Tank Storage Magazine October/November 2016

The voice of the storage terminal industry

OCTOBER/NOVEMBER 2016 Volume 12 Issue No.5

THE GATEWAY TO GERMANY’S ENERGY MARKET

A former refinery has emerged as a key coastal terminal for the country’s supply chain

A NEW PLAYER FOR THE UK’S GROWING STORAGE DEMAND

An exclusive interview with the UK’s largest independent bulk liquid storage provider

REGIONAL FOCUS: GERMANY

PROFILE l XXXXXX XXXXXX

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OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

CONTENTS

Contents News TERMINAL NEWS 09

Europe

12

The Americas

15 Asia 16 Africa & Middle East 20 Incident report

22

33

Storage in Germany 22

The gateway to Germany’s energy market

26

Satisfying Germany’s crude appetite

29

It’s all about location

Profile 33

A new player for the UK’s growing storage demand

Technical features 36

Technical news

46 Eliminating piping support weaknesses 48 Solving the seven most common tank gauging problems OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

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CONTENTS

Contents

50

Speaker interviews 70

Insights from a selection of Tank Storage Germany’s industry experts

Events

Technical features 50

Bringing the future to the tanker truck

53

Custody transfer meter diagnostics improve process stability

56

A new level of loading

58

360˚ surveillance for bulk liquid security

60

Mixers play a key role in the petroleum supply chain

63

Fighting the flames with foam

64

Addressing challenges in oil and gas downstream distribution with Industry 4.0

67

Solving critical firefighting problems

68

Tailor-made rotary lobe pumps for stationary or mobile use

02

76

Centralising the energy supply chain A preview of some of the exhibitor’s at this year’s Tank Storage Germany in Hamburg

87

Asia: the engine for energy growth

88

Upcoming events

89

Advertisers’ index

76

OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

CONTENTS

INGENIEURTECHNIK

| Engineering | Manufacturing | Construction | Reconstruction | Maintenance | Repair

Engineering and Construction of Storage Tanks Advanced Technology in Welding

Repair and Maintenance Tanklifting

New Storage Tanks

Repair and Maintenance

ŀ According to DIN, EN, AD2000, API, BS, CODRES, EEMUA, etc. ŀ Approved by Bureau Veritas, Lloyd`s, TÜV, etc. ŀ Stainless Steel and Carbon Steel ŀ Fixed Roof Storage Tanks ŀ Floating Roof Storage Tanks ŀ Internal Floating Roofs ŀ Double Wall/Cup Tanks ŀ Double Wall and Double Bottom Leak Detection ŀ Cryogenic Storage Tanks ŀ Steel Silos for e.g. Sugar, Sulfur Pallets, Steel Pallets, etc. ŀ Pressure Vessels, Columns, Reactors ŀ Special Piping Components for Diameter > 1.000mm ŀ Turn Key Projects ŀ Aluminium Dome Roof ŀ Floating Roof Seal SWING

ŀ Tank Inspection ŀ Engineering and 3D CAD Design ŀ Static Calculation and FEA ŀ Tank Lifting ŀ Tank Moving ŀ Repair of Bottom, Shell and Roof ŀ Repair and Upgrading of External and Internal Floating Roofs ŀ Repair, Upgrading and Exchange of Floating Roof Seals ŀ Calculation of Evaporative Loss from Floating Roof Tanks ŀ Repair, Upgrading and Exchange of Tank Equipment ŀ Upgrading of Tanks according to new Standards ŀ Upgrading of Tanks e.g. increasing of Working Temperature and Pressure ŀ Upgrading of Cooling Systems and Foam Systems ŀ Shut Down Works ŀ High Pressure Abrasive Waterjet Cutting

INGENIEURTECHNIK GMBH

Heideweg 2 24558 Henstedt-Ulzburg, Germany

OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

Tel.: +49 (0) 4193/905-0 Fax: +49 (0) 4193/905-50

E-Mail: jpm@jpm-gmbh.de Web: www. jpm-gmbh.de

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CONTRIBUTORS

Contributors

The voice of the storage terminal industry

OCTOBER/NOVEMBER 2016 Volume 12 Issue No.5

THE GATEWAY TO GERMANY’S ENERGY MARKET A former refinery has emerged as a key coastal terminal for the country’s supply chain

OCTOBER/NOVEMBER 2016 Volume 12 Issue No.5

A NEW PLAYER FOR THE UK’S GROWING STORAGE DEMAND

An exclusive interview with the UK’s largest independent bulk liquid storage provider

REGIONAL FOCUS: GERMANY

TSM_Front_cover_October-November 2016.indd 2

11/10/2016 06:36

Front cover courtesy of Emerson Automation Solutions

PUBLISHER Margaret Dunn t: +44 (0)20 3551 5721 e: margaret@tankstoragemag.com

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INTERNATIONAL SALES MANAGER David Kelly t: +44 (0)20 8843 8161 e: david@tankstoragemag.com

PORTFOLIO MARKETING MANAGER Amy Jordan t: +44 (0)20 8843 8837 e: amy@tankstoragemag.com

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Part of

OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

CONTRIBUTORS

OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

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COMMENT

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OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

17M092016H

COMMENT

A rebalancing market

W

hile the continued storage inventories glut has been good news for operators across the globe, it has been hard to ignore the impact this stock overhang has had on the wider oil market.

Over the past two years prices have more than halved and volatility has increased. The oil industry has faced deep cuts in investment and the economic growth of oil exporting countries and oil companies has been significantly impacted.

There are real and potential risks that this stock overhang may continue to negatively impact producers, consumers and the industry.

As such, at OPEC’s extraordinary meeting in Algeria, it was agreed that global oil production would be cut by 700,000 barrels per day in a bid to reduce the global glut of an estimated 1 million to 1.5 million barrels per day.

It is hoped that this move will go some way to stabilise and ultimately rebalance the oil market and avoid adverse impacts in the future.

It will certainly be interesting to see how this move will impact market movements as well as its impact on the ever fluctuating oil price, but what can be agreed is that this action is needed to address the widening disparity between supply and demand.

Against these volatile global markets, tank storage in Germany remains a stable business, with the focus on product distribution throughout the country. The fact

OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

that there is little domestic oil and natural gas production means Germany relies heavily on imports – particularly motor petrol, gas/diesel oil and fuel oil to keep the country moving. This is excellent news for storage operators.

Within this issue we speak to HES Wilhelmshaven about how it offers logistical solutions for the country’s supply chain. The former refinery underwent an extensive €25 million recommissioning process and is now a sustainable and flexible terminal for the country’s energy market, with 1.29 million m3 of capacity for crude oil, diesel, jet fuel, fuel oil, petrol and LPG. Also located in Wilhelmshaven is NordWest Oelleitung’s (NWO) storage facility, which not only supplies refineries in the northwest of the country but is also the only supplier for most of Germany’s crude reserves. We speak to its managing director about future developments to ensure it can be even more efficient and profitable in an increasingly narrow market.

We also take a closer look at the UK’s largest independent bulk liquid storage player following a series of acquisitions

by Macquarie Capital and Greenergy to form Navigator Terminals.

This edition is the official publication for Tank Storage Germany in Hamburg so please come by our stand F3 to pick up a copy and say hi to the team.

We hope you enjoy this issue.

With best wishes, Jasmin

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TERMINAL NEWS l CONTENTS

Terminal news All the latest terminal storage news from around the globe

15 Saudi Aramco and Japan poised to agree storage expansion

13 Joint venture formed for pipeline and storage terminal in Oklahoma

Europe 09 Thames Oilport expands diesel tank storage

CLH invests millions in pipeline and environmental projects

Vopak and Dow invest in Antwerp storage capacity

Vopak reports strong first half performance

10 Vopak & Exmar consider floating LNG storage facility

19 $100 million petroleum storage terminal planned in Hamriyah

ASIA 15 Asian countries remain top LNG importers

Saudi Aramco and Japan poised to agree storage expansion

AFRICA & MIDDLE EAST 16 Expansion boosts Vivo’s storage capacity

Finland’s first LNG import terminal officially opened

Fujairah to start publishing weekly storage data

Oiltanking acquires former Shell terminals in Copenhagen

UAE’s first VLCC jetty launched to boost region’s hub role

ARA gasoil stocks hit record high

CLH profit grows following investment projects

17 Iran’s largest oil terminal to grow by 10 million barrels

Puma opens Congo fuel storage terminal

11 Odfjell’s competitiveness generates strengthened results 18 Militant attacks disrupt Nigeria crude oil production

Puma delivers first cargo of bitumen to Nigerian terminal

THE AMERICAS 10 Vopak & Exmar consider floating LNG storage facility

19 $100 million petroleum storage terminal in Hamriyah

Finland’s first LNG import terminal officially opened

13 Joint venture formed for pipeline and storage terminal in Oklahoma

Partial pipeline shutdown results in product shortages

For the latest tank storage news visit www.tankstoragemag.com 08

OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

TERMINAL NEWS l EUROPE

Thames Oilport expands diesel tank storage

The amount of diesel tank storage at Thames Oilport will be expanded in early 2017.

The company announced that it will be bringing a further 56,000 m3 of capacity online in the first quarter of 2017 in addition to the 175,000 m3 which came on stream in April 2016 and the 64,000 m3 which was commissioned earlier in August.

Thames Oilport, the site of shuttered Coryton refinery, is being developed in phases, beginning with diesel storage and then moving onto storage and road loading for other product.

CLH invests millions in pipeline and environmental projects

Almost €23 million has been spent by the CLH Group on research, development and innovation projects.

Of these projects, one comprises the design and implementation of new energy optimisation techniques to reduce energy consumption when moving oil products through the pipeline and to cut down on CO2 emissions deriving from these activities.

A global investigation of consumption figures was carried out, including an analysis of the different fuel flows and routes through the pipeline network. The data was then incorporated in a new mathematical model to make it possible to schedule pumping in a more efficient and optimised manner.

A second project is the analysis of new biological techniques for the environmental recovery of land affected by hydrocarbons.

The company has analysed the development of new ways of cleaning land associated with the bioremediation technique, based on promoting the development of fuel-degrading microorganisms, which offer benefits such as reduced consumption and acoustic impact and lower emissions.

Both of these projects have obtained qualification and approval from the Centre for the Development of Industrial Technology.

Additional projects include the design of a new SCADA system for its pipeline network, improvements in loading areas and a new facility control centre.

Vopak reports strong first half performance Vopak’s positive business developments and increase on its EBITDA provide a healthy outlook for its full year performance.

The storage operator reported that its EBITDA increased by 3% to €421 million, which was resulting from higher occupancy rates. EBIT increased by 3% to €291 million.

During the first half of 2016, the company divested UK activities and its Japan terminals and as a result, its overall storage capacity decreased by 700,000 m3 to 33.6 million m3 compared to year-end 2015.

Eelco Hoekstra, CEO of Vopak, says: ‘We see that the growing imbalances of refined petroleum products are further impacted by global developments such as liberalisations in markets like Mexico and Indonesia, China’s transition towards a service-driven economy, and the gradual return of Iran onto the world energy market.

‘Growing population, urbanisation and increasing wealth levels drive demand in end markets. Therefore, we expect demand for chemicals to grow in the long term, particularly in Asia.’

He adds that the global LNG market conditions continue to be challenging due to an ‘intensifying oversupply’. However looking ahead, there appears to be a trend in market towards more trading.

Hoekstra says: ‘Vopak continues to diligently assess the changing energy landscape. In line with the key messages set out during our capital markets update in 2016, there will be a step-by-step increasing need for better and more storage infrastructure.

‘We maintain our focus on seizing new opportunities in order to further strengthen our leading position in an agile industry. This is also supported by recently commissioned terminals, such as the independent LPG facility in Singapore, as well as recently announced projects like our new operations in Panama and the intention to expand Vopak Terminal Deer Park in Houston with 130,000 m3 for chemical storage.’

Vopak and Dow invest in Antwerp storage capacity Dow Sadara and Vopak Eurotank have expanded liquid chemical storage capacity in Antwerp for the Dow Sadara joint venture.

A total of 20 news storage tanks with a combined capacity of 40,500 m3 to hold 11 different types of liquid chemicals have been added to the Vopak Eurotank terminal. Vopak Eurotank will act as the northern European distribution hub for these products.

Additionally, investments have been made in a new pipeline network for two deepsea loading jetties with three loading/unloading bays for trucks and rail wagons.

OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

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TERMINAL NEWS l EUROPE

Vopak & Exmar consider floating LNG storage facility Exploratory talks are underway regarding the potential of an acquisition of Exmar’s share in its floating LNG storage and regasification business by Vopak.

Vopak has earmarked storage and handling of LNG as one of its strategic focus areas. The storage operator is looking for strategic opportunities to strengthen its presence as a service provider in LNG. Vopak jointly owns and operates two land-based storage and regasification terminals – the Gate terminal in the Port of Rotterdam and the TLA terminal in Mexico.

Exmar is currently co-owner and/or operator of 10 FSRUs and has one FSRU and one FLNG facility under construction.

Vopak says in a statement that as the outcome of these discussions in unknown, no further details will be disclosed.

Finland’s first LNG import terminal officially opened

Pori LNG terminal, Finland’s first LNG import terminal, has been officially opened.

Deliveries of LNG began on the same day of the opening on September 12 and it enables LNG deliveries to industrial, maritime and heavy-duty road transport customers outside the gas pipeline network and diversifies the Finnish energy market.

The option of LNG deliveries outside the gas pipeline network lowers the threshold for the utilisation of gas throughout the country. Total investment in the project exceeds over €80 million and in 2014 €23 million was granted for the terminal project by the Finnish Ministry for Employment and the Economy.

In August, Finland’s first gas filing station aimed a heavy-duty vehicles was opened at the Vuosaari Harbour in Helsinki. Progress in the construction of the Tornio Manga LNG joint project is also on schedule and is due to be completed in Tornio in 2018.

The Gasum subsidiary and terminal operator Skangas supplied a total of 376,700 tonnes of LNG in Finland, Sweden and Norway in 2015.

Oiltanking acquires former Shell terminal in Copenhagen Oiltanking Copenhagen has acquired the former Shell terminal on the island of Prøvestenen in Copenhagen.

The company says that the acquisition will enhance its position as a leading provider of jet fuel storage capacity at Copenhagen Airport.

The facility has pipeline connectivity to the Copenhagen Airport system.

This connectivity means that Oiltanking Copenhagen will have more than one direct supply route to the airport’s system, creating a much needed redundancy option.

The terminal will have to be upgraded before it can potentially be taken back into service as it has been out of service for a number of years.

Oiltanking is currently assessing the size of required investment, as well as the market potential for the 73,000 m3 additional capacity for jet fuel.

CLH profit grows following investment projects CLH has recorded after-tax profits of €92.4 million during the first half of 2016, a 20.8% increase from its 2015 figures.

EBITDA for the first six months of 2016 reached €174 million, 11.5% higher than the same period in 2015. This has been attributed to increased activities in Spain and the incorporation of the international subsidiaries CLH-PS and CLH Aviation Ireland, which started their operations in May 2015 and June 2016, respectively.

The company’s investments in the period totalled €40 million, which were mainly devoted to improving the company’s infrastructure in Spain and developing new international projects in Oman, the UK and Ireland.

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ARA gasoil stocks hit record high Gasoil stocks in the ARA reached the highest level in four years in September.

According to Genscape, stocks increased to a record high of 6.416 million metric tonnes (MT) the week ending September 9 after a 175,000 MT build. This marked the highest stock level since Genscape began monitoring the area in August 2012.

Genscape says that storage levels are likely to continue to build in ARA with a net increase of 639,805 MT of gasoil predicted to enter the area in the next few weeks.

The record high the week of September 9 was 93,000 MT higher than the previous record high of 6.323 million MT reached the week ending July 15.

Due to the recent oversupply of oil and relatively mild winter in 2015, gasoil supplies did not fall as significantly as in previous years and did not have as strong of a building pattern, says Brittney Mills and Callie Minor, oil storage analysts at Genscape.

The recent continuous build of gasoil stocks is attributed to low demand during the summer months as terminal start to stock up ahead of the colder months.

On September 9, the ARA terminals utilised 71% of the gasoil capacity, just below the record high capacity utilisation of 76% on October 16, 2015.

OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

TERMINAL NEWS l EUROPE

Odjfell’s competitiveness generates strengthened results Odfjell has reported a significant increase in its 2016 half year EBITDA compared to the same period last year.

It’s 2016 first half EBITDA is $129 million, compared to $88 million in the same period last year.

Its terminals segment delivered stable results stable results, with an EBITDA of $12.1 million in the second quarter of 2016, basically flat from $11.9 million in the previous quarter.

There was a 63,000 m3 increase in available capacity from the last quarter, bringing the total to 4.01 million m3 and the occupancy rate was 97%.

A full strategic business review of Odfjell Terminals’ activities has also been announced and it will be led by the new terminal management, headed up by Odfjell Terminals CEO Frank Erkelens. It is due to be completed later this year.

The operator’s Rotterdam terminal has now delivered positive EBITDA for three consecutive quarter and distillation volumes continue to increase. The Rotterdam results are expected to stabilise at this level for the remainder of 2016.

Performance at the operator’s other terminals is also expected to be

stable. Its facility in Tianjin, China, continues to move forward in obtaining the required operating permits, as the process was severely hampered by the explosion in the old harbour in 2015.

Kirstian Mørch, CEO of Odfjell says: ‘Our markets are currently challenging, but we are pleased to see that the increased competitiveness of Odfjell means that we continue to generate positive results.’

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OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

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TERMINAL NEWS l THE AMERICAS

General Petroleum fined over violating spill prevention regulations General Petroleum has reached an agreement with the US Environmental Protection Agency following a string of violations concerning a spill prevention plan.

The company will pay a $15,500 penalty as part of the agreement to resolve federal Clean Water Act violations at its petroleum storage facility on Terminal Island. EPA says that it has already ‘come into compliance’ with the law.

It follows a joint inspection by the EPA and Los Angeles Fire Department in April 2015, which found that the company had violated regulations requiring onshore oil production facilities at risk of discharging oil into water to prepare and implement a spill

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prevention, control and countermeasure (SPCC) plan.

The company failed to provide adequate secondary containment around the tanks to keep spilled oil from leaving the site and entering surrounding waters.

General Petroleum also failed to amend and re-certify its SPCC plan after making ‘significant physical changes’ to its facility.

Additionally, it did not maintain and implement an SPCC plan that discusses discharge or drainage controls, and procedures for the control of a potential discharge.

Kathleen Johnson, director of the enforcement division in EPA’s Pacific southwest region, says: ‘To reduce the risk to San Pedro Bay, we have been working with our state and local partners to ensure the deficiencies were all addressed.’

Tesoro Logistics acquires final portion of Alaska storage assets Tesoro Logistics (TLLP) has acquired the remaining part of storage and terminalling assets in Alaska owned by subsidiaries of Tesoro.

TLLP acquired the refined products terminals in Anchorage and Fairbanks, Alaska, for $178 million.

Greg Goff, chairman and CEO, says: ‘The acquired terminals build upon TLLP’s logistics capabilities in the region and enable TLLP to provide a first class, full-service solution for customers in Alaska.’

Combined with the crude oil and refined product storage portion, which closed in July, the total acquisition price was $444 million.

OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

TERMINAL NEWS l THE AMERICAS

Joint venture formed for pipeline and storage terminal in Oklahoma Velocity Midstream Partners and a subsidiary of CVR Refining have formed a joint venture for a crude oil pipeline and storage terminal project.

The project will directly link the assets to the fairway of the South Central Oklahoma Oil Province (SCOOP) to CVR Refining’s Wynnewood, Oklahoma refinery.

Partial pipeline shutdown results in product shortages Petrol supplies to the southeast and east coast of the US have been disrupted following a partial shutdown of a pipeline system.

The Colonial Pipeline shut down its Line 1 pipeline following a leak in Alabama. It is a major source of transportation fuels to the southeast and as a result of the shutdown, it has disrupted petrol supplies, resulting in higher prices and product shortages in part of the region.

The EIA says that repair and restoration activities are currently underway, including the construction of a 500-foot, above-ground bypass around the affected section of pipeline. This bypass is expected to allow the pipeline to resume operations on Line 1 as early as today, September 21.

As there are no refineries between Alabama and Pennsylvania that product substantial quantities of transportation fuels, the southeast is supplied primarily by pipeline flows from refineries along the US Gulf Coast and supplemented by marine shipments from the US Gulf Coast and imports.

The pipeline is a 2.5 million barrel per day system of approximately 5,500 miles of pipeline and it connects 29 refineries and 267 distribution terminals.

Petrol shipments were temporarily allowed on the pipelines Line 2 however, these supplies were less than the volumes that would have normally been transported on Line 1.

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CVR Refining will hold a 40% stake in the venture – Velocity Pipeline Partners – and it will contract with VPP for transportation services.

Velocity will act as a manager of the joint venture and operate the pipelines following the completion of the pipeline’s construction.

Velocity’s new crude oil project provides the Wynnewood refinery with direct pipeline access to SCOOP production.

The new pipeline also enables producers in the SCOOP to segregate their heavier crude barrels, produced from the Springer and Woodford oil formations, from their lighter barrels, produced from the Woodford condensate formation.

Once completed, the addition of Velocity’s VPP pipeline and crude oil loop will allow producers to gather and transport crude oil and condensate from points in Grady, Stephens, Garvin, McClain and Carter counties to both the Wynnewood refinery and Cushing.

Rick Wilkerson, Velocity’s chief executive officer, says: ‘The Woodford and Springer crude is attractive to Midcontinent refiners and, coupled with the reduction in crude transportation costs, provides the producers in SCOOP with very strong and reliable markets.’

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TERMINAL NEWS l AFRICA & MIDDLE EAST

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OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

TERMINAL NEWS l ASIA

Asian countries remain top LNG importers

Emerging Asian LNG markets have the potential to increase their LNG imports to ensure the region remains the top LNG importer.

Japan, South Korea and China are the three largest importers of LNG in the world, and they accounted for more than half of the global LNG imports in 2015.

According to the EIA, combined LNG imports in these countries averaged 18.2 billion cubic feet per day in 2015, a 5% decline from 2014 levels and the first annual decline in these countries’ combined LNG imports since the global economic downturn in 2009.

However, these declines were partially offset by increasing LNG imports elsewhere in Asia. Imports in India and Taiwan, the fourth and fifth largest LNG importers, increased slightly in 2015. But most of the increase in LNG imports came from emerging Asian LNG markets, such as Malaysia, Singapore, Thailand and Pakistan.

LNG demand growth prospects are limited in the more mature markets of Japan and South Korea, LNG demand in China, India, Taiwan and emerging Asian markets is expected to grow in the future. LNG import growth in these countries is driven primarily by the increased use of natural gas for power generation.

OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

Saudi Aramco and Japan poised to agree storage expansion Saudi Aramco and the Japanese government are on the verge of agreeing a two million barrel expansion of crude storage capacity in Okinawa.

According to Reuters, Saudi Aramco and Abu Dhabi National Oil Company each store up to 6.3 million barrels of crude oil in Okinawa.

In return for providing free storage space, Japan gets priority claim on the stockpiles in the case of an emergency.

Saudi Aramco CEO Amin Nasser told reporters at a press conference: ‘It would be in the best interest for Saudi Aramco and Japan to increase the capacity. We are looking at a couple of million barrels more than what we have now.’

The company has also signed memorandums of understand on business corporation in Tokyo with Japanese companies including three major banking groups.

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TERMINAL NEWS l AFRICA & MIDDLE EAST

Expansion boosts Vivo’s storage capacity

UAE’s first VLCC jetty launched to boost regions hub role

Vivo Energy Kenya has the largest diesel storage capacity in Kenya following the opening of additional tank capacity.

The UAE has boosted its role as a global oil trading hub by launching its first crude shipment jetty in the Port of Fujairah.

The oil marketer has opened a 23 million litre diesel storage tank at its Mombasa terminal and a five million litre petrol storage tank.

These tanks increase the company’s diesel storage to 53 million litres and its petrol storage to 29 million litres. The diesel storage increase reflect the growth in the industry with increased volumes at service stations, manufacturing and agricultural sectors.

Diesel consumption at Shell service stations has grown significantly since November 2012 and Vivo Energy Kenya distributes and markets Shell branded fuels and lubricants. It is this increase that has created the need for additional fuel storage.

The company says that the investment will also serve as ‘an avenue to supplement the current ullage received from the pipeline, and enable Vivo Energy Kenya to support inland and Vivo Energy Uganda business’.

Vivo Energy Kenya MD Polycarp Igathe says: ‘Additional storage will enable Vivo Energy Kenya to support its rapidly growing retail business which has witnessed a 54% growth over the last three years. It also increases flexibility to support inland markets like Uganda.’

Vivo Energy Kenya has fuels storage capacity of 87,625 m and 172 service stations.

The VLCC jetty will leverage the port’s strategic position at the heart of rising energy trades along the south-south corridor. This corridor stretched from Beijing to Lagos.

The berth is seen as a key step in allowing the port to expand its offering on the global market. The Middle East could account for 18% of oil demand growth between 2015 and 2021.

The Fujairah government reclaimed more than 10.25 million square meters of land using more than 22 million tonnes of rock to achieve the 26 meter deep-water draft necessary for VLCC’s for 24 hour marine operations.

The berth will allow customers to load or discharge up to two million barrels of crude oil within 24 hours and can facilitate tankers up to 344 meters long.

The total cost of the project is AED 650 million (€157 million).

H.H. Sheikh Saleh Bin Mohammed Bin Hamad Al Sharqi, chairman of the Department of Industry and Economy and chairman of the Port of Fujairah, says: ‘The Port of Fujairah’s launch of the first VLCC berth on the Indian Ocean is integral to supporting the UAE’s energy demands and keeping pace with what is an intensely competitive sector.

‘The new VLCC berth illustrates our determination to continually elevate Fujairah and the UAE on the regional and international energy map.’

Captain Mousa Murad, general manager at the port, adds: ‘The new VLCC berth significantly enhances the Port of Fujairah’s commercial ability and is a necessary step in ensuring that the port, which already operates a unique matrix manifold system, continues to be recognised as a world-class facility, enhancing the UAE’s position as one of the most influential players in the global energy market.’

Fujairah to start publishing weekly storage data Fujairah will start publishing weekly inventory data as part of a transparency initiative to establish the region as a global energy trading hub.

Gulf Intelligence reports that the region, which hosts the Middle East’s largest commercial storage capacity for refined oil products, will have the first oil products benchmark shortly.

His Excellency Suhail Al-Mazrouei, UAE Minister of Energy, says: ‘Today, Fujairah sits at the heart of the new energy corridor opening up east of the Suez Canal to Asia, and not only is it a world-scale bunkering and oil products storage centre – it is now also becoming an important crude oil export centre.

‘This transparency initiative will play a key role in Fujairah’s evolution from a key logistics hub for the region into a trading hub for global energy markets.’

Storage in Fujairah is expected to reach nine million m3 in 2016 and exceed 14 million m3 by 2020. The project is aligned with the UAE government’s 2021 vision to adopt an open data practice to make government data and information seamlessly available to the public.

Additionally, Platts will publish independent, outright price assessments for a range of oil products for the Middle East market on a free-on-board Fujairah basis starting on October 3.

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TERMINAL NEWS l AFRICA & MIDDLE EAST

Iran’s largest oil terminal to grow by 10 million barrels Iranian Oil Terminals Company will add 10 million barrels of capacity to the country’s largest export terminal.

The expansion at the facility in the southern city of Genaveh, 40km off Kharg Island, will be complete and go live shortly according to the company.

Managing director Pirouz Mousavi says: ‘By inauguration of a number of projects in line with the economy of resistance, Iran has raised its export capacity at Kharg Island and has minimised the time vessels have to wait for loading at the terminal.’

He adds that given the reduction of berthing time at the terminal, oil cannot be stored on floating vessels.

The additional capacity will be spread across four tanks, bringing total storage capacity in the region of 28 million barrels.

Mousavi adds: ‘More storage capacity in the island is translated into more bargaining power for Iran in oil export.’

Puma opens Congo fuel storage terminal A new bulk fuel storage terminal at Matadi in the Democratic Republic of Congo has been opened by Puma Energy.

The terminal, which is the 99th facility in the company’s inventory, can handle petrol, jet fuel and gasoil. The company says it is an important hub for the shipment and distribution of petroleum products and provides security of product supply to the Congo and its neighbouring countries.

The facility comprises four, 6,500 m3 clean fuels storage tanks, complete with truck loading and unloading racks. Additionally, the site includes a new administration building, a state-of-the-art firefighting system, a floating jetty and interconnecting jetty pipelines and further interconnecting piping with another site.

The terminal and jetty will provide strategic vessel reception capability for the Congo and the subregion.

Puma Emergy’s COO for Africa Jonathan Molapo says: ‘The Matadi terminal will secure the supply of high quality reliable fuels for DRC and the region for the next generation.’

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TERMINAL NEWS l AFRICA & MIDDLE EAST

Militant attacks disrupt Nigeria crude oil production Militant attacks on oil and natural gas infrastructure in Nigeria have resulted in the highest level of oil production disruptions since January 2009.

According to the EIA, disruptions in the west African region reached 75,000 barrels per day in May 2016. The disruptions are concentrated in the Niger Delta region, an oil-rich area that is the mainstay of the country’s crude oil production.

Since the beginning of 2016, the Niger Delta Avengers have instigated many attacks on oil and natural gas infrastructure throughout the region. They are currently the most active of the militant groups conducting attacks in the region.

These attacks have resulted in immediate and severe disruptions in crude oil production. As a result, by May 2016, Nigerian oil production had fallen to 1.4 million barrels per day, nearly a 30-year low.

Some of the disrupted production was restored following some repairs however, the continued threat of militant attacks poses a risk to sustained production.

According to Nigeria’s Minister of Budget and National Planning, the country’s oil sector provides 70% of government revenue and 95% of export revenue.

The attacks are mainly a response to the cutback on amnesty payments and termination of security contracts to former militants.

Puma delivers first cargo of bitumen to Nigerian terminal The first cargo of bitumen has been delivered by Puma Energy to its terminal in Calabar, south east Nigeria.

The cargo was delivered by MT Acacia Rubra, which completed the discharge to the terminal, a joint venture with Wabeco Petroleum, registered as P.E. Bitumen Resources (Nigeria), on September 5.

The delivery will assist the Nigerian Government’s effort in rebuilding its road infrastructure, which is a catalyst for the country’s economic development.

Olof Klintholm, Puma’s global head of Bitumen, says: ‘Nigeria is a key focus market for us as we keep building our global presence and it shows we can deliver bitumen on specification and on time anywhere across the world.’

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TERMINAL NEWS l AFRICA & MIDDLE EAST

$100 million petroleum storage terminal in Hamriyah

A new petroleum storage terminal in Hamriyah Free Zone will open up the regional to the international market.

The $100 million Sharafco Petroleum Terminal has a capacity of 80,0000 m3 spread across 16 tanks and is the company’s first step towards the international market.

Saud Salim Al Mazrouei, director of Hamriyah Free Zone Authority and Sharjah Airport International Free Zone, inaugurated the first phase of the terminal.

Al Mazrouei says: ‘Due to our excellent facilities and services, several companies within the free zone have expanded their operational, which just reinforces the fact that Hamriyah Free Zone is the ideal hub.

‘Hamriyah Free Zone has always had a reputation as a logistics centre for the upstream oil and gas industry – a chief hub for the Gulf service sector.’

The company plans to lease out the tanks and terminal on a contract basis, predominantly to multinational companies across the globe.

The terminal can store gas oil, base oil and fuel oil. It has two distinctive pipeline from the deeper harbour and another three separate pipelines from the inner harbour as well as bunkering pits.

Sharfudheen Mohammed, Sharafco Group managing director and CEO says: ‘We have been active in the local market for the last 15 years and we want to venture into the international market.

‘The starting of operations at the Sharafco Petroleum Terminal reflects Sharafco’s strength and determination to continue our ambitious growth plans into the international market. We believe that the bold investment program we have put in place will strengthen our position in the international terminal market.’

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19

INCIDENT REPORT

Incident report

A summary of the recent explosions, fires and leaks in the tank storage industry

9/9/2016

18/9/2016

Colonial Pipeline

Sidra Oil Terminal

Shelby County, Alabama, US A broken segment of pipeline caused four states – Alabama, Georgia, North Carolina and South Carolina – to declare a state of emergency. Colonial Pipeline started excavation work immediately to dig up and repair the segment that sprung a leak. The amount spilled varies according to differing reports ranging from 6,000 barrels to 252,000 barrels.

Ras Lanuf, Libya Firefighting teams for Libya’s National Oil Corporation extinguished a fire at tank number 12 caused during fighting after forces loyal to a Libyan general attacked Ras Lanuf and Sidra terminals. Reports suggest there were a number of casualties. A statement from NOC said that they had to suspend crude oil loading at Ras Lanuf as a precautionary measure. No other significant damage was reported.

20/9/2016

San Pablo Bay, Rodeo, US Phillips 66

Mystery surrounds the cause of an oil spill on San Pablo Bay which was cleaned up within two days of appearing. The US Coast Guard collected fuel samples from oil tankers and sent divers to inspect a docked tanker for a possible leak as it tries to establish the cause of the spill. Several vessels and skimmers launched containment and cleanup operations, with a 1,000 foot boom surrounding the refinery.

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OCTOBER/NOVEMBER 2016 VOLUME 12 ISSUE NO.5

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