petrol and exports of “long” products such as fuel oil.’

With construction work about to get underway, Concord is looking to conclude take or pay contracts for one to three years for its storage

tanks. According to Stuart, the company already has received two Letters of Intent from trading company clients for storage space and has received inquiries from oil majors for storage for up to 3 million barrels (500,000m3).

Concord is looking to provide clients with facilities to handle port calls by VLCC oil tankers in future. Currently fully loaded tankers up to 200,000 dwt can use Fujairah Port’s jetties while only partially loaded VLCCs can use the port jetties due to draft restrictions.

‘We expect a mixture of product origins: products from India, especially petrol, when there are shortages in the Middle East. Also, there are no local break-bulk facilities in Fujairah now for west Africa, that is done in Singapore at present,’ Stuart explains.

‘We are discussing with Fujairah Port about investing in a SPM but that would require a significant capacity commitment by clients.

‘Currently Singapore is the only major break bulk location in either Asia or the Middle East. VLCC loads of fuel oil are shipped from Europe and South America, then broken into smaller cargoes in Singapore and shipped to other Asian destinations.

‘Once the full range of products is available in Fujairah product will be broken there for on-sale into the region and the east coast of Africa.’

Concord expects to have contracted its entire terminal capacity by the time the terminal is commissioned.

‘It is more cost-effective to move bunkering ashore where there is lower risk of a spill. Also, there will be oil from the ADCOP pipeline taking up storage and oil majors will want to store products here.

‘There is little danger of storage overcapacity in Fujairah,’ Stuart agrees. Ship to ship bunkering will come onshore and take up capacity due to both environmental and economic pressures.’

January/February 2013 • TANK STORAGE

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tank terminal update

Tank terminal update – Middle East Iranian Oil Terminals Location Bandar Jask, Iran Products Oil Capacity 20 million barrels Construction / expansion / Construction acquisition Project start date May 2012 (announced) Investment $2.2 billion (€1.6 billion) Comment The new terminal will enable Iran to export more oil from Caspian producers and provide a backup option for Iran’s main export terminal at Kharg Island.

It will be connected to the Caspian Sea port of Neka via a 1 million bpd pipeline

National Iranian Oil Terminals Location

Port of Genaveh, Bushehr province, Iran Products Crude oil Capacity 8 million barrels Construction / expansion / Construction acquisition Project start date January 2012 (announced) Completion date End of 2015 Investment €91 million

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Iraqi Government Location Faw Peninsula, Basra, Iraq Products Crude oil Construction / expansion / Expansion acquisition Designer / builder Leighton Offshore Project start date October 2011 (announced) Completion date 2013 Investment $1.3 billion (€992 million) Comment Leighton Offshore’s contract is worth $518 million.

The project includes the construction of two marine pipelines and one onshore pipelines, as well as the installation of four single point moorings for loading oil tankers.

Foster Wheeler is handling the project management consultancy services

Tethys Petroleum Location Kazakhstan Products Oil Construction / expansion / Construction acquisition

Completion date The Aral Oil Terminal opened in January 2012 but could be expanded by a further 12,000 bpd shortly Comment The new terminal comprises oil storage tanks and a rail loading facility, which transports oil shipments from Tethys Petroleum’s Doris oilfield into the Kazakh rail system

January/February 2013 • TANK STORAGE

tank terminal update Oman Oil Company Location Products

Ras Markaz, Duqm, Oman Crude oil in addition to other products Capacity 200 million barrels Construction / expansion / Construction acquisition

Project start date October 2012 (announced) Comment Oman Oil Company is already is talks with potential clients, such as Petroleum Development Oman

Concord Energy Location Products

Fujairah, UAE Crude oil, fuel oil, gasoil, petrol, jet fuel Capacity 1.125 million m3 Construction / expansion / Construction acquisition

Designer / builder Rotary Engineering Project start date End 2011 Completion date Q4 2014

Vopak and SABIC Location

King Fahd Industrial Port, Jubail, Saudi Arabia Products Oil Capacity 250,000m3 Construction / expansion / Construction acquisition

Designer / builder Project start date November 2012 (announced) Completion date 2015 Investment $400 million (€305 million)

GPS Chemoil Location Products Capacity Construction / expansion / acquisition Completion date

Shoaiba II Combined Cycle Power Plant Project Location Products Capacity

Shoaiba, Saudi Arabia Fuel oil Seventeen storage tanks to be built at the Shoaiba II Combined Cycle Power Plant Project Construction / expansion / Construction acquisition

Designer / builder Rotary Engineering. The EPC contract is worth $34 million (€26 million) Project start date June 2012 Completion date 2013 Investment $1.23 billion

Emirates National Oil Company Location Products Capacity Construction / expansion / acquisition Project start date Completion date Investment Comment

Jebel Ali Free Zone, Dubai, UAE Petroleum products, including jet fuel 141,000m3 Construction

May 2012 (broke ground) Q4 2013 $142 million (€108 million) The terminal will also feature a 58km pipeline, which will be used to transport fuel to Dubai International Airport and Al Maktoum International Airport

Horizon Terminals Location Products Capacity Construction / expansion / acquisition Designer / builder Project start date Comment

Jebel Ali, Dubai, UAE Jet fuel 141,000m3 Construction

Punj Lloyd April 2012 (announced) The terminal will feature a 60km jet fuel pipeline to the Dubai International Airport, in addition to a tanker truck loading system which will connect the oil tanker berths with the related facilities

TANK STORAGE • January/February 2013

Fujairah, UAE Oil 675,000m3 Expansion from 86,000m3 to 675,000m3 with a total 21 storage tanks Q3 2012

Gulf Petroleum Location Products Capacity Construction / expansion / acquisition Completion date Investment

Fujairah, UAE Petroleum products 1 million m3 Expansion from 412,000m3 to 1 million m3 Q4 2012 $136 million (€103 million)

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

Fujairah, UAE Oil 600,000m3 Construction

IL&FS Mid-2014 $100 million (€76 million) EPC contract Primestar and Leasing & Financial Services began developing the terminal after receiving funding from a consortium of banks led

by India’s Bank of Baroda

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

Fujairah, UAE Oil 600,000m3 Construction

IL&FS Mid-2014 $100 million (€ million) EPC contract Primestar and Leasing & Financial Services began developing the terminal after receiving funding from a consortium of banks led

by India’s Bank of Baroda

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tank terminal update SOCAR Aurora Fujairah Terminal Location Products

Fujairah, UAE Fuel oils, gasoils and middle distillates including diesel, gasoil and jet kerosene Capacity Phase I: 144,000m3 in 2012

Phase II: 232,000m3 in 2013, including 10 new storage tanks

Phase III: 295,000m3 in 2014

Total: 645,000m3 comprising 22 tanks Construction / expansion / Construction on Phase II of the acquisition terminal is underway as Phase I has finished and the storage tanks built in both stages have been let. The project also includes a third phase, scheduled for completion in 2014. This will feature seven new tanks capable of storing a combined 295,000m3.

Project start date June 2012 (broke ground on second phase) Completion date Q4 2013 (second phase) Investment Phase II will be built at a cost of $61 million (€48.5 million), which is being supplied by Apicorp and the National Bank of Fujairah

Vitol Tank Terminals International Location Products Capacity

Port of Fujairah, Fujairah, UAE Oil 1.18 million m3, made up of 47 storage tanks, increased to 2.18 million m3 Construction / expansion / Expansion acquisition Project start date Beginning of 2014 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

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48

January/February 2013 • TANK STORAGE

In the storm’s wake

emergency planning

Hurricane Sandy shut oil distribution infrastructure in the Northeast down cold at the end of last year, putting terminals, tanks and the supply chain to the ultimate test

by Nicholas Zeman The Arthur Kill Waterway, between New Jersey and Staten Island, New York, serves one of the busiest fuel and petrochemical distribution centres in the US. BP, Kinder Morgan, Phillips 66, Gulf Oil, NuStar and Motiva all have terminals on Arthur Kill, which was right in the main path of Hurricane Sandy’s record surge.

There were several ‘minor’ spills along the waterway – two were equivalent to about one tanker truck each – but at the Sewaren, New Jersey terminal of Motiva Enterprises, (Shell), a tidal surge dislodged and ruptured a major fuel tank to discharge approximately 378,000 gallons of low-sulphur diesel into the water, officials said. Nearly three quarters of that amount escaped the containment area, rushing into the Arthur Kill and its tributaries. The New Jersey Department of Environmental Affairs says it is the state’s worst spill in over a decade.

Kayla Macke, spokesman for Motiva, told Tank Storage magazine: ‘We continuously monitor inclement weather developments such as hurricanes, and initiate preparation and response plans to minimise any potential impacts accordingly. The safety of our employees and assets, the community, and the environment remains our top priority.’

The tank was only 10% full, so this may have played a part in the tank being dislodged.

However ‘buoyancy’ rarely affects large, industrial steel tanks. The chances are increased for a tank to become buoyant during flooding if its volume is low, says Rob Newset of Amtech Tank Lining and Tank Repair. ‘This mostly happens to the fibreglass tanks that are used in chemicals and waste

TANK STORAGE • January/February 2013

water treatment,’ he says.

‘We’ve had to replace a lot of those since the storm.’

The US’ refining and petrochemical manufacturers have developed robust preparedness measures that can be taken in the event of a hurricane or other extreme weather event. However there was no risk mitigation strategy, no automated controls or check valves that could have anticipated a 14ft tidal surge that overwhelmed everything in its path. ‘You might have heard reports, but if you weren’t here, you have no idea how bad it was. Nobody has ever seen anything like this, 48 people were killed,’ says Danny Falcone, a former purchasing agent and terminal operator in New York markets, and now a fuels manager for Renewable Energy Group, headquartered in Iowa.

Ultimately, however, he said the industry did a remarkable job handling the disaster: ‘It was the best outcome of the worst situation. Everybody did the best job they could.’

Facility roundup Despite causing the worst oil spills in New Jersey for 10 years, Sandy also ‘crippled’ terminal infrastructure. It did, however, recover pretty fast.

The US Energy Information Administration reported, as of 13 November 2012 that only five of

the 57 terminals in Sandy’s path remained shut. Nevertheless, all of the terminals were damaged in some way. ‘Existing terminal and transfer locations had the primary function of getting damaged equipment repaired and the electricity back up and running,’ Falcone says.

‘If it has to pump out water or get a heat transfer to one of the tanks, a terminal cannot load or move any product.’

Over two weeks after the storm five port terminals in the Northeast remained closed: in New Jersey, the Hess terminal in Bayonne and CITGO terminal in Linden; in New York, the Phillips 66 terminal in Tremley Point and Motiva’s terminals in Brooklyn and on Long Island. These terminals are not only used for receiving imports, they are also used to receive waterborne oil products from major aggregating terminals in New York Harbour in order to move it into local distribution chains, particularly in the New York City area and on Long Island.

Phillips 66 says it had to take steps to supply its wholesale customers through its Linden terminal until its Bayway, New Jersey refinery resumed operations. The processing units at Bayway made it through Sandy undamaged, but the refinery’s capability to pump existing inventory to the terminal was disabled along with the marine dock which accepts shipments of

53

emergency planning fuel. Most of the damage was to electrical equipment flooded with saltwater during the historic surge. Phillips said Bayway would be down for two to three weeks following the storm. It also was coordinating a clean up effort with area officials and the US Coast Guard.

Approximately 185 barrels, or 7,700 gallons, of oil was spilled as a result of the storm surge.

Generators and the fuel to run them were also in high demand explains Dennis Burke of Burke Oil, Massachusetts.

‘Burke Oil was fortunate enough to have fuel on hand to serve the Federal Emergency Management Administration and the New York and New Jersey markets areas most affected.’

Electric power was the main issue for Kinder Morgan, New York Harbour terminals and its other facilities in Carteret and Perth Amboy in New Jersey and Staten Island, New York.

‘Like others, we experienced flooding, damage and a loss of electricity at our Northeast facilities,’ Kinder Morgan terminals president Jeff

54

Armstrong says. ‘Thanks to our pre-storm preparations, and extremely dedicated employees working around the clock following it, we have made significant progress in assessing these terminals and preparing to resume service.

We will be able to resume operations even if power has not been restored, as we have brought in power generation resources from our operations elsewhere. Additionally, we are working closely with government agencies to restart operations as soon as possible.’

Nustar also indicated to Tank Storage magazine that its terminal in Paulsboro, New Jersey was also compromised by power outages: ‘We have a good relationship with New Jersey Governor’s office and we had generators out at the site quickly. But there was a lot of flooding, and a lot of water had to be pumped out.’

The storm also killed an independent terminal deal.

TriState Biodiesel (TSB)of New York was looking at purchasing a fuel terminal along the Pasaic River but, after reviewing the damage done, TSB is not moving forward with the acquisition. ‘This location

was clearly in a flood zone,’ states Dehran Duckworth, fuels manager at TSB. Things look different Hurricane Sandy showed the intimate integration of the fuel supply chain – if a terminal taking loads off a pipeline goes down, pretty soon the pipeline is backed up and the list goes on. Even the backup of a few loads can cause huge disruptions. A bottleneck in the Colonial Pipeline for instance, the prime connector of Gulf coast refining capacity to New York markets caused a build up in inventories. With capacity disrupted, many terminals in the region did not have the ability to take volumes off the Colonial Pipeline.

‘Even if you were not in the path of the storm you were still damaged because of the chain reaction,’ Falcone says, adding that the fuel distribution system is fragile and complicated. Every link supports each other through symbiotic relationships. The storm also showed, however, that there is an opportunity for independent fuel suppliers – not 100% dependent on the traditional

supply chain – to provide product in times of shortages or increased demand. ‘There are going to be shortages, and that is when you have a good position with a ratable product,’ Falcone says. ‘Having your 60,000 gallons of storage stocked will be gone in a day, so you have to think bigger.’

‘We try to keep our avenues of acquiring fuel very open,’ Duckworth agrees. ‘We are connected to a small network of producers in New England and that kept us going through the storm. For one thing it was refreshing because there was no skepticism about biodiesel, we just heard “We need fuel and we need it now” from customers. There has been a push-back against biodiesel based on lack of info, but it performed well and even more importantly, was available through the storm.’

All of a sudden, suppliers with access to alternatives like renewable fuels had an opportunity. Even major oil companies were making deals with third parties to get fuel, and the storm showed that independent fuel suppliers need to be prepared for those situations in the future.

January/February 2013 • TANK STORAGE

page header

This conference is response to the challenge being faced by U.S. petroleum companies who are pumping crude out of the Bakken shale in North Dakota and Montana. The sudden increase in volume has resulted in the problem that the companies are having problems shipping the crude to the refineries. This conference is a follow up to our highly successful 2012 Bakken Crude Oil Logistics Conference, where we had very good attendance, numerous sponsors, and a great lineup of speakers. This event is organized to help bring together the crude producers, the rail companies, truckers, barges, and p those who provide technology solutions to help develop a more efficient supply chain.

March 7-8, 2013 JW Marriott | Houston TX

www.crudeoillogistics.com

PRESENTED BY

TANK STORAGE • January/February 2013

51

training

Training: just like a fine wine...

In the world of health and safety, good workplace competency takes centre stage. In the early days, competency was a mere ideal thrashed out by safety experts over bad coffee. Now, competency has become the standard high hazard sites are compelled to achieve.

What is competency?

Storing up good faith with Simons Client: Simon Storage Brief: Delivery of vocational assessment against L2 Diploma in Bulk Liquid Operations. Develop training modules based around Simon’s core operational principles, supporting the knowledge requirements of the L2 Diploma in Bulk Liquid Operations, including: • Process safety • Tank dipping and sampling operations • Jetty operator responsibilities • Safe product transfer • Road receipt and discharge operations • Rail receipt and discharge operations • Routine maintenance Timeline: 2009 - present Flexible on training, inflexible on safety Developing training materials around Simon’s specific needs has had a measurable impact on the company’s competency culture. Outcomes include: • Standardising training material across the group and raising the importance of the minimum operating procedures • Cost benefits by introducing authorised trainers • Validated training by an independent body (NSAPI) • Supporting cogent gold standards.

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Like a fine wine, competence matures over time. Bubbles of personal improvement float to the surface through a mix of training, on-thejob learning, instruction, assessment and qualification.

Now, the Process Safety Leadership Group (PSLG) report into Safety and Environmental Standards for Fuel Storage Sites describes competency as: ‘A combination of practical and thinking skills, experience and knowledge. It means the ability to undertake responsibilities and to perform activities to a recognised standard on a regular basis.’

To clarify, competency simply means keeping the workplace safe today, tomorrow and happily thereafter.

Does everyone need to be competent?

In short, yes. This is particularly the case given that the Health and Safety Executive (HSE) has grabbed the issue by

the scruff of the neck. As the HSE embarks on its review of competency management systems, with a focus on high hazard sites, the industry must analyse its ability to demonstrate and continually develop competency.

Good competency systems: • Support regulatory compliance • Reduce incidents • Avoid working days lost and potential litigation • Enhance profitability by getting things right proactively rather than reactively.

And this is more than just about the law. Good competency keeps staff happy thereby improving culture and attitude within working environments.

Balancing the equation Good workplace competency consists of a careful blend of unique elements. Just like the perfectly balanced petrochemical compound, getting the mix right is crucial – one wrong ingredient and things can quickly turn volatile.

Competency comprises three core elements: knowledge, skill and experience. In this age of greater autonomy, two key behavioural aspects must also be taken into consideration: understanding and attitude.

The secret ingredients: • Knowledge: the ability to undertake specific

January/February 2013 • TANK STORAGE

training

•

•

•

•

tasks, in the right order, with the correct resources. Knowledge can be derived through classroom-based and onsite training as well as continuous development within the workplace.

Skill: practical and mental aptitude to carry out the task at hand, to a recognised standard, on a steadfast basis.

Experience: develops over time. It is important in this development phase that personnel know what good competency is and embed this into their routine. This should be supported by robust assessment practices, ensuring the ability to perform prior to going ‘solo’ and refreshed throughout their career.

Understanding: a deeper aspect of ‘knowledge’.

It represents individual awareness of the consequences of the actions you take, be those good or bad.

Attitude: influenced by a variety of factors including personal aspects of our lives that may affect concentration.

Qualifying good competence There are a range of available vocational and academic qualifications, including: Awarding body

Qualification type

Usage

PAAVQ-Set and City and Guilds

L3 award assessing competence in the work environment

This qualification ensures the competence of those carrying out roles in the workplace, using observation and questioning as the principle assessment methods.

PAAVQ-Set and City and Guilds

Downstream standards: • L2 Diploma in Bulk Liquid Operations • L2 & 3 Diploma in Field Operations • L2 & 3 Diploma in Jetty Operations • L3 Diploma in Control Room Operations

These qualifications form the backbone of competence standards within the downstream sector. Underpinning knowledge and performance requirements, they can be taken as full qualifications or broken down into separate units.

NEBOSH

• L3 Award in Oil and Gas Operational Safety • L2 Award in Health and Safety for Process Industries

These qualifications underpin health and safety, whilst ensuring the value of good process safety is embedded into the organisation.

NSAPI

• Process Safety Leadership • Process Safety Management - Foundations • Process Safety Management - Operations (due 2013)

Three sets of standards underpin process safety across all levels from operators through to senior managers.

NSAPI also provides validation for bespoke course development.

Cogent

Downstream Gold Standards • Bulk Storage Operator • Jetty Operator • Field Operator • Control Room Operator • 1st Line Supervisor

This is a national framework for continuous professional development, setting out the skills required to deliver Gold Standard performance in key job roles within the downstream sector.

Enhancing core skills across four areas: Technical Competence, Functional and Behavioural, Business Improvement and Compliance.

Managing competency systems A competence management system (CMS) needs to ensure that staff have received appropriate training and continuous development.

Any effective CMS should align to six key principles:

1. Demonstrating leadership/ commitment 2. Identifying business critical activities relating to the control of accident hazards 3. Setting procedures and standards 4. Compliance against your standards

So who sets the standards?

Cogent

National Skills Academy for Process Industries

Awarding bodies PAAVQSet/ City and Guilds

Trainers/assessors and training providers

Cogent, led by employers, works closely with industry to identify skills gaps and needs, developing standards and qualifications. Cogent underpins the quality of the standards developed and passes to the awarding bodies for formulation into the formal qualification structure.

NSAPI links training providers with industry, providing skills assurance, helping identify training gaps as well as benchmarking skills against the gold standards.

NSAPI also leads the development in Process Safety Training Standards, providing a suite of standards from senior executive through to operational personnel.

They are leading the way developing standards with Cogent and the downstream advisory council to improve petroleum safety training aimed at contractors in high hazard environments.

Awarding bodies play a vital role in ensuring the quality of the standards delivered. These include: • Approving centres for delivery of the qualifications • Ensuring Assessors are Competent to assess • Providing external quality assurance to ensure that centres reach and maintain the high standards required.

They are regulated by the Office of Qualifications and Examinations Regulation, the Welsh Government, CCEA and the Scottish Qualifications Authority.

The trainers’ role is vital in imparting knowledge. Whether training is developed and delivered in-house or provided by an external provider, it is the quality and consistency that counts.

TANK STORAGE • January/February 2013

5. Taking actions to improve competence 6. Commitment to continuous improvement.

A good CMS does not just provide assurance to regulatory authorities; it delivers tangible benefits to the business by reducing risks to people, environment, plant and profit.

Industrial strength competency Good workplace competency is not just about a one off review, observation or audit.

It lays the foundations on which safer performance is built and embedded in an organisation, its culture, workers and business. That is why it is so important to get it right.

For more information:

This article was written by John Reynolds, director at RTS – a leading provider of specialist safety training and consultancy to the petroleum and petrochemical industries, www.reynoldstraining.com John Reynolds will also be presenting at the upcoming StocExpo Conference & Expo in Antwerp from 19-21 March, www.stocexpo.com

57

automation

Aluminum geodesic dome roofs are used to cover storage tanks up to 120 m diameters in the petroleum industry.

• Extreme Light-Weight Construction • Corrosion Resistance • Low Maintenance • Low Erection Cost • Minimum Emission

54

January/February 2013 • TANK STORAGE

automation

Sometimes it takes a partnership Terminal automation supplier Toptech Systems has partnered with Rotterdambased Argos Group and others in Europe to pilot a platform that is able to deliver terminal lifting data to partners that do business at these terminals.

For the last few years Toptech has been working to address the various ‘right-tolift’ controls suppliers want to leverage to appropriately allocate to their customers.

These controls include credit and allocation management as well as order-based loading.

The Toptech Data Services (TDS) platform has been used in the US for the past 15 years. It is a hosted data exchange service between terminal operators and fuel suppliers. TDS services include Bill-of-Lading (BOL) data delivery as well as lifting control toolsets designed to give customers better visibility and management over their business.

First steps in Antwerp In October 2010, Toptech hosted a workshop at its Antwerp facility to initiate dialogue about the exchange of data between European petroleum trading partners.

This event was attended by many of the industry’s most influential players, such as Argos (North Sea Group), BP, Comfort Energie, ExxonMobil, Kuwait Petroleum, Lukoil, and Shell.

Shortly thereafter Toptech became involved in the Terminal Data Exchange Standards (TDXS) initiative.

The goal of this initiative is to formulate a global data exchange standard that is built on both US PIDX standards and EU requirements.

The first phase of this effort offers direct feeds of BOL data from select terminal facilities to TDS. These feeds will enable

Argos is among the first in Europe to adopt a centralised data clearinghouse approach to share critical terminal data with others in the supply chain Argos and other customers to visualise real-time lifting data from the non-owned terminals in which they do business.

Recently, the completion of the second phase of this project now offers direct data feeds to the Argos TopHAT system. TopHAT, another product of Toptech, provides consolidated terminal data from both the Argos owned and non-owned facilities. This consolidated data is fed directly into the Argos ERP system.

According to Martin Sissing of Argos: ‘We are very pleased to be among the first in Europe to adopt a centralised data clearinghouse approach to share critical terminal data with others in the supply chain.

As Argos continues to expand our infrastructure, it will be increasingly beneficial to have the ability to provide our customers with critical lifting data in real-time. In addition, we are able to receive data from our own terminal network

TANK STORAGE • January/February 2013

as well as Outside Supply Points (OSPs) in real-time using a single interface our TopHAT to our ERP system.’

The same benefits seen

by Argos can be enjoyed by others in Europe. Any facility using Toptech’s TMS inherently supports TDS. In addition, most automation systems today support PIDX protocols which are also supported by TDS. Companies have valid data exchange options available today and the opportunity to align with the global standard when it is available.

The future is bright With the European community working towards the adoption of a global standard, new opportunities are beckoning on the horizon.

Through TDS and other data clearinghouses, companies can simplify and improve business processes while at the same time exercising tighter inventory controls.

The TDS platform has been designed to work with the established PIDX protocols ensuring compatibility with most major terminal automation systems. For added flexibility, TDS also supports a proprietary data exchange format via TMS, the company’s own automation solution which is used at over 800 facilities worldwide.

Rising fuel costs drive the need for tighter supply and inventory controls.

Furthermore, most companies seek to reduce IT infrastructure and complexity by turning to hosted software platforms, also referred to as ‘Software as a Service’ (SaaS) to perform critical functions such as data management and routing. Industry-wide data clearinghouses are designed to remedy for the aforementioned challenges.

For more information www.toptech.com

59

tank foundations

Renovated tank foundations – design and safety considerations The foundation is one of the most important parts of a storage tank. However most codes do not provide detailed requirements and guidance on foundation design. Furthermore, codes such as EEMUA and API do not provide recommendations on renovated tank foundations, only for newly built tanks.

Certain types of foundation such as concrete ringwalls might be too expensive and time consuming for renovated tanks.

Although the subsoil underneath a renovated tank has experienced greater load in the past, a systematic design methodology still has to be considered, especially when the subsoil conditions exhibit large settlement and are sensitive to variable loading. This is often neglected due to insufficient knowledge on foundation and subsoil conditions.

Codes and standards also provide little guidance on this issue, raising difficulties to practitioners who then

have to resort to engineering judgment for repaired tank foundations. In this case, expertise in local subsoil conditions and knowledge in foundation engineering design are of paramount importance.

This article is written based on a case study of renovated tanks with particular emphasis on the foundation design of the stone-ring with an inner sand pad as the foundation type.

The tank type is a floating roof with product liquid of less than 70ºC. The tank diameter ranges between 15-76m with maximum short-term foundation pressure of 175kPa. Foundation design A tank foundation must be designed with a view to satisfy the following performance criteria: - It is capable of supporting the load of the tank and its content – the ultimate limit state (ULS) - Without excessive settlement that might hinder structural integrity

– service limit state (SLS) Maintain the integrity of the tank structure throughout the life cycle time of the tank.

In the case of tank repair, the repaired foundation still has to be designed to fulfil the above criteria. Particular attention should be paid to ensure the ULS of a renovated tank foundation remains within an acceptable range according to what is stipulated in the standards. However, the available standard only provides the required factor of safety (FoS) of newly built tanks, which is obviously the requirement designated for original subsoil conditions.

If the tank previously performed satisfactorily over an acceptable period, the FoS pertaining to that period may be used as a benchmark to assess stability requirements of the repaired foundation. At any rate, the repaired foundation should take into account: (1) possible settlement due to the additional load as a consequence of new design geometry, new materials or contents, and (2) the tank’s lifetime (lifetime for the next operational period). These requirements should be emphasised where subsoil conditions -

Tank foundation being prepared

60

promote large total and differential settlements.

ULS Global and local analyses have to be performed to assess all possible failure patterns of the renovated tank foundation by modelling the tank foundation, paying particular attention to the edge of the tank. Those analyses have to be performed taking into account: (1) specific and critical load cases, and (2) the quality of the repair works.

In the case of tank renovation, the stress history of the subsoil has been influenced by the previous foundation system and loading conditions.

Specific attention must be paid to the evolution of soil properties resulting from the previous consolidation and settlement occurring during the first phase of loading.

Therefore, three major load cases have to be considered to reflect the stress history of the subsoil: (1) load case when the tank was initially built (load case A), (2) at the end of the operational period just before the tank was emptied to be repaired (load case B), and (3) with the renovated foundation (load case C).

The FoS for load case C should preferably not be lower than any of the FoS for other load cases to maintain compatibility of design requirements with those observed during the tank’s first satisfactory operational period.

If this is not the case then the tank owner should be informed where a decision and possibly

January/February 2013 • TANK STORAGE

tank foundations counter measures against the low FoS after renovation (load case C) should be taken.

An additional critical load case has to be considered when the tank is lowered onto the renovated foundation, since local failure around the tank edge may be induced as a consequence of eccentric loading of the tank shell weight.

In this case, construction details around the edge and quality of repair works are of paramount importance.

The construction details around the edge might include the foundation thickness, the foundation shoulder width, the quality of the repair work and the type of material around the edge. The presence of sand-asphalt layer, and the related drip plate welded perpendicularly to the outer edge of the annular bottom plate, must be considered.

SLS Although the subsoil has experienced a greater load in the past, the issue of additional settlements of the renovated foundation under extra materials has to be explicitly considered. However, a distinction should be made between the settlement that takes place uniformly and gradually or unevenly.

Settlement that takes place uniformly and gradually does not cause stress to the imposed tank structure as explained in API Standard 653.

The magnitude of the uniform settlement should be taken into account in the final design of the renovated foundation as to maintain the foundation level within the acceptable limit.

Uneven settlement causes significant problems to the tank structure as it may introduce stresses on the tank shell. This settlement is observed by measuring shell elevation along its perimeter during hydrotest, repair phase and operational period. API Standard 653 provides detailed explanation on assessing

Factor of Safety evaluated for the five tanks

various settlements to maintain tank integrity. However, there is no detailed guidance as to what Percentage Allowable Settlement (PAS) can be tolerated right after foundation repair.

For repair tank foundation (renovated tank foundation), specifying the PAS after hydrotest is required, in the authors’ opinion, (1) to allow controlling foundation work, (2) to enforce quality construction work and (3) to allow for future deformation during repaired tank’s operational lifetime.

of: (1) relatively loose to medium dense sand, (2) very soft to soft peat and clay, (3) medium dense to very dense sand, and (4) stiff clay.

The lateral variability of the subsoil is significant in this area where the thickness of the soft soil can vary from 1m to 10m, while the depth of the top of the weak layer ranges from 1m to 5m. The first two layers are considered as the governing layers for the foundation design, especially the depth and the thickness of the weak layer.

Case study

Observations - ULS

The case study involved five selected tanks with tank diameters of 44-61m giving volumetric sizes ranging from 19,500m³ to 47,300m³. The tanks were built in the 1950s.

Only one of the five tanks had a fixed roof while the others had a floating one – these roof types were kept the same after the tank repairs.

All the tanks were located at the same area where the subsoil conditions, in descending order, consist

In all the cases the FoS showed a significant increase from load case A to load case B due to the increase of the undrained shear strength (Su) as a result of consolidation process taken place during the previous operational phase.

On the contrary, the addition of new foundation materials reduces the FoS due to additional stress concentrations on the weaker soil. Most of the slip surfaces reach the base of this layer and

Failure pattern with thin very soft to soft clay

Failure pattern with thick very soft to soft clay

TANK STORAGE • January/February 2013

61

tank foundations

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the failure pattern evolves from a pure edge shear mechanism to a partially lateral squeezing between the two sand layers, sandwiching the clay layer depending on the depth and the thickness of the latter. This emphasises the importance of analysing renovated tank foundations systematically by taking into consideration the stress history of the subsoil.

The local analyses showed significant effects on the required foundation dimensions such as shoulder width and the use of a drip-plate. For a stone-ring foundation the local FoS increases sharply with the shoulder width in the 0.5 to 1m range, and then levels off beyond a shoulder width of 1.5m.

Therefore, a minimum foundation shoulder width of 1.5m was adopted. This complies with the available standard (EEMUA Publication 183), but it is in variance with API Standard 650 which suggests a minimum shoulder width of 0.9m.

It is understood that the sand-asphalt placed underneath the tank bottom has no structural capacity.

However, it was observed that the thin layer of sand-asphalt might significantly influence edge settlement especially upon tank landing. The actual sand-asphalt behaviour remains uncertain because it depends on several factors, especially its viscosity under variable loading (creep and fatigue).

In this study, the sandasphalt layer is characterised as a geotechnical layer by adopting a Mohr-Coulomb geotechnical failure criterion.

Following a conservative approach, the drip-plate was shown to help confine the sand-asphalt layer, thereby reinforcing the foundation against localised failure around the edge of the tank.

However, the shear strength of the sand-asphalt still governs the stability around the edge of the tank. Incorporating a drip-plate into the design

58 anzeige_halbe_Seite.indd 1

increased the FoS by about 0.5m, conveniently providing the required safety margin.

Observations - SLS The global settlement analysis was performed on the tank to distinguish between the short- and the long-term settlement behaviours. Shortterm settlement reaches the maximum value close to the tank edge while the long-term settlement reaches the maximum value at the centre of the tank.

Long-term settlement is mainly governed by the thickness and the depth of the weak and compressible layer, while the short-term settlement is mainly governed by the stiffness of the upper layers.

The maximum foreseeable post-repair settlements have been calculated at about 40cm at the shell location against a maximum of about 70cm at the centre of the tank.

The settlement anticipated at the shell has been added to the recommended 60cm foundation thickness to enforce the required free board of the tank periphery above the average adjacent terrain.

Finally, permissible settlement criteria for the three settlement criteria defined by API Standard 653 (shell, edge and bulge settlements) have been set as 40% of the corresponding maximum allowable settlement.

This criterion is related to settlements measured after a hydrotest. Those settlement criteria were specified based on: (1) observation of settlement data, (2) feasibility, and (3) discussions with the client.

For more information:

This article was written by Prigiarto Yonatan and Nicolas Charue from Fugro GeoConsulting Belgium, www. fugro.be in cooperation with Alain Holeyman from GeOpinion, Belgium and Evert Martens, freelance EEMUA 159 and API653 assessor at Tanxperts, www.tanxperts.com, Netherlands.

This article focuses only on limited aspects which are considered vital for renovated tank design, leaving out details pertaining to the design.

January/February 2013 • TANK STORAGE 21.12.2012 10:14:10

roofs

Is a floating roof enough for shale oil tanks?

True vapour pressure (TVP) is a physical property pertaining to the potential of a liquid to evaporate. TVP is a critical parameter in the estimation of storage tank emissions, and it is also used to determine the applicability of air regulations to a given storage tank.

When a regulated storage tank contains a volatile organic liquid which has a TVP greater than 11.1 pounds per square inch absolute (psia), regulations typically do not allow a floating roof as a control option but rather require the emissions to be routed to a vapour control device. Accurate determination of the TVP, then, is critical for determining whether a floating roof is an acceptable control option for a given storage tank.

This issue has become particularly sensitive for the light crude oils that are produced from shale oil plays, in that traditional determination methods may predict the TVP of these light crude oils to occasionally exceed the 11.1 psia limit.

Storage tanks containing stabilised crude oil are generally equipped with floating roofs to control air emissions.

A floating roof covers the liquid surface, thereby largely preventing the evaporation that would otherwise occur at a free liquid surface. Floating roofs have been demonstrated to achieve well upwards of 90% reduction in storage tank emissions, as long as the stored liquid is not boiling.

Floating roof storage tanks may have a dome-shaped fixed roof, a cone-shaped fixed roof, or no fixed roof (i.e., open at the top).

Floating roofs have been demonstrated to achieve well upwards of 90% reduction in storage tank emissions, as long as the stored liquid is not boiling

TANK STORAGE â&#x20AC;˘ January/February 2013

Floating roof tank A floating roof is deemed a pollution prevention measure, in that it prevents pollutants from being generated rather

than treating pollutants after they have been generated. Pollution prevention is generally preferable to vapour treatment, in that vapour treatment involves a system to capture and convey vapours to a control device. The control device requires energy to operate, and it may produce secondary emissions as a result of the vapour treatment process.

For example, if the vapour treatment process is combustion, then the oxidation of the organic vapours results in the emission of combustion products such as carbon monoxide, carbon dioxide, nitrogen oxides and sulphur oxides. The use of a pollution prevention measure avoids the creation of these secondary pollutants, and it saves the costs and energy consumption associated with operating a vapour control device.

The recent surge in crude oil production in the US has focused on the use of hydraulic fracturing to recover oil and gas from shale plays, such as the

Eagle Ford in Texas, the Bakken in North Dakota, and the Utica in Ohio. Liquids produced from these shale plays tend to be lighter and more volatile than conventional crude oils. In fact, it is

somewhat arbitrary as to whether these liquids should be characterised as crude oil or condensate. For purposes of this discussion, liquids from these shale plays shall be referred to as light crude oil.

On the one hand, light crude oils are advantageous as they are easier to process than heavy crude oils. On the other hand, some of these light crude oils may have a maximum TVP that approaches the limit for floating roofs of 11.1 psia under certain storage conditions.

TVP from RVP The conventional method of predicting the TVP of petroleum liquids is to extrapolate the TVP from a measurement of the Reid vapor pressure1 (RVP). RVP is the vapour pressure measured under specified laboratory conditions at 38Ë&#x161;C, whereas TVP is the actual vapour pressure of the liquid under the given storage conditions. Thus, while RVP is always

63

roofs measured at 38˚C, TVP is determined for the given storage temperature.

TVP is extrapolated from RVP by means of correlations that are published by both API2 and EPA3. The correlation equations are used to calculate values for vapour pressure constants A and B that are then used in a relationship based on the Clausius-Clapeyron equation to predict TVP as a function of temperature. This equation for predicting TVP is presented as equation 1-24 in EPA’s AP-42 7.1 document: PV = exp[A – B/(TLA + 459.67)] where: PV is the TVP (psia), and TLA is the average temperature at the liquid surface (degrees Rankine).

Values for A and B to be used in this equation are determined for crude oils from the equations given in AP-42 7.1 Figure 7.1-16: A = 12.82 – 0.9672 ln(RVP) B = 7261 – 1216 ln(RVP) The reference given in AP-42 for these equations is Evaporative Loss From Fixed Roof Tanks, Second Edition, Bulletin 2518, American Petroleum Institute, Washington, D.C., October 1991. This reference does not give a source for these equations, but similar equations are presented in the parallel document Evaporative Loss From External Floating-Roof Tanks, Third Edition, API Publication 2517, American Petroleum Institute, Washington, D.C., February 1989. API Publication 2517 is the document cited in EPA regulations4 for the methodology to determine TVP from RVP. API Publication 2517, Third Edition, states that these equations were derived from a regression analysis of points read off a nomograph, which is the same nomograph presented in AP-42 7.1 Figure 7.1-13a. This nomograph appears in the first edition of API Bulletin 2518, dated June 1962, but no source is indicated for it. Thus the equations for extrapolating TVP from RVP are derived from a nomograph of unknown origin that dates back to at least 1962.

Problems with the RVP correlations The validity of this nomograph has been questioned from time to time. The California Air Resources Board (CARB) developed a correction factor for predicting TVP from RVP5, on the basis that ‘an error was discovered in the API nomograph calculated values of TVP so that the RVP

64

was not equal to TVP at 38˚C as was expected given the general definition of RVP.’6 The CARB correction factor adjusts the TVP curve such that it reasonably matches the RVP value at 38˚C. This CARB correction has not received much attention outside of California, perhaps because the adjustment is relatively inconsequential for conventional crude oils. AP-42 suggests that a typical RVP for crude oil is 5 psi. The calculated TVP for an RVP 5 crude oil at a storage temperature of 15.5˚C would be 2.2 psia using AP-42, or 2.9 psia using the CARB-corrected value.

However, at higher values of RVP the difference becomes quite dramatic. The TVP at 15.5˚C for an RVP 12 crude oil is 9.6 psia using the AP-42 correlations, but only 4.1 psia using the CARB corrections.

Thus the apparent inaccuracy of the AP42 nomographs becomes substantially more significant for light crude oils than it is for conventional crude oils.

Comparisons of TVP predictions for an RVP 12 crude oil Temp (C) Reid

AP-42

CARB (corrected)

5 6.9 2.3 10 8.2

3.1

15 9.6

4.1

21 11.2

5.4

27 13.0

7.2

32 14.9

9.4

38

12 17.1

12.2

It appears from Table 1 that the overstatement of TVP from the AP-42 methodology would wrongly indicate that an RVP 12 crude oil stored at 21˚C exceeds the 11.1 psia cutoff for allowing a floating roof, whereas the CARB correction indicates the TVP to be only 5.4 psia. The overstatement of TVP by the AP-42 methodology is thus a significant issue for the storage of light crude oils.

Problems with the ASTM D2879 alternative EPA regulations specify, as an alternative to the RVP method of ASTM D323, use of ASTM D28797 to determine TVP. This method does not involve correlation equations, in that TVP is directly measured over a range of temperature in order to establish the TVP-temperature relationship. ASTM D2879 has been found to give significantly lower TVP values than those predicted by the RVP methodology, but questions have been raised concerning the validity of ASTM D2879 for light crude oils.

In order to assure that the TVP measured

by ASTM D2879 excludes the contribution of dissolved gases such as air, the test

method specifies that the sample shall be ‘degassed’ by ‘gentle boiling.’ In that the relatively high TVP of these light crude oils is due to the presence of light ends that may readily boil, it would seem that the sample is no longer characteristic of the light crude oil after undergoing this degassing procedure.

Disproportionate loss of the light ends would result in understating the TVP of the sample.

More work needed EPA regulations specify determination of the TVP for volatile organic liquids either by measuring the RVP and then predicting the TVP from correlations given in AP-42, or by direct measurement of the TVP over a range of temperatures in accordance with ASTM D2879. The RVP method has been shown to grossly overpredict the TVP of light crude oils, and there is potential for ASTM D2879 to underpredict the TVP of light crude oils. There is, then, a need for improved methodology to determine the TVP of these light crude oils.

For more information:

This article was written by Robert L. Ferry at the TGB Partnership. To hear more Ferry will be leading a Tanks Essentials Training course at this year’s LDAR/ BWON/TANKS/FLARES (LBTF) Conference on 19-21 February at the Hyatt Regency in Austin, Texas.

1 ASTM D323 – 08, “Standard Test Method for Vapor Pressure of Petroleum Products (Reid Method),” ASTM International, West Conshohocken, PA. 2 American Petroleum Institute, Evaporative Loss Reference Information and Speciation Methodology, Manual of Petroleum Measurement Standards chapter 19.4, Third Edition, Washington, D.C., October 2012.

3 U.S. Environmental Protection Agency, 7.1 “Organic Liquid Storage Tanks,” in Compilation of Air Pollutant Emission Factors, USEPA Report No. AP-42, November 2006.

4 U.S. Environmental Protection Agency, “Standards of Performance for Volatile Organic Liquid Storage Vessels (including Petroleum Liquid Storage Vessels) for Which Construction, Reconstruction, or Modification Commenced After July 23, 1984,” 40 CFR Part 60, Subpart Kb, §60.116b(e)(2)(i); also, the definition of maximum true vapor pressure in 40 CFR Part 63 Subpart G, §63.111.

5 State of California Air Resources Board, Technical Support Division, “Technical Guidance Document for the Emission Inventory Criteria and Guidelines Regulation for AB 2588 (Air Toxics “Hot Spots” Information and Assessment Act of 1987),” August 1989. http://www.arb.ca.gov/ab2588/tgd1989.pdf 6 Ibid., 103.

7 ASTM D2879 – 10, “Standard Test Method for Vapor Pressure Temperature Relationship and Initial Decomposition Temperature of Liquids by Isoteniscope,” ASTM International, West Conshohocken, PA.

Hear more about this topic at the upcoming LDAR/BWON/Tanks/Flares Conference Feb 19-21st in Austin, TX More information at www.lbtfconference.com or info@lbtfconference.com

January/February 2013 • TANK STORAGE

Sign up now to receive your FREE weekly newsletter providing up-to-date information on acquisitions, mergers, new terminals and the latest regulations: www.tankstoragemag.com/tsm_newsletter.html If you would like your companyâ&#x20AC;&#x2122;s name to feature in this please contact margaret@tankstoragemag.com (+44 (0)20 8687 4126)

TANK STORAGE â&#x20AC;˘ January/February 2013

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degassing

Making the commitment Since degassing is one of the most dangerous and regulated procedures in a refinery, it’s important for all vendors to remain 100% dedicated to compliance and safety The three biggest issues concerning tank degassing are: safety, regulatory compliance and price.

Safety clearly leads that list, since refineries and petrochemical plants are some of the most technically sophisticated places on the planet. There is a zero-tolerance policy for mistakes and that is the way it should be.

Price is always part of the equation since no one has money to burn; companies that cannot offer degassing services at a competitive price simply will not get the job.

But what about the third item: regulatory compliance?

As multi-service vendors try to expand their product lines with tank cleaning and vacuum trucks, customers need to take a closer look at the compliance record and experience level of their potential vendors.

California, for example, is crisscrossed by multiple air

66

quality management districts that protect the health and safety of area residents. If a degassing vendor fails to meet the letter of the law, these districts will immediately issue a Notice of Violation (NoV).

Fines and bad publicity are the last things a facility wants, and NoVs generate ill will from the communities surrounding a facility. Regulators use NoVs to police the industry, and they can levy substantial fines against both the offending vendor and the company that hires them.

Air agencies use a number of tools to confirm compliance. One of these tools is a ‘field audit’ that can confirm actual combustion chamber temperatures and compare them with the chart recorder’s data. Lower combustion temperatures (and lower vapour destruction efficiency) may be allowed by different districts or states. But other degassing tasks require meeting 760ºC to achieve

the specified results. Low temperature combustion may result in lower propane costs, but compliance fines and bad press are penalties for failing to ensure that proper combustion temperatures are used to meet all regulatory requirements.

The moral of the story is simple: since degassing is one of the most dangerous and regulated procedures in a refinery, it is important for all vendors to remain 100% committed to compliance and safety.

Planning for proper compliance also means planning for things that can go wrong. Air quality districts and environmental agencies throughout the US require degassing operations to be ‘continuous until complete’.

Consider this language from the Bay Area Air Quality Management rules and regulations: ‘If excessive emissions resulting from the breakdown of air pollution abatement equipment or operating equipment persist until the end of a production run or up to 24 hours, whichever is sooner, a violation of district regulations shall be deemed to have occurred.’

Translation: if a thermal

oxidiser breaks down on a degassing job, the vendor better have another option standing by or expect being served an NoV. Many plants maintain their own ‘in house’ vapour recovery units to handle assignments such as ship loading, truck loading, or tank farm vapour recovery – and most of these machines are subject to the same regulations that govern the mobile units operated by independent contractors.

But plants know their inhouse equipment may not be suited for every job, or they may not be available because of scheduled maintenance. In these instances, it makes sense to hire a mobile vendor to handle a degassing job. But here’s the catch: operators who pride themselves on their safety and operational efficiency should do their homework and check if their chosen vendor shares their commitment to superior performance.

For more information:

This article was written by Chad Fernandes, operations manager for northern California and northwest at Envent, +1 (925) 270-9003 or Chad.Fernandes@Envent.net

January/February 2013 • TANK STORAGE

vapour recovery

Vapour recovery: a glossary of terms The growth in environmental legislation throughout the world has garnered increasing interest, or indeed in many cases a legal requirement, in the recovery of hydrocarbon vapours (VOCs) from storage or the transfer of products from storage to carrier and vice versa.

With the growth in the use of vapour recovery systems for an ever widening range of VOC products and applications, in ever growing areas of the world, this article provides an introduction to some of the key facts and terms commonly used; covering typical applications, the selection of equipment and vapour recovery technologies, the need for accuracy when preparing the design, achievable emission rates, practical recovery efficiencies and recovered product issues, such as absorbents to use and the risks of product cross contamination.

Vapour recovery system applications Vapour recovery systems are used in a number of applications related with either the storage of VOC products or the transfer of the product from storage to the carrier or vice-versa, whether a truck, rail wagon,

ship or barge. Typical products for which vapour recovery would be used include the following (and combinations of): petrol, diesel, intermediate products such as naphtha and condensates, finished chemicals such as benzene, toluene and xylenes, and there has also been increasingly significant growth in crude oil applications.

There are a number of vapour recovery processes available with proven track records, each tending to have its own place in the market for a particular range of applications.

Activated carbon adsorption/ vacuum regeneration (CVA): In most circumstances the CVA technology is considered to be the best available technology (BAT) for most applications. The technology is widely used throughout the world, across a wide range of loading operations, from the smallest of systems, for example where a single truck loading spot is used, to the largest systems in the world.

Two of the three largest vapour recovery systems in the world, supplied by oil and gas equipment supplier Aker Solutions, use the CVA technology, with design vapours flows ranging from 36,000m3/hr up to 45,000m3/hr.

The activated carbon

TANK STORAGE â&#x20AC;˘ January/February 2013

is used to strip and adsorb the VOCs from the vapour stream. Vacuum pumps are used to regenerate the

to attain very low emission requirements, lead to the BAT label. Emissions limits readily attainable range from 35g/

activated carbon, stripping the adsorbed hydrocarbons from the activated carbon, the recovered VOCs in most cases being re-absorbed into an absorbent stream, usually the product being loaded/ transferred. Options are available where an absorbent is not readily available.

The technology can operate across a wide operational turn ratio of 0 to 100% of design. In addition, operating at ambient temperatures and low pressures, the technology is considered to be safe which, together with its ability

Nm3 to <150mg/Nm3 (97% to 99.9%+ recovery efficiencies).

Lower vent emissions are feasible although these requirements may require some degree of specialist design and in some cases a second stage system. It should be noted that for products such as benzene emissions as low as 10mg/ Nm3 are readily achievable.

Absorption technologies: These include direct absorption, in which the vapour stream is directly contacted in an absorber column with an absorbent. The process

Cold liquid absorption (CLA) vapour recovery system

67

vapour recovery Cold liquid absorption vapour recovery system

may require cooling of the absorbent or operation at pressure or a combination of both, dependent on the equilibrium conditions between the vapour stream and the available absorbent. The technology is infrequently used; one of the greatest drawbacks being its inability to readily meet, in many cases, the emission requirements of several environmental authorities.

However, there remains a place in the market for the technology. Two recent examples where there were good reasons to utilise absorption are two crude oil systems in marine loading applications.

The first of these two systems, operated in Norway, is the third of the three largest VRUs in the world referred to above, with a total inlet vapour flow rate of 24,000m3/hr. In this case the system adopted was a cold liquid absorption (CLA) process where space was a premium on the three jetties. An absorber was located at each of the jetties, the absorbent used being regenerated/recovered in a common plant on shore.

The second of the two applications was a simple pressurised absorption system, for which the inlet vapour conditions combined with the operating parameters suited

68

the required emissions. The primary reason for adoption of the technology was plot space and weight, the systems being in service offshore.

offer the same degree of operational flexibility as the activated carbon CVA systems, often requiring large vapour holders to be installed in order to operate satisfactorily, where constant vapours flows are not a feature of the vapour inlet conditions.

For the larger applications such as marine loading operations, high power requirements will often be a limiting factor for the systems.

Membrane vapour recovery systems however, may be a preferred technology selection for some chemical VOCs, which may not be best suited for use with activated carbon CVA systems.

Truck Loading: Truck loading

Pressurised absorption VRU system

Membrane: Membrane separation technologies are also available and used in vapour recovery applications.

Membrane systems do not

applications for vapour recovery by far represent the largest installed base, with activated carbon CVA forming the greatest proportion of technologies used.

FSO pressurised absorption VRUs installed

Within the EU and the US long standing specific emission control legislation stands, covering the control of hydrocarbon emissions for the loading of petrol into trucks. Emission control limits and recovery efficiencies tend to be very good with 35g/ Nm3 to 150mg/Nm3 emissions expectations (97% to 99.9%+ recovery efficiencies) being usual requirements. Installed systems play a significant role in the reduction of product losses at the terminals where used. Payback periods from the installation of a vapour recovery system vary, depending on the bonded status of the terminal, but typically periods of less than one to two years are feasible, based on the value of the product recovered that would have been otherwise lost and recoverable duty payments, where this is applicable.

The systems are used in either loading rack operations or a balanced vapour system.

For a system in which the vapours are recovered directly from the loading racks, the applications usually arise at terminals where the product storage tanks are fitted with internal floating roofs (IFRs).

A balanced vapour system is one where the vapour piping from the loading racks and the storage tank vents are manifolded together, the tanks being of fixed roof construction. Vapours displaced during the filling of the trucks flow back into the storage tanks as a result of the product withdrawal during loading. The vapour recovery unit is thus designed to handle only the vapour flows arising from vapours displaced from the storage tanks, when being filled, and the vapour growth effects from either filling of the trucks or thermal growth effects in the storage tanks.

The term â&#x20AC;&#x2DC;loading profileâ&#x20AC;&#x2122; is regularly used in the world of vapour recovery. A loading profile is the resulting analysis of how the vapour flow may

January/February 2013 â&#x20AC;˘ TANK STORAGE

vapour recovery vary to a VRU over the course of a day or loading period and includes inlet hydrocarbon concentrations considerations, in addition to the vapour flows to the VRU. In marine and tank filling applications vapour flows are relatively straightforward rates, however, for truck loading operations where the vapours are recovered directly back to the VRU, loading profiles tend to be somewhat more complex.

To ensure that the vapour recovery unit is correctly sized for the application, it is essential that the loading profile is correctly determined.

Over sizing would result in a VRU that has excessive power requirements, whereas an undersised VRU runs a significant risk of: i) higher emissions limits than permitted, and/or ii) limiting the loading operations at the terminal.

In many cases the terminal operations staff are fully aware of the loading patterns at their terminal, in which case a good loading profile can be developed. Where this data is not readily available, at for example a new build terminal, there are a number of key factors that can be used to develop a good non-limiting profile and correctly sized VRU. These would include: • Number of loading spots that can be used simultaneously • Number of loading arms that can be simultaneously used per loading spot • Maximum liquid flow rate per loading arm • Maximum size of the trucks loaded at the terminal.

Vapour hydrocarbon concentrations tend to vary significantly for truck loading operations, associated with varying volumes of the different products loaded, i.e. petrol versus diesel.

Together,with the loading profile flow rates, these parameters can be utilised to develop very cost effective vapour recovery systems.

The varying nature of

the vapour stream to the - Variable ambient rail tracks/trains simultaneously.

VRU can also be effectively temperatures having For these loading systems the utilised to provide the a direct impact on the VRU loading profile closely systems with energy saving HC concentration follows the development modes of operating the - Seasonal changes processes used for a vapour recovery system. in the RVP of the truck loading system.

There are a number of products loaded Other rail loading systems energy saving modes for • Actual operating connect up a number of operating a vapour recovery performance of the rail wagons, loading these unit. These include systems carbon bed and the simultaneously. The loading that measure/determine the unit. The unit might not rates, on a per wagon basis, volume of product loaded be operating optimally – tend to be somewhat lower at the loading racks, starting for example, a leak in a than for On Spot loading the VRU when a volume of carbon bed regeneration systems, resulting in longer product equivalent to the valve would prevent uninterrupted loading periods. design vapour load of a the carbon from fully In these applications the carbon bed has been loaded. regenerating impacting on loading profiles mimic more These volume loaded based the VRUs performance. closely those seen in ship energy saving operating or tank filling applications, modes rely on a number of Rail wagon loading: In many where flows tend to persist at assumptions, such as the ways rail wagon loading constant rates for long periods vapour stream is always a is similar to truck loading, of time. As with truck loading fully saturated petrol vapour. although it is uncommon applications, the resulting Naturally this is not commonly for rail wagon loading to vapour recovery system for the the case; frequently terminals be included in a balanced two types loading methods will load a large proportion vapour system. There tends often result in very differently of diesel or other distillate to be two common types of sized vapour recovery units. based fuels. The ambient and loading utilised: the loading product temperatures also method utilised impacting the Ship loading applications: vary and have a significant development of the loading Vapour recovery systems have impact of the inlet vapour profile, and the resulting design been used in bulk petrol ship concentration flowing to of the vapour recovery unit. loading applications for many the VRU. A volume loaded On Spot rail loading years. The products in which based energy saving mode of systems are commonly used. In vapour recovery systems are operation can be improved these systems the rail wagons utilised recently have widened on through the use of a vent are moved into place and to include, most prominently, hydrocarbon analyser control loaded, usually one wagon products such as crude oil. scheme. The vent analyser load at relatively high flows.

In addition the flow rates to control system (VACS), when Times vary but between three be handled are increasing, used as the primary mode of and four wagons can be with flows of between operation, can save between loaded per hour. It is often 10,000m3/hr and 20,000m3/hr 40 and 50% of the energy used found that an On Spot loading becoming common requests. where systems are not used. system will support two or more Marine loading vapour The VACS system is Typical ship loading profile more successful than other forms of energy saving systems in that it not only accounts for variances in not just the vapour flow to the unit, but also compensates for the following situations: • Variable inlet vapour concentrations, as a result of : - Variable volumes of petrol/distillate loading at the loading racks - Levels of switch loading occurring at the A typical indication of how the loading profile for a ship/marine loading loading racks application may vary throughout a load

TANK STORAGE • January/February 2013

69

vapour recovery Schematic of absorbent supply options

recovery units adopt a continuous duty loading profile approach in their design, that is the flows, although high, tend to be steady and continuous for many hours. However, this does not detract from the complexities of understanding the design. Naturally there are many challenges in the construction of large complex vapour recovery systems. The most critical point is, however, understanding the design basis to be used. Marine loading operations give rise to high vapour growth rates, with a potentially large impact on the hydraulic design of the entire vapour recovery system and stratified hydrocarbon concentrations in the vesselsâ&#x20AC;&#x2122; holds, leading to wide ranging concentrations to from very lean concentrations at the start of the loading operation to fully saturated vapours at the end.

A detailed knowledge and the ability to accurately simulate the loading operation are essential to accurately designing a marine vapour recovery system. As products become more complex, as with crude oil, it is not sufficient to make assumptions about any aspect of the process design requirements.

Tank filling/tank breathing: The design of a vapour recovery system associated with tank storage, as with ship loading

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systems, requires a good degree of understanding of the mechanisms which give rise to the development of the out breathing of vapours to the VRU. Vapour development can arise from a number of mechanisms which need to be accounted for in the determination of the vapour flow and VOC concentrations.

Unlike other vapour recovery applications, it is often the case that the hydrocarbon concentrations in the vapour phase from the tanks will be fully saturated and will often fully stress the VRU design, in terms of flow and hydrocarbon load.

Vapour out flows from storage tanks will often result from the following mechanisms: 1. Displacement emissions arise from the filling of the tanks.

2. Breathing emissions arise from temperature changes in the tank, primarily an increase in the temperature of the vapour space, usually as the tank warms up, for example from overnight temperatures to day time temperatures.

3. Withdrawal emissions arise from the development of a vapour growth as the vapour in the tank saturates following product having been withdrawn.

Air drawn in through the tanks vents over time will

saturate. This causes an increase in the vapour air volume and hence pressure, a vapour growth, which in turn leads to an emission from the tank.

Withdrawal emissions would normally be expected to be negligible, relative to the other emission generating factors and their interrelationships, i.e. displacement and breathing emissions. However, where tanks stand partially empty for more than a few days, certainly VOC saturation levels and withdrawal emission rates will be impacted by the dormancy of the tank.

Absorbent: Most vapour recovery systems require a circulated absorbent supply into which the captured VOCs are recovered. In most instances the absorbent would be the same product

as being loaded and usually drawn from and returned to one of the storage tanks. For marine loading operations it is common for the absorbent to be drawn from and returned to the shipsâ&#x20AC;&#x2122; loading line(s).

As with any aspect of the vapour recovery system design, design of the absorber is critical to the successful operation of the VRU. A correctly designed absorber requires a detailed knowledge of the vapour inlet properties, in addition to the absorbent properties, to ensure the equilibrium conditions in the absorber are conducive to the recovery of the hydrocarbons. An incorrect design will result in a failure of the absorber to operate efficiently, which would likely result in the failure of the overall system to meet the required emissions.

Options are also available where absorbents are not readily available, or where concerns may occur with product cross contamination.

The importance that should be drawn from this is that, although vapour recovery packages may be similar, each application is different and understanding and ensuring the design basis to be correct is critical. It requires an experienced understanding of the products being handled, the mechanisms that result in the vapour formation and their properties.

Petrol marine loading CVA vapour recovery unit

January/February 2013 â&#x20AC;˘ TANK STORAGE

loading

Picture caption to come

Logistics solution for marine loading arms holds key to refinery expansion Shipping components 4,000km is an everyday occurrence, but when it comes to 39 highly advanced engineered marine loading arms – each one as big as three articulated lorries end to end and weighing almost 1,500 tonnes in total – there is a logistics challenge.

The arms will form an integral part of the $10 billion (€7.5 billion) expansion plan to the refinery that is being created by Abu Dhabi Oil Refining Company (TAKREER).

With vast gas and oil reserves, Abu Dhabi has a distinct advantage in the petrochemical sector and as such, the expansion of TAKREER’s Ruwais Refinery in Abu Dhabi forms an integral part of the oil refining industry in the UAE. Located 240km from Abu Dhabi along the Persian Gulf Coast, the new refinery will see an increase in production of 400,000 bpd when it becomes fully operational this year.

With the refinery configured

for petrochemical production, featuring a Residue Fluid Catalytic Cracker (RFCC) at its heart, this will lead to the production of high value polymer grade propylene, as well as traditional refinery products such as LPG, naphtha, jet/kerosene, gasoil and diesel.

The task was to deliver the loading arms from its factory at Kirchhain in Germany to an oil refinery on the Persian Gulf Coast in the UAE. The shipment, which took more than two years to complete, over 60,000 man hours going into its production, will eventually be placed on three seaport jetties that are currently under construction at Ruwais by main contractor GS Engineering and Construction.

The customer required 13 marine loading arms for each jetty ranging in diameter from 8-16”, weighting more than 40 tonnes and measuring 26m high.

These massive structures had to meet all international

TANK STORAGE • January/February 2013

regulatory requirements and standards with each loading arm incorporating advanced safety features combined with pantograph balanced link technology to provide stability and strength.

Following an initial shipment to Abu Dhabi in January 2012, the manufacturer Emco Wheaton completed what was to be one of the single biggest shipments of equipment, in terms of weight and value, in the company’s history on November 2012 when the final loading arms we shipped.

‘In terms of the scale of what we were transporting from our production centre in Germany, this was a big shipment of 24 MLAs equivalent to around 920 tonnes of metal,’ says Brian Armitage, director of supply chain management.

In total, 39 MLAs were split into three shipments over a 12 month period along with more than 20 containers holding

couplers, emergency release systems, electro-hydraulic controls and complete loading systems for the state-of-the-art jetty facility.

Emco Wheaton built the individual parts of the loading arms at different centres across Germany and Italy.

These then had to be moved from the production centres to Hamburg. This logistical juggling act included moving the parts at night which required special permits and coordination with the German highways agency and police authorities.

But it wasn’t just by road; the canal system in Germany was also used to transport the larger MLAs with three loaded on each barge. Upon arrival in Hamburg, heavy lifting equipment was used to safely load the equipment onto the ship. The overall operation ran smoothly and the ship, M/V Leopold Staff, sailed from Hamburg, heading for the Middle East on schedule.

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secondary containment

Searching for a liner resistant to benzene When Flint Hills Resources set out to refurbish a tank that would hold benzene/ reformate, the company quickly realised it needed a secondary containment liner that was resistant to the chemical

Flint Hill Resources’ (FHR) petrochemicals are used to manufacture goods from plastics to building products to packaging materials; and it produces about 9 billion pounds of buildingblock chemicals annually.

These chemicals, usually highly abrasive, are regularly stored in tanks and must use appropriate lining to prevent leakage.

Tank owners typically defer to using HDPE liners despite understanding its limitations

(i.e. cannot handle high temperatures, does not have high chemical resistance and does not provide dimensional stability). Their preference is due to a combination of the product’s cost, a certain level of chemical resistance and its fairly competent constructability. Historically, it has been known as one of the only options available.

The chemical resistance of the HDPE liner, however, is simply not sufficient to contain benzene/reformate. As a result

Existing (unlined) steel tank floor and sump Detail extrusion-welding of Cooley Group’s Coolshield liner in tank sump

of this and other problems that occurred as a result of using HDPE, FHR decided to conduct a risk assessment. Use of liners for these types of chemicals is regulated and HDPE would certainly have met them; but after the assessment, corporate due diligence dictated the use of a better liner.

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Not having a clear idea of which company could provide a liner that would meet its requirements, FHR turned to its tank maintenance contractor, who suggested their engineering consultant contact EnviroCon Systems.

EnviroCon specialises in the supply and installation of geosynthetic liners for environmental, industrial, architectural, commercial and agricultural uses. They also provide a variety of applications for primary and secondary containment. Chris Swires, principal at EnviroCon Systems and who also served as project manager in this task, referred them to Cooley Group.

Rhode Island-based Cooley Group is a global developer and manufacturer of highperformance, sustainable engineered membranes. The engineered membranes division produces the polyvinylidene fluoride-formulated (PVDF) Coolshield liner.

This is generally used in applications requiring the highest purity, strength and resistance to solvents, acids and harsh chemicals. It is 100% resistant to benzene (it is the only flexible liner resistant to it) and the only rollgood-type PVDF liner on the market, which allows it to survive the installation procedure that most other liners – whether resistant to benzene or not – cannot.

January/February 2013 • TANK STORAGE

secondary containment

Calibrating fusion welder for Coolshield liner installation

Tank refurbishment As tanks become older, the tank bottoms age and, unless they are refurbished, they can eventually leak. When they leak, there is a huge expense in cleanup and, most likely, fines.

In March 2010 FHR started a tank-bottom retrofit, where a secondary containment liner was to be installed over an existing tank floor before a new one was installed.

Stephen Siener, general manager of Cooley’s engineered membranes division, explains: ‘FHR had experienced an issue before where a more conventional HDPE liner failed in a similar application, resulting in substantial remediation and cleanup costs.’

The Coolshield liner is a flexible rollgood (not plate stock), which means it is not only easy to transport but also easy to install on-site. Largely due to this feature, FHR was able to meet the schedule from an installation and construction standpoint. There were no issues with mechanical damage, which is typically the problem when a liner with sufficiently heavy resistance is used.

An unexpected discovery was the ease in which the Coolshield liner was installed in the field. In addition to taking about the same time to install as HDPE, the material’s physical properties also ensured it was capable of withstanding all

EnviroCon Systems performing nondestructive spark test of Coolshield extrusion weld

the subsequent construction activities performed adjacent to it. ‘There was really no downtime involved. The relative ease of field installation was a very important factor,’ says Swires. ‘While many companies make similar, very thin Teflon or PVDF liners, they can’t be welded in the field and they lack important physical properties like sufficient abrasion resistance.’

Based on the success of the first installation, as well as Cooley’s technical guidance and product support, FHR specified the use of Coolshield for its next series of similar tank refurbishing projects.

Cost Among the reasons HDPE has historically been the liner of choice is that it tends to be the least expensive option that can withstand the majority of liner jobs. On the other hand, while there are existing products in the market that may meet a high chemical resistance requirement, most are far too delicate for the demanding installation procedure this type of project entails. Stainless steel, for example, is a highpriced alternative and used to be the next best option when handling very harsh chemicals.

Coolshield is significantly less expensive than using stainless steel. The Cooley membrane is also much faster to install.

‘In the long run, the

TANK STORAGE • January/February 2013

Coolshield membrane is actually more economical as it is far more resistant than most other liners and can withstand harsher conditions than HDPE,’ says Ray Peebles, global sales manager for Cooley’s engineered membranes division.

FHR found that no other company offered a more constructible geosynthetic liner that matched Coolshield’s chemical and high-temperature resistance. ‘Cooley Group was the only company able to provide a geomembrane liner resistant to benzene/reformate that was durable enough to be deployed and welded in the field using industrystandard welding and testing techniques,’ explains Swires, who managed the project.

Despite the higher cost of the Coolshield material, the savings from avoiding remediation and cleanup from a failed conventional liner made these tank projects more economically viable.

The chemistry Cooley’s PVDF formulation is a fluorinated, semicrystalline thermoplastic polymer obtained by radical polymerisation of vinylidene fluoride, making Coolshield among the most chemically inert of all polymers. This is a direct result of the unique chemical structure of fluoropolymers, which differs

significantly from the structure of traditional polymers such as polyethylene. The exclusive extrusion-laminated, PVDF resin coating on select substrates provides hightensile strength and excellent chemical resistance even at high temperatures.

‘For any kind of project where aggressive chemicals or high temperatures are involved, and applications where liners had to be ruled out as an option, the Coolshield geomembrane liner can now be used,’ says Peebles.

An added advantage to PVDF is it has very high temperature resistance to intermittent as well as continuous temperatures.

Coolshield has been used as a pit liner due to both, its chemical resistance and also its ability to withstand 121°C continuously and 135°C intermittently. ‘This is one of the chief reasons it has been used on several occasions in the oil sands drilling applications in northern Canada. During the oil sand drilling, steam is used to get the oil to flow and there are waste products that could possibly spill,’ adds Siener.

Coolshield is UV- and flameresistant, as well as resistant to high abrasion and highly aggressive chemicals.

For more information:

This article was written by Stephen A. Siener, VP of Cooley Group’s engineered membranes division, www.cooleygroup.com

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loading

How to avoid breaking the supply chain Though it would be virtually impossible to determine the exact number of aboveground storage tanks that are located at the bulk storage facilities that dot the US landscape – the API puts the number somewhere in the range of 700,000 – it is safe to say that they play a critical role in the storage and transfer of any number of commodities.

Hand in hand with this legion of vertical ASTs, which generally range in storage capacity from 500 to 300,000 barrels, or 21,000 to 12.6 million gallons, are the vessels – be they ocean-going ship, barge, railcar or truck – that are used to deliver these commodities to, or take them away from, the liquid-storage facility.

From the most basic building-block chemical to the highest refined motor fuel, all would have spent some time being transferred into or out of a storage tank at a bulk storage facility. That is millions and millions of gallons of liquids, many of which can be hazardous, that are constantly on the move, and all of this transfer activity creates myriad opportunities for unwanted spills, leaks or loss of product containment.

Since the 1960s, ‘environmental protection’ has been a catchphrase used by individuals or groups that wish to

minimise the adverse effects that human activity can have on the environment.

Protecting the environment and optimising the health and safety of the planet’s residents is an admirable goal, and one that the bulk storage industry embraces. Still, by its very nature, there is always the chance that an amount of product will be released while it is being handled, especially when transferred from a ship, barge, railcar or transport truck to a storage tank, or vice versa.

With responsible business practices, as well as increased regulatory and environmental regulations, mandating that the connections for the transfer of industrial liquids into and out of liquid bulk storage facilities be able to safely prevent potentially harmful product releases, there is a need for liquid handling equipment that can help prevent costly environmentor personnel-harming release incidents.

The challenge With the sheer amount of industrial liquids constantly in motion there are any number of points in the supply chain where things can go wrong. One constant concern is that a pull-away incident

OPW Engineered Systems developed the NTS-PU Series Safety Breakaway Couplings as an additional safety device to protect the vehicle and piping in the event of a pull-away incident

74

January/February 2013 • TANK STORAGE

loading most effective and reliable performance in bulk liquid handling operations.

The solution A specialist in this area, OPW, has launched the NTS-PU Series Safety Breakaway Coupling, which has been designed to protect bulk storage facilities and their product transfer operations by safely and reliably preventing product spills when a pull-away incident occurs.

Should the transport vessel pull away from a transfer point while the hose is still attached separation will occur courtesy of a simple The NTS-PU Series Safety Breakaway Couplings from OPW installed at a storage terminal loading application will occur during a transfer operation.

When a pull-away – which takes place when a truck, railcar, barge or ship leaves a docking site before the transfer hoses are disconnected from it – occurs the consequences for the facility itself, plant personnel and the environment can be catastrophic. In fact, the best result that can be expected when a pull-away incident occurs is damage to the transport, piping, support structures or access equipment. While that sounds bad, it pales in comparison to the worst things that can happen, including a severe environmental release, fire and personal injury (up to and including death).

The adverse effects associated with a pull-away incident are not only immediate, but can be far-reaching, not to mention the cleanup costs that can be incurred. In addition to actual litigation or cleanup costs, another consideration is the bad publicity and subsequent harm to the bulk storage facility’s reputation that can result from a high profile environmental or personal injury incident.

The overriding challenge for the producers, handlers and transporters of industrial liquids is to do the best they can to eliminate or minimise risks in their operations. The only way to do this is identify the best companies and systems, ones that can deliver the

TANK STORAGE • January/February 2013

straight or angular pulling force on the hose line. That is because the NTS-PU coupling consists of two halves that are each equipped with spring-loaded nonreturn valves that are held together by spring-loaded cams for rapid hookup.

When a pre-determined pulling force is reached, separation will occur.

Upon separation, both spring-loaded valves – which are open during product transfer – will close, which prevents any product spill or leakage from occurring while simultaneously protecting the environment, the loading station and any personnel that may be in the vicinity.

Since OPW has designed the NTS-PU coupling without shear pins, no destruction or damage will occur to the coupling during separation. This also means that after depressurising and emptying the hose, the coupling can be reassembled without the need of any special tools or spare parts. This operation also means that it is easy for the operator to test and verify that the system is operating properly.

OPW also offers the NTS-SZ Series Safety Breakaway Coupling. The NTS-SZ model features cable-release operation that is designed to protect against unintended liquid-transport pullaways. When a pull-away occurs, the tensile force travels along the cable, leaving the hose or loading arm tension-free at all times. When the pre-determined pull force is reached, the couplings springloaded valves shut both ends, enabling separation to occur.

For more information:

In addition to transport loading applications, the NTS-PU Series Safety Breakaway Couplings (above) can be installed for railcar applications as well

This article was written by Dave Morrow, product manager for OPW Engineered Systems, +1 (513) 305-2059 or dmorrow@opw-es.com

75

High risk upgrades

upgrade

76

The Port of Los Angeles is a flurry of activity as pressure intensifies to upgrade and repair oil terminals, some of which have been labelled ‘high risk’ by California state officials

by Nicholas Zeman A recent report from the Port of Los Angeles (POLA) to the city’s Board of Harbour Commissioners says work is set to start on over $100 million (€77 million) in construction, repair and upgrades to marine oil terminals in order to comply with California’s Marine Oil Terminal Engineering and Maintenance Standards (MOTEMS) programme.

In fact projects accounting for more than $1 billion in construction are slated to continue at POLA into 2013, as the port strives to keep pace with its rapidly expanding international business. Many of the oil terminals, however, remain dated and ‘high risk’.

Statewide, more than half of the marine oil terminals are 70-plus years old, and POLA has some of California’s oldest facilities.

In fact, six of the seven at POLA were built between 1919 and 1923. The port’s ‘newest’ terminal dates back to 1938.

POLA serves the densest population centre in North America. With the neighbouring

Port of Long Beach it handles 60% of all waterborne imports from Asia, a trade corridor that continues to grow.

Los Angeles’ (LA) vast collection of oil terminals, natural gas storage tanks and surrounding refineries make it an important global trade and distribution link. For instance, Los Angeles International Airport buys almost all of its fuel from Vopak, the top liquid bulk wholesaler at POLA, and the terminal infrastructure here plays a large role in local bunker fuel needs.

Though officials say there is no serious danger looming, because of LA’s history of earthquakes and pollution, the port remains heavily scrutinised and regulated. MOTEMS is among the protocols and laws oil terminals must adhere to, becoming law in 2006. But many terminals in the state, and at the port specifically, remain ‘high risk’ and have not completed the process of complying with MOTEMS. The 25 October report from

POLA staff to the Board Of Harbour Commissioners outlines the MOTEMS Implementation Strategy (MIS) estimated to cost nearly $100 million over the next three years.

But lease uncertainties with terminal operators like Vopak, the age of the marine oil infrastructure at the port and continued amendments to the programme’s final rules have made the situation more pressing. There has been some public outcry, especially among neighbourhoods near the port, that POLA’s marine terminals rating of 4.1 out of 10 on a MOTEMS compliance scale is a ‘disaster waiting to happen’.

For one, some of LA’s oil terminals sit on wharves supported by wooden pilings – construction not used today when berthed tankers are at least 10 times heavier than their predecessors from the 1920s. Some sections of the docks are in such disrepair that they are not in use. ‘There are ways to reduce risk,’ says Don Hermansson of the California

January/February 2013 • TANK STORAGE

upgrade State Lands Commission, administrator of the MOTEMS programme. ‘The risk of a spill is not based on the terminals themselves but on the amount of oil on deck at a given time.

Installing segmented pipes with check valves or incorporating more advanced seismic engineering can reduce risk.’

Complicated negotiations California has become notorious for regulatory burdens including the California Environmental Quality Act, National Environmental Policy Act and the California Coastal Act, which influence the conditions and cost of construction and repair projects.

Sandra Burkhart of the Western State’s Petroluem Association says that there has been a lot of ‘angst’ with members over the costs associated with MOTEMS compliance: ‘There has been a number of delays that have added to the anxiety as state officials quibbled over the final rule of MOTEMS for years. I’ve only been here a year and I kept hearing about MOTEMS, it just kept popping up as something that was going to be difficult.’

Leasing negotiations have also been a problem. POLA chief harbour engineer Tony Gioiello says the port has needed to revamp its facilities and operations to remain

one of the long projects that has been on hiatus, 53 feet of deepening for the main navigational channels and basins. The majority of it will be done by the end of the year.

‘The ships are certainly bigger, so we knew that we needed to handle deeper ships. We’re spending almost $1 million per day over the next three years on construction, upgrading and maintenance. We have an aggressive strategy to update our terminals, but part of the problem has been that we are at the end of our lease agreements with several of the operators.’

Vopak, which occupies the leading fuel wholesaler position here, supports several crucial businesses in LA. At Vopak, approximately 1.6 million barrels of 2. 4 million barrel storage capacity is dedicated to bunker fuels which are used to fuel container and other large cargo ships in the San Pedro Bay. It represents the only large-scale bunker storage facility there so San Pedro Bay’s bunker fuels market is dependent on Vopak’s operations.

The port certainly does not want to lose Vopak’s business, but again lease negotiations under MOTEMS have been problematic. Vopak had argued that the port’s MIS is financially unfeasible. ‘Based on its financial analysis, a

Much of the cost associated with the $100 million MIS is for new tank construction, so there is an opportunity for tank builders to assist the port in building out and updating its storage infrastructure competitive in the realm of international commerce, and negotiations to finalise an MIS are part of the overall growth strategy: ‘Recently, the last $7.5 million has been approved for

capital investment ranging from $150 to $200 million would require a storage rate increase of 20-45%, but the bunker fuels market will not support such rate hikes,’

TANK STORAGE • January/February 2013

POLA says. ‘Understanding these issues, Vopak has stated it would not pursue this proposed development and would instead cease operations in the Port when its current lease expired.

‘Based on Vopak’s considerable existing investments in pipelines and storage tanks outside of its marine oil terminal, it is even less likely a new operator with no existing assets and no contracted business could be successful considering the required investment to enter the market,’ the port adds, eventually conceding to Vopak’s arguments. Vopak’s alternative proposal, however, costing nearly $300 million less than the original plan, was incorporated into POLA’s final MOTEMS compliance strategy.

But some business has been lost. In November, Plains All American (PAA) Pipeline, represented

by WSPA, announced its determination not to proceed with the development of its Pier 400 project.

‘Since inheriting the Pier 400 project in connection with the acquisition of Pacific Energy Partners in late 2006, we have invested significant time and capital working through the regulatory process and negotiating with a variety of potential customers, while also re-engineering the project to meet environmental requirements and adapt to the changing needs of potential customers,’ PAA says. ‘A number of factors contributed to the uncertainty with respect to financial returns and the determination not to proceed with the project, including project delays, the economic downturn, regulatory and permitting hurdles, a challenging refining environment in California and an industry shift in the outlook for availability of domestic crude oil.’

‘Though I don’t know the specific monetary impact to the industry, I have found

that any new regulation or amendment, especially in California, typically won’t decrease the cost of doing business. Therefore, though we appreciate California State Lands staff incorporating WSPA’s comments into the final MOTEMS rules, this regulation is going to have a negative impact on industry,’ Burkhart says.

Closing the deal Much of the cost associated with the $100 million MIS is for new tank construction POLA believes, so there is an opportunity for tank builders to assist the port in building out and updating its storage infrastructure.

Tank cleaning and maintenance, coatings and anti-corrosion applications, engineering services and other items of MOTEMS will all be addressed as Vopak, Exxon Mobil and the POLA upgrade their assets to bring them into compliance.

The port has eight liquid bulk facilities comprising a total of 114 acres to handle various types of commodities, both for import and export.

MOTEMS is designed to reduce the needs for the port’s capital investment by consolidating operations and reducing the number of berths that need to be upgraded for MOTEMS compliance. The port currently has the capacity to handle over 124 million barrels per year, but projected throughput through 2025 is estimated near 106 million gallons. That means the port will invest only in those berths that are needed to support the projected capacity. Under the revised MIS, POLA plans to invest $7.5 million each in four berths at marine oil terminals.

Nevertheless, the port made several concessions to Vopak under its revised MIS plan, mostly to allow the company the flexibility to handle and store various petroleum products. California

77

upgrade Energy Commission is forecasting greater receipts of waterborne ethanol volumes and the potential of greater exports of petrol grades that cannot be utilised in the state.

As both of these commodities have low flash points, and are therefore dangerous, it is anticipated that Vopak would be limited in handling and storing these commodities at their existing marine facilities due to hazardous footprint overlap with the adjacent public access recreational areas. ‘This restriction would be a significant competitive limitation for Vopak, but relocating would remove the land use conflicts,’ said a POLA report to the Los Angeles Board of Harbour Commissioners.

In addition, the state made concessions to the industry at large. ‘We submitted

comments during the last amendment cycle and we pretty much got everything we asked for,’ Burkhart says.

‘One area of concern was stipulations that would have made certain maintenance, upgrades or repairs to a facility change its classification. We couldn’t have that happen.

Facilities that are classified as ‘new’ are much more heavily regulated. Now, after years of amendments, the final rules were approved by the State Land Commission (SLC) on 5 December, and are now waiting for approval from the building commission before it is effective January 2014. ‘We’re pleased with it,’ Burkhart says.

The bottom line for all concerned is that these terminals are fit for the purpose for which they were intended. ‘These terminals feed the refineries and they

feed our appetite for oil, so it’s important to improve them to comply with MOTEMS,’ Hermansson says. ‘The terminals are aging and some of them are quite old, so they need to be brought up to date to lessen the risk to the public.

Also, you have to remember that the tankers now hold up to 1 million barrels and when these terminals were built tankers held 50,000 barrels.

‘We have to ensure the mooring equipment and the structures themselves are capable of handling some of these loads. They are also more fully laden than they have been in the past. No one at the SLC is trying to tell the port how to run its business and no one would attempt to do so. And I don’t want to imply that the port is not doing anything,’ Hermansson adds. ‘They are

engaged in a considerable amount of construction and rehabilitation. There are a lot of improvements going on but we want it to temper expansion with the proper standards and codes for mooring, berthing, structure and seismic events.

‘Despite the problems with delays, we think everyone is trying to do the right thing.

The leasing issues involved have been difficult to resolve.

Ultimately, Vopak’s alternative to the port’s MIS plan that was incorporated to the final proposal. They took a look at what Vopak was proposing and the two sides came to an agreement,’ Hermansson concludes. ‘I think they came up with a strategy that is amenable to both sides. This is good news because there looks like now there can be a deal.’

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January/February 2013 • TANK STORAGE

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International 011.813.600.4024 January/February 2013 • TANK STORAGE

g : n i s r e e l v g o C an l l a another.

A terminal operator based in Texas, US was faced with this challenge with an upcoming audit. The problem was that site plans did not exist for most of the tanks and containments, and what plans did exist

How one terminal combined GPS and laser scanning for a comprehensive insight into the facility’s containment capacity

Secondary containment at a storage terminal is one thing, proving that it is adequate enough to comply with the relevant API standard is

were unreliable, outdated, or simply did not contain any relevant information.

The owner wanted to get as accurate a map as possible without blowing the budget.

The volumetric calculations would be used in conjunction with other variables, such as above-average rainfall and tank areas and volumes, to determine the actual containment capacity of each individual area.

Maintaining accuracy during this task was complicated by the existence of past construction activities within the confines of the secondary containment dikes throughout the storage facility. Useful containment volume had been displaced

Aerial isometric view of actual point cloud depicting congested containment area

TANK STORAGE • January/February 2013

Actual laser scan image from software by the added equipment, pipe racks and supports, supply and return piping, as well as intermediate fire-berms in some cases.

While all these items are necessary for safety and maximising each tank’s efficiency, each item occupies space and thus displaces useful containment volume. Volume displaced by anything except the tanks and containment dikes themselves is referred to herein as ‘deadwood’.

The terminal operator approached civil engineering and mapping firm Meridian Associates to provide topographic plans and documentation for 100+ tanks and its respective secondary containment areas.

High-definition laser scanning, commonly referred to as scanning, is a method of three-dimensional (3D) surface documentation. The scans, in this case study, were collected using a Leica HDS C10 laser scanner, a measurement instrument that records the distance to all visible surfaces using a laser, recording the data as points. The deadwood

calculations were a major factor in the decision to utilise laser scanning to capture the data, as the owner maintained that the means of measuring net volumetric capacity should account for the loss of secondary containment volume by deadwood, as well as loss by the tanks and intermediate fire-berms themselves.

It would also be most beneficial if the high and low points of the containment areas were accounted for, rather than simply calculating volumes using an average assumed floor elevation which may not account for subtle containment volume gains and losses.

Project planning and execution Alternative options for collecting the data included using land survey practices with either a global positioning unit (GPS) or a conventional survey crew utilising a total station. Using this methodology would have tasked the field crew with a daunting prospect. After all,

81

secondary containment

3D rendered CAD model generated using laser scan point cloud data capturing the subtleties of each containment dike, tank and deadwood by area for 100+ tanks could have taken the better part of a year.

In light of this, Meridian decided to use laser scanning, which provided many competitive advantages, including expediency, accuracy and unrivaled point density. Laser scanning alone, however, did not provide Meridian with sufficient redundancy in its data.

It was therefore decided to incorporate a hybrid approach, using a surveygrade GPS system to control the site and laser scans, thus tying all of the scan data onto a known plant-coordinate system. GPS also served as a means of providing redundant measurements and establishing a site-wide control network in the form of benchmarks tied into the existing plant coordinate system.

High-definition laser scanning provided another

critical advantage by ensuring the ability to determine the single lowest point on any

It also ensured the survey captured the nuances of the containment areas, berms and deadwood, helping to provide exceptional precision in volumetric calculations.

Project deliverables Meridian was tasked with providing the owner with volumetric calculations. This method of reporting that data is subjective. Reporting the data in a manner that made sense to the client was a challenge given the complexity and size of the data set, and the fact that the secondary

3D rendered CAD model generated using laser scan point cloud data depicting deadwood given containment dike or intermediate berm. As is the case in many tank storage facilities, a good percentage of the individual tank secondary containments were designed to spill into adjacent

3D rendered CAD model generated using laser scan point cloud data

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tank’s containment areas, thus increasing the capacity of each containment area.

The fact that this was an intentional design feature required Meridian to be able to determine with accuracy the location of the ‘lowest point of top of containment dike’, referred to herein as the ‘spillover point’. The location of this spillover point was critical in validating that a single tank’s secondary containment volume may include one or more adjacent tank’s secondary containment area, generously increasing the containment capacity.

In the end, the hybrid approach to data collection was successful in capturing the necessary data to satisfy the contract and the owner, as well as to ensure accuracy of data. GPS provided the owner with a thorough site control network in the form of benchmarks, which, while it was not the primary intention of the fieldwork, was a useful byproduct of the data capture itself. GPS also provided redundant measurements on tank foundation elevations and top of berm elevations, as well as topographic measurements.

The laser scans provided a wealth of data quickly and effectively, simultaneously maintaining the highest possible level of accuracy.

containment areas and tanks were spread out over five sites, some being 30 miles apart.

Meridian ultimately decided on another hybrid approach, providing the volumetric data in the form of a spreadsheet, and the planimetric and topographic information in the form of a CAD model depicting the data as 3D solids.

While the volumetric data was reported in spreadsheet format with columns and rows reporting tanks’ ID numbers, gross containment volumes, individual tank volumes, deadwood volumes and the secondary containment volumes themselves, reporting the planimetric and topographic data required the data to be made

January/February 2013 • TANK STORAGE

secondary containment compatible with the AutoCAD 2011 3D programme.

Laser scanning data by its very nature and purpose is dense. Thus, the data contained vast amounts of information that takes up a lot of space. The total data set for the 100+ tanks and secondary containment areas was approximately 150GB. While the laser scan point cloud data can be explored natively in various CAD programmes, it was not efficient in this case to load all the data on every machine being used by the owner’s resident engineers.

It would be more efficient for the cloud data to be stored in a central location in the owner’s system, accessed by a select few persons, including the project manager.

Central storage was possible with the creation

of the CAD 3D solid surface models which could be easily shared among the team. The cloud data was used to generate 3D solids depicting deadwood, tanks and the containment surfaces themselves. The 3D solid CAD elements were used in the calculation of displacement volumes in the case of the tanks and the deadwood, and the surface solids were used to calculate the gross volumetric containment volumes inside the designated containment dikes.

Using this methodology, no time was wasted as the required 3D CAD models helped to calculate and report the required volumetric information.

Also, since the scan data recorded the subtleties of the containment dikes and

floors of the containment areas, the resultant 3D solid surface model was very efficient accounting for the low and high points of each containment area that may have been overlooked using another method.

Outcome of the project The data for the 100+ tanks was collected and reported in about 10 weeks from procurement to project data delivery. Typically, design engineering is the first to benefit from this comprehensive and accurate set of data. In a 3D work flow, models can be developed, demolition planned, new pipe routes scoped out and utility service tie-ins planned, all without stepping foot back in the plant once the

data is collected. Using laser scanning in a conventional 2D workflow, plans, elevations and sections can be developed from an almost infinite number of positions.

A further benefit of laser scanning is its use for design, construction and trade coordination as it provides a complete and accurate picture of the facility.

Providing accurate data in a timely manner without interfering with critical path construction schedules is vital to the efficient and costeffective execution of any project and is the mainstay of ‘scanning’ practice.

For more information:

This article was written by Andrew P. Titcomb, Meridian Associates, +1 (281) 905-0396 www.meridian-3D.com

LASER SCANNING MODELING ANALYSIS

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TANK STORAGE • January/February 2013

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January/February 2013 â&#x20AC;˘ TANK STORAGE

tank storage asia review

Tank Storage go

Asia 2012:

od

The important take home from last yearâ&#x20AC;&#x2122;s Tank Storage Asia Conference in Singapore is that demand for capacity in the region is very much on the up.

One reason for this is that there is planned refining capacity of 6.5 million barrels a day. On top of this Asia is a net importer of naphtha and fuel oil and a net exporter of petrol, diesel and kerosene, which leads to product imbalances that require storage.

Asia is at the forefront of global oil demand growth, with China a clear leader with strong growth in diesel and petrol.

Onur Capan, manager of downstream oil service at Wood Mackenzie, added to the positivity by saying that there have been increasingly attractive rental rates in

news

Singapore over the past few years and these are likely to remain robust in the longt-erm.

China: what everyoneâ&#x20AC;&#x2122;s talking about Taking a closer look at that growth in China Karl Sanders, senior consultant at Downstream BV, gave his opinions based on his travels to virtually every maritime location in China, including Jiangsu, Ningbo, Guangzhou, Dalian and Shanghai.

In the past oil storage was the exclusive playground of the Chinese majors. This may change to a certain degree with some independent operators and traders appearing. However for the time it is still a very fragmented

TANK STORAGE â&#x20AC;˘ January/February 2013

all round business. The consolidation that was expected has not yet taken place and there is still a clear separation between oil and chemical terminals with the foreign companies mainly focusing on the latter so far.

Sanders highlighted some important longterm trends: that China will continue to build more refineries, grow consumption in double digit figures and improve strategic storage.

All this leads to a continued boom for the storage sector, although regulations are becoming stricter after several recent incidents.

Other challenges of working in China include a lack of trained operators and employees, potential corruption and the fact that

domestic companies often outperform foreign operators.

North China is now developing the fastest, but still has a way to go and therefore provides opportunities on a larger scale than other areas.

Major developments will be in oil and major new development areas but opportunities in secondary chemical terminals may be worthwhile.

Malaysia: still a hot topic At last year Tank Storage Asia, Malaysian marine construction firm Benalec Holdings announced a partnership with project management company Rotary Engineering to develop an independent deepwater storage terminal for oil products in Tanjung Piai, southwest Johor.

This year Brian Mak, Benalec business development manager, returned to update delegates on the progress made so far.

The terminal has an initial capacity of 1 million m3, with subsequent phases to increase capacity to 3 million m3. This is expected to be

85

tank storage asia review

operational in 2015-2016.

The company has also won the contract to reclaim a total 3,485 acres of land in Tg Piai over the next 10 to15 years.

Tanjung Piai is located 17km from Jurong Island, and close to the major ports of Johor, Tanjung Langsat, Jurong and Keppel ports.

It also has natural water depths of more than 20m, minimising dredging costs, but with a subsea that is conducive for land reclamation.

It also has a vast amount of land for future expansion, as well as existing anchorage area for over 1,000 vessels.

In addition to this, Benalec has been awarded a project to reclaim 1,760 acres in Pengerang, also in Johor, with the intention of setting up a petrol and maritime industrial park on the land reclaimed. The construction timeline for this is 10 years.

Phase one of the terminal in Pengerang will be 150 acres with a capacity of 1.3 million m3 with seven berths, at a cost of RMB1.7 billion (€400 million).

Pengerang is located 120km from Johor and has an initial refining capacity of 800,000 bpd.

Mak explained that although there are a vast amount of storage projects planned at the moment, there remains a large demand for future capacity.

Reasons for this include the fact that the International

86

The global top 10 emerging oil storage markets 1. China 2. UAE 3. India 4. Canada 5. Iran 6. Netherlands 7. France 8. Poland 9. Singapore 10. South Korea Maritime Organisation (IMO) restricts the use of VLCCs for use as floating storage capacity, regional demand from China and India is on the rise, and trading activating driven by speculative storage is also on the up.

Middle East: the one to watch Behind China, the UAE is the second largest emerging storage market. Sanjeev Sisaudia, group CEO for local terminal operator Gulf Petrochem FZC, highlighted the enormous potential for the storage market in Fujairah, the world’s second largest marine fuels hub.

Refined product demand in the Middle East, for example, is expected to grow by 1.8% a year from 6.7 million bpd in 2010 to 10.4 million bpd in 2035.

To cater for this, additional

refining capacity in the Middle East between 2012 and 2016 is projected to be 1.8 million bpd.

Much of this will come from grassroots projects. The most likely developments are Jubail &Yanbu refineries in Saudi Arabia and Ruwais & Fuajirah refinery in the UAE, each adding 400,000 bpd.

Expansions of existing plants in Karbala in Iraq, Isfahan in Iran and Rabigh in Saudi Arabia are also expected.

Saudi Aramco is partnering with Sinopec for the Yanbu refinery and with Total for the Jubail project, amounting to 400,000 bpd.

Saudi Arabia is planning another refinery at Jazan Industrial City (400,000 bpd) and has revived an older project for the expansion of the Ras Tanura refinery (550,000-950,000 bpd).

Iraq is in negotiations with several investors about building four new refineries with an initial total capacity of 750,000 bpd.

The UAE is also announcing plans to build a new refinery in Fujairah (200,000 bpd) and is opening of a 1.5 million bbl per day Abu Dhabi crude oil pipeline.

Oman is considering building a 230,000 bpd refinery in Duqm and Qatar is announcing projects in Ras Laffan and Mesaieed. The latter would be designed to process expected additional barrels from the Al-Shaheen field.

Updating delegates on Gulf Petrochem’s own project, Sisaudia explained that Phase I is now complete. This consists of 412,000m3 storage capacity in 49 tanks ranging from 12,000-

40,000m3. He also added that the company now has plans to expand into Africa.

Elsewhere in Asia Alexander Wood, CEO of AWR Lloyd, has experience in new project feasibility, capital gaining and strategy consulting in Thailand, Vietnam, Cambodia and Indonesia, and used this expeirience to shed a little more light into some of the other markets in Asia.

Thailand’s oil consumption has increased by a factor of nearly four times since the 1980s, from 200,000 bpd to nearly 800,000 million bpd, with the main refineries located near Bangkok and on the eastern seaboard in southeast Thailand, he explained.

Thailand has six large refineries with a capacity of around 1.2 million bpd.

Around 4/5ths of Thailand’s crude is still imported from the Middle East, however.

The country’s oil consumption is likely to increase to around 1.6 million bpd by 2030 and, with domestic oil production likely to fall over that time, it will leave the country increasingly exposed to the risks of Middle Eastern crude supply and product imports.

Strategic storage is one area requiring additional tankage in the coming years as the country has imposed a 90 day net import strategic standard by 2030, up from the current 36 days of consumption.

In Vietnam demand for petroleum products is expected to grow from

January/February 2013 • TANK STORAGE

tank storage asia review

   COMPANY

CDU CAPACITY KBPD

LOCATION

CURRENT STATUS

NEW OPERATOR

UNITED KINGDOM BP

16.5 million tonnes in 2012 to 39.3 million tonnes in 2025.

New refinery constructions are still uncertain but, by 2030, the country could have refining capacity of 40 million tonnes per year or more.

Vietnam’s petroleum consumption is likely to double within the next two decades.

The country currently has commercial storage capacity of around 4 million m3, equivalent to around 60 days of consumption. However the government plans to increase stockpiling rules, so it will fall mainly on industry (albeit mainly state-owned) to achieve strategic storage of over 70 days of consumption by 2025.

In Indonesia oil demand stands at around 1.4 million bpd.

AWR Lloyd forecasts consumption of around 2.2 million bd by 2030.

Current stock levels in Indonesia are estimated at around 20 days of consumption but again the country’s government is currently formulating a strategic reserves programme.

Shell

Kent

150

Closed -new port

Llandarcy

Wales

80

Closed

Grangemouth

Scotland

180

Operating

Belfast

N. Ireland

80

Closed

Shellhaven

Thames

180

Closed- New Container terminal

Teesport

NE England

80

Ardrossan

Scotland

Ineos/Petrochina

Closed- New Container terminal Closed

Stanlow

Mersey River

240

Operating

Esso

Milford Haven

Wales

100

Closed-dismantled

Chevron/Gulf

Milford Haven

Wales

210

Operating

Murco

Milford Haven

Wales

120

Converting to terminal

Petroplus

Teeside

NE England

80

Closed- Oil terminal

Coryton

Thames

220

Closed-Terminal

COMPANY

CDU CAPACITY KBPD

LOCATION

Essar Energy

Valero

10 CURRENT STATUS

FRANCE BP

Total Petroplus LyondellBassel

Vernon Dunkirk Strasbourg Dunkirk Petit Couronne Berre

Rouen N Coast N Coast Provence

100 80 80 156 162 105

Closed dismantled Closed dismantled Closed dismantled Closed -Terminal Bankrupt Closed

108 112

Restarted by Gunvor Closed Terminal

BELGIUM Petroplus

Antwerp Antwerp

GERMANY Shell

Harburg

Hamburg

110

Closed-Terminal

Petroplus

Ingoldstadt

Bavaria

105

Closed-Gunvor possible restart

Cremona Civita Vecchia Gela Falconara Priolo

NE Italy Rome Sicily E Coast Sicily

80 86 105 83 360

Closed Closed Closed for 12 months Closed for 12 months 80% sold to Lukoil

ITALY Tamoil ERG Total ENI API ERG Total

 Closed  Sold  Converted

Coping with natural disasters With Hurricane Sandy still fresh in the memories of those affected Brent Cooper, terminal operations manager at Z Energy, shared his experiences of how the New Zealand earthquakes also impacted the storage sector.

Z Energy is the largest supplier of fuel to the New Zealand market. Due to geographical isolation, four companies, Z Energy, Chevron, Mobil and BP, are

Isle Of Grain

all involved in various JVs which enables comingled storage and shared use of terminal and shipping assets.

Christchurch was rocked by two powerful earthquakes in 2010 and 2011, causing major infrastructural damage and disruption to the fuel chain.

Damage to terminals included foundation seals, stretched bolts and tank settlement.

TANK STORAGE • January/February 2013

2080 kbpd 1098 kbpd 790 kbpd

Refinery closures?

Colin Allcard, MD of Channoil Consulting, gave a rundown of the refinery closures in Europe and asked whether a similar situation would unfold across Asia.

Indications are, however, that Asia Pacific will not have excess capacity, so refineries’ margins should stay healthy.

11

Having said that, smaller low conversion units could still come under pressure.

With so much positivity secreting from the event it is no surprise that next year’s event has already been announced, with over 80% of this year’s exhibitors already re-booked to return to Singapore on 10-11 December 2013. For full details visit www.tankstorageasia.com

87

events FEBRUARY 2013

n 19-21st February LBTF Conference Hyatt Regency, Austin, Texas The upcoming LBTF Conference will have a special focus on oil and gas, following the progression of the EPA enforcement. This will include current and pending rulemaking, permitting implications and increased regulatory scrutiny. n 18-20th February International Petroleum Week Park Plaza Victoria, London, UK Over 2,000 visitors are expected to attend IP Week, which will feature conferences and seminars and an exhibition, in addition to an evening reception and annual dinner. Topics to be covered include finance and investment, technology and regional outlooks.

MARCH 2013 n 19-21st March StocExpo Antwerp Expo, Antwerp, Belgium The Storage Terminal Operators’ Conference and Exhibition (StocExpo), now in its ninth year, provides a platform for terminal operators, traders, regulators and equipment suppliers to do business. The 2012 event boasted more than 180 exhibitors from 29 countries across the world. A world-renowned conference will run alongside the three-day exhibition.

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n 5-7th June OGA – the 14th Asian Oil, Gas and Petrochemical Engineering Exhibition Kuala Lumpur Convention Centre, Malaysia OGA 2013 will showcase the latest technology, equipment and machinery in the fields of oil, gas and petrochemical engineering. The 2011 show saw the participation of 1,560 companies from 45 countries that attracted 20,705 trade visitors from 68 countries.

SEPTEMBER 2013

n 17-19th September Tank Storage Forum LATAM Sao Paulo, Brazil This event provides information and networking opportunities to industry professionals in the region. It will bring together over 250 oil and chemical companies, ports, tank terminal operators, integrators and suppliers to share best practice and address growth opportunities in the region.

8 Aker Solutions

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8 Auma 62 8 Bakken Crude Oil Logistics

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8 BTE 21 8 Cashco 50 8 CB & I

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8 CST Covers

Front Cover, 31

8 EA Projects

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8 Envent 24 8 Franklin Valve

27

8 HMT 42

OCTOBER 2013 n 9-10th October Tank Storage Canada TELUS Convention Centre, Calgary This two-day conference and exhibition brings together terminal operators, traders, regulators and equipment suppliers from around the world.

8 ILTA 84 8 IMHOF 33 8 Ivens 15 8 Kanon IFC 8 L&J OBC

APRIL 2013

n 29-30th April Tank Storage Forum MENA Dubai, UAE The MENA 2013 conference will address the key issues facing tank storage professionals in the region. The forum is attended by over 250 experts from the Middle East and North Africa including oil and chemical companies, ports, tank terminal operators, integrators and supplies.

MAY 2013

n 6-8th May 8th Annual Bulk Liquid Storage Tanks Conference Southern Sun Elangeni, Durban, South Africa Highlighting the latest advances in technologies, processes and procedures for effective storage tank management. This year the conference is in the new location of Durban and will also feature a seminar on tank terminal management.

DECEMBER 2013 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 relating to tank design, construction and maintenance, through to innovations in metering and measuring, pumps and valves, and automation and loading equipment.

8 LBFT Conference

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8 Lightning Master

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8 Magnetrol 47 8 Meridian 83 8 Mesa

8 NISTM 80 8 Nordic Storage

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8 Oiltanking 10 8 OPW

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8 Oreco 13 8 Pentair 51

JUNE 2013

8 PFT Alexander

n 3-5th June ILTA Houston, Texas The International Liquid Terminals Association aims to provide its members with information tools to facilitate regulatory compliance and improve operations, safety and environmental performance while at the same time offering opportunities for relationship building, networking and knowledge sharing.

39

8 Protego 22 8 Rosen 16 8 Safe Cut

19

8 StocExpo IBC 8 Vacono America

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 2012 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.

Air Business Ltd is acting as our mailing agent.

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29

58

8 Zerust 14

January/February 2013 • TANK STORAGE

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Consisting of a threeday Conference and Exhibition, StocExpo provides the opportunity for terminal operators, traders, regulators as well as equipment suppliers to come together to network and do business in this vital region.

The exhibition provides an excellent sales and marketing platform for manufacturers and suppliers of everything from tank design, construction and maintenance, through to innovations in automation, certification, inspection, loading equipment, metering, measuring, pumps and a lot more.

The Conference will attract terminal and pipeline operators, as well as traders, analysts, regulators, renewable energy producers and technical expert. They will come together to discuss the key issues impacting the sector.

For more information on exhibiting at StocExpo, please contact: Sharé Mason: T: +44 (0)20 8843 8819 E: share@stocexpo.com Suzy Hall: T: +44 (0)20 8843 8817 E: suzy@stocexpo.com TANK STORAGE • January/February 2013

www.stocexpo.com

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Left to right: MCG 1500SFI Wireless Servo Gauge with MCG 2150 Infrared Calibrator, Wireless MCG 1600SFI Radar Gauge

level gauging solutions for changing industry demands As a leader in the level gauging market, L&J engineering continues to evolve at every level with products and features not found anywhere else in the market. The MCG 1500SFI Servo Gauge and MCG 1600SFI Radar Gauge are no exception. By utilizing L&J engineering’s MCG 2150 Remote Calibrator, the industry’s only handheld infrared calibrator, setup is simplified to five quick steps through the radar or optional MCG 1350M Ground Level Display. High quality precision, easy installation, and calibration puts L&J engineering’s line of radar level and servo gauges in a class of its own ahead of the competition.

For difficult applications and others that require a need for advanced technology, L&J engineering has the solution. Contact us for a no charge assessment of your tank gauging needs.

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5911 Butterfield Road Hillside, IL 60162 USA

tel: (708) 236-6000 fax: (708) 236-6006

www.ljtechnologies.com January/February 2013 • TANK STORAGE sales@ljtechnologies.com