Tank Storage Magazine Feb/March 2017

The voice of the storage terminal industry

FEBRUARY/MARCH 17 Volume 13 Issue No.1

THE STORAGE EVOLUTION

Five operators from the US, Middle East and Europe discuss what 2017 has in store for the industry

STORAGE MOMENTUM IN AFRICA Puma Energy Africa explains how the continent’s market dynamics are driving its growth strategy

REGIONAL FOCUS: EUROPE

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CONTENTS

Contents

29

News TERMINAL NEWS 09 Europe 13 Asia 14

The Americas

22

Africa & Middle East

24 Global 25

Incident report

Storage in Europe

48

26

Tank terminal update: Europe

29 Niche growth in a competitive market 37 The dynamic storage sector 42

Mediterranean downstream dreams

45 Europe: a steady storage market 48

European tank storage – uncertain times ahead

Profile 34

Storage momentum in Africa

Terminal outlook 51

FEBRUARY/MARCH 17 VOLUME 13 ISSUE NO.1

The storage evolution

Five storage operators from Europe, the US and the Middle East examine how events from 2016 affected global markets and share their thoughts about what 2017 has in store‌ 01

CONTENTS

Contents

90

Technical features 57

Technical news

64

Frangibility of tank terminals

65 Smokecatcher software alleviates false alarms at production facilities 66 Activated carbon in vapour recovery units 71 Testing and applying flame arresters to prevent large terminal fires 75 Stay afloat using radar technology 78

Static electricity – a dangerous ignition source

81 Firefighting foams – a changing world 82 Harnessing the latest technology for the highest safety standards 84

Enhancing terminal business performance

86

The loading arm: an evolution in safety

88

On a roll: how Concrete Canvas is making its mark on the storage sector

90

Continuous improvement in tank maintenance

Speaker interviews 104 Insights from a selection of StocExpo Europe’s industry experts

104

93 Payback from preventative maintenance services of vapour recovery units 99

A revolution in vocational training

103 A modular system for twin screw pumps

81

Events 113 A new storage era

A preview of some of the exhibitors at this year’s StocExpo Europe at the Ahoy Rotterdam

133 New beginnings for global energy markets 135 Upcoming events 136 Advertisers’ index 02

FEBRUARY/MARCH 17 VOLUME 13 ISSUE NO.1

CONTENTS

â„¢

FEBRUARY/MARCH 17 VOLUME 13 ISSUE NO.1

03

CONTRIBUTORS

Contributors

The voice of the storage terminal industry

FEBRUARY/MARCH 17 Volume 13 Issue No.1

THE STORAGE EVOLUTION

FEBRUARY/MARCH 17 Volume 13 Issue No.1

Five operators from the US, Middle East and Europe discuss what 2017 has in store for the industry

STORAGE MOMENTUM IN AFRICA Puma Energy Africa explains how the continent’s market dynamics are driving its growth strategy

REGIONAL FOCUS: EUROPE

TSM_Front_cover_TSM_Feb-March_17.indd 2

20/02/2017 19:08

Front cover courtesy of Emerson Automation Solutions

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

ONLINE & CONTENT EDITOR Jasmin McDermott t: +44 (0)20 3196 4402 e: jasmin@tankstoragemag.com

INTERNATIONAL SALES MANAGER David Kelly t: +44 (0)20 3196 4401 e: david@tankstoragemag.com

PORTFOLIO MARKETING MANAGER Amy Jordan t: +44 (0)20 3196 4390 e: amy@tankstoragemag.com

DATABASE MANAGER Jourdan Roze t: +44 (0)20 3196 4342 e: jourdan.roze@easyfairs.com

SUBSCRIPTION MANAGER Henry Kenyon t: +44 (0)20 3196 4343 e: Henry.Kenyon@easyfairs.com

MANAGING DIRECTOR Matt Benyon t: +44 (0)20 3196 4310 e: matt.benyon@easyfairs.com

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@tankstorageinfo Tank Storage Magazine Tank Storage Magazine

Tank Storage Magazine (ISSN 1750-841X) is published six times a year (in February, March, May, August, October and November) by Easyfairs UK Ltd, 2nd Floor, Regal House, 70 London Road, Twickenham, TW1 3QS, UK. The 2017 US Institutional subscription prices is $243. 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 Easyfairs UK Ltd, 2nd Floor, Regal House, 70 London Road, Twickenham, TW1 3QS, UK. Air Business Ltd is acting as our mailing agent.

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FEBRUARY/MARCH 17 VOLUME 13 ISSUE NO.1

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COMMENT

An unpredictable market

A

re we heading towards backwardation? Has the contango finished? Will supply and demand trends rebalance?

Without the aid of a crystal ball these questions are hard to answer and reflect the volatile market trends affecting the sector.

While last year proved to be a little more predictable, 2017 could throw up its fair share of surprises for the global market – particularly with several key developments coming into play such as the OPEC production cap, moves towards implementing the IMO’s 2020 marine fuel cap and the gradual rebounding of the oil price.

According to Frost and Sullivan’s Carl Larry, many in the oil industry are now hesitant. ‘They know something’s going to change, but they don’t know what’s going to change and how much’.

However, with a healthy M&A market, with transactions from Oiltanking Copenhagen and Zenith Energy, and new expansion projects and developments regularly hitting headlines – tank storage certainly remains a solid and robust business.

In this issue we speak to five operators from Europe, the US and Middle East to get their thoughts on what the outlook for storage will be in the year ahead.

Interestingly, many are focusing on diversifying their assets to ensure greater flexibility in the face of a distinct change in the future energy-mix as well as future proofing their operations against regular market fluctuations.

06

Focusing on the mature European markets, Ratio Group MD Ellen Ruhotas examines how future demand and global consumer trends will impact the market.

While tank storage will always remain an integral part of the logistical supply chain, Ruhotas says that the long-term growth of the industry seems uncertain in the face of changes in demand for fossil fuels and the plateauing of European demand for energy.

However operators in the region remain upbeat. Spain’s Port of Tarragona is embarking on a new business strategy to strengthen the region as a trading hub in the Mediterranean while InterTank continues to flourish in a highly competitive market.

Heading further south this issue also contains an in-depth interview with Puma Energy Africa’s CEO Jonathon Molapo about how Africa’s growing need for imported products is driving its impressive growth strategy.

This edition of the magazine is the official publication for StocExpo Europe, meaning every visitor and delegate will get a copy. It is also the official publication for our all-new global Tank Storage Awards, which promises to be a memorable evening. We hope you enjoy this issue and we look forward to seeing many of you in Rotterdam.

With best wishes, Jasmin

FEBRUARY/MARCH 17 VOLUME 13 ISSUE NO.1

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TERMINAL NEWS l CONTENTS

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

p12 Varo to sell Hydrocarbon Hotel storage terminal

p15 Magellan and LBC to expand Houston storage assets

Europe 09 Gate terminal celebrates LNG terminal expansion

Oil terminal opened on Turkmenistan and Afghanistan border

Vero sells Hanau storage terminal to Roth

Inter Pipeline plans significant European tank storage investment

Vopak agrees to acquire Exmar’s FSRU business

11 CPC marine terminal shipments make history

Dunkirk LNG terminal starts operations

FinCo and Zenith reach agreement over Amsterdam terminal

Neste sells storage terminal to Wibax

12 Varo to sell Hydrocarbon Hotel storage terminal

VTTI announces acquisitions and expansions across storage portfolio

ASIA 13 ADNOC agrees crude oil storage with India

p22 Puma’s South Africa storage terminal starts operations

THE AMERICAS 14 Canadian government approves Trans Mountain expansion project 15 Pin Oak secures equity investment for midstream logistics hub

Magellan and LBC to expand Houston storage assets

16 Freeport LPG terminal fully operational

NuStar completes storage terminal assets purchase

Tallgrass Energy Partners acquires terminal assets

17 New refined energy products terminal planned for Mexico

Crude oil infrastructure joint venture planned for Delaware Basin

18 Rulemaking package strengthens inspection of US pipelines

Zenith to develop Mexican storage assets

21 TransCanada submits Keystone permit application

Donald Trump signs executive orders for Keystone XL and Dakota

Access pipelines

Sprague to buy Rhode Island refined product terminal

AFRICA & MIDDLE EAST 22 Helios and Vitol to acquire stake in Vivo Energy

New liquid bulk storage facility planned for South Africa port

23 Liberia storage terminal to be modernised

For the latest news and developments visit www.tankstoragemag.com 08

Port of Duqm terminal development contract awarded

Global 24 2016 crude prices were below 2015 averages

Crude prices forecast to rise over next two years

FEBRUARY/MARCH 2017 VOLUME 13 ISSUE NO.1

TERMINAL NEWS l EUROPE

Gate terminal celebrates LNG terminal expansion

Inter Pipeline plans significant European tank storage investment

Gate terminal has completed the expansion of its LNG terminal with a third berth and new infrastructure for small LNG vessels loading.

Inter Pipeline plans to spend more than $40 million on expansions and growth projects across its European terminals segment.

The small LNG vessels will allow for the distribution to LNG terminals in other North Sea and Baltic ports, where large LNG tankers are prohibited to deliver directly due to their draught.

In conjunction with LNG bunker vessels, the new berth will also make it easier for ocean-going vessels to full up with LNG in Rotterdam. The use of LNG as a maritime fuel is being encouraged by the EU, the Dutch government and the Port of Rotterdam because of its environmentally-friendly properties.

To celebrate these new facilities, Gate terminal, along with its shareholders Gasunie and Vopak and its partners Shell and the Port of Rotterdam, hosted a mini-symposium and networking event to share experiences and new developments regarding LNG use.

Eelco Hoekstra, chairman of the executive board and CEO of Vopak, says: ‘Vopak has earmarked storage and handling of LNG as one of its strategic focus areas. This third jetty is an opportunity to facilitate the introduction of LNG as a more sustainable transportation fuel. It also strengthens the hub function of Gate terminal in Northwestern Europe for our valued partners and customers.’

Rolf Brouwer, MD of Gate terminal says that it will add two new truck loading bags in the second quarter of 2017.

The company says it continues to experience near record demand for storage services at its European terminals and that the $40 million will be spent in 2017.

In the third quarter of 2016, Inter Terminals executed two long-term contracts to provide 175,000 barrels of new chemical storage capacity at its Seal Sands terminal in the UK. $20 million will be spent to complete the construction of five new storage tanks to support these contracts, with the new capacity expected to be in-service by mid-2017.

The remaining $20 million will be used on smaller, organic growth projects at Inter Pipeline’s terminals in Germany, Denmark and Sweden.

Additionally, Inter Pipeline expects to invest $65 million to expand oil battery connections, add services and increase storage capacity across its conventional oil pipelines business segment.

Oil terminal opened on Turkmenistan and Afghanistan border

A new oil storage terminal has been opened in Imamnazar on the border between Turkenistan and Afghanistan.

Turkman president Gurbanguly Berdymukhamedov and Afghan president Ashraf Ghani officially opened the terminal along with a new railway, which will bring Turkman goods to Afghanistan.

The storage facility has a direct link with the railway, which could eventually become a trans-Asian rail corridor. The terminal will allow Turkmenistan to increase volumes of export oil products.

Varo sells Hanau storage terminal to Roth

Varo Energy has agreed to transfer its storage terminal in Hanau to Adolf Roth in an asset deal.

The facility, which opened in 1961, has a total capacity of 9,700 m3 and is used for heating oil and diesel.

The transaction complements Roth’s geographical positioning and optimises the utilisation of the terminal’s capacity. The divestment is part of Varo’s ongoing development of its portfolio.

The transfer of the terminal to Roth was scheduled to take place on February 1.

FEBRUARY/MARCH 2017 VOLUME 13 ISSUE NO.1

Vopak agrees to acquire Exmar’s FSRU business Exmar’s FSRU business is set to be acquired by Vopak following an agreement signing.

Both companies started exploratory discussions on floating LNG storage and regasification in September 2016, which has resulted in this agreement as well as possible cooperation between Vopak and Exmar in future projects.

The agreement on the acquisition envisages the transfer in stages of Exmar’s participation in FSRU assets, FSRU projects under development and a corresponding part of the Exmar organisation.

The deal is subject to the consent and cooperation of multiple stakeholders, including current partners in the FSRU and customary approval from authorities.

Vopak says in a statement that the ultimate scope of the transaction is dependent on the outcome of this process.

09

TERMINAL NEWS l EUROPE

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FEBRUARY/MARCH 2017 VOLUME 13 ISSUE NO.1

TERMINAL NEWS l EUROPE

CPC marine terminal shipments make history

FinCo and Zenith reach agreement over Amsterdam terminal

The Caspian Pipeline Consortium marine terminal shipped 4.5 million tonnes of oil in December – the highest recorded in the company’s history.

FinCo will continue its supply and sales activities at Zenith Terminal Amsterdam following the signing of an agreement.

In total, the facility near Novorossiysk shipped more than 44 million tonnes of oil to international markets in 2016 – an increase of 1.5 million tonnes compared to 2015.

The company says that these record figures resulted from the expansion of the CPC pipeline system from Tengiz to Novorossiysk.

Dunkirk LNG terminal starts operations The Dunkirk LNG terminal has officially started commercial operations.

The regasification facility is one of the largest industrial construction sites in France and is used to import, store and regasify LNG before delivery with the transmission systems to the places of consumption.

The terminal is the second largest in mainland Europe and is the only one in Europe to be directed to two consumption markets: France and Belgium. Its annual regasification capacity of 13 billion m3 accounts for more than 20% of French and Belgian natural gas consumption.

The facility comprises a jetty that can receive up to 150 LNG tankers per year, three isothermal LNG storage tanks – each with a capacity of 200,000 m3 and a regasification unit made up of 10 heat exchangers.

Marc Benayoun, executive director of the EDF Group, in charge of the gas sector and Italy, says: ‘I am delighted that commercial operations have started up at the Dunkirk regasification terminal, thus creating a new point of gas importation in France and strengthening security of supply in Europe. It also contributes to the development of the gas supply market, on which the group already operates with its Italian subsidiary, Edison, and wishes to further strengthen its share.’

FinCo announced it will use the tank storage, blending and storage rack systems at the terminal, but it will also further expand from the facility in Amsterdam.

Zenith has recently invested in the truck storage rack system at the facility, offering seven loading blocks to FinCo’s customers.

Additionally, Finco has expanded its supply and sales activities from the Avia Weghorst terminal in Enschede in the Netherlands. The terminal, FinCo Terminal Enschede, will store various petroleum and diesel products and comprises 10 storage tanks with a total capacity of 8,350 m3. FinCo says that the facility contributes to the nationwide network that that company wishes to offer its customers.

FinCo has also started the provision of various diesel products from its terminal in Harlingen. Previously the facility was used primarily for marine fuels.

Neste sells storage terminal to Wibax Neste has sold its Pietarsaari terminal to Wibax Ab. The company says the terminal has not been used for Neste’s own operations for many years because the tanks and other facilities are not suitable for storing oil products without investments to upgrade them.

The company has been offering terminal and operations services for chemicals to a third-part customer. The details of the transaction have not been disclosed.

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TERMINAL NEWS l EUROPE

Varo to sell Hydrocarbon Hotel storage terminal

Varo Energy has sold all of its shares in the Hydrocarbon Hotel storage and hydrocarbon blending terminal in the Port of Amsterdam.

The terminal has been acquired by Global Petro Storage Group, an independent storage and logistics company backed by funds managed

by Blue Water Energy and White Deer Energy.

The company plans to develop the site further.

Varo will continue to utilise the storage capacity of the terminal to serve its customers.

The facility comprises 11 tanks with a total

capacity of 148,000 m3 and three dedicated berths, which are accessible to both sea and inland vessels. It is primarily used for the import, export and storage and blending of petrol, biofuels and petrol components and has the potential for additional expansion.

Eric Arnold, CEO of GPS Group, says: ‘Global Petrol Storage is pleased to have signed this

transaction with Varo. This quality asset in the Port of Amsterdam gives GPS a firm footing in the ARA global hub.

‘We are also delighted to have established a new long-term partnership with Varo, which will help to facilitate our expansion in this area and also globally, as we further build out the GPS growth strategy.’

VTTI announces acquisitions and expansions across storage portfolio

VTTI has completed the acquisition of storage assets in Panama and Croatia and has announced a series of expansion projects at its existing facilities.

The company has entered a joint venture with Global SLI following the acquisition of a 230,000 m3 facility in Panama. The deal involves VTTI taking a 75% interest in PetroAmerica Terminal, located close to the Panama canal, with a wide range of refined products storage.

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The facility serves as a clean products bulk breaking location to supply deficit markets on the west coast of south and central America.

At the Platts European Oil Storage conference in Amsterdam Jared Pearl, VTTI’s chief commercial officer, said that jet fuel demand is growing in the region and as a result of growing trade flows from the US Gulf Coast, more traffic is coming through the canal.

Additionally, VTTI has also closed its acquisition with Energia Naturalis Holding, which comprises 70% of the newly built Adriatic Tank Terminal in the Port of Ploce, Croatia.

Pearl said the facility is ideally located for truck supplies to a wide region in the Balkans. The area has a deficit of clean products and LPG. He said: ‘With the new jetty, the terminal will have the second deepest draft in the region.’

A second stage of development is planned, comprising 200,000 m3 of liquid product capacity, as well as up to 60,000 m3 of LPG capacity.

Rob Nijst, CEO of VTTI, says: ‘These opportunities take us into new geographies, extend our portfolio commercially, and further realise our aim to be a top three company in the global terminalling industry, as always in combination with our focus on safe operations.’

Additionally, VTTI plans to develop some of its existing terminals. It will expand its ETT terminal in Rotterdam with a further 174,000 m3 of capacity and will increase its LPG capability in Antwerp at its ATPC terminal with two new spheres of 15,000 m3.

Pearl said this additional capacity is in anticipation of growing diesel imports into ARA and increasing blending requirement for bunker fuels post 2020, in light of the sulphur emission requirements.

In South Asia, VTTI also recently signed a share purchase agreement for a new greenfield terminal project. Negotiations are ongoing and the closing of the deal is anticipated to happen at the beginning of March.

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FEBRUARY/MARCH 2017 VOLUME 13 ISSUE NO.1

TERMINAL NEWS l ASIA

ADNOC agrees crude oil storage with India ADNOC and the Indian Strategic Petroleum Reserves (ISPRL) have agreed to establish strategic crude oil storage in Mangalore, India.

The agreement with Indian government-owned company ISPRL covers the storage of 5.86 million barrels of ADNOC crude oil in underground facilities at the Karnataka facility.

The agreement was signed by His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and India’s Prime Minister Narendra Modi during a UAE delegation visit to India.

The Mangalore facility is the third that ADNOC has had access to in Asia. In Japan, the ADNOC has oil stored in the Kiire’s Oil Terminal in Kagoshima City, and in South Korea a similar agreement allowed ADNOC to store oil in KNOC’s

Strategic Petroleum Reserve.

H.E. Dr Al Jaber says: ‘India is an important energy market and this storage agreement reinforces ADNOC’s role as one of the world’s most trusted and reliable suppliers of oil. We will utlise the Mangalore facility to not only build on our existing business relationships across India, but also to explore new downstream opportunities for ADNOC’s expanding range of refined and petrochemical products.’

Dharmendra Pradhan adds: ‘This will also help to ensure India’s energy security and enable us to meet the nation’s growing demand for energy.’

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TERMINAL NEWS l THE AMERICAS

Canadian government approves Trans Mountain expansion project The Government of Canada has approved the Trans Mountain Expansion Project in a landmark decision.

This final federal approval triggers several actions. Trans Mountain will continue to seek all necessary permits, and is planning to begin construction in September 2017, with an in-service date for the twinned pipeline expected in late 2019. There will also be a final cost estimate review with shippers committed to the project and a final investment decision by the Kinder Morgan board of directors.

Ian Anderson, president of Kinder Morgan Canada, says: ‘This is a defining moment for our project and Canada’s energy industry. This decision follows many years of engagement and the presentation of the very best scientific, technical and economic information.

‘In today’s announcement the federal

government commits to implementing the recovery plan for the Southern Resident Killer Whale and the establishment and funding for an Indigenous advisory and monitoring committee. Taken together, we are confident we will build and operate this project in a way that respects the values and priorities of Canadians.’

In May 2016, Canada’s National Energy Board recommended the project be approved by the federal government. The recommendation allowed the project to proceed with 157 conditions if it were to be approved.

The CAD 6.8 billion project involved the expansion of the pipeline system between Edmonton, Alberta, and Burnaby, British Colombia.

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FEBRUARY/MARCH 2017 VOLUME 13 ISSUE NO.1

TERMINAL NEWS l THE AMERICAS

Chose the right Hose?

Pin Oak secures equity investment for midstream logistics hub A $100 million equity investment in Pin Oak has been announced by Dauphine Midstream and Mercuria Energy Group.

Pin Oak says the investment will go towards the construction of an independent logistics hub as well as towards acquiring and developing additional midstream assets in North America.

The company initiated construction on a petroleum and chemicals terminal – Pin Oak Terminals – in Mount Airy, Louisiana, which is due to be operational by June 2017.

Mike Reed, CEO of Pin Oak, says: ‘This investment from Dauphine and Mercuria represents a strategic milestone for Pin Oak that provides the necessary capital to build and grow our first terminals while looking to expand into other areas.

‘Together with our equity partners, we will be constructing and operating a terminalling business that will meet customer and industry needs as an independent midstream company. We will provide all our customers with premier services on the Eastern Gulf Coast while adhering to the highest safety and environmental standards. Pin Oak will be a key hub and will add much needed storage and logistics capabilities to help meet the rising market demand of one of the largest refining and producing complexes in the world.’

Brian Falik, CIO of Mercuria, says: ‘This is a significant US terminal company investment and we are confident that Pin Oak will build an independent, world-class company to meet the maket’s needs. We believe the lower Mississippi River will continue to grow in importance in the US commodity landscape.’

Magellan and LBC to expand Houston storage assets

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Magellan Midstream Partners and LBC Tank Terminals are increasing crude and condensate storage and pipeline assets at Seabrook Logistics.

Seabrook is building 1.7 million barrels of additional crude oil and condensate storage adjacent to LBC’s existing terminal in Seabrook, Texas.

Additionally, the facility will be connected to Magellan’s Houston crude oil distribution system with a 24-inch diameter bi-directional pipeline between the Seabrook Logistics’ facility and Genoa Junction and investing in a new Aframax dock with up to a 45-foot draft.

The expansion is slated to cost $250 million and is due to be operational during mid-2018.

Separately, Magellan is investing an additional $70 million to build a new 24-inch diameter pipeline from its East Houston terminal to Holland Avenue. This new pipeline segment is expected to be operational during mid2018.

Seabrook Logistics is currently in the final stages of constructing more than 700,000 barrels of new crude oil and condensate storage and a new pipeline, which will connect to an existing third-part pipeline to transport crude to a Houston-area refinery in the first quarter of 2017.

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FEBRUARY/MARCH 2017 VOLUME 13 ISSUE NO.1

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TERMINAL NEWS l THE AMERICAS

Freeport LPG terminal fully operational

The Freeport LPG export terminal, which features at 7.5 million barrel storage facility, is now fully operational.

Phillips 66 loaded its first contracted cargo on the Commander, a very large gas carrier that departed in December 2016.

The facility includes Phillips 66 Partners’ 100,000 barrel per day Sweeny fractionator and 7.5 million barrel Clemens storage terminal.

It can simultaneously load two ships with refrigerated propane and butane at a combined rate of 36,000 barrels per hour. Supply is sourced from the fractionator and storage facility, which is connected by pipeline to the Mont Belvieu hub.

The facility was developed to satisfy growing international demand for US NGL. Greg Garland, chairman and CEO of Phillips 66, says: ‘The start-up of the Freeport LPG export terminal is the culmination of a four-year effort to develop a new US Gulf Coast NGL market hub.

‘The new LPG export terminal gives customers the ability to place mutigrade LPG products directly into global markets through Port Freeport, which provides immediate blue water access with minimal congestion.’

NuStar completes storage terminal assets purchase NuStar Energy has completed the purchase of crude oil and refined product terminal assets in Texas from Martin Midstream Partners.

The transaction closed at $93 million (€89 million) and is expected to generate a seven times earnings EBITDA multiple based on an annual average EBITDA estimate of approximately $13.5 million.

The terminal in Corpus Christi include 1.15 million barrels of total storage, comprising of 900,000 barrels of crude oil storage and 250,000 barrels of refined product storage. It has direct connectivity to Eagle Ford crude oil production and receives crude and condensate via its connection to the Harvest Pipeline and through its six-bay truck rack.

With this facility NuStar now has more than 3.6 million barrels of total storage in the Port of Corpus Christi.

President and CEO Brad Barron says: ‘This acquisition further strengthens NuStar’s position as one of the top logistics players in the Corpus Christi region, which has long been a strategic hub for us.

‘We now have access to a new pipeline and new customers, and greater connectivity to domestic and international crude oil and refined products markets.’

Tallgrass Energy Partners acquires terminal assets

A series of storage terminal assets has been acquired by Tallgrass Energy Partners as well as the operator of the Rockies Express Pipeline.

The $140 million acquisition of Tallgrass Terminals and Tallgrass NatGas Operator represents Tallgrass Energy Partners’ fifth dropdown acquisition from Tallgrass Development and was funded through borrowing on its revolving credit facility.

The assets comprise the Sterling Terminal in Colorado, which provides 1.3 million barrels of operational storage to the Tallgrass Pony Express crude oil pipeline, and it can accommodate a capacity expansion of at last 800,000 million barrels.

It also includes the Buckingham Terminal, also in Colorado, which includes four truck unloading skids capable of receiving up to 16,000 barrels per day and a 20% interest in the Deeprock Development Terminal in Cushing, Oklahoma, which provides the Pony Express with 2.3 million barrels of operational storage capacity.

Additionally, Tallgrass Energy Partners has acquired the following projects under development: • 5.5 million barrels of storage for a potential terminal facility located within a 550 acre parcel of land. The terminal would connect with other third-party terminals in Cushing, have inbound pipeline connectivity and provide outbound pipeline connectivity to destinations on the Gulf Coast.

• A 2.1 million barrel storage facility. Tallgrass Terminals has been exploring a number of opportunities to provide customers with receipt, blending, storage and delivery services, in addition to direct access to transportation services on Tallgrass Pony Express.

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FEBRUARY/MARCH 2017 VOLUME 13 ISSUE NO.1

TERMINAL NEWS l THE AMERICAS

New refined energy products terminal planned for Mexico

A joint venture investment project between Kansas City Southern (KCS), Watco Companies and WTC Industrial will facilitate the exportation of liquid fuels from the US to Mexico.

The project includes the construction of a unit train liquid fuels terminal in the WTC Industrial Park in San Luis Potosi and will be solely rail served by Kansas City Southern de Mexico.

The companies will invest $45 million in this phase of the project, which is due to be completed in the second quarter of 2017. The terminal project will eventually include a storage facility that would provide retail fuels for central Mexico.

This development is a direct result of Mexico’s newly liberalised energy market after legislation was passed in 2013. The piece of legislation, which is due to be completely fulfilled by 2018, will result in the country’s energy markets being fully open to foreign investment and the importation of refined energy products, including petrol and diesel.

KCS president and CEO Patrick Ottensmeyer says: ‘Not only will the terminal provide Mexico with vitally needed refined energy products, it will also serve to boost job creation in both the US and Mexico. This project perfectly aligns the goals of Mexican energy reform with the desire of the US refining companies to expand their operations and enter new markets.’

Crude oil infrastructure joint venture planned for Delaware Basin

Santa Fe Midstream and Vermilion Cliffs Partners have formed a joint venture to develop crude, natural gas and water midstream infrastructure in the Delaware Basin.

Vermilion will contribute a 20 inch natural gas pipeline and associated facilities in Culerson County and dedicated acreage to the joint venture. Santa Fe sill supply the additional capital required to construct gathering pipelines as well as a new cryogenic gas processing plant. Santa Fe will also be the operator of the midstream assets.

The joint venture will offer natural gas gathering and processing and crude oil gathering in Reeves and Culberson.

Nautral gas residue will be delivered to downstream interstate and intrastate pipelines serving Mexican, western US and Texas markets.

These facilities will meet a ‘critical’ need for midstream services in the central and southern sections of the basin.

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TERMINAL NEWS l THE AMERICAS

Rulemaking package strengthens inspection of US pipelines A new set of rules that makes critical safety improvements for hazardous liquid pipelines has been approved.

The rulemaking package strengthens the standards that determine how operators repair aging and high-risk infrastructure. It also increases the quality and frequency of tests that assess the condition of pipelines, and extends leak detection requirement to onshore, non-HCA transmission hazardous liquids pipelines.

There is an increased focus on a data and risk informed approach to pipeline safety by requiring operators to integrate data on the operating environment, pipeline condition, and known manufacturing and construction defects.

The rule requires operators to have a system for detecting leaks and to establish a timeline for inspecting affected pipelines following extreme weather conditions or a natural disaster. It also improves the quality and frequency of tests used to assess threats and the condition of pipelines.

Zenith to develop Mexican storage assets

Zenith Energy plans to market and develop assets for oil storage and distribution in Mexico as part of an agreement with Cemex.

The agreement provides for the use of certain facilities of Cemex in Mexico to support the growing demand for oil products.

Zenith has been given the rights to develop these sites for fuel and LPG storage and distribution. The facilities include more than 90 storage and distribution locations, both inland and in coastal cities, and most of them are connected to the Mexican railroad network.

In a statement, Zenith says the development of these sites will not interfere with Cemex’s normal business activities in Mexico.

Jay Reynolds, chief commercial officer, says: ‘Based on the advantageous locations in major metropolitan areas and the customer demand for reliable operating facilities in Mexico, we believe that this solution will be very attractive to the market, particularly those looking for alternatives to uncertain and expensive pipeline projects.’

‘We see a growing number of promising opportunities to invest in the country’s developing midstream sector, particularly with the ability to utilise existing assets in key distribution markets inside the country,’ adds CEO Jeffrey Armstrong.

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TERMINAL NEWS l THE AMERICAS

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FEBRUARY/MARCH 2017 VOLUME 13 ISSUE NO.1

TERMINAL NEWS l THE AMERICAS

TransCanada submits Keystone permit application

Donald Trump signs executive orders for Keystone XL and Dakota Access pipelines

TransCanada has submitted a presidential permit application to the US Department of State for the Keystone XL Pipeline.

US President Donald Trump has signed two executive orders supporting the Keystone XL and Dakota Access pipeline projects.

This follows President Donald Trump signing an executive order supporting the project. Former president Barak Obama denied a presidential permit to construct the 1,100 mile crude pipeline back in January 2016.

President and CEO Russ Girling says: ‘KXL will strengthen the US’ energy security and remains in the national interest. The project is an important new piece of modern US infrastructure that secures access to an abundant energy resource produced by a neighbour that shares a commitment to a clean and healthy environment.

‘Numerous studies have shown that pipelines are a safer and more environmentally sound way to transport oil to market than trains KXL raises the bar on both fronts.’

In a statement, the White House says the signing of these orders will ‘reduce the burden of regulations and expedite high priority energy and infrastructure projects that will create jobs and increase national security’.

In January 2016, TransCanada launched a lawsuit and filed a claim against former president Obama’s decision to withhold a presidential permit to construct the 1,100 mile crude pipeline. It will connect oil production in Alberta, Canada to refineries in the US. In a statement, the White House says: ‘Construction and operations of the Keystone XL pipeline, as well as oil production and refining activities related to it,

would create tens of thousands of jobs for American workers, enhance our nation’s energy security and support affordable and reliable energy for American families.’

The president’s second executive order, relating to the construction of the Dakota Access pipeline, instructs the relevant federal agencies (including the Army Corps of Engineers) to expedite reviews and approvals for the remaining portions of the Dakota Access Pipeline.

The pipeline is more than 90% complete and only a limited stretch is not yet constructed. The statement says: ‘Timely review and approval of energy pipelines is critical to a strong economy, energy independence and national security.’

Sprague to buy Rhode Island refined product terminal

Sprague Resources is set to purchase the Capital Terminal Company’s East Providence, Rhode Island refined product terminal for $23 million.

The facility’s combined distillate storage capacity of just over one million barrels has been leased exclusively by Sprague since April 2014.

Along with the purchase agreement, Sprague’s operating subsidiary Sprague Operating Resources also plans to invest $8 million to convert half of the terminal’s storage capacity to petrol and ethanol services to create a new revenue stream at the facility in addition to the company’s existing proprietary

distillate marketing business. This investment will be supported by a new, long-term petrol storage and handling agreement with a large multi-national supplier operating an extensive proprietary branded distribution business.

The contract is expected to begin in the third quarter of 2017.

Additionally, the company also announced a $3 million expansion investment to optimise distillate storage and expand the materials handling business at its Providence facility.

FEBRUARY/MARCH 2017 VOLUME 13 ISSUE NO.1

David Glendon, president and CEO, says: ‘The Capital terminal has given a boost to Sprague’s distillate marketing activities in Providence over the past two years, and we are thrilled to convert our status from tenant to owner of this high quality terminal. We are looking forward to investing in the terminal and diversifying the product mix to include more ratable petrol handling services, eventually making East Providence the highest volume petrol facility in our system.’

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TERMINAL NEWS l AFRICA & MIDDLE EAST

Helios and Vitol to acquire stake in Vivo Energy

New liquid bulk storage facility planned for South African port

Vitol and Helios Investment Partners have agreed to acquire Shell’s 20% share in Vivo Energy for $250 million (€240 million).

Oiltanking Grindrod Calulo has been selected to part fund, construct, maintain and operate a large liquid storage facility in the Port of Ngqura.

BE PART OF ONE OF THE WORLD’S BOOMING STORAGE REGIONS

Once the transaction is complete, Vivo will be 100% owned by Vitol and Helios. Additionally, a long-term brand licence agreement The facility, which is due to be completed in 2019, will create a has been renewed with Shell so that Vivo Energy will continue to new tank farm for the Eastern Cape when the existing lease for operate under the Shell brand. storage at the Port Elizabeth harbour ends.

Vivo Energy, the company behind the Shell brand in Africa, has According to local media reports, petroleum, diesel, jet fuel, plans for an additional $300 million of investment over the next LPG and illuminated paraffin will be transported to the Port With a special focus on the growing Middle East three years. of Ngqura via ship and piped to the tank facility prior to being the April/May issueofof Tank Storage Magazine Tope region, Lawani, co-founder and managing partner Helios distributed for local and global re-export.

Investment says:the ‘Together, in partnership withstorage Shell and terminal The project will be co-funded by Transnet National Port willPartners, feature latest breaking Vitol, we have played a key role in supporting Vivo Energy operator in its Authority (TNPA) and Oiltanking for almost ZAR 6 billion. development plus EXCLUSIVE interviews. mission to create Africa’s most respected energy business.

Construction is due to start in September and will continue ‘We look forward to continuing to build the Vivo platform across until June 2019. It is due to be operational in August 2019.

Africa while upholding best-in-class standards and business pracTNPA chief executive Richard Vallihu is reported as saying: tices.’

‘It will provide storage and marine infrastructure to support the The transaction is expected to close during the first half of 2017. overall petroleum demand projections for South Africa.’

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TERMINAL NEWS l AFRICA & MIDDLE EAST

NETZSCH TORNADO® T2 Rotary Lobe Pumps Liberia storage terminal to be modernised

An agreement on the modernisation and expansion of Liberia Petroleum and Refining Company’s storage terminal has been reached.

The company and Israeli firm Lutech Engineering and Project Management Consultants have reached a $21 million deal for the project at the Petroleum Storage Terminal on Bushrod Island.

The project involves the construction of new petroleum storage tanks, installation of new jetty pipelines, installation of new loading gantry and the installation of a firefighting system.

Lutech plans to build a central control room, a new operations building and expand the loading gantry fitted for nine loading areas.

It will also demolish and rebuild six storage tanks and increase their capacity.

Local media reports Liberia Petroleum and Refining Company MD Sumo Kupee says that there has not been any structural repair work on the terminal for 30 years and that the work on the facility is a ‘national priority’.

Port of Duqm terminal development contract awarded Boskalis has been awarded a €480 million contract for the development of a bulk liquid berth terminal of at the Port of Duqm.

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The contract will be awarded by the Special Economic Zone Authority Duqm, subject to it satisfying certain conditions.

The contact includes the engineering, design, procurement and construction of a bulk liquid berth terminal.

Various dredging and civil activities will be executed under the responsibility of Boskalis, including the deepening of the port basin to a depth of 18 meters, reclamation of new land, the construction of a quay wall with a length of one kilometre, a double berth jetty island and stone revetment.

The Port of Duqm is a dry dock and industrial free trade zone in the Al Wusta Region between Muscat and Salalah and has been designated as a special economic zone.

The design activities are expected to start in the coming weeks and equipment will be mobilised mid-2017. The project is due to be completed in 2020.

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TERMINAL NEWS l GLOBAL

2016 crude prices were below 2015 averages

Crude oil prices ended 2016 above $50 per barrel, however were still below the 2015 price average.

According to the Energy Information Administration (EIA), the annual average for West Texas Intermediate (WTI) crude oil price in 2016 was $43 per barrel, down $5 per barrel from 2015. However, it ended 2016 at $53 per barrel â&#x20AC;&#x201C; $16 per barrel higher than at the end of 2015.

Brent also ended the year up $17 from the end of 2015, at $54 per barrel, but the 2016 annual average of $44 per barrel was $8 below the 2015 average.

The EIA says that relatively high production and inventory levels provided downward pressure on crude oil prices throughout the bulk of 2016. However, the recent OPEC agreement to cut output and additional pledges by some key non-OPEC producers put upward pressure on prices at the end of 2016 as markets appear to be anticipating tighter balances than previously forecast.

Total OPEC crude oil and other liquids production increased by 3% to 39.3 million barrels per day in 2016, the EIA estimates.

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Crude prices forecast to rise over next two years North Sea Brent and West Texas Intermediate crude prices are set to increase during 2017 and 2018.

According to the Energy Information Administrationâ&#x20AC;&#x2122;s Short-Term Energy Outlook, Brent and WTI crude prices to average $53 per barrel and $52 per barrel respectively in 2017. These prices are expected to rise to $56 per barrel and $55 per barrel respectively in 2018.

Forecast increases in global production will put downward pressure on prices and effectively mitigate the potential for significant price increases through 2018.

The EIA expects global petroleum and other liquid inventory builds to continue, but at a slowing rate, in 2017 and 2018.

Brent crude oil spot prices are expected to remain fairly flat over 2017 in part as a result of the responsiveness of US tight oil production to rising oil prices in late 2016.

The EIA forecasts Brent prices will slowly increase in 2018, ending at $59 per barrel in December. It says that between January and December 2018, inventory builds will slow, putting modest upward pressure on prices. This oil price rise encourages production increases, particularly in the Lower 48 onshore.

FEBRUARY/MARCH 2017 VOLUME 13 ISSUE NO.1

INCIDENT REPORT

Incident report

A summary of the recent explosions, fires and leaks in the tank storage industry 15/1/2017

3/2/2017

Enbridge Energy

Two male workers had to be rescued by firefighters following a fire in the roof of an oil storage refinery warehouse. A three storey building containing two oil refinery cylinders was damaged in the blaze, which took less than two hours to extinguish. An investigation has been launched into the cause of the fire.

Halltown, Missouri, US

Erith, London, UK

A pipeline leak at Enbridge Energyâ&#x20AC;&#x2122;s pumpstation spilled nearly 200 barrels of oil. A detection alarm was activated alerting workers to the leak. 8,400 gallons of oil leaked, mostly staying on the property.

Some oil managed to get into a nearby drainage area however it was quickly contained and was vacuumed out. An investigation has been launched into what led to the leak.

25/1/2017

Worth County, Iowa, US Magellan Midstream Partners A pipeline rupture in Iowa resulted in 138,600 gallons of diesel fuel being spilled. The oil polled in an agricultural field but did not threaten any waterways or cause any injuries or evacuations and was quickly cleaned up.

9/1/2017

29/1/2017

Houston Fuel Oil Terminal Company

Iranian Oil Pipelines and Telecommunications Company

An out-of-service pipeline at the Houston Fuel Oil Terminal Company facility along the Houston Ship Channel caught fire, injuring one person. A contractor, who was part of a team of 12 workers repairing the out-of-service pipeline was injured in the blaze. He was taken to hospital for treatment and later released. Some crude oil residue was swept into the channel during the firefighting, causing a small amount of water pollution. An investigation has been launched into the cause of the fire.

A fire ignited in a tank following a lightning strike. The fire was extinguished in less than four hours after sparking in the tank, which is used for the management of surplus pressure in oil pipelines. A total of 400,000 litres of crude oil was burnt during the incident.

The tank involved has a capacity of two million barrels and no other tanks were damaged in the blaze. No-one was injured in the incident.

Houston Ship Channel, Texas, US

FEBRUARY/MARCH 2017 VOLUME 13 ISSUE NO.1

South of Tehran, Iran

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